UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________


FORM 10-Q
_______________________
ý                                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2016
 
or
 
                                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                               to
 
 
Commission file number 0-52493
VERACITY MANAGEMENT GLOBAL, INC.
(Exact Name Of Registrant As Specified In Its Charter)
Delaware
43-1889792
(State of Incorporation)
(I.R.S. Employer Identification No.)
 
 
 12720 Hillcrest Road, Suite 750 Dallas, TX
75230
(Address of Principal Executive Offices)
(ZIP Code)

Registrant's Telephone Number, Including Area Code: (214) 365-3099
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  No 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
.Large Accelerated Filer
 
Accelerated Filer
 
Non-Accelerated Filer (Do not check if a smaller reporting company)
 
Smaller Reporting Company
On June 2, 2016, the Registrant had 16,643,057 shares of common stock issued and outstanding.
 

 
 

 
TABLE OF CONTENTS
 
 
 
PART I - FINANCIAL INFORMATION
 
 
 
 
 
Page
 
 
 
 
 
 
 
ITEM 1.
 
Financial Statements. (Unaudited)
    
 3
 
 
 
 
 
 
 
ITEM 2.
    
Management's Discussion And Analysis And Results Of   Operation.
    
9
 
 
 
 
 
 
 
ITEM 3
 
Quantitative And Qualitative Discussion About Market Risk
 
10
 
 
 
 
 
 
 
ITEM 4.
 
Controls And Procedures
 
11
 
 
 
 
 
 
 
PART II – OTHER INFORMATION
 
 
 
 
 
 
ITEM 1.
    
Legal Proceedings.
    
11
 
 
 
 
 
 
 
ITEM 1A. 
 
Risk Factors 
 
11
 
 
 
 
 
 
 
ITEM 2.
    
Recent Sales Of Unregistered Equity Securities And Use Of Proceeds
    
11
 
 
 
 
 
 
 
ITEM 3.
    
Default Upon Senior Securities.
    
11
 
 
 
 
 
 
 
ITEM 4.
    
Mine Safety Disclosures
    
11
 
 
 
 
 
 
 
ITEM 5.
    
Other Information.
    
11
 
 
 
 
 
 
 
ITEM 6.
 
Exhibits
 
12
 
 
 
 
 
 
 
 
 
Signatures
 
 13
 

 
- 2 -

 

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VERACITY MANAGEMENT GLOBAL, INC.
 
CONDENSED BALANCE SHEETS
 
(Unaudited)
 
 
   
March 31,
   
June 30,
 
ASSETS
 
2016
   
2015
 
   
 
     
Current Assets
       
     Cash
 
$
20,000
   
$
-
 
Total Current Assets
   
20,000
     
-
 
                 
                 
Total Assets
 
$
20,000
   
$
-
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current Liabilities
               
     Accounts Payable
 
$
2,230
   
$
5,790
 
     Accounts Payable - Related party
   
-
     
113,877
 
     Note Payable - Related party
   
135,000
     
-
 
Total Current Liabilities
   
137,230
     
119,667
 
                 
Long-term liabilities
               
    Convertible notes payable, net of discount
   
355
     
-
 
Total Long-term liabilities
   
355
     
-
 
Total Liabilities
   
137,585
     
119,667
 
                 
Stockholders' Deficit
               
     Preferred Stock, $.001 par value, 5,000,000 shares
               
        authorized, 0 shares issued and outstanding
   
-
     
-
 
     Common Stock, $.001 par value, 3,500,000,000 shares
               
        authorized, 16,643,057 and 16,643,057 shares issued and
               
        outstanding at March 31, 2016 and June 30, 2015 respectively
   
16,635
     
16,635
 
Additional paid-in capital
   
4,077,863
     
4,052,836
 
Accumulated deficit
   
(4,212,056
)
   
(4,189,138
)
                 
Total Stockholders' Deficit
   
(117,585
)
   
(119,667
)
                 
Total Liabilities and Stockholders' Defecit
 
$
20,000
   
$
-
 

 

The accompanying notes to the financial statements are integral part of these financial statements
 
 
 
- 3 -






VERACITY MANAGEMENT GLOBAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended March 31, 2016 and 2015
(Unaudited)
 
