Approximately 97.5% of the revenues of our clients in fiscal year 2017 came from entities which were under common principal ownership with our majority shareholder. For the years ended December 31, 2017 and 2016, we recorded advisory/consulting revenue of $157,926 and $178,019 respectively. Of the $157,926 and $178,019 recorded advisory/consulting revenue in 2017 and 2016, $153,901 and $157,970 is related party revenue. This advisory/consulting fee revenue relates to services performed for Nexcore Group, LP, Peter Kloepfer, and Bohemian Asset Management, Inc. We and the related parties have common affiliates.
As of December 31, 2017 and 2016, we recorded $12,000 and $6,000, respectively, as accounts receivable, related party. In 2017 and 2016, one of our investments declared a distribution of $164,500 and $322,726, respectively.
Currently, we believe that we have sufficient capital to sustain our business operations beyond December 31, 2018. We were not profitable for the fiscal years ended December 31, 2017, 2016 and 2015 although we have been profitable in the fiscal year ended December 31, 2014. If we could develop and sustain ongoing profitability, we could operate at our present level indefinitely.
We have had ongoing discussions with and due diligence reviews of possible acquisition candidates but have not entered into any definitive agreements.
Markets
We believe that the primary reason that clients would work with us rather than competitors
is
the existing relationships that we can develop. We believe that client loyalty and satisfaction
is
the basis for success in this business. Therefore, we believe that we have developed and expanded on already existing relationships to develop a competitive edge. We utilize the expertise of our principal officer to develop our business.
Customers and Competition
Our business involves acting as a fee-based marketing and media consultant and, secondarily, as an investor. Both businesses are highly competitive. There are numerous similar companies providing such services in the United States of America. Our competitors will have greater financial resources and more expertise in this business. Our ability to develop our business
depends
on our ability to successfully develop our business plan in this highly competitive environment. We cannot guarantee that we will be able to continue to do so successfully.
Employees
Until December 31, 2017, we had one full-time employee: Mr. Steve Anderson, our President. We also had a part-time employee, Ms. Joni Troska, our corporate Secretary. In addition, we reimburse our employees for all necessary and customary business related expenses. We have no plans or agreements which provide health care, insurance or compensation on the event of termination of employment or change in our control. We do not pay our Director for any Board meeting he attends.
As of December 31, 2017, the Company terminated the employment of our full-time and part-time employees. They received aggregate severance pay of $131,000 in February, 2018. They will continue to provide support as outside contractors.
How to Obtain our SEC Filings
We file annual, quarterly, and special reports, proxy statements, and other information with the Securities Exchange Commission (SEC). Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SEC's website at
www.sec.gov
.
We also have a corporate website, www.westmountainco.com, on which we post our regulatory filings.
Our investor relations department can be contacted at our principal executive office located at 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525. Our telephone number is (970) 223-4499.
ITEM 1A. RISK FACTORS.
You should carefully consider the risks and uncertainties described below and the other information in this document before deciding to invest in shares of our common stock.
The occurrence of any of the following risks could materially and adversely affect our business, financial condition and operating result. In this case, the trading price of our common stock could decline and you might lose all or part of your investment.
Risks Related to Our Business and Industry
We were not profitable for the fiscal years ended December 31, 2017, 2016 and 2015, and prior to 2013
.
If we never achieve sustained profitability, we could go out of business.
We were formed as a Colorado business entity in October, 2007. While we were profitable in the fiscal year ended December 31, 2014, we were not profitable for the fiscal years ended December 31, 2017, 2016, 2015 and prior to 2013. Currently, we believe that we have sufficient capital to sustain our business operations past March 15, 2019. We recognize that we must achieve ongoing profitability to be viable over the long term. If we never achieve sustained profitability, we could go out of business.
We currently rely upon clients under common principal control of our majority shareholder for approximately 97.5% of our revenues, which means that we could be severally impacted if the current arrangement does not continue and we cannot replace our current clients with other clients.
Approximately 97.5% of the revenues of our clients in fiscal year 2017 came from entities which were under common principal ownership with our majority shareholder. This was up from 88.7% in 2016. Our revenue projections are subject to greater uncertainty than if we had revenue commitments from a number of clients not under common principal ownership. We could be materially impacted if the current arrangement does not continue, and we cannot replace our current clients with other clients. While we have no basis to believe that we will not continue to generate revenue from this arrangement, we cannot assure you that these clients or any of our clients, will continue to purchase our products or services in significant volume, or at all.
