VRDT Corp - FORM 10-Q - August 14, 2012

Attached files

file	filename
EX-31.1(2) - EXHIBIT 31.1(2) - VRDT Corp	ex31-1.htm
EX-31.2(2) - EXHIBIT 31.2(2) - VRDT Corp	ex31-2.htm
EX-32.1(2) - EXHIBIT 32.1(2) - VRDT Corp	ex32-1.htm
EX-32.2(2) - EXHIBIT 32.2(2) - VRDT Corp	ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[x]	QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOR ENDED JUNE 30, 2012

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITIION PERIOD FROM ____________ TO ____________

Commission File number: 000-52677

VRDT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	45-2405975
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

12223 Highland Avenue, Suite 106-542, Rancho Cucamonga, California 91739

(Address of principal executive offices)

(909) 786-1981

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	[ ]	Accelerated filer [ ]
Non-accelerated filer	[ ]	Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of August 13, 2012 the Company has 125,565,141 shares of Class A Common Stock outstanding and no other classes of common stock.

TABLE OF CONTENTS

VRDT CORPORATION

(A DEVELOPMENT STAGE COMPANY)

Part I – Financial Information

Item 1	Financial Statements	4

	Balance Sheets as of June 30, 2012 and March 31, 2012	5

	Statements of Operations for the Nine Months Ended June 30, 2012, and 2011 and for the Period from Inception, August 19, 1999, through June 30, 2012	6

	Statement of Stockholder’s Equity for the Period from Inception through June 30, 2012	7

	Statements of Cash Flows for the Nine Months Ended June 30, 2012, and 2011 and the Period from Inception, August 19, 1999, through June 30, 2012	9

	Notes to the Financial Statements	11

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4	Controls and Procedures	18

Part II – Other Information

Item 1	Legal Proceedings	19

	Item 1A. Risk Factors	19



Item 2	Unregistered Sales Of Equity Securities And Use Of Proceeds	19

Item 3	Defaults Upon Senior Securities	19

Item 4	Mine Safety Disclosure	19

Item 5	Other Information	19

Item 6	Exhibits	20

PART I

ITEM 1. FINANCIAL STATEMENTS

The Financial Statements of the Company required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Company.

VRDT Corporation

(A Development Stage Company)

Consolidated Balance Sheet

	June 30, 2012			March 31, 2012
ASSETS

CURRENT ASSETS:

Cash	$	9,373		$	36,447
Prepaid expenses		5,440,077			5,403,921
Total Current Assets		5,449,450			5,440,368

PROPERTY AND EQUIPMENT, NET		48,368			48,144

OTHER ASSETS

Note Receivable		218,063			215,383
Deposits		6,270			6,270
Intangibles		500			0
Total Other Assets		224,833			221,653
TOTAL ASSETS	$	5,722,651		$	5,710,165

LIABILITIES AND STOCKHOLDERS' EQUITY / (DEFICIT)

CURRENT LIABILITIES:

Accounts payable and accrued expenses	$	3,775,878		$	3,142,645
Accounts payable and accrued expenses - Related party		0			20,679
Notes Payable		95,000			95,000
Notes Payable - Related parties		323,206			942,759
Total Current Liabilities		4,194,084			4,201,083

LONG TERM LIABILITIES:

Notes Payable - Related parties		661,922			0
Total Current Liabilities		661,922			0

STOCKHOLERS' EQUITY / (DEFICIT)

Preferred stock, $.001 par value; 5 shares issued and outstanding at June 30, 2012
Common Stock, .001 par value: 989,999,995 shares authorized: 124,736,955 and 120,946,840 shares issued and outstanding as of June 30, 2012, and March 31, 2012, respectively		124,737			120,947
Additional paid-in capital		20,046,583			19,607,273
Stock issue payable		13,000			0
Deficit accumulated during the development stage		(19,317,675	)		(18,219,138	)
Total Stockholders' Equity / (Deficit)		866,645			1,509,082
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY / (DEFICIT)	$	5,722,651		$	5,710,165

