Annual Statements Open main menu

TORtec Group Corp - Quarter Report: 2015 December (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  


FORM 10-Q


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  

For the quarterly period ended December 31, 2015

  

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

  

For the transition period from ____________ to____________

  

Commission File No. 000-55150

  

GEO POINT RESOURCES, INC.

(Exact name of Registrant as specified in its charter)


Nevada

45-5593622

(State or Other Jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

  


1421 E. Pomona Street

Santa Ana, California 92705

 (Address of Principal Executive Offices)


(714) 584-4361

(Registrant’s Telephone Number, including area code)


Not Applicable

(Former name, former address and former fiscal year,

if changed since last report)


Indicate by check mark whether the Registrant has (1) 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.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


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


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

Yes [  ] No [X]





Outstanding Shares


Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:  February 21, 2016 – 1,002,204 shares of common stock.



2






FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q, references to “Geo Point Resources,” the “Registrant,” the “Company,” “we,” “us,” “our” and words of similar import refer to Geo Point Resources, Inc., a Nevada corporation, unless the context requires otherwise.


This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report. These factors include, among others:


·

our ability to raise capital;

·

our ability to identify suitable acquisition targets;

·

our ability to successfully execute acquisitions on favorable terms;

·

declines in general economic conditions in the markets where we may compete;

·

unknown environmental liabilities associated with any companies we may acquire; and

·

significant competition in the markets where we may operate.


You should read any other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should read this Quarterly Report completely, and it should be considered in light of all other information contained in the reports or registration statement that we file with the Securities and Exchange Commission, including all risk factors outlined therein. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.




3




JUMPSTART OUR BUSINESS STARTUPS ACT DISCLOSURE

We qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act by the Jumpstart Our Business Startups Act (the “JOBS Act”). An issuer qualifies as an “emerging growth company” if it has total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year, and will continue to be deemed an emerging growth company until the earliest of:


 

the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1.0 billion or more;


 

the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement;


 

the date on which the issuer has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or


 

the date on which the issuer is deemed to be a “large accelerated filer,” as defined in Section 240.12b-2 of the Exchange Act.


As an emerging growth company, we are exempt from various reporting requirements. Specifically, we are exempt from the following provisions:


 

Section 404(b) of the Sarbanes-Oxley Act of 2002, which requires evaluations and reporting related to an issuer’s internal controls;


 

Section 14A(a) of the Exchange Act, which requires an issuer to seek shareholder approval of the compensation of its executives not less frequently than once every three years; and


 

Section 14A(b) of the Exchange Act, which requires an issuer to seek shareholder approval of its so-called “golden parachute” compensation, or compensation upon termination of an employee’s employment.


Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.


PART I –FINANCIAL INFORMATION


Item 1.  Financial Statements.


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



4













INDEX TO FINANCIAL STATEMENTS

 

 


Financial Statements of Geo Point Resources, Inc.


 

 


 

Balance Sheets as of December 31, 2015 and March 31, 2015

6

 

 


 

Statements of Operations for the Three and Nine months Ended

  December 31, 2015 and 2014


7

 

 


 

Statements of Cash Flows for the Three and Nine months Ended

  December 31, 2015 and 2014


8

 

 


 

Notes to the Financial Statements

9






















5




GEO POINT RESOURCES, INC.

BALANCE SHEETS

(unaudited)


 

 

December 31,

 

March 31,

 

 

2015

 

2015

 

 

 

 

 

ASSETS

 

 

 

 

Current Assets

 

 

 

 

Cash

 

 $          39,929

 

 $        186,466

Accounts receivable, net of allowance for bad debt

 

 

 

 

of $11,693 and $11,693, respectively

 

                   -   

 

                   -   

Note receivable

 

             75,000

 

                   -   

Total Current Assets

 

           114,929

 

           186,466

Furniture and equipment, net of accumulated depreciation of $60,281 and

 

 

 

 