Our lack of operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. An investor could lose his entire investment.
We have a limited operating history. An investor has no frame of reference to evaluate our future business prospects. This makes it difficult, if not impossible, to evaluate us as an investment. An investor could lose his entire investment if our future business prospects do not result in our ever sustaining profitability.
If we do not continue to generate adequate revenues to finance our operations, our business may fail.
As of December 31, 2017 and 2016, we had a cash position of $235,573 and $685,128, respectively. We anticipate that operating costs will range between $100,000 and $200,000, for the fiscal year ending December 31, 2018. These operating costs include, contract services, marketing costs, and all other costs of operations. We will use contract employees who will be paid on an hourly or monthly fee basis. However, the operating costs and expected revenue generation are difficult to predict. We expect to continue to generate revenues in the next twelve months from our fee-based marketing, media and investor relations consulting services. Since there can be no assurances that revenues will be sufficient to cover operating costs for the foreseeable future, it may be necessary to raise additional funds. Due to our lack of a consistent profitable operating history, raising additional funds may be difficult.
Competition in our industry is intense.
Our business plan involves acting as a fee-based marketing and media consultant to public and private companies. This business is highly competitive. There are numerous similar companies providing such services in the United States of America. Our competitors will have greater financial resources and more expertise in this business. Our ability to develop our business will depend on our ability to successfully market our services in this highly competitive environment. We cannot guarantee that we will be able to do so successfully.
The share control position of WestMountain Blue, LLC will limit the ability of other shareholders to influence corporate actions.
Our largest shareholder, WestMountain Blue, LLC, of which Mr. Klemsz is a 16.8% member, owns 8,505,652 shares and thereby controls approximately 89.4% of our outstanding shares. Because WestMountain Blue, LLC individually beneficially controls more than a majority of the outstanding shares, other shareholders, individually or as a group, will be limited in their ability to effectively influence the election or removal of our directors, the supervision and management of our business or a change in control of or sale of our company, even if they believed such changes were in the best interest of our shareholders generally.
Our future success depends, in large part, on the continued service of our President and Treasurer.
We depend almost entirely on the efforts and continued employment of Mr. Klemsz, our President and Treasurer, Mr. Anderson is our former primary executive officer, and we will continue depend on him for aspects of our operations as a contractor. We do not have an employment contract with Mr. Klemsz, and we do not carry key person insurance on his life. We have a contract relationship with Mr. Anderson. The loss of the services of either Mr. Anderson or Mr. Klemsz through incapacity or otherwise, would have a material adverse effect on our business. It would be very difficult to find and retain qualified personnel such as Mr. Klemsz or Mr. Anderson.
Our success also depends upon our ability to develop relationships with our clients. If we cannot develop sufficient relationships, we may never become profitable. An investor could lose his entire investment.
We now have one line of business. We operate as a fee-based marketing and media consultant to client companies, which include both public and private entities. Our success now depends, in large part, on our ability to develop relationships with potential consulting services clients. We have no long-term contracts or other contractual assurances of consulting services. We may never develop sufficient consulting services clients, which would negatively impact our proposed operations. As a result, we may never become profitable or be able to sustain profitability. An investor could lose his or her entire investment.
Risks Related to an Investment in Our Common Stock
The lack of a broker or dealer to create or maintain a market in our stock could adversely impact the price and liquidity of our securities.
We have no agreement with any broker or dealer to act as a market maker for our securities and there is no assurance that we will be successful in obtaining any market makers. Thus, no broker or dealer will have an incentive to make a market for our stock. The lack of a market maker for our securities could adversely influence the market for and price of our securities, as well as your ability to dispose of, or to obtain accurate information about, and/or quotations as to the price of, our securities.
We have limited experience as a public company.
We have only operated as a public company since January, 2009. We trade on the OTC Bulletin Board under the trading symbol WASM. Thus, we have limited experience in complying with the various rules and regulations which are required of a public company. As a result, we may not be able to operate successfully as a public company, even if our operations are successful. We plan to comply with all of the various rules and regulations which are required of a public company. However, if we cannot operate successfully as a public company, your investment may be materially adversely affected. Our inability to operate as a public company could be the basis of your losing your entire investment in us.