   
Three Months Ended
   
Three Months Ended
   
Nine Months Ended
   
Nine Months Ended
 
   
March 31,
   
March 31,
   
March 31,
   
March 31,
 
   
2016
   
2015
   
2016
   
2015
 
Revenues
 
$
-
   
$
-
   
$
-
   
$
-
 
Cost of Sales
   
-
     
-
     
-
     
-
 
Gross Profit
   
-
     
-
     
-
     
-
 
Expenses
                               
Administrative Expenses
   
3,500
     
1,000
     
9,500
     
5,000
 
General Expenses
   
4,008
     
1,430
     
8,063
     
3,574
 
Selling Expenses
   
5,000
     
-
     
5,000
       -  
Loss from operations       12,508        2,430        22,563        8,574  
Other Expense                                 
Amortization of debt discount       355        -        355       -  
Total Expenses
   
12,863
     
2,430
     
22,918
     
8,574
 
                                 
Net Loss
 
$
(12,863
)
 
$
(2,430
)
 
$
(22,918
)
 
$
(8,574
)
                                 
Basic and Diluted Net Loss per Share
   
*
     
*
     
*
     
*
 
                                 
Weighted Average Shares
   
16,643,057
     
16,643,057
     
16,643,057
     
16,643,057
 
 
* less then ($0.01)
                               




The accompanying notes to the financial statements are integral part of these financial statements
 
 
 
- 4 -

 
 
VERACITY MANAGEMENT GLOBAL, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
(Unaudited)


   
 
     
   
 
     
                     
                     
                     
   
Common Stock Shares
   
Amount
   
Additional Paid-in Capital
   
Accumulated Deficit
   
Total
 
Balance at June 30, 2015
   
16,643,057
   
$
16,635
   
$
1,052,836
   
$
(4,189,138
)
 
$
(119,667
)
Beneficial conversion feature on convertible note       -        -        25,000        -        25,000  
     Net loss
     -        -        -      
(22,918
)
   
(22,918
)
Balance at March 31, 2016
   
16,643,057
   
$
16,635
   
$
4,077,836
   
$
(4,212,056
)
 
$
(117,585
)
 

 
The accompanying notes to the financial statements are integral part of these financial statements
 
 
 
- 5 -

 
 
VERACITY MANAGEMENT GLOBAL, INC.
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
 
 
    
Nine Months Ended, March 31,
   
Nine Months Ended, March 31,
 
   
2016
   
2015
 
CASH FLOWS FROM OPERATING ACTIVITIES
       
Net loss
 
$
(22,918
)
 
$
(8,574
)
Adjustments to reconcile net loss to net cash
               
   used in operating activities:
               
           Amortization of debt discount      355        -  
Changes in net assets and liabilities                 
Increase (decrease) in:
               
    Accounts Payable
   
(3,560
)
   
3,360
 
                 
Net cash used by operating activities
   
(26,123
)
   
(5,214
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Proceeds on Converatable notes
   
25,000
     
-
 
Related Parties - note payble
   
21,123
     
-
 
Related Parties - accounts payable
   
-
 
   
5,130
 
                 
Net cash provided by financing activities
   
46,123
     
5,130
 
                 
NET INCREASE (DECREASE) IN CASH
   
20,000
     
(84
)
                 
CASH - BEGINNING OF PERIOD
   
-
     
84
 
                 
CASH - END OF PERIOD
 
$
20,000
   
$
-
 
                 
Supplement cash flow information: 
               
Non-Cash Transactions:                
  Transfer of related party accounts payable to related party note payable    113,877      -  
   Beneficial conversion feature    25,000      -  


 
The accompanying notes to the financial statements are integral part of these financial statements
 
 
 
- 6 -

 
 
VERACITY MANAGEMENT GLOBAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 2016
(Unaudited)

NOTE 1 – BASIS OF PRESENTATION
The accompanying financial statements of Veracity Management Global, Inc (the "Company", "VCMG") at March 31, 2016 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted or condensed pursuant to such rules and regulations. These statements should be read in conjunction with VCMG's audited financial statements and notes thereto included in VCMG's Form 10-K. In management's opinion, these unaudited interim financial statements reflect all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of the financial position and results of operations for each of the periods presented. The accompanying unaudited interim financial statements for the nine months ended March 31, 2016 are not necessarily indicative of the results which can be expected for the entire year.
 Basis of Presentation
The Company follows accounting principles generally accepted in the United States of America

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The financial statements include the accounts of Veracity Management Global, Inc and the operations of Secured Financial Data, Inc and Veracity Management Group, Inc. are being reported as loss from discontinued operations. Any inter-company transactions have been eliminated as part of the transaction.

As a development stage company, the Company continues to rely on infusions of debt and equity capital to fund operations. The Company relies principally on cash infusions from its directors and affiliates, and paid a significant amount of personal services and salaries in the form of common stock.

