UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended July 31, 2013
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number: 333-171637

 

Forever Zen Ltd.

(Exact name of registrant as specified in its charter)

 

Nevada	Applied For
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

E09 Calle Jacarandas, Urbanizacion Los Laureles, Escazu San Jose, Costa Rica

(Address of principal executive offices)

 

(866) 860-0707

(Registrant’s telephone number)

_______________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 (§232.405 of this chapter) 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.

 

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

 

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

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,412,000 as of September 11, 2013.

 

	TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	7
Item 1A:	Risk Factors	7
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Mine Safety Disclosures	7
Item 5:	Other Information	7
Item 6:	Exhibits	8

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Balance Sheets as of July 31, 2013 and October 31, 2012 (unaudited);
F-2	Statements of Operations for the three and nine months ended July 31, 2013 and 2012 and period from March 30, 2010 (Inception) to July 31, 2013 (unaudited);
F-3	Statements of Cash Flows for the nine months ended July 31, 2013 and 2012 and period from March 30, 2010 (Inception) to July 31, 2013 (unaudited);
F-4	Notes to Financial Statements;

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended July 31, 2013 are not necessarily indicative of the results that can be expected for the full year.

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS (unaudited)

AS OF JULY 31, 2013 AND OCTOBER 31, 2012

  

		July 31, 2013				October 31, 2012
ASSETS
Current Assets
Cash and equivalents		$	1,776			$	1,534
TOTAL ASSETS		$	1,776			$	1,534
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accrued expenses		$	12,206			$	13,106
Loans payable – related party			15,751				5,960
Total Liabilities			27,957				19,066
Stockholders’ Deficit
Common Stock, $.001 par value, 500,000,000 shares authorized, 2,412,000 shares issued and outstanding			2,412				2,412
Additional paid-in capital			92,765				92,765
Deficit accumulated during the development stage			(121,358	)			(112,709	)
Total Stockholders’ Deficit			(26,181	)			(17,532	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	1,776			$	1,534

    

See accompanying notes to financial statements.

  

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (unaudited)

FOR THE THREE MONTHS AND NINE MONTHS ENDED JULY 31, 2013 AND 2012

FOR THE PERIOD FROM MARCH 30, 2010 (INCEPTION) TO JULY 31, 2013

  

		Three months ended July 31, 2013				Three months ended July 31, 2012				Nine months ended July 31, 2013				Nine months ended July 31, 2012				For the period from March 30, 2010 (Inception) to July 31, 2013
REVENUES		$	0			$	0			$	0			$	0			$	0
EXPENSES
Professional fees			2,300				2,687				8,210				8,678				76,017
Consulting fees			0				0				0				0				6,000
Travel			0				0				0				855				3,985
Meals and entertainment			0				0				0				22				1,470
Website expenses			0				0				0				0				4,664
Transfer agent fees			0				0				0				488				18,716
General and administrative expenses			232				198				439				2,658				10,506
TOTAL EXPENSES			2,532				2,885				8,649				12,701				121,358
LOSS FROM OPERATIONS			(2,532	)			(2,885	)			(8,649	)			(12,701	)			(121,358	)
PROVISION FOR INCOME TAXES			0				0				0				0				0
NET LOSS		$	(2,532	)		$	(2,885	)		$	(8,649	)		$	(12,701	)		$	(121,358	)
NET LOSS PER SHARE: BASIC AND DILUTED		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED			2,412,000				2,412,000				2,412,000				2,412,000

 

 

See accompanying notes to financial statements.

 

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (unaudited)

FOR THE NINE MONTHS ENDED JULY 31, 2013 AND 2012

PERIOD FROM MARCH 30, 2010 (INCEPTION) TO JULY 31, 2013

  

		Nine months ended July 31, 2013				Nine months ended July 31, 2012				For the period from March 30, 2010 (Inception) to July 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(8,649	)		$	(12,701	)		$	(121,358	)
Change in non-cash working capital items:
Changes in assets and liabilities:
Increase (decrease) in accrued expenses			(900	)			(2,252	)			12,206
Net Cash Used by Operating Activities			(9,549	)			(14,953	)			(109,152	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock			0				0				75,600
Proceeds from related party loans			9,791				15,397				35,328
Net Cash Provided by Financing Activities			9,791				15,397				110,928
Net Increase (Decrease) in Cash			242				444				1,776
Cash, beginning of period			1,534				1,187				0
Cash, end of period		$	1,776			$	1,631			$	1,776
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid		$	0			$	0			$	0
Income taxes paid		$	0			$	0			$	0
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION:
Forgiveness of shareholder debt recorded as contributed capital		$	0			$	19,577			$	19,577

 

See accompanying notes to financial statements.