We may be required to register under the Investment Company Act of 1940, or the Investment Advisors Act, which could increase the regulatory burden on us and could negatively affect the price and trading of our securities.
Because our proposed business may involve the identification, acquisition and development of investments, we may be required to register as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law. While we believe that we are currently either not an investment company or an investment advisor or are exempt from registration as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law, either the SEC or state regulators, or both, may disagree and could require registration either immediately or at some point in the future. As a result, there could be an increased regulatory burden on us, which could negatively affect the price and trading of our securities.
Our stock has a limited public trading market and there is no guarantee an active trading market will ever develop for our securities.
There has been, and continues to be, a limited public market for our common stock. An active trading market for our shares has not, and may never develop or be sustained. If you purchase shares of common stock, you may not be able to resell those shares at or above the initial price you paid. The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, including the following:
|
*
|
actual or anticipated fluctuations in our operating results;
|
|
|
|
|
*
|
changes in financial estimates by securities analysts or our failure to perform in line with such estimates;
|
|
|
|
|
*
|
changes in market valuations of other companies, particularly those that market services such as ours;
|
|
|
|
|
*
|
announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
|
|
|
|
*
|
introduction of product enhancements that reduce the need for the products our projects may develop; and
|
|
|
|
|
*
|
departures of key personnel.
|
Of our total outstanding shares as of December 31, 2017, a total of 8,755,652, or approximately 92%, are restricted from immediate resale but are potentially available to be sold into the market under Rule 144. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
The market price of our stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.
Applicable SEC rules governing the trading of "Penny Stocks" limit the liquidity of our common stock, which may affect the trading price of our common stock.
Our common stock is currently quoted on the Over-the-Counter Bulletin Board and trades well below $5.00 per share. As a result, our common stock is considered a "penny stock" and is subject to SEC rules and regulations that impose limitations upon the manner in which our shares can be publicly traded. These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the written purchaser's agreement to a transaction prior to purchase. These regulations have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.
The over-the-counter market for stock such as ours is subject to extreme price and volume fluctuations.
The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in the our industry and in the investment markets generally, as well as economic conditions and quarterly variations in our operational results, may have a negative effect on the market price of our common stock.
Buying low-priced penny stocks is very risky and speculative.
Our common shares are defined as a penny stock under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in the public markets.
Issuances of our stock could dilute current shareholders and adversely affect the market price of our common stock, if an active public trading market develops.
As of February 2018, we have the authority to issue up to 100,000,000 shares of common stock, 1,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our common stock without stockholder approval. Although no financing is planned currently, we may need to raise additional capital to fund operating losses. If we raise funds by issuing equity securities, our existing stockholders may experience substantial dilution. In addition, we could issue large blocks of our common stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval.
The issuance of preferred stock by our board of directors could adversely affect the rights of the holders of our common stock. An issuance of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over the common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our board of directors' authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve.
Colorado law and our Articles of Incorporation protect our directors from certain types of lawsuits, which could make it difficult for us to recover damages from them in the event of a lawsuit.
Colorado law provides that our directors will not be liable to our Company or to our stockholders for monetary damages for all but certain types of conduct as directors. Our Articles of Incorporation require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require our Company to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
We have recently paid cash dividends on our common stock but do not expect to pay dividends on common stock in the future.
While we have recently paid cash dividends with respect to our common stock, it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Future earnings, if any, that we may realize will be retained in the business for further development and expansion.
ITEM 2. DESCRIPTION OF PROPERTY.
Our principal executive offices are located at 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525, and our telephone number is (970) 223-4499.
We own no real estate nor have plans to acquire any real estate.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings, nor is our property the subject of any material legal proceeding.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable to smaller reporting companies.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Holders
As of February 1, 2018, there were sixty record holders of our common stock and there were 9,517,402 shares of our common stock outstanding.
