GLORYWIN ENTERTAINMENT GROUP, INC. - Quarter Report: 2012 June (Form 10-Q)

zippybags10q063012.htm

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 June 30, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-173680

ZIPPY BAGS, INC.

(Exact name of registrant as specified in its charter)

Nevada	27-3369810
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1844 South 3850 West #B, Salt Lake City, Utah 84104

(Address of principal executive offices)

(888) 890-5692

(Registrant’s telephone number)

Not Applicable

(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 o

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 o

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 91,250,000 (post-split) shares of $0.001 par value common stock outstanding as of August 7, 2012.

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ZIPPY BAGS, INC.

FORM 10-Q

Quarterly Period Ended December 31, 2011

TABLE OF CONTENTS

		Page


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Balance Sheets as of June 30, 2012 (unaudited) and March 31, 2012	4
	Condensed Statements of Operations for Three Months ended June 30, 2012 and 2011, and the period from August 26, 2010 (inception) to June 30, 2011 (unaudited)	5
	Statement of Stockholders’ Equity (Deficit) from August 26, 2010 (inception) to June 30, 2012 (unaudited)	6
	Condensed Statements of Cash Flows for the Three Months ended June 30, 2012 and 2011, and the period from August 26, 2010 (inception) to June 30, 2012 (unaudited)	7
	Notes to the Condensed Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
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.	Submission of Matters to a Vote of Security Holders	19
Item 5.	Other Information	19
Item 6.	Exhibits	19

SIGNATURES		20

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EXPLANATORY NOTE

Unless otherwise noted, references in this registration statement to "Zippy Bags, Inc." the "Company," "we," "our" or "us" means Zippy Bags, Inc.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

AVAILABLE INFORMATION

We file annual, quarterly and special reports and other information with the SEC that can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

ZIPPY BAGS, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

(UNAUDITED)

	June, 30			March 31,
	2012			2012
ASSETS
Current assets
Cash	$	876		$	912
Inventory		8,255			8,255

Total Current Assets		9,131			9,167
Long-term assets
Deposit on Equipment		37,128			37,128
Total Assets		46,259			46,295

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1,309		$	2,056
Sales tax payable		7,052			7,052
Income tax payable		2,267			2,267
Accrued expense		746			-
Accrued Interest, related party		796			626
Note payable, related party		10,401			7,575

Total current liabilities		22,571			19,576

Stockholders' equity (deficit)
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2012 and March 31, 2012, respectively		-			-
Common stock, $0.001 par value, 240,000,000 shares authorized, 91,250,000 shares issued and outstanding as of June 30, 2012 and March 31, 2012, respectively		91,250			91,250
Additional paid in capital		(49,250	)		(49,250	)
Retained earnings (deficit) accumulated during the development stage		(18,312	)		(15,281	)
Total (deficiency in) stockholders' equity		23,688			26,719

Total liabilities and (deficiency in) stockholders' equity	$	46,259		$	46,295

See accompanying notes to these financial statements.

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ZIPPY BAGS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the			For the			August 26, 2010
	Three Months Ended			Three Months Ended			(inception) to
	June 30,			June 30,			June 30,
	2012			2011			2012

Revenue		-		$	-		$	102,948

Cost of revenue		-			-			30,106

Gross profit		-			-			72,842

Operating expenses:
General and administrative		2,861			805			9,481
Professional Fees		-			6,070			74,774

Total operating expenses		2,861			6,875			84,255

Net Operating Income (Loss)		(2,861	)		(6,875	)		(11,413	)

Other income (expense):
Impairment loss on equipment		-			-			(4,125	)
Interest income		-			-			295
Interest expense		(170	)		(48	)		(802	)
Total other income (expense)		(170	)		(48	)		(4,632	)

Income (Loss) before provision for income taxes		(3,031	)		(6,923	)		(16,045	)

Provision for income taxes		-			-			2,267

Net income (loss)	$	(3,031	)	$	(6,923	)	$	(18,312	)

Net income (loss) per share - basic	$	(0.00	)	$	(0.00	)

Net income (loss) per share - diluted	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding - basic		91,250,000			90,000,000

Weighted average shares outstanding - diluted		91,250,000			90,000,000

See accompanying notes to these financial statements.