See the accompanying notes to the financial statements

VRDT Corporation

(A Development Stage Company)

Consolidated Statement of Operations

	Three Months Ended June 30,						For the Period August 19, 1999 (Inception) to June
	2012			2011				30, 2012

Sales		0			0			370,800
Cost of sales		0			0			0
Gross profit		0			0			370,800

Operating Expenses

Depreciation and amortization		1,880			50			6,589
General and administrative expenses		1,069,642			649,853			13,646,946
Impairment of goodwill		0			3,833,722			3,833,722
Impairment of long-lived assets		0			0			855
Impairment of loan receivable		0			0			130,000
Total operating expenses		1,071,522			4,483,625			17,618,112

Income / (Loss) from Operations		(1,071,522	)		(4,483,625	)		(17,247,312	)

Other Income / (Expense)

Other income		0			0			56,889
Loss from conversion of shareholder debt		0			0			(1,506,528	)
Interest Income		2,680			0			3,063
Interest (expense)		(2,948	)		(4,354	)		(564,471	)
Interest (expense) - Related parties		(26,747	)		(4,271	)		(59,316	)
Unrealized Exchange (Gain) / Loss		0			0			0
Total Other Income / (Expense)		(27,015	)		(8,625	)		(2,070,363	)
Income / (Loss) before Income Taxes		(1,098,537	)		(4,492,250	)		(19,317,675	)

Provisions for Income Taxes		0			0			0
Net Income / (Loss)		(1,098,537	)		(4,492,250	)		(19,317,675	)

Net Income / (Loss) Per Share:
Basic and Diluted		(0.01	)		(0.13	)

Weighted Average Shares Outstanding
Basic and Diluted		124,222,044			34,504,511

See the accompanying notes to the financial statements

VRDT Corporation

(A Development Stage Company)

Consolidated Statement of Stockholder's Deficiency

For the Period August 19, 1999 (Inception) to June 30, 2012

	Common Stock				Additional Paid-in			Deficit Accumulated During the Development			Total Stockholders'
	Shares		Amount		Capital			Stage			Equity

Balance at inception, August 19, 1999		0	$	0	$	0		$	0		$	0
Issuance of common stock		2,000		2		18						20
Net loss									(84,021	)		(84,021	)

Balance at December 31, 1999		2,000		2		18			(84,021	)		(84,001	)
Net loss									(230,879	)		(230,879	)

Balance at December 31, 2000		2,000		2		18			(314,900	)		(314,880	)
Net loss									(494,816	)		(494,816	)

Balance at December 31, 2001		2,000		2		18			(809,716	)		(809,696	)
Net loss									(384,590	)		(384,590	)

Balance at December 31, 2002		2,000		2		18			(1,194,306	)		(1,194,286	)
Reclassification of debt to equity		4,300		4		1,581,979			0			1,581,983
Net loss									(736,364	)		(736,364	)

Balance at December 31, 2003		6,300		6		1,581,997			(1,930,670	)		(348,667	)
Net loss									(205,994	)		(205,994	)

Balance at December 31, 2004		6,300		6		1,581,997			(2,136,664	)		(554,661	)
Net loss									(1,592,469	)		(1,592,469	)

Balance at December 31, 2005		6,300		6		1,581,997			(3,729,133	)		(2,147,130	)
Net loss									(1,376,529	)		(1,376,529	)

Balance at March 31, 2006		6,300		6		1,581,997			(5,105,662	)		(3,523,659	)
Shares issued for services		88,285		88		123,511						123,599
Expenses paid by related party						515,000						515,000
Stock issued as dividend		2,636,564		2,637		(2,637	)					0
Conversion of SKRM Interactive payable to equity						4,382,718						4,382,718
Net loss									(1,810,502	)		(1,810,502	)