$59,531, respectively

 

               2,825

 

1,095

Note receivable

 

           100,000

 

                   -   

Other assets

 

               1,000

 

1,000

Total Assets

 

 $        218,754

 

 $        188,561

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

 

 

 

Current Liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

 $        159,016

 

 $        126,023

Revolving line of credit

 

           214,160

 

           173,560

Total Current Liabilities

 

           373,176

 

           299,583

 

 

 

 

 

Shareholders' Deficit

 

 

 

 

Preferred Stock - $0.001 par value; 10,000,000 shares authorized;

 

 

 

 

none outstanding

 

                   -   

 

                   -   

Common stock - $0.001 par value; 100,000,000 shares authorized;

 

 

 

 

1,002,204 and 1,002,204 shares issued and outstanding, respectively

 

               1,002

 

1,002

Additional paid-in capital

 

           332,195

 

332,195

Accumulated deficit

 

       (487,619)

 

(444,219)

Total Shareholders’ Deficit

 

     (154,422)

 

     (111,022)

Total Liabilities and Shareholders’ Deficit

 

 $        218,754

 

 $        188,561




The accompanying notes are an integral part of the financial statements.





6




GEO POINT RESOURCES, INC.

STATEMENTS OF OPERATIONS

(unaudited)


 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

December 31,

 

December 31,

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

Sales

 

 $  15,668

 

$   29,734

 

$   71,087

 

$   80,804

Related party (Note 5)

 

   62,304

 

  46,056

 

  62,304

 

  93,336

Total Sales

 

77,972

 

75,790

 

 133,391

 

174,140

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Cost of sales

 

 17,091

 

 20,822

 

   29,702

 

   52,667

General and administrative

 

   40,981

 

  39,182

 

  111,323

 

  119,124

Total Operating Expenses

 

58,072

 

60,004

 

 141,025

 

171,791

Operating Income (Loss)

 

19,900

 

15,786

 

 (7,634)

 

 2,349

Interest expense

 

  (12,615)

 

  (9,955)

 

 (35,766)

 

  (25,361)

Income (loss) before provision for income taxes

 

   7,285

 

 5,831

 

  (43,400)

 

   (23,012)

Provision for income taxes

 

      -   

 

     -   

 

        -   

 

      -   

Net income (loss)

 

 $    7,285

 

 $    5,831

 

 $  (43,400)

 

 $(23,012)

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Share

 

 $      0.01

 

 $      0.01

 

 $      (0.04)

 

 $    (0.02)

Basic and Diluted Weighted-Average

 

 

 

 

 

 

 

 

Common Shares Outstanding

 

1,002,204

 

1,002,204

 

1,002,204

 

 1,002,204

 

 

 

 

 

 

 

 

 


















The accompanying notes are an integral part of the financial statements.





7




GEO POINT RESOURCES, INC.

STATEMENTS OF CASH FLOWS

(unaudited)


 

 

For the Nine Months Ended

 

 

December 31,

 

 

2015

 

2014

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

Net loss

 

 $            (43,400)

 

 $            (23,012)

Adjustments to reconcile net loss to net cash

 

 

 

 

  from operating activities:

 

 

 

 

 Depreciation

 

           775

 

         1,500

 Bad debt expense

 

             -   

 

          500

Changes in assets and liabilities:

 

 

 

 

 Accounts receivable

 

            -   

 

    12,738

 Prepaid expenses and other current assets

 

            -   

 

              117

 Accounts payable and accrued liabilities

 

          32,993

 

          13,083

Net Cash Provided by (Used in) Operating Activities

 

           (9,632)

 

           4,926

Cash Flows from Investing Activities:

 

 

 

 

 Loans to third parties

 

      (175,000)

 

                 -   

 Purchase of property and equipment

 

         (2,505)

 

               -   

Net Cash Used in Investing Activities

 

     (177,505)

 

                 -   

Cash Flows from Financing Activities:

 

 

 

 

Net change on line of credit

 

         40,600

 

         45,810

Cash Flows Provided by Financing Activities:

 

         40,600

 

          45,810

 

 

 

 

 

Net Change in Cash

 

         (146,537)

 

         50,736

Cash at Beginning of Year

 

         186,466

 

        110,777

Cash at End of Year

 

 $              39,929

 

 $            161,513

 

 

 

 

 

 

 

 

 

 

Supplement Disclosure of Cash Flow Information:

 

 

 

 

 Cash paid for interest

 

 $                        -   

 

 $                         -   

 Cash paid for income taxes

 

 $                        -   

 

 $                         -   

 

 

 

 

 








The accompanying notes are an integral part of the financial statements.






8




GEO POINT RESOURCES, INC.

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)


NOTE 1 – ORGANIZATION AND BUSINESS


On June 13, 2012, the Board of Directors of Geo Point Technologies, Inc. (“Geo Point Utah”) approved a stock dividend that resulted in a spin-off (“Spin-Off”) of Geo Point Resources, Inc. (the “Company”) common stock to the Geo Point Utah stockholders, pro rata, on the record date (the “Record Date”). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Geo Point Utah. The Company was incorporated on June 13, 2012, comprising all of Geo Point Utah’s Environmental and Engineering Divisions’ assets, business, operations, rights or otherwise, along with its “Hydrocarbon Identification Technology” License Agreement with William C. Lachmar dated January 31, 2008.  The Spin-Off had a “Record Date” of January 17, 2013; an ex-dividend date of January 15, 2013; and a Spin-Off payment date of April 22, 2013.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Going Concern


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements, the Company has incurred significant current period losses, negative cash flows from operating activities, has negative working capital, an accumulated deficit, and a revolving line of credit from a third party in order to fund its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters, if needed, include raising additional debt or equity financing. The terms of which might not be acceptable to the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Interim Financial Statements


The accompanying unaudited interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).  The accompanying balance sheet as of December 31, 2015, and the statements of operations and cash flows for the nine months ended December 31, 2015 and 2014, are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations, and cash flows for such periods.  The financial data and other information disclosed in these notes to the financial statements related to the three and nine month periods are unaudited.  The results of the three and nine months ended December 31, 2015, are not necessarily indicative of the results to be expected for the year ending March 31, 2016, any other interim period, or any other future year.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes to financial statements.  Actual results could differ from those estimates.  Significant estimates made by management include allowance for doubtful accounts and the useful life of property and equipment.


Fair Value of Financial Instruments


The Company complies with the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as well as certain related FASB staff positions.  This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.




9




The guidance also establishes a fair value hierarchy for measurements of fair value as follows:


Level 1 –

quoted market prices in active markets for identical assets or liabilities.


Level 2 –

inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.  


Level 3 –

unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  


As of December 31, 2015 and March 31, 2015, the Company did not have Level 1, 2, or 3 financial assets or liabilities.  Financial instruments consist of cash, accounts receivable, payables, and a line of credit.  The fair value of financial instruments approximated their carrying values as of December 31, 2015 and March 31, 2015, due to the short-term nature of these items.


Concentration of Credit Risks and Customer Concentrations


During the nine months ended December 31, 2015, services provided to two customers accounted for 46.7% (a related party) and 38.5% of total revenues.  During the nine months ended December 31, 2014, services provided to two customers accounted for 49.9% and 37.0% of total revenues.  One of these customers is considered a related party (see Note 5). Management believes the loss of these customers would have a material impact on the Company.


Revenue Recognition


The Company recognizes revenue when it is realized and earned.  The Company considers revenue realized or realizable and earned when: (1) it has persuasive evidence of an arrangement; (2) services have been rendered and are invoiced; (3) the price is fixed or determinable; and (4) collectibility is reasonably assured.