Recently Issued Accounting Standards

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern ("ASU 2014-15"). ASU 2014-15 will explicitly require management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016. Earlier adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15.
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.
NOTE 2- GOING CONCERN
Veracity Management Global, Inc.'s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $4,212,056 and has insufficient working capital to meet operating needs for the next twelve months as of March 31, 2016, all of which raise substantial doubt about VCMG's ability to continue as a going concern.
 
- 7 -



VERACITY MANAGEMENT GLOBAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 2016
(Unaudited)

NOTE 3 – ADVANCES – RELATED PARTY
The officers and directors of the Company have advanced funds to pay for the filing and other necessary costs of the Company. The following are the advances from the officers and directors:
     
 
March 31, 2016
 
June 30, 2015
 
Donald W Prosser (Director)
 
$
-
   
$
107,877
 
Gregory Paige (CEO & Director)
   
-
     
6,000
 
Total
 
$
-
   
$
113,877
 
 
On January 22, 2016 Donald W Prosser converted his advances to a promissory note for the amount $135,000. The note includes additional advances from Mr. Prosser during the first quarter and the purchase of the Gregory Paige advance by Mr. Prosser. The Note was due March 31, 2016 and extended to June 30, 2016.


NOTE 4 – DEBT
 
Note Payable - Related Party

The note payable of $135,000 to related parties (Donald W. Prosser) was due March 31, 2016 and has been extended to June 30, 2016.  The note provides for no interest.
 
Convertible Note

On March 24, 2016 the Company agreed to provide unsecured promissory notes with an related party for $25,000. The note is noninterest bearing and is due on July 30, 2017. The note has a conversion right that allows the holder to convert the principal balance into the Company's common stock at the lender's sole discretion at $0.05 per share.
 
In accordance with ASC 470, the Company has analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (BCF) exists because the effective conversion price was less than the quoted market price at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. The BCF of $25,000 has been recorded as a discount to the notes payable and to Additional Paid in Capital.
 
For the nine months ended March 31, 2016 the Company has amortized $355 of the beneficial conversion feature which has also been recorded as interest expense. The carrying value of convertible note is as follows:

     
Face amount of the note
 
$
25,000
 
Unamortized discount 
   
(24,645
)
Carrying value at March 31, 2016  
 
$
355
 
 
 
NOTE 5 – RELATED PARTY TRANSACTIONS
 
The related party transactions during the nine months ended March 31, 2016 and 2015 are the amounts contributed for operating expenses for the related periods.  For the nine months ended March 31, 2016 was $21,123 and for the nine months ended March 31, 2015 was $5,130.  All funds were provided by Donald W. Prosser.
 
NOTE 6 – SUBSEQUENT EVENTS
The Company has received a letter of intent dated August 31, 2015 and an Exchange Agreement dated November 20, 2015 to merge an operating business before June 30, 2016.
The Company Board of Directors have approved a name change to Santa Fe Resource Development, Inc. effective upon the completion of the above referenced merger.
 
- 8 -



ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION
Forward-Looking Statement
Some of the statements contained in this quarterly report of Veracity Management Global, Inc., a Delaware corporation (hereinafter referred to as "we", "us", "our", "Company" and the "Registrant") discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.
General
The Registrant acquired its operating subsidiaries Veracity Management Group, a Florida corporation ("VMG") and Secured Financial Data Inc., a Florida corporation ("SFD") effective on July 1, 2006. Prior to the acquisition of its operating subsidiaries, during the period from May 2002 until the acquisition of its operating subsidiaries on July 1, 2006, the Registrant had only limited business operations. The Registrant operated the above named subsidiaries until July 1, 2008 until the when the Registrant rescinded the merger and the Registrant has no business operations and is in the business of acquiring a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Registrant will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The results of operations comparative information has no meaning as the operations were removed as part of the rescinding of the mergers of the operating businesses.
Results of Operations For the Three Months and the Nine Months Ended March 31, 2016 Compared to Three Months and the Nine Months Ended March 31, 2015
The results of the recession agreement made the Company a shell company as defined in Rule 12b-2 of the Exchange Act.
Revenue: The Company recorded revenue of $0 and $0 for the nine months ended March 31, 2016 and 2015, respectively. The Company recorded revenue of $0 and $0 for the three months ended March 31, 2016 and 2015, respectively.
Cost of Service: The Company recorded cost of services of $0 and $0 for the nine months ended March 31, 2016 and 2015, respectively. The Company recorded cost of services of $0 and $0 for the three months ended March 31, 2016 and 2015, respectively.
Administrative Expenses: Our administrative expenses totaled $9,500 for the nine-months ended March 31, 2016 as compared to $5,000 administrative expenses for the same period ended March 31, 2015. Our administrative expenses totaled $3,500 for the three-months ended March 31, 2016 as compared to $1,000 administrative expenses for the same period ended March 31, 2015.
 