Balance at March 31, 2007		2,731,149		2,731		6,600,589			(6,916,164	)		(312,844	)
Stock issued for debt		669,577		670		1,673,250						1,673,920
Net loss									(1,596,320	)		(1,596,320	)

Balance at March 31, 2008		3,400,726		3,401		8,273,839			(8,512,484	)		(235,244	)

See the accompanying notes to the financial statements

VRDT Corporation

(A Development Stage Company)

Consolidated Statement of Stockholder's Deficiency - continued

For the Period August, 1999 (Inception) to June 30, 2012

	Common Stock						Additional Paid-in			Deficit Accumulated During the Development			Total Stockholders'
	Shares			Amount			Capital			Stage			Equity
Net loss											(6,954	)		(6,954	)
Balance at March 31, 2009		3,400,726			3,401			8,273,839			(8,519,438	)		(242,198	)

Conversion of Martin debt		300,000			300			60,700						61,000
Net loss											(73,636	)		(73,636	)
Balance at March 31, 2010		3,700,726			3,701			8,334,539			(8,593,074	)		(254,834	)
Stock-based compensation - Non-Emp								79,500						79,500
Net loss											(115,118	)		(115,118	)
Balance at March 31, 2011		3,700,726			3,701			8,414,039			(8,708,192	)		(290,452	)

Treasury Stock - Redemtion and cancellation		(1,700,000	)		(1,700	)		(848,300	)					(850,000	)
Issuance of common stock		46,021,000			46,021			5,242,780			0			5,288,800
Shares issued for services		14,015,500			14,016			1,442,405			0			1,456,420
Restricted Stock - Employees & Directors		53,650,000			53,650			5,311,350			0			5,365,000
Exercised warrants		259,614			260			0			0			260
Conversion of debt to equity		5,000,000			5,000			45,000			0			50,000
Net (Loss) / Income		0			0			0			(9,510,946	)		(9,510,946	)

Balance at March 31, 2012		120,946,840			120,947			19,607,273			(18,219,138	)		1,509,082

Issuance of common stock - 1st Quarter		910,115			910			154,190						155,100

Shares issued for services - 1st Quarter		2,880,000			2,880			285,120						288,000

Net loss - 1st Quarter											(1,098,537	)		(1,098,537	)
Balance at June 30, 2012		124,736,955			124,737			20,046,583			(19,317,675	)		853,645

See the accompanying notes to the financial statements

VRDT Corporation

(A Development Stage Company)

Consolidated Statement of Cash Flows

	Three Months Ended June 30,						For the Period August 19, 1999 (Inception) to
	2012			2011			June 30, 2012
CASH FLOWS FROM OPERATIONS:

Net Income / (Loss)		(1,098,537	)		(4,492,249	)		(19,317,675	)

Adjustments to reconcile net income / (loss) to net cash used in operating activities:

Depreciation & Amortization		1,880			50			58,540
Impairment of Goodwill					3,833,722			3,833,722
Impairment of Long-Lived Assets								855
Impairment of Loan Receivable								130,000
Accrued Interest on payable converted to debt								209,817
Issurance of warrants for services								79,500
Common stock issued for services		288,000			550,000			1,868,279
Loss on conversion of stockholder debt to Common Stock								1,506,528
Expense paid by stockholder and affiliate								636,796
Payables and servcies converted to Common Stock								770,674
Assumption of liabilities over value of assets		0			(833,722	)		(833,722	)
Changes in Assets & Liabilities:
Decrease / (Increase) in prepaid expenses		(36,156	)		(311,014	)		(81,347	)
Decrease / (Increase) in note receivable		(2,680	)		0			(218,063	)
(Decrease) / Increase in accounts payable and accrued expenses		633,233			845,656			3,785,132

(Decrease) / Increase in interest payable to stockholder		(20,679	)		4,271			335,757
(Decrease) / Increase in notes payable related party - current		42,369						42,369
Net cash provided by operating activities		(192,569	)		(403,287	)		(7,192,838	)

