Item 1. Financial State
ments (Unaudited)
PREMIER PACIF
IC CONSTRUCTION INC.
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Balance Sheets
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(Unaudited)
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March 31,
2017
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December 31,
2016
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ASSETS
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Current Assets
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Cash and cash equivalents
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$
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1,187
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$
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209
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Total current assets
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1,187
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209
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Fixed assets
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Property and equipment,net
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957
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957
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TOTAL ASSETS
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$
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2,144
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$
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1,166
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LIABILITIES & STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts payable
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8,947
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8,052
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Loan from shareholder
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11,836
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6,598
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Total current liabilities
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20,783
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14,650
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TOTAL LIABILITIES
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20,783
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14,650
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STOCKHOLDER'S DEFICIT
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Common Stock $0.001 par value, 75,000,000 authorized and
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5,169,000 issued and outstanding as of March 31, 2017
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and December 31, 2016 respectively
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5,169
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5,169
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Additional paid-in capital
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79,847
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77,072
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Accumulated deficit
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(103,655
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)
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(95,725
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TOTAL STOCKHOLDERS' DEFICIT
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18,639
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13,484
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TOTAL LIABILITITES & STOCKHOLDERS' DEFICIT
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$
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2,144
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$
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1,166
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See accompanying notes to unaudited financial statements.
PREMIER PACI
FIC CONSTRUCTION INC.
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Statement of Operations
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(Unaudited)
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Three Months Ended
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Three Months Ended
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March 31,
2017
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March 31,
2016
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Revenue
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Construction income
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$
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4,708
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$
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4,960
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Total revenue
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4,708
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4,960
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Cost of goods sold
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Job related costs
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2,707
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3,839
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Gross profit
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2,001
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1,121
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Operating costs
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General, administrative and professional fees
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9,931
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11,498
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Total operating costs
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9,931
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11,498
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Net loss
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$
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(7,930
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$
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(10,377
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Basic and dilutive loss per share
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(0.00
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(0.00
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Weighted average number of
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common shares outstanding basic and diluted
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5,169,000
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5,148,396
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See accompanying notes to unaudited financial statements.
PREMIER PACIFIC CON
STRUCTION INC.
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Statements of Cash Flows
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(Unaudited)
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Three Months Ended
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Three Months
Ended
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March 31,
2017
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March 31,
2016
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$
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(7,930
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$
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(10,377
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Adjustments to reconcile net loss to net cash provided by
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(used in) operations
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Depreciation
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-
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531
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Contribution from shareholder
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2,775
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2,775
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Accrued interest Angel Marketing
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-
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(888
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Accounts payable
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895
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-
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Net cash provided by operating activities
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(4,260
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(7,959
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FINANCING ACTIVITIES
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Issuance of common stock for cash
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-
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25,000
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Payment on loan payable
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-
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(21,193
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Loan from shareholder
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6,088
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6,704
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Repayment of shareholder loan
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(850
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(5,650
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Net cash from financing activities
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5,238
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4,861
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Net cash increase (decrease) for period
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978
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(3,098
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Cash and cash equivalents at beginning of period
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209
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4,224
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Cash and cash equivalents at end of period
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$
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1,187
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$
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1,146
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Cash paid for interest
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$
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-
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$
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-
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Cash paid for taxes
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$
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-
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$
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-
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See accompanying notes to unaudited financial statements.
PREMIER PACIFIC CONSTRU
CTION, INC.
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
March 31, 2017
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1. ORGANIZATION AND BASIS OF PRESENTATION
Premier Pacific Construction, Inc. ("the Company") was originally incorporated in the State of California on July 28, 2000 in the name of Francella's Kitchen and Bath Refinishing Inc. to engage in the business of small scale construction, repairs and alterations for residential clients. On August 8,2008 the Company changed its name to Premier Pacific Construction, Inc., a California Corporation ("PPC-CA"). The Company merged with Premier Pacific Construction Inc., a Nevada Corporation ("PPC-NV") in March of 2012.