Market Information
A limited public market currently exists for shares of our common stock. We began trading on the Over-the-Counter Bulletin Board under the trading symbol WASM in January 2009. The following table sets forth the high and low closing bid prices of our common stock on for the period indicated in 2017 and 2016.
|
Closing Bid Price
|
|
|
High
|
|
Low
|
|
2017
|
|
|
|
|
First Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Second Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Third Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Fourth Quarter
|
|
$
|
0.35
|
|
|
$
|
0.30
|
|
|
Closing Bid Price
|
|
|
High
|
|
Low
|
|
2016
|
|
|
|
|
First Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Second Quarter
|
|
$
|
2.67
|
|
|
$
|
0.35
|
|
Third Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Fourth Quarter
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
The last date that our common stock was traded during our fiscal year ended December 31, 2017 was on December 4, 2017. On that date, the closing bid price of our common stock in the OTC Bulletin Board was $0.30 per share, volume was 2,500 shares, and the number of shares issued and outstanding was 9,517,402.
The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
A purchaser is purchasing penny stock, which limits the ability to sell the stock. Our shares constitute penny stock under the Securities and Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:
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●
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contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
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●
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contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended;
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●
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contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
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●
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contains a toll-free telephone number for inquiries on disciplinary actions;
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●
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defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
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●
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contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;
|
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:
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●
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the bid and offer quotations for the penny stock;
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●
|
the compensation of the broker-dealer and its salesperson in the transaction;
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●
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the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
|
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●
|
monthly account statements showing the market value of each penny stock held in the customer's account.
|
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
Equity Compensation Plan Information
On August 15, 2011, the Company approved an employee compensation plan and granted a total of 200,000 common stock options to our employees. All of the options have expired as of December 31, 2015. The Equity Compensation Plan currently has no options outstanding.
Stock Transfer Agent
The stock transfer agent for our securities is Corporate Stock Transfer of Denver, Colorado. Their address is 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209. Their phone number is (303) 282-4800.
Dividend Policy
The payment of dividends on our common stock is within the discretion of our Board of Directors. While we have recently paid cash dividends with respect to our common stock, we do not plan to pay dividends in the future but intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our Board of Directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends.
For the year ended December 31, 2017, the Board of Directors approved the following payments:
The Board of Directors declared a cash dividend of $0.10 per share to all shareholders of record as of the close of business on December 1, 2017, except for shareholders WestMountain Blue, LLC. and BOCO Investments, LLC, who each have previously waived payment of the dividend. The dividend of $101,200 was paid to all remaining eligible shareholders on December 4, 2017.
The Board of Directors simultaneously declared two cash dividends. The first dividend was at $0.06 per share to all shareholders of record as of the close of business on December 29, 2017, except for shareholders WestMountain Blue, LLC. and BOCO Investments, LLC, who each have previously waived payment of the dividend. The second dividend was at $0.03 per share, payable to all shareholders of record as of the close of business on December 29, 2017, including shareholders WestMountain Blue, LLC. and BOCO Investments, LLC. The two dividends of $346,307 were paid to all eligible shareholders on December 28, 2017.
ITEM 6. SELECTED FINANCIAL DATA.
A smaller reporting company is not required to provide the information in this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management's Discussion and Analysis or Plan of Operation contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as "may", "will", "should", "anticipate", "believe", "expect", "plan", "future", "intend", "could", "estimate", "predict", "hope", "potential", "continue", or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption "Risk Factors". We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.
Results of Operations
For the fiscal year ended December 31, 2017 we had revenue of $157,926. In comparison for the fiscal year ended December 31, 2016 we had revenue of $178,019. In 2017, we recorded consulting fees of $157,926, of which $153,901 were from a related party. We recorded consulting fees of $178,019 in the fiscal year ended December 31, 2016, of which $157,970 were from a related party.
Operating expenses were $630,181 and $328,372, respectively for the years ended December 31, 2017 and 2016. Of the $630,181 in 2017, $236,000 was an accrual posted for merger expenses that was paid subsequent to December 31, 2017, the terminated full-time and part-time employees and additional legal and contract work in contemplation of a possible merger transaction. Of the remaining amount of $394,181 of operating expenses, $358,771 was mostly related to payroll, general contract services, additional fees for audit and tax work and services provided to process the year-end dividends that were paid to the Company's common shareholders. Of the $328,372 in 2016, $294,377 was mostly related to payroll and contract services.