CASH FLOWS FROM INVESTING:

Purchase of property plant and equip		(2,104	)		(8,501	)		(107,763	)
Note Receivable								(130,000	)
Intangibles		(500	)					(500	)
Net cash used in investing activities		(2,604	)		(8,501	)		(238,263	)

CASH FLOWS FROM FINANCING:

Proceeds from parent company								697,193
Net proceeds from notes payable - other					145,000			91,982
Net proceeds from notes payable - shareholder								1,721,208
Net proceeds from notes payable - affiliates								2,423,191
Net proceedsfrom stock issue payable		13,000			39,000			13,000
Proceeds from inssuance of common stock		155,100			320,300			2,493,900
Net cash from financing activities		168,100			504,300			7,440,474

Net Increase / (Decrease) in cash		(27,074	)		92,512			9,373

CASH AT BEGINNING OF PERIOD		36,447			101			0
CASH AT END OF PERIOD		9,373			92,613			9,373

See the accompanying notes to the financial statements

Verdant Automotive Corporation

(A Development Stage Company)

Statement of Cash Flows - Continued

	Three Months Ended June 30,				April 19. 1999 to
	2012		2011		June 30, 2012
SUPPLEMENTAL CASH FLOW INFORMATION:

Common stock issued for services		288,000		588,800		1,868,279

See the accompanying notes to the financial statements

NOTE 1. BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

The accompanying unaudited financial statements of VRDT Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the interim period ended June 30, 2012 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending March 31, 2013. In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The Company has reclassified certain amounts previously reported in our financial statements to conform to the current presentation. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2012, and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The consolidated financial statements include by full consolidation all domestic and foreign entities controlled by the Company (i.e., all subsidiaries), except where the subsidiary’s effect on the Company’s financial position and results of operations is immaterial. The following list includes all entities controlled by the Company:

Verdant Industries, Inc., a Delaware corporation;

Verdant Ecosystem, Inc, a Delaware corporation;

Verdant (Hong Kong) Ltd.; a Hong Kong corporation; and

Verdant (China) Ltd., a People’s Republic of China corporation.

All material intercompany transactions have been eliminated.

NOTE 2. REVENUE RECOGNITION

The Company recognizes revenue in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, which states that revenues are generally recognized when it is realized and earned. Specifically, the Company recognizes revenue when services are performed and projects are completed and accepted by the customer. Revenues are earned from the sale of electric vehicles and other related technologies and services.

NOTE 3. DEVELOPMENT STAGE COMPANY

The Company is a development stage company. The Company is subject to risks and uncertainties, including new product development, actions of competitors, reliance on the knowledge and skills of its employees to be able to service customers, and availability of sufficient capital and a limited operating history. Accordingly, the Company presents its financial statements in accordance with the accounting principles generally accepted in the United States of America that apply in establishing new operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the accumulated statement of operations and cash flows from inception of the development stage to the date on the current balance sheet. Contingencies exist with respect to this matter, the ultimate resolution of which cannot presently be determined.

NOTE 4. RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on our financial statements, from those disclosed in the our Annual Report on Form 10-K for the year ended March 31, 2012.

NOTE 5. RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 6. GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained losses of $1,098,537and $9,510,946 for the three months ended June 30, 2012 and the year ended March 31, 2012, respectively. The Company had an accumulated deficit of $19,317,675 at June 30, 2012. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is highly dependent on its ability to continue to obtain investment capital and loans from an affiliate and shareholder in order to fund the current and planned operating levels. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to bring in income generating activities and its ability to continue receiving investment capital to sustain its current level of operations. No assurance can be given that the Company will be successful in these efforts.

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may be required to curtail its operations.