The Company’s primary source of revenue has been in its environmental division, providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange.  Revenues from providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange are recognized after services have been performed.  The Company also has operations associated with the oil and gas segment that have limited activity and have not yet generated revenues.  All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers, if any.  Shipping and handling costs incurred, if any, are reported in cost of products sold.


See Note 5 for revenue transactions with a related party.


Basic and Diluted (Income) Loss per Common Share


Basic income (loss) per common share is calculated by dividing net loss by the weighted average common shares outstanding during the period.  Diluted income (loss) per common share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options, or other such items to common shares using the treasury stock method, based upon the weighted average fair value of the Company’s common shares during the period.  As of December 31, 2015 and 2014, the Company did not have any dilutive securities.




10




NOTE 3 – FINANCIAL STATEMENT ELEMENTS


Loans Receivable – Construction Project


In July 2015, the Company loaned $75,000 to an unrelated third party. The loan does not incur interest and is due on demand. The loan is intended to be a short term loan used for a construction project by the borrower.


On November 9, 2015, the Company loaned $100,000 to an unrelated third party which is a potential client of the Company.  The loan incurs interest at 2% per annum and is due upon the earlier of October 31, 2018, or completion by the borrower of one or more projects having an aggregate value of not less than $40 million. The loan is intended to be a short term bridge loan used for working capital for the third party.


Property and Equipment


Property and equipment are stated at cost, net of accumulated depreciation, and are comprised of the following at December 31, 2015 and March 31, 2015:


 

 

December 31, 2015

 

March 31, 2015

Computers and equipment

 

$ 40,216

 

$ 37,736

Vehicles

 

22,890

 

22,890

Total

 

63,106

 

60,626

Less: accumulated depreciation

 

(60,281)

 

(59,531)

Net Value

 

$   2,825

 

$   1,095


Depreciation expense for the nine months ended December 31, 2015 and 2014, was $775 and $1,500, respectively.


NOTE 4 – LINE OF CREDIT


On January 1, 2013, the Company entered into a $100,000 revolving line of credit with a non-related third party.  Under the terms of the agreement, the outstanding principal incurs interest at 24% per annum with principal and interest and was due nine months from the date of the agreement or July 1, 2013.  The revolving line of credit is unsecured and is currently in default; however, no demands for repayment have been made.  Proceeds from the revolving line of credit were used for operations and professional fees in connection with filing the Company’s S-1 Registration Statement. As of December 31, 2015, the revolving line of credit had a principal and an accrued interest balance of $214,160 and $98,390, respectively. As of March 31, 2015, the revolving line of credit had a principal and an accrued interest balance of $173,560 and $62,624, respectively.


NOTE 5 – RELATED PARTY TRANSACTION


During the nine months ended December 31, 2015 and 2014, the Company recorded revenues of $62,304 and $93,336, respectively, for services performed for an entity partially owned by the Company’s Chief Executive Officer. The Company performs engineering services for the related entity and bills based upon time and expenses incurred. The Company’s management maintains that the fees charged are similar to those in which would be obtained from third parties.


NOTE 6 – SUBSEQUENT EVENTS


There are no subsequent events through the date of this filing in which require disclosure.



11




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


Special Note Regarding Forward-Looking Statements


This Quarterly Report includes forward-looking statements based on management’s beliefs, assumptions and plans for the future, information currently available to management and other statements that are not historical in nature.  Forward-looking statements include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” estimate,” “consider,” or similar expressions are used.  These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, including among others: a general economic downturn; a downturn in the securities markets; regulations that affect trading in the securities of “penny stocks” the enactment of United States or foreign laws, rules and regulations that could have a materially adverse impact on current and intended operations; and other risks and uncertainties.  For additional forward-looking statement information, see the heading “Forward-Looking Statements” at the forepart of this Quarterly Report on page 3.


Our future results and stockholder values may differ materially from those expressed in these forward-looking statements.  Many of the factors that will determine these results and values are beyond our ability to control or predict.  We may be required to update these forward-looking statements from time to time as circumstances change.  