- 9 -

 

 

General Expenses General expenses were $8,063 during the nine-months ended March 31, 2016. There were $3,574 general expenses for the nine-months period ended March 31, 2015. There were general expenses of $4,008 during the three-months ended March 31, 2016. There were general expenses of $1,430 for the three-months period ended March 31, 2015.
Selling expenses: There was $5,000 selling expenses during the nine months ended March 31, 2016 and no selling expenses for the nine months ended March 31, 2015. There was $5,000 selling expenses during the three-months ended March 31, 2016 and no selling expenses for the three-months period ended March 31, 2015.
Other Expenses:  There was $355 of other expenses, related to amortization of debt discount, during the nine months ended March 31, 2016, and no other expenses during the nine months ended March 31, 2015.  There was $355 of other expenses during the three months ended March 31, 2016 and no other expenses during the three months ended March 31, 2015.
Net Loss: We incurred a net loss of $22,918 during the nine-month period ended March 31, 2016, compared to a net loss of $8,574 during the nine-month period ended March 31, 2015. We incurred a net loss of $12,863 during the three-month period ended March 31, 2016, compared to a net loss of $2,430 during the three-month period ended March 31, 2015.
Liquidity and Capital Resources
At March 31, 2016, we had $20,000 current assets compared to no current assets at June 30, 2015. We had total current liabilities of $137,230 at March 31, 2016 compared to $119,667 at June 30, 2015. We had long-term liabilities of $355 as of March 31, 2016 compared to $0 at June 30, 2015.
We had deficit working capital of $117,230 at March 31, 2016.
Net cash used by operations during the nine-month period ended March 31, 2016 was $(26,123). For the nine-month period ended March 31, 2015 the net cash used by operations was ($5,214).
During the nine-month period ended March 31, 2016, financing activities provided $46,123 compared to $5,130 during the same nine-month period in the prior year.
There are no limitations in the Company's articles of incorporation on the Company's ability to borrow funds or raise funds through the issuance of restricted common stock.
Plan of Current and Future for the fiscal year 2016
The Company has no business operations and is in the business of acquiring a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

ITEM 3. QUANTITATIVE and QAULITATIVE DISCUSSION ABOUT MARKET RISK

The Company is defined by Rule 229.10 (f)(1) as a "Smaller Reporting Company" and is not required to provide or disclose the information required by this item.
 
 
- 10 -

 

 

ITEM 4. CONTROLS AND PROCEDURES
As of March 31, 2016 our Chief Executive Officer and Chief Financial Officer (the "Certifying Officers") conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Exchange Act, the term "disclosure controls and procedures" means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including the Certifying Officers, to allow timely decisions regarding required disclosure. Based on this evaluation, the Certifying Officers have concluded that our disclosure controls and procedures were not effective to ensure that material information is recorded, processed, summarized and reported by our management on a timely basis in order to comply with our disclosure obligations under the Exchange Act and the rules and regulations promulgated thereunder.

As of March 31, 2016, there were no other changes in our internal control over financial reporting during the subject fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
Item 1A - RISK FACTORS
There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended June 30, 2015, as filed with the SEC on December 17, 2014. The risk factors in our Annual Report on Form 10-K for the year ended June 30, 2015, in addition to the other information set forth in this quarterly report, could materially affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or that we deem to be immaterial could also materially adversely affect our business, financial condition or results of operations.
ITEM 2. RECENT SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5. OTHER INFORMATION
None.
 
 
- 11 -

 

 

ITEM 6. EXHIBITS
(a)
The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein.
Exhibit
Number
 
Exhibit Description
 
 
 
31.1
 
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
31.2
 
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
32.1
 
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002    
     
32.2   Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document*
 
 
 
101.INS
 
XBRL Instance Document
 
 
 
101SCH
 
XBRL Taxonomy Extension Schema Document
 
 
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 

 

- 12 -

 

 
Veracity Management Global, Inc.
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
/s/Robert Shuey
Robert Shuey
   CEO
   Dated: June 3, 2016
 
/s/ Peter Dauterman
Peter Dauterman
   CFO
   Dated: June 3, 2016

 
 
 
 
- 13 -