NOTE 7. GOODWILL

Goodwill represents the excess of the cost of the amount paid over the acquired assets over the fair value of their net assets at the dates of acquisitions, plus the assumption of certain liabilities. Under ASC 350, Goodwill and Other Intangible Assets, the Company is required to annually assess the carrying value of goodwill to determine if impairment in value has occurred.

The Company determined that its Goodwill was impaired and recorded an impairment charge of $3,833,722 for the three months ended June 30, 2011.

NOTE 8. NOTES PAYABLE-RELATED PARTIES

The Company’s related party notes payable consist of the following:

	June 30, 2012		March 31, 2012

Note payable, 12% interest, principal and interest due monthly commencing January 1, 2013, and due June 1, 2014. (1)	$	167,758	$	142,759

Note payable, 12% interest, principal and interest due monthly commencing January 1, 2013, and due June 1, 2014. Interst payment due 8/31/2012 of 10% of funds raised between date of extension and 8/31/2012 up to $10,000.	817,370		800,000
	$	985,128	$	942,759
Current portion of notes payable	$	323,206	$	942,759

Non current portion of notes payable	$	661,922	$	0

(1) This note is convertible into 881,744 shares of common stock for its cancellation and the conversion price is based on the 10-day volume-weighted average price (“VWAP”) of the Company’s common stock or $0.16, whichever is less. The accrued interest shall be converted at the same rate.

NOTE 9. NOTES PAYABLE

The Company’s notes payable consists of the following:

	June 30, 2012		March 31, 2012

Notes payable, 15% interest, principle and interest due April 12, 2013	$	45,000	$	45,000

Note payable, 10% interest, principle and interest due March 18, 2013		50,000		50,000
	$	95,000	$	95,000

Each of two (2) unsecured convertible promissory notes identified in this Note 9 are convertible to common stock of the Company at one-tenth of one percent of the Company’s initial private placement offering, which, in this case, was $0.10 per share. As such, the notes are convertible to common stock of the Company at $0.01 per share. The $45,000 note bears interest at 15% per annum and the $50,000 note bears interest at 10% per annum. The notes are scheduled to be converted on or before April 12, 2013 and March 18, 2013, respectively.

NOTE 10. INCOME TAXES

The application of income tax law is inherently complex. Laws and regulation in this area are voluminous and are often ambiguous. As such, the Company is required to make many subjective assumptions and judgments regarding the income tax exposures. Because interpretations of, and guidance surrounding, income tax laws and regulations change over time, changes in the subjective assumptions and judgments can materially affect amounts recognized in the balance sheets and statements of income.

The Company uses the liability method to account for income tax expense. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established for deferred tax assets if, after assessment of available positive and negative evidence, it is more likely than not that the deferred tax asset will not be fully realized.

Due to various changes in ownership over the years, management does not believe that any significant net operating losses from prior years will be recognized. The current year losses should have created federal tax benefits for net operating losses and various deferrals in the amount of approximately $3,200,000. A valuation allowance in an equal amount has been recognized for the year ended March 31, 2012.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending March 31, 2009 through 2012. The Company state income tax returns are open to audit under the statute of limitations for the years ending March 31, 2009 through 2012.

The Company recognizes interest and penalties related to income taxes in income tax expense. The Company knew of no incurred penalties and interest for the three months ended June 30, 2012.

NOTE 11. PREPAID EXPENSES

The items identified as prepaid expenses are current as Registrant anticipates filing an S-8 registration statement immediately upon the effectiveness of a S-1 registration statement registering many of the outstanding shares of currently restricted common stock. Registrant anticipates that any S-1 registration statement will be effective within four (4) months of the filing date thereof. Registrant anticipates that it should shortly be in a position to file “Form 10-type” information to effectively cure its status as a “shell” company, at which time the Company shall proceed to file its anticipated S-1 registration statement. Upon the effectiveness of the S-1 registration statement, the Company shall file an S-8 registration statement registering the amount of shares identified herein as prepaid expenses according to the vesting schedules of the restricted stock agreements pursuant to which the restricted common stock identified as prepaid expenses have been issued. The Registrant therefore expects that the prepaid expenses shall vest within one (1) year of the date hereof and are therefore properly categorized as current prepaid expenses.