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ZIPPY BAGS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)

												(Deficit)
												Accumulated
									Additional			During			Total
	Preferred Stock				Common Stock				Paid-In			Development			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Stage			Equity

Common stock issued to founder at $0.001 per share		-	$	-		90,000,000	$	90,000	$	(72,000	)	$	-		$	18,000
Net income (loss) from August 26, 2010 (inception) to March 31, 2011		-		-		-		-	$	-			(22,554	)		(22,554	)

Balance, March 31, 2011		-	$	-		90,000,000	$	90,000	$	(72,000	)	$	(22,554	)	$	(4,554	)

Common stock issued for services at $0.0192 per share on November 28, 2011		-		-		1,250,000		1,250		22,750			-			24,000
Net income (loss) for the year ended March 31, 2012		-		-		-		-		-			7,273			7,273

Balance, March 31, 2012		-	$	-		91,250,000	$	91,250	$	(49,250	)	$	(15,281	)	$	26,719

Net income (loss) for the three months ended June 30, 2012		-		-		-		-		-			(3,031	)		(3,031	)

Balance, June 30, 2012		-	$	-		91,250,000	$	91,250	$	(49,250	)	$	(18,312	)	$	23,688

See accompanying notes to these financial statements.

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ZIPPY BAGS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the			For the			August 26, 2010
	Three Months Ended			Three Months Ended			(inception) to
	June 30,			June 30,			June 30,
	2012			2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(3,031	)	$	(6,923	)	$	(18,312	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment loss on equipment		-			-			4,125
Common Stock issued for services		-			-			24,000
Changes in assets and liabilities:
Inventory		-			(38,361	)		(8,255	)
Prepaid expense and other receivables		-			1,000			-
Accounts Payable		(747	)		38,361			1,309
Sales tax payable		-			-			7,052
Income tax payable		-			-			2,267
Accrued expenses		746			3,750			746
Accrued Interest, related party		170			48			796

Net cash provided by (used in) operating activities		(2,862	)		(2,125	)		13,728

CASH FLOWS FROM INVESTING ACTIVITIES
Deposit on Equipment		-			-			(41,253	)

Net cash provided by (used in) investing activities		-			-			(41,253	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from officer loans, related party		2,826			2,769			18,351
Repayments of officer loans, related party		-			(680	)		(8,630	)
Proceeds from notes payable		-			-			680
Proceeds from sale of common stock		-			-			18,000

Net cash provided by (used in) financing activities		2,826			2,089			28,401

Net Increase (Decrease) in cash and cash equivalents		(36	)		(36	)		876

Cash and cash equivalents at beginning of period		912			259			-

Cash and cash equivalents at end of period	$	876		$	223		$	876

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	-		$	-		$	38
Income taxes paid	$	-		$	-		$	-

NON-CASH TRANSACTIONS
Common stock issued for services		-			-			24,000

See accompanying notes to these financial statements.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

Zippy Bags, Inc. (“the Company”) was incorporated in the state of Nevada on August 26, 2010 (“Inception”). The Company was formed to market a snowboard carrying bag. The company will market the bags locally, in the Salt Lake City, Utah area to snowboard shops and outdoor retailers.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. The Company follows the same accounting policies in the preparation of interim reports.

The Company is considered to be in the development stage as defined by FASB ASC 915-10-05. This standard requires companies to report their operations, shareholders equity and cash flows from inception through the reporting date. The Company will continue to be reported as a development stage entity until, among other factors, revenues are generated from management’s intended operations. Management has provided financial data since inception (August 26, 2010).

The Company has adopted a fiscal year end of March 31.

Results of operations for the interim period are not indicative of annual results.

Use of Estimates

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

Cash and Cash Equivalents

We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of June 30, 2012.

Inventory

Inventories consist of snowboard carrying bags held for resale. Inventories are valued at the lower of cost or market, and the company uses the average cost methodology for recording cost of sales. Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to not be marketable is written down to market value. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified.

Equipment

Equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful lives of the related asset.

Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and any resulting gain or loss will be reflected in operations.

The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.

Fair value of Financial Instruments

Financial instruments consist principally of cash and debts due to the officer. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to significant currency or credit risks arising from these financial instruments.

Revenue Recognition

Revenues from fixed price contracts and cost-plus-fee contracts are recognized as services are performed. Revenue is recognized at the time of sale if collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, there were no outstanding potential common stock equivalents and therefore basic and diluted earnings per share result in the same figure.

Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation upon inception at August 26, 2010. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company has not had any stock and stock options issued for services and compensation for the three months ended June 30, 2012.

Recently Issued Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on December 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value

Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on December 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. ASU 2011-02 has become effective for the Company on September 1, 2012. The Company does not believe that the guidance will have a material impact on its financial statements.

Note 2 – Going Concern

As shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit of $18,312 as of June 30, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Note 3 – Inventory

All inventories on the Company’s balance sheet at June 30, 2012 have been shipped and are in the possession of the end customer. This transaction has not met the criteria for revenue recognition based on reasonable assurance of collection. The unpaid portion is listed as inventories on consignment in the amount of $30,164 and is recorded at cost as inventory on the Company’s balance sheet until collectability is reasonably assured. At June 30, 2012 and March 31, 2012 inventory is as follows:

		June 30, 2012				March 31, 2012
Inventory		$	8,255			$	8,255

Note 4 – Deposit on Equipment

At June 30, 2012 and March 31, 2012, deposit on equipment is as follows:

	June 30, 2012		March 31, 2012
Deposit on equipment	$	37,128	$	41,253
Impairment on deposit		-		(4,125	)
Deposit on equipment, net		37,128		37,128

During fiscal year 2012, Company made 50% deposit on equipment. As of March 31, 2012, 10% of the deposit was not refundable per vendor of the equipment. Company recorded impairment expense for the non-refundable deposit as of March 31, 2012. As of the date of this report, the Company has not received the equipment.

Note 5 – Related Party Transactions

From time to time the Company has received loans from BK Consulting and Associates, P.C. (“BK Consulting”) to fund operations.

From time to time, the Company’s CEO and founder, Janet Somsen, advanced loans to the Company for operations.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Related party transactions consist of the following at June 30, 2012 and March 31, 2012, respectively:

	June 30, 2012				March 31, 2012
	Notes Payable		Accrued Interest		Notes Payable		Accrued Interest
Unsecured promissory notes to Janet Somsen, founder and CEO, carry an 8% interest rate, due on demand	$	6,876	$	755	$	6,876	$	618

Promissory notes to BK Consulting & Associates, P.C., carry an 8% interest rate, due on demand	$	3,525	$	41	$	699	$	8

Notes Payable, Related Party	$	10,401	$	796	$	7,575	$	626

The Company recorded interest expense in the amount of $170 related to the related party loans for the three months ended June 30, 2012.

On November 5, 2010, the Company issued 90,000,000 founder’s shares (post-split) at the par value of $0.001 in exchange for proceeds of $18,000 to the Company’s CEO.

Note 6 – Stockholder’s Equity

Stock-split

On February 24, 2012 the Company approved a 5 for 1 forward stock split of the Company’s common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes to the consolidated financial statements have been retroactively restated to reflect the 5 for 1 stock split.

Shares Authorized

On August 26, 2010, the Company’s certificate of incorporation authorized 90,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001. On March 27, 2012, the Company amended its certificate of incorporation to increase the t authorized capital of the Company to 250,000,000 shares (post-split) consisting of: (i) 240,000,000 shares (post-split) of common stock having a par value of $0.001 per share, and (ii) 10,000,000 shares of preferred stock having a par value of $0.001 per share

Shares Issued

On November 5, 2010, the Company issued 90,000,000 founder’s shares (post-split) at the par value of $0.001 in exchange for proceeds of $18,000.

On November 28, 2011, the Company issued 1,250,000 shares of common stock (post-split) at a value of $0.0192 per share (post-split) to a service provider as compensation. The aggregate value of $24,000 was charged to operations during the year ended March 31, 2012. The value of the shares was based on the fair market value of the services provided.

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Zippy Bags, Inc.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Note 7 – Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company had no other items that required fair value measurement on a recurring basis.

The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following table provides a summary of the fair values of assets and liabilities:

Fair Value Measurements at

June 30, 2012

Carrying

Value

June 30, 2012

Level 1

Level 2

Level 3

None

Note 8 – Revenue

Since inception (August 26, 2010) through year June 30, 2012 one customer accounted for 100% of our revenue. The Company delivered its’ initial shipment to the customer in June 2011, but did not meet the criteria for revenue recognition based on reasonable assurance of collection. As of the date of this filing, the Company has collected $110,000 related to this shipment. Accordingly, the Company recognized $102,948 of revenue during the year ended March 31, 2012. During the three months ended June 30, 2012 and 2011 the company recorded no revenue.