 

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Business

Forever Zen Ltd. (“Forever” or “the Company”) was incorporated in Nevada on March 30, 2010. Forever is developing a line of skin cream products. Forever is a development stage company and has not yet realized any revenues from its planned operations. The accompanying unaudited interim financial statements have been prepared by Forever Zen Ltd. pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments.

 

These interim financial statements should be read in conjunction with the audited financial statements of the Company for the fiscal year ended October 31, 2012.

 

The results of operations for the nine months ended July 31, 2013 are not indicative of the results that may be expected for the full year.

 

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted an October 31 fiscal year end.

 

Cash and Cash Equivalents

Forever considers all highly liquid investments with maturities of three months or less to be cash equivalents. At July 31, 2013 and October 31, 2012, the Company had $1,776 and $1,534 of cash, respectively.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accrued expenses, and amounts due to a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

 

Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Foreign Currency

The operations of the Company are located in Canada. Forever maintains both U.S. Dollar and Canadian Dollar bank accounts. The functional currency is the U.S. Dollar. Transactions in foreign currencies other than the functional currency, if any, are re-measured into the functional currency at the rate in effect at the time of the transaction. Re-measurement gains and losses that arise from exchange rate fluctuations are included in income or loss from operations. Monetary assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at the rate in effect at the balance sheet date. Revenue and expenses denominated in Canadian Dollars are translated at the average exchange rate.

 

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of July 31, 2013.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Recent Accounting Pronouncements

In May 2009, the FASB issued ASC 855-10 entitled “Subsequent Events”. Companies are now required to disclose the date through which subsequent events have been evaluated by management. Public entities (as defined) must conduct the evaluation as of the date the financial statements are issued, and provide disclosure that such date was used for this evaluation. ASC 855-10 provides that financial statements are considered “issued” when they are widely distributed for general use and reliance in a form and format that complies with GAAP. ASC 855-10 is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively. Management evaluated subsequent events through the date that such financial statements were issued.

 

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

In June 2009, the FASB issued ASC 105-10, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. ASC 105-10 establishes the Codification as the sole source of authoritative accounting principles recognized by the FASB to be applied by all non-governmental entities in the preparation of financial statements in conformity with GAAP. ASC 105-10 was prospectively effective for financial statements issued for fiscal years ending on or after September 15, 2009 and interim periods within those fiscal years. The Codification did not change GAAP, however, it did change the way GAAP is organized and presented.

 

As a result, these changes impact how companies reference GAAP in their financial statements and in their significant accounting policies. The Company implemented the Codification in this Report by providing references to the Codification topics.

 

NOTE 2 – ACCRUED EXPENSES

 

Accrued expenses consisted of the following at July 31, 2013 and October 31, 2012:

 

	July 31, 2013				October 31, 2012
Audit and accounting fees	$	3,600			$	4,500
Legal fees		8,571				8,571
Transfer agent fees		35				35
Total Accrued Expenses	$	12,206			$	13,106

 

NOTE 3 – LOANS PAYABLE – RELATED PARTY

 

During the year ended October 31, 2011, an officer and shareholder loaned the Company $4,426 to help fund operations. The loans are non-interest bearing, unsecured and due upon demand.

 

During the year ended October 31, 2012, the officer and shareholder loaned the company an additional $15,151. The loans are non-interest bearing, unsecured and due upon demand.

 

The officer and shareholder forgave all amounts due from the company as of October 31, 2012. An amount of $19,577 was forgiven and recorded as contributed capital.

 

Another officer and shareholder loaned the Company $5,960 during the year ended October 31, 2012. The loans are non-interest bearing, unsecured and due upon demand.

 

An officer and shareholder loaned the Company $9,791 during the period ended July 31, 2013. The loans are non-interest bearing, unsecured and due upon demand.

 

The total amount due to the officers and shareholders was $15,751 as of July 31, 2013.

 

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

  

NOTE 4 – COMMON STOCK

 

The Company has 500,000,000 shares of $0.001 par value common stock authorized.

 

During the period ended October 31, 2010, the Company issued 1,500,000 shares of common stock to its founder for total cash proceeds of $30,000. The Company also issued 912,000 to several investors at $0.05 per share for total cash proceeds of $45,600.

 

An officer and shareholder forgave all amounts due from the company as of October 31, 2012 and the amount of $19,577 was recorded as contributed capital.

 

There were no additional shares issued during the period ended July 31, 2013.