NOTE 12. RELATED PARTY TRANSACTIONS

The Company has, from time to time, contracted with 24Tech Corporation for the latter to perform information technology services for the Company. Larry Pendleton, the Company’s Chief Information Officer, is a principal of 24Tech Corporation. The board of directors of the Company is fully aware of Mr. Pendleton’s interest in 24Tech Corporation and has deemed the terms of the Company’s contractual relationship with 24Tech Corporation to be fair and reasonable and in the best interests of the Company. During the three months ended June 30, 2012, The Company purchased $3,686 of services from 24Tech. The amount due to 24Tech as of June 30, 2012, was $4,549, compared to $854 at March 31, 2012.

NOTE 13. SUBSEQUENT EVENTS

Subsequent to the quarter ended June 30, 2012, and through August 13, 2012, the Company issued 177,500 shares of restricted common stock through a private placement, pursuant to the exemption from registration provided by Section 4(2) of the Securities Act and Rule 506 promulgated thereunder, at a valuation of $0.20 per share for a total consideration of $35,500. Subsequent to the year ending March 31, 2012, a warrant holder elected to convert warrants into 300,000 shares of the Company’s restricted common stock for a total consideration of $3,000. The converted shares were issued to the warrant holder subsequent to the quarter ending June 30, 2012. Subsequent to the quarter ended June 30, 2012, the Company issued 350,686 to a previous convertible note holder who elected to convert his note into shares of common stock during the fiscal year 2012 as payment of the interest on said note.

Except as provided herein, the Company has evaluated its activities, pursuant to ASC 855, and has determined that there are no additional reportable subsequent events.

NOTE 14. STOCKHOLDERS’ EQUITY

Common Stock

The Company has authorized 989,999,995 shares of common stock, of which 125,565,141 shares of Class A Common Stock have been issued and are outstanding as of August 13, 2012. As of August 13, 2012, the Company has no other classes of common stock authorized, issued or outstanding.

Preferred Stock

As of August 13, 2012, the Company is authorized to issue ten million five (10,000,005) shares of preferred stock with a par value of One Thousandths of One Cent ($0.001). As of August 13, 2012, the Company has five (5) shares of preferred stock issued and outstanding.

As of the date of this Report, the Registrant has no other classes of preferred stock.

Warrants

During the quarter ended June 30, 2012, the Company did not issue any new warrants.

During the quarter ended June 30, 2011, and prior to the acquisition of Verdant Industries, Inc., Verdant Industries, Inc. issued 600,000 warrants, having a de minimus value, to two (2) members of its advisory board. The warrants were assumed by the Company during the acquisition of the assets and liabilities of Verdant Industries, Inc. The warrants are convertible to common stock of the Company at a strike price of $0.01 per share and, as of the date of this Report, 300,000 of said warrants have been exercised by one (1) holder as set forth in Note 13 herein.

Prior to the acquisition of Verdant Industries, Inc., for the year ending March 31, 2011, the Company granted warrants to non-employee individuals and entities as follows:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms		Aggregate Intrinsic Value

Outstanding at March 31, 2010
Granted		500,000		$	0.16
Exercised
Exchanged for Shares
Expired

Outstanding at March 31, 2011		500,000		$	0.16		4.87		70,000

Granted		0
Exercised
Exchanged for Shares		(300,000	)	$	0.16
Expired		0

Outstanding at March 31, 2012		200,000		$	0.16		3.87		28,000

Granted		0
Exercised
Exchanged for Shares		0
Expired		0

Outstanding at June 30, 2012		200,000		$	0.16		3.62		26,000

Exercisable at June 30, 2012		200,000		$	0.16		3.62		26,000
Weighted Average Grant Date Fair Value				$	0.16