For the year ended December 31, 2017 we recorded a net loss of $68,497. In comparison, for the year ended December 31, 2016 we recorded a net loss of $151,969, a decrease in net loss of $83,472 over the two years presented. This decrease came from a $20,093 decrease in revenue that was associated with services that were exchanged for Class C units of RavenBrick; decrease in the distribution income from Nexcore Companies LLC of $158,226; decrease of $60,000 in the loss on impairment of nonmarketable securities that consisted of a $30,000 investment in RavenBrick and a $30,000 investment in Arogenne; and a decrease of impairment of marketable securities of $147,102. The decreases were offset by an increase in selling, general and administrative expenses of $301,809; increase in interest expense of $2,357; and an increase in other income of $8,938 that was associated with the receipt of RavenBrick fees from prior quarters and an increase in tax benefit of $345,203 mainly associated with the sale of our Nexcore asset.
A summary of the comparison is below.
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For the years ended December 31,
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Category
|
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2017
|
|
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2016
|
|
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Variance
|
|
Revenue
|
|
$
|
157,926
|
|
|
$
|
178,019
|
|
|
$
|
(20,093
|
)
|
Selling, general and administrative expenses
|
|
|
630,181
|
|
|
|
328,372
|
|
|
|
(301,809
|
)
|
Interest expense
|
|
|
2,281
|
|
|
|
(76
|
)
|
|
|
2,357
|
|
Other income
|
|
|
13,500
|
|
|
|
4,562
|
|
|
|
8,938
|
|
Distribution income on nonmarketable securities
|
|
|
164,500
|
|
|
|
322,726
|
|
|
|
(158,226
|
)
|
Loss on impairment of nonmarketable securities
|
|
|
-
|
|
|
|
(60,000
|
)
|
|
|
60,000
|
|
Loss on impairment of available for sale marketable securities
|
|
|
-
|
|
|
|
(147,102
|
)
|
|
|
147,102
|
|
Income tax expense (benefit)
|
|
|
(223,477
|
)
|
|
|
121,726
|
|
|
|
345,203
|
|
Net income (loss)
|
|
$
|
(68,497
|
)
|
|
$
|
(151,969
|
)
|
|
$
|
83,472
|
|
During February 2016, the Company paid $30,000 for 6.98 of RavenBrick Class C unit shares. RavenBrick was an existing customer to whom we provide advisory services. These services consisted of, but were not limited to, developing public recognition of their business plans and strategic goals, and engaging in website development and media production. During the second quarter ended June 30, 2016, the Company exchanged advisory services for an additional 3.72 of RavenBrick Class C unit shares recognized at no value.
In 2016, the Company wrote off two of its nonmarketable securities and three of its marketable securities due to the determination the securities had no value. The decrease in nonmarketable securities consists of $30,000 investment in RavenBrick. The decrease in available for sale marketable securities consisted of $99,750 in Hangover Joes, $46,488 in Silver Verde, $918 in WestMountain Gold and $54 for related taxes in 2016.
In December 2017, we sold two of our available for sale marketable securities and one nonmarketable security, Hangover Joe's Holding Corporation, WestMountain Gold, Inc. and WestMountain Distressed Debt, Inc., to a related party for $1. The remaining two available for sale marketable securities and two nonmarketable securities ceased operations, Omni Bio Pharmaceutical, Inc., Silver Verde May Mining Co., Inc., SKRP 16, Inc., and Marine Exploration. Our remaining nonmarketable security, Nexcore Companies LLC, was sold to a related party for $529,208. On December 18, 2017, the Company recorded a note receivable and the gain as a dividend to accumulated deficit for this asset sale transaction. The note carried a 12% annual interest rate with a maturity date of January 18, 2018. The note receivable was paid on January 2, 2018 in the amount of $529,208. This included a principal amount of $526,400, additional securities of $1 and accrued interest of $2,807.
An investment summary as of December 31, 2017 and December 31, 2016 is as follows:
|
December 31, 2017
|
|
December 31, 2016
|
|
Company Name
|
Shares
|
|
Fair Value
|
|
Sale Price
|
|
Shares
|
|
Units
|
|
Fair Value
|
|
Impairment
|
|
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Omni Bio Pharmaceutical, Inc.