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's most recent Annual Financial Statements which were included in the Company's Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017. 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 period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
2. GOING CONCERN CONSIDERATION
These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has generated recurring losses and a working capital deficit and anticipates future losses in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or issuance of common shares. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
3. STOCKHOLDERS' EQUITY.
On March 15, 2016, The Company authorized the sale of 25,000 shares of common stock, par value $0.001 per share, to an individual investor for $1.00 per share. The net proceeds to the Company were $25,000. There was no activity for the current quarter.
4. RELATED PARTY TRANSACTIONS
In the three-month period ended March 31, 2017, the President of the Company provided management fees and office premises to the Company for a fee of $925 per month, the right to which the President agreed to assign to the Company until such time as the Company closes on an equity or debt financing of not less than $200,000. The $2,775 for donated management fees were charged to operating and general expenses and recorded as donated capital (Additional Paid in Capital).
In the period ended March 31, 2017, the loans from the majority shareholder increased by $6,088 and the Company repaid $850, the net increase being $5,238. The loans are to enable the Company to continue as a going concern. The loans carry no interest and have no maturity date. As of March 31, 2017, the outstanding loans are $11,836.
Item 2. Management's Discuss
ion and Analysis of Financial Condition and Results of Operations
Plan of Operations
All statements contained in this Report, other than statements of historical facts, that address future activities, events or developments, are forward-looking statements, including, but not limited to, statements containing the word "believe," "anticipate," "expect" and word of similar import. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance, and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.
The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Report. Except for the historical information contained herein, the discussion in this Report contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Report should be read as being applicable to all related forward-looking statements wherever they appear in this Report. The Company's actual results could differ materially from those discussed here.
We were incorporated on March 14, 2012 in the State of Nevada. In March 2012, we completed a merger with Premier Pacific Construction, Inc., a California corporation ("PPC-CA"). PPC-CA was originally formed in 2000 by our President, Richard Francella to provide general contracting and construction services within San Diego County, California. Since our inception, we have operated as a construction company providing general contracting and construction services to both residential and commercial clients.
Our plan is to continue to provide general contracting and construction services as we have done for more than a decade. In addition, we are also pursuing opportunities to work with homeowners who wish to sell their homes in the currently weak real estate market and wish to make certain renovations and upgrades to increase their potential sales price. In order to assist the homeowners, we will complete the renovations and upgrades (hereinafter "pre-sale renovation and upgrade services") with no up-front out of pocket costs to the homeowner. Rather, the homeowner will agree to pay for our services through escrow when they sell. We plan to market our services to real estate brokers.
We have begun marketing our pre-sale renovation and upgrade services to real estate brokers on a limited basis and have expended zero funds on marketing our pre-sale renovation and upgrade services to date. We have only established a few business relationships with real estate brokers in San Diego County. Our current lack of assets and no plan for obtaining additional funding may preclude our ability to execute on our business plan.
The Company will most likely require additional funding for development and this additional funding may be raised through debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital the Company will attempt to obtain and there is no guarantee that the Company will be able to raise any capital through any type of offerings. For these reasons, our auditor has expressed substantial doubt about our ability to continue as a going concern.
The Company has been operating since 2000, offering general construction services within San Diego County, California. Over the past two years, we have had little revenue from operations and limited assets. Our plan is to continue to offer general construction services while expanding our business into renovation of real estate properties to be sold.
During the next 12 months, the Company will continue to network with local real estate brokers who could refer homeowners who are interested in selling their properties, but need renovations and/or upgrades to increase the market value. We have created a basic website for our services (see Premierpacific.net), and are working on creating additional website pages that address our remodeling and renovation services to prospective home sellers in furtherance of our additional business plan.