On February 18, 2011, the Company granted 500,000 warrants to five non-employees. The warrants were valued at $0.159 per warrant or $79,500 using a Black-Scholes option-pricing model with the following assumptions:

Stock Price	$0.16
Expected Term	5 Years
Expected Volatility	252.35%
Dividend Yield	0
Rick Free Interest Rate	1.125%

The expected term equals the contractual terms for this non-employee grant. The volatility is based on comparable volatility of other companies since the Company was not yet trading and had no historical volatility.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. The Company does not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Results of Operations for the Three Months Ended June 30, 2012 as Compared to the Three Months Ended June 30, 2011.

Overview

Total revenues did not change from $0 for the three months ended June 30, 2012 from $0 for the three months ended June 30, 2011.

Total operating expenses decreased to $1,071,522 for the three months ended June 30, 2012 from $4,483,625 for the three months ended June 30, 2011. This decrease was primarily attributable to the $3,833,722 write-off of Goodwill for the three months ended June 30, 2011.

Liquidity and Capital Resources

As of June 30, 2012, the Company had cash of $9,373 and working capital of $1,255,366. Net loss was $1,098,537 for the three months ended June 30, 2012. The Company generated a negative cash flow from operations of $179,569 for three months ended June 30, 2012. The negative cash flow from operating activities for the period is primarily attributable to the Company’s increase in accrued salaries and consulting fees. During the three months ended June 30, 2012, the Company invested $2,104 in property, plant and equipment. During the quarter ended June 30, 2012, the Company raised $155,100 from a private placement it made by selling shares of its common stock.

Going Concern

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained income of $0 and losses of $1,098,537 for the three months ended June 30, 2012 compared to income of $0 and losses of $4,492,250 for the three months ended June 30, 2011. The Company had an accumulated deficit of $19,317,675 at June 30, 2012. The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the

These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is highly dependent on its ability to continue to obtain investment capital in order to fund the current and planned operating levels. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to bring in income generating activities and its ability to continue receiving investment capital to sustain its current level of operations. No assurance can be given that the Company will be successful in these efforts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As the Company is a “smaller reporting company,” this item is inapplicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act) as of the quarter ending June 30, 2012 covered by this Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of its management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management is still in the process of evaluating its internal controls over financial reporting, based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this ongoing evaluation, management has concluded that the Company’s internal control over financial reporting were not effective as of June 30, 2012 under the criteria set forth in the Internal Control—Integrated Framework. The determination was made partially due to the small size of the company and a lack of segregation of duties.

Changes in Internal Control over Financial Reporting

Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

As the Company is a “smaller reporting company,” this item is inapplicable. Nonetheless, there are no material changes from the risk factors previously disclosed in the Registrant’s Form 10-K for the year ending March 31, 2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended June 30, 2012, the Company issued 775,500 shares of restricted common stock through a private placement, pursuant to the exemption from registration provided by Section 4(2) of the Securities Act and Rule 506 promulgated thereunder, at a valuation of $0.20 per share for a total consideration of $155,100. During the quarter ended June 30, 2012, the Company issued 3,014,615 shares of restricted common stock to various consultants for services, pursuant to the exemption from the registration requirements of Section 5 of the Securities Act provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The monies raised through the above-referenced private placement were used for general operating expenses.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Number

Description

31.1 (2)

Certification of Chief Executive Officer of the Company as required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 (2)

Certification of Chief Financial Officer of the Company as required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 (2)

Certification of Chief Executive Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63

32.2 (2)

Certification of Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated.

	VRDT CORPORATION


Date: August 13, 2012	By:	/s/ Graham Norton-Standen
		Graham Norton-Standen
		Executive Chairman

Date: August 13, 2012	By:	/s/ Dennis Hogan
		Dennis Hogan
		Chief Financial Officer

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