Note 9 – Subsequent Events

During the month ended, July 31, 2012, the Company received loans in the amount of $6,247 from BK Consulting and Associates, P.C. (“BK Consulting”) to fund operations at an 8% per annum interest rate, due on demand.

On August 3, 2012, the Company received a loan in the amount of $1,309 from BK Consulting and Associates, P.C. (“BK Consulting”) to fund operations at an 8% per annum interest rate, due on demand.

There are no additional subsequent events to disclose through the date of this filing.

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

OVERVIEW AND OUTLOOK

Zippy was formed in the state of Nevada on August 26, 2010 to provide retail sales of snowboard carrying bags to the general public. The Company expects to generate its revenue from the sale of its snowboard carrying bags. The Company plans to market Zippy through a combination of direct sales, referrals and networking within the industry. To date, the Company has delivered an initial shipment of product to an end customer but has not recognized all the revenue related to this transaction as collectability is not yet reasonably assured. The Company is currently in the planning stage and organization stage and is without significant operations.

The Company has adopted a fiscal year end of March 31.

We have established an internet website (www.zippybagsinc.com) where customers can purchase the snowboard carrying bag.

To commence active business operations we will need to engage in a number of planning stage and preliminary activities. We will commence activities include developing the website for our snowboard carrying cases, preparing marketing materials and direct mail. We have started some of the activities, by developing the snowboard carrying case and creating the initial marketing material but the marketing completion cannot occur without the raising of additional funds in the amount of $75,000. From inception (August 26, 2010) to date we have spent a substantial amount of time in developing the finished snowboard carrying cases and marketing material, strategic planning, budgeting, and preliminary work.

We have not devoted much time to raising capital other than the investments from Ms. Somsen. Zippy is considered a development stage company because it has not commenced its major operations. In addition, the Company has not achieved a recurring revenue stream in connection with its business to date.

Over the next twelve months, Zippy Bags, Inc. plans to build out its reputation and develop a network in the snowboard carrying bags business and begin sales to the general public.

Based on our current operating plan, we do not expect to generate revenue that is sufficient to cover our expenses for at least the next twelve months. Additional financing, whether through public or private equity or debt financing, arrangements with the security holder or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us. Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital.

If we issue additional equity securities to raise funds, the ownership percentage of our existing security holder would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of our common stock. Debt incurred by us would be senior to equity in the ability of debt holders to make claims on our assets. The terms of any debt issued could impose restrictions on our operations. If adequate funds are not available to satisfy either short or long-term capital requirements, our operations and liquidity could be materially adversely affected and we could be forced to cease operations.

Results of Operations for the Three Months Ended June 30, 2012

Sales

No revenue was recognized during the three months ended June 30, 2012.

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Operating Expenses

Total operating expenses for three months ended June 30, 2012 were $2,861 consisting of general and administrative fees.

Other (Income) Expenses

Other (income) expenses for the three months ended June 30, 2012 totaled $170, consisting of interest expense accrued on notes payable.

Net Loss

For the reasons above, net loss for the three months ended June 30, 2012 was $3,031.

Results of Operations for the Three Months Ended June 30, 2011

Sales

The company delivered its’ initial shipment to their first customer in June, but did not meet the criteria for revenue recognition based on reasonable assurance of collection. Accordingly, the company recognized $0 of revenue for the three months ended June 30, 2011 and will recognize the remaining balance once collectability is reasonably assured.

Operating Expenses

Total operating expenses for the three months ended June 30, 2011 were $6,875 consisting of $805 of general and administrative fees and $6,070 of professional fees

Other (Income) Expenses

Other (income) expenses for the three months ended June 30, 2011 totaled $48, consisting of interest expense accrued on notes payable.

Net Income (loss)

Net loss for the three months ended June 30, 2011 was $6,923 and is primarily attributed to the general and administrative and professional fees.