The Company has also been exploring other business opportunities and is considering expanding its operations to the renewable energy market. The solar energy market continues to grow at a rapid pace. In fact, 2016 was a record-breaking year for solar energy installations in the United States with 14.8 Gigawatts ("GW") of solar photovoltaic ("PV") installations. This represents a 95% increase over 2015. GTM Research forecasts that 13.2 GW of new PV installations will come on-line in 2017. Total installed U.S. solar PV capacity is expected to nearly triple over the next 5 years. By 2022, it is expected that more than 18 GW of solar PV capacity will be installed annually. (Source: Wood Mackenzie, Limited/SEIA U.S. Solar Market Insight®.) Our initial phase of expansion into the solar energy industry would include residential and commercial solar equipment installation. This would entail the purchase of solar power equipment and hiring solar equipment installers. We will require additional funding to commence this initial phase.
In the event that we are unable earn enough revenue from operations, we will endeavor to proceed with our plan of operations by locating alternative sources of financing. While the officers and directors have generally indicated a willingness to provide services and financial contributions if necessary, there are presently no agreements, arrangements, commitments, or specific understandings, either verbally or in writing, between the officers and directors and the Company.
We anticipate hiring several new employees in the next 12 months of operation if we decide to enter into the solar energy industry. We will continue to rely on the services of outside contractors for labor on our real estate property renovations and, if applicable, solar equipment installations.
Results of Operations
We incurred losses from operations in the amount of $(7,930) for the three months ended March 31, 2017. Our gross profits (revenues less cost of goods sold) for the three months ended March 31, 2017 were $2,001. We incurred operating expenses in the amount of $9,931 for the three months ended March 31, 2017.
Liquidity and Capital Resources
As of March 31, 2017, we had cash of $1,187 and operating working deficit of $(19,596). Over the past two fiscal years, the Company has funded its operations primarily through sales of common stock and through loans from its President, Richard Francella.
Our current average monthly administrative expenses are about $580, of which $218 is for phone, $100 is for gasoline, and $262 is for miscellaneous. We have been able to pay our monthly expenses from income from operations, sales of our common stock, and stockholder loans. We do not foresee quantifiable long term liquidity needs that vary from our current since those needs are dependent on whether or not we enter into contracts to provide pre-sale renovation and upgrade services.
Richard Francella will be the only employee initially as the company seeks contracts. Additionally, there will be little if any capital expenditures due to the nature of the business and the ability to bring in subcontractors for the bigger work. We believe that we have enough cash to support our daily operations and produce revenues while we are attempting to commence the expansion of our business with our pre-sale renovation and upgrade services. However, if we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our pre-sale renovation and upgrade services.
Increase in mortgage interest rates or unavailability of mortgage financing could adversely affect the ability of homebuyers to sell their current homes. As a result, once we commit to provide pre-sale renovation and upgrade services to a client, our margins, revenues, and cash flows may also be adversely affected.
Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no significant 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 stockholders.
Going Concern
We have an accumulated deficit through March 31, 2017 of $103,655. The Company will most likely require additional funding for development and this additional funding may be raised through debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital the Company will attempt to obtain. There is no guarantee that the Company will be able to raise any capital through any type of offerings. For these reasons, our auditors have substantial doubt we will be able to continue as a going concern.
Critical Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue from the sale of products or services in accordance with ASC 605-35-25-1" Revenue Recognition in Financial Statements". The Company has adopted the "Completed Contract Method of Accounting.". Revenue will consist of services income and will be recognized only when the following criteria have been met: i) Persuasive evidence of an agreement has been met; ii) Service has occurred; iii) The fee is fixed or determinable; iv) The collection is reasonably assured.
Item 4. Controls and Proc
edures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Limitations on Systems of Controls
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
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●
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2017, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and were considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: lack of a functioning audit committee; lack of a majority of independent members and a lack of a majority of outside directors on our board of directors; inadequate segregation of duties consistent with control objectives; and, management is dominated by a single individual. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of March 31, 2017.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2017 that have materially affected, or that are reasonably likely to materially affect, the Company's internal control over financial reporting.