References to “we,” “our” or “us” and words of similar import under this heading also refer to “Geo Point Nevada,” unless the context implies otherwise.


Plan of Operation


We anticipate continuing our current business operations comprising the Engineering and Environmental Divisions’ operations formerly conducted by our former parent, Geo Point Technologies, Inc., a Utah corporation (“Geo Point Utah”), and we believe with the resurgence on the U.S. Economy and the real estate market in general, that our efforts during fiscal 2016 should result in modest increases in revenues.


We may also attempt to raise the capital necessary for research and development of our HI Technology.  Substantial additional funding will be required for research and development respecting the efficacy of the HI Technology to locate oil and gas prospect areas.  It is estimated that approximately $15,000 will be needed for laboratory equipment to analyze attendant microwaves produced by the attendant process; and that an additional sum of approximately $80,000 will be needed for testing and software development for fast video processing boards.  Even then, assuming the HI Technology functions as hoped, the process to determine the best locations to drill for oil and gas will take about two years, after recording data and quantifying it, following the examination of zones or areas in oil and gas fields that are known to have oil and gas reserves.   No assurance can be given that any efforts respecting the HI Technology will prove to be successful. For additional information on our License Agreement respecting the Hi Technology, see the heading “Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration” of Part I, Item 1, of our 10-K Annual Report for the fiscal year ended March 31, 2015, which was filed with the Securities and Exchange Commission (the “SEC”) on July 14, 2015.


Management’s Discussion and Analysis of Financial Condition and Results of Operations


Three Months Ended December 31, 2015, Compared to the Three Months Ended December 31, 2014


During the three months ended December 31, 2015, we had sales of $77,972, compared to $75,790 for the three months ended December 31, 2014, an increase of $2,182.  Cost of sales for the three months ended December 31, 2015, was $17,091, compared to $20,822 for the three months ended December 31, 2014, a decrease of $3,731. The gross profit percentage remained fairly consistent during the current year due to continued costs incurred for contract work paid to third parties for their assistance. Additionally, during the three months ended December 31, 2015 and 2014, we recorded revenues from related parties of $62,304 and $46,056.  In addition, during fiscal 2014 and 2015, we have seen an increase in the need for our services due to increased activity in the construction industry in Southern California.  However, we are continuing to see significant pressure on fees within our industry due to competition.  Due to our overall low cost structure, we believe our ability to provide our services at a lower cost than many of our competitors will continues to result in a greater level of bid acceptance for our services.


General and administrative expenses during the three months ended December 31, 2015, were $40,981, compared to $39,182, during the three months ended December 31, 2014, an increase of $1,799.  The increase in general and



12




administrative expenses during the three months ended December 31, 2015, was directly related to a small increase in professional fees.

 

Nine months Ended December 31, 2015, Compared to the Nine months Ended December 31, 2014


During the nine months ended December 31, 2015, we had sales of $133,391, compared to $174,140 for the nine months ended December 31, 2014, a decrease of $40,749.  Cost of sales for the nine months ended December 31, 2015, was $29,702, compared to $52,667 for the nine months ended December 31, 2014, a decrease of $22,965.  Cost of sales decreased during the nine months ended December 31, 2015, due primarily to a decrease in revenues. The gross profit percentage decreased during the current year due to additional costs incurred for contract work paid to third parties for their assistance, where in the previous period this assistance was not needed.  Additionally, during the nine months ended December 31, 2015 and 2014, we recorded revenues from related parties of $62,304 and $93,336, respectively.  In addition, during fiscal 2014 and 2015, we have seen an increase in the need for our services due to increased activity in the construction industry in Southern California.  However, we are continuing to see significant pressure on fees within our industry due to competition.  Due to our overall low cost structure, we believe our ability to provide our services at a lower cost than many of our competitors will continues to result in a greater level of bid acceptance for our services.