LIQUIDITY AND CAPITAL RESOURCES

We believe that our existing sources of liquidity will not be sufficient to fund our operations, anticipated capital expenditures, working capital and other financing requirements for at least the next twelve months. In the event the Company is unable to achieve profitable operations in the near term, it may require additional equity and/or debt financing, or reduce expenses, including officer’s compensation, to reduce such losses. There is no assurance that we will be able to obtain such financing if needed and the failure to do so could negatively impact the viability of our company to continue with this business and the business may fail.

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The following table summarizes total assets, accumulated deficit, stockholder’s equity and working capital at June 30, 2012.

	June 30, 2012
Total Assets	$	46,259

Accumulated (Deficit)	$	(18,312)

Stockholders’ Equity	$	23,688

Net Working Capital	$	(13,440)

Since our inception on August 26, 2010, we have generated net loss of $18,312. Our cash and cash equivalent balances were $876 and $912 at June 30, 2012 and March 31, 2012 respectively. On June 30, 2012, we had an accumulated deficit of $18,312 and total current liabilities were $22,571.

We have generated net cash from operating activities of $13,728 during the period of August 26, 2010 (date of inception) to June 30, 2012.

During the period of August 26, 2010 (date of inception) to June 30, 2012, we used $41,253 of cash for investing activities.

Financing Activities

Cash provided by financing activities relating to the issuance of shares of common stock during the period of August 26, 2010 (date of inception) to June 30, 2012 was $18,000 as a result of the sale of ninety million (90,000,000) shares (post-split) of common stock, issued with a value of $0.001 to our founder and CEO, Janet Somsen.

Since inception, we also received proceeds of $18,351 from related parties, Janet Somsen CEO and BK Consulting in exchange for an unsecured promissory notes carrying 8% interest, due on demand. Since inception, our capital needs have entirely been met by these sales of stock and short term debt financings. Ms. Somsen is willing to commit any funds necessary for sustainability of the Company until it is fully funded.

Satisfaction of Our Cash Obligations for the Next Twelve Months

Our plan for satisfying our cash requirements for the next twelve months is through generating revenue from the sale of snowboard bags, sale of shares of our common stock, third party financing, and/or traditional bank financing. Consequently, we intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

We cannot assure that we will have sufficient capital to finance our growth and business operations or that such capital will be available on terms that are favorable to us or at all.

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We will need to obtain additional financing to conduct our day-to-day operations, and to fully execute our business plan. Additional financing, whether through public or private equity or debt financing, arrangements with security holders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us.

Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital. If we issue additional equity securities to raise funds, the ownership percentage of our existing security holders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of our common stock. Debt incurred by us would be senior to equity in the ability of debt holders to make claims on our assets. The terms of any debt issued could impose restrictions on our operations. If adequate funds are not available to satisfy either short or long-term capital requirements, our operations and liquidity could be materially adversely affected and we could be forced to cease operations.

Inflation

The rate of inflation has had little impact on the Company's results of operations and is not expected to have a significant impact on the continuing operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout management's Discussion and Analysis or Plan of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

Revenue Recognition

Sales are recorded when products are shipped to customers and collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue from sales for which payment has been received, but shipment to our customers has not occurred.

Recently Issued Accounting Pronouncements

In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s financial statements.

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Item 3. Quantitative and Qualitative Disclosure About Market Risk.

This item is not applicable as we are currently considered a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, Janet Somsen, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on the evaluation, Ms. Somsen concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure, for the following reasons:

	●	The Company does not have an independent board of directors or audit committee or adequate segregation of duties;

	●	All of our financial reporting is carried out by our financial consultant;

	●	We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.

We plan to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material pending legal proceedings to which our company or subsidiary is a party or of which any of their property is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any director, officer or affiliate of our company, or any registered or beneficial stockholder of our company, or any associate of any such director, officer, affiliate, or stockholder is a party adverse to our company or subsidiary or has a material interest adverse to our company or subsidiary.

Item 1A. Risk Factors.

There has been no change in the Company’s risk factors since the Company’s Form S-1/A filed with the SEC on July 20, 2011.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date

31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X
32.1	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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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.

	ZIPPY BAGS, INC.

Date: August 17, 2012	By:	/s/Janet Somsen
		Janet Somsen
		President, Chief Executive Officer, Chief Financial Officer Director (Principal Executive Officer, Chief Financial Officer, and Principal Accounting Officer)

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