 

As of July 31, 2013 there were 2,412,000 shares of common stock issued and outstanding.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

NOTE 6 – LIQUIDITY AND GOING CONCERN

 

Forever Zen Ltd. has a working capital deficit, has incurred losses since inception, and has received no revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of Forever to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

 

NOTE 7 – INCOME TAXES

 

As of July 31, 2013, the Company had net operating loss carry forwards of approximately $121,400 that may be available to reduce future years’ taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

 

FOREVER ZEN LTD.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

 

 

The provision for Federal income tax consists of the following for the periods ended July 31, 2013 and 2012:

 

	2013				2012
Federal income tax benefit attributable to:
Current Operations	$	2,941			$	4,318
Less: valuation allowance		(2,941	)			(4,318	)
Net provision for Federal income taxes	$	0			$	0

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of July 31, 2013:

 

	2013
Deferred tax asset attributable to:
Net operating loss carryover	$	41,262
Less: valuation allowance		(41,262	)
Net deferred tax asset	$	0

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $121,400 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

NOTE 8 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to July 31, 2013 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

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

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Company Overview

 

We are engaged in the business of developing, manufacturing, and selling a line of skincare products inspired by Eastern spiritualism and philosophies and produced specifically for men in the global market. Such products will cater to men who wish to meet their grooming and skincare needs through a disciplined and holistic approach that incorporates diet, exercise, and an Eastern philosophy. This holistic approach is based on the believe that if you incorporate diet, exercise, and yoga with the right skincare treatments the benefits will be much greater than by just using skincare products alone.

 

We have three products developed and ready for sale and distribution. We are in the process of developing additional products to complement our existing line. We are continually refining our formulas through experimentation, testing different ingredients and percentage ratios during the mixture and production process. We intend to manufacture and distribute of our product online initially, and eventually through conventional skincare retailers.

 

At present, manufacturing consists of sourcing ingredients and containers from third parties, and packaging the product. We are currently engaged in planning our marketing and distribution with a view to rolling out the product within the coming months. Our marketing and distribution will be constrained by our lack of capital. If the company is successful at raising additional capital in the near term, this will accelerate the product rollout because certain preliminary activities such as product marketing and relationship building with Internet bloggers and social media “hubs” can be outsourced to professionals instead of being done in-house.

 

Hans Morgan Van Niekerk is our president and sole director. Our offices are located at E09 Calle Jacarandas, Urbanizacion Los Laureles, Escazu San Jose, Costa Rica.

 

Results of Operations for the three and nine months ended July 31, 2013 and 2012 and for the period from March 30, 2010 (Date of Inception) until July 31, 2013

 

We generated no revenues since our inception. We are presently in the development stage of our business and we can provide no assurance that we will develop viable products or that we will be to enter into commercial production and generate sufficient sales.

 

We incurred $2,532 in operating expenses for the three months ended July 31, 2013, compared with $2,885 for the three months ended July 31, 2012. We incurred $8,649 in operating expenses for the nine months ended July 31, 2013, compared with $12,701 for the nine months ended July 31, 2012. We incurred $121,358 for the period from March 30, 2010 (Date of Inception) until July 31, 2013.

 

Our operating expenses from inception to date have consisted mostly of legal and accounting fees for the preparation of our registration statement and reporting obligations under the Exchange Act, for consulting and transfer agent fees, and for the development of our website. We expect that our operating expenses will increase as we are able to locate funds and pursue our business objectives. Until then, our operating expenses will largely consist of fees associated with our reporting obligations.

 

We had a net loss of $2,532 for the three months ended July 31, 2013, compared with $2,885 for the three months ended July 31, 2012. We had a net loss of $8,649 for the nine months ended July 31, 2013, compared with $12,701for the nine months ended July 31, 2012. We had an accumulated net loss of $121,358 from March 30, 2010 (Date of Inception) until July 31, 2013.

 

Liquidity and Capital Resources

 

As of July 31, 2013, we had total current assets of $1,776, consisting entirely of cash. Our total current liabilities as of July 31, 2013 were $27,957. Thus, we have a working capital deficit of $26,181 as of July 31, 2013.

 

Operating activities used $109,152 in net cash for the period from March 30, 2010 (Date of Inception) until July 31, 2013. Our net loss of $121,358 was the major contributing factor to our negative operating cash flow. Investing activities used no cash during the period from March 30, 2010 (Date of Inception) until July 31, 2013. Financing activities generated $110,928 from the sale of our common stock and from related party loans during the period from March 30, 2010 (Date of Inception) until July 31, 2013.

 

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

 

Off Balance Sheet Arrangements

 

As of July 31, 2013, there were no off balance sheet arrangements.

 

Going Concern

 

We have a working capital deficit, have incurred losses since inception, and have received no revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

 

Our ability to continue as a going concern is dependent on our generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies currently fit this definition.

 

Recently Issued Accounting Pronouncements

 

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2013. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of July 31, 2013, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of July 31, 2013, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending October 31, 2013: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees. 

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the three months ended July 31, 2013 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A: Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

N/A

 

Item 5. Other Information

 

None

Item 6. Exhibits

 

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2013 formatted in Extensible Business Reporting Language (XBRL).
**Provided herewith

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	Forever Zen Ltd.
Date:	September 23, 2013
By:	/s/ Hans Van Niekerk
	Hans Van Niekerk
Title:	Chief Executive Officer and Director