General and administrative expenses during the nine months ended December 31, 2015, were $111,323, compared to $119,124, during the nine months ended December 31, 2014, a decrease of $7,801.  The decrease in general and administrative expenses during the nine months ended December 31, 2015, was directly related to a small decrease in professional fees.


Liquidity


Current assets at December 31, 2015, included cash of $39,929.  At December 31, 2015, we had a negative working capital of $258,246, as compared a negative working capital of $113,117 at March 31, 2015.  The negative working capital at December 31, 2015, is a result of the historical net losses incurred by the Company, as revenues, at times, are still not sufficient to cover our minimum operating costs. In addition, we loaned $100,000 to a third party for which the terms are in excess of one year, making the note receivable long term.


Capital Resources


During the nine months ended December 31, 2015, operating activities used cash of $9,632 compared to $4,926 net cash provided by during the nine months ended December 31, 2014, a decrease of $14,558. The decrease was primary related to the current period net increase in accounts payable and accrued liabilities offset by the increase in our loss. We funded operations during the nine months ended December 31, 2015, primarily through operations, the use of cash on hand and proceeds from the line of credit.


During the nine months ended December 31, 2015, we used cash in financing activities of $177,505, primarily due to loans of $75,000 and $100,000 to third parties. These loans were used to assist one of the third parties on a construction project and the other third party for operations.


During the nine months ended December 31, 2015, we received cash from financing activities of $40,600 from proceeds on a line of credit as compared to $45,810 provided by the line of credit for the nine months ended December 31, 2014.


We intend to fund future operations for the next 12 months through cash flows generated from operations and current cash on hand.  These contributions are expected to satisfy amounts in accounts payable and potentially be used for operations.  If these cash flows are not sufficient to fund operations, we may be required to raise capital through either a debt or equity financing.  Currently, we cannot provide assurance that such financing will be available to us on favorable terms, or at all.  If, after utilizing the existing sources of capital available to us, further capital needs are identified and if we are not successful in obtaining the required financing, we may be forced to curtail our existing or planned future operations.  We believe our plans will enable us to continue our current operations for in excess of one year from the date of financial statements contained in this Quarterly Report.


Off-Balance Sheet Arrangements


We had no off balance sheet arrangements during the quarter ended December 31, 2015.




13




Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


Not required.


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.


Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2015, our disclosure controls and procedures were effective, and provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.


Changes in Internal Control over Financial Reporting


Our management, with the participation of the chief executive officer and chief financial officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



14





PART II - OTHER INFORMATION


Item 1. Legal Proceedings.


None; not applicable.


Item 1A.  Risk Factors.


As a smaller reporting company, we are not required to provide risk factors; however, for information regarding risk factors about us, our business and our common stock, see the Risk Factors commencing on page 6 of our Prospectus referenced in Part II, Item 6, below, which was filed by us with the SEC on January 8, 2013.


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


None; not applicable.


Item 3. Defaults Upon Senior Securities.


None; not applicable.


Item 4. Mine Safety Disclosures.


None, not applicable.


Item 5. Other Information.


None; not applicable.


Item 6. Exhibits.


Exhibit No.                         Identification of Exhibit


31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by William C. Lachmar, President, CEO, Chief Financial Officer and Director.

32

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 proved by William C. Lachmar, President, CEO, Chief Financial Officer and Director.

101.INS

XBRL Instance Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.SCH

XBRL Taxonomy Extension Schema


*10-K Annual Report for the fiscal year ended March 31, 2015, which was filed with the SEC on July 14, 2015.


*Prospectus filed with the SEC on January 8, 2013.


*  Incorporated by reference.



15





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

  

Geo Point Resources, Inc.


Date:

February 22, 2016

  

By:

/s/William C. Lachmar

  

  

  

  

William C. Lachmar, President, CEO, Chief Financial Officer, Treasurer, and Controller




16