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Hangover Joe's Holding Corporation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
868,463
|
|
|
|
-
|
|
|
|
99,750
|
|
|
|
(99,750
|
)
|
Silver Verde May Mining Co., Inc.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
246,294
|
|
|
|
-
|
|
|
|
46,488
|
|
|
|
(46,488
|
)
|
WestMountain Gold, Inc.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
918,000
|
|
|
|
-
|
|
|
|
918
|
|
|
|
(918
|
)
|
Total Shares or Units
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
2,032,757
|
|
|
|
-
|
|
|
$
|
147,156
|
|
|
$
|
(147,156
|
)
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
Company Name
|
|
Shares
|
|
|
Units
|
|
|
Cost
|
|
|
Shares
|
|
|
Units
|
|
|
Cost
|
|
|
Impairment
|
|
Nonmarketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SKRP 16, Inc.
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
200,000
|
|
|
|
-
|
|
|
$
|
30,000
|
|
|
$
|
(30,000
|
)
|
Nexcore Companies LLC (Common Units)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,645,000
|
|
|
|
1,645
|
|
|
|
-
|
|
WestMountain Distressed Debt, Inc.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
80,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
RavenBrick (Class C Units)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Shares or Units
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
280,000
|
|
|
|
1,645,000
|
|
|
$
|
31,645
|
|
|
$
|
(30,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
2,312,757
|
|
|
|
1,645,000
|
|
|
$
|
178,801
|
|
|
$
|
(177,156
|
)
|
The Company's tax (benefit) expense for the years ended December 31, 2017 and 2016 was ($223,477) and $121,726, respectively, for a decrease in tax expense of $345,203. The Company's tax expense decrease is mainly due to the deferment of the impairments on a tax basis versus book basis that occurred in 2016 and the recognition of tax associated with the sale of our Nexcore nonmarketable security.
Liquidity and Capital Resources
As of December 31, 2017 and 2016, we had cash or cash equivalents of $235,573 and $685,128, respectively.
Net cash (used in) provided by operating activities was ($2,048) for the fiscal year ended December 31, 2017 and $138,590 for the fiscal year ended December 31, 2016. The following is a table showing the changes in non-cash and cash operating activities.
|
|
Years ended December 31,
|
|
|
Increase
|
|
|
|
2017
|
|
|
2016
|
|
|
(Decrease)
|
|
Net (loss)
|
|
$
|
(68,497
|
)
|
|
$
|
(151,969
|
)
|
|
$
|
83,472
|
|
Non-cash Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,202
|
|
|
|
2,630
|
|
|
|
572
|
|
Loss on disposal of property and equipment
|
|
|
1,716
|
|
|
|
1,712
|
|
|
|
4
|
|
Interest on note receivable
|
|
|
(2,281
|
)
|
|
|
-
|
|
|
|
(2,281
|
)
|
Income tax benefit for sale of nonmarketable securities to a related party
|
|
|
(194,452
|
)
|
|
|
|
|
|
|
(194,452
|
)
|
Loss on impairment of available-for-sale marketable securities
|
|
|
-
|
|
|
|
147,102
|
|
|
|
(147,102
|
)
|
Loss on impairment of nonmarketable securities
|
|
|
-
|
|
|
|
60,000
|
|
|
|
(60,000
|
)
|
Deferred income tax
|
|
|
-
|
|
|
|
95,062
|
|
|
|
(95,062
|
)
|
Total Non-cash Expenses
|
|
|
(191,815
|
)
|
|
|
306,506
|
|
|
|
(498,321
|
)
|
Changes in operating assets and operating liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
3,230
|
|
|
|
(2,255
|
)
|
|
|
5,485
|
|
Accounts receivable
|
|
|
(950
|
)
|
|
|
16,435
|
|
|
|
(17,385
|
)
|
Accounts receivable, related parties
|
|
|
(6,000
|
)
|
|
|
-
|
|
|
|
(6,000
|
)
|
Accounts payable and accrued liabilities
|
|
|
252,215
|
|
|
|
(3,748
|
)
|
|
|
255,963
|
|
Accrued liabilities, related parties
|
|
|
-
|
|
|
|
(5,751
|
)
|
|
|
5,751
|
|
Income tax receivable
|
|
|
9,769
|
|
|
|
(20,628
|
)
|
|
|
30,397
|
|
Total Changes in Operating Assets and Operating Liabilities
|
|
|
258,264
|
|
|
|
(15,947
|
)
|
|
|
274,211
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(2,048
|
)
|
|
$
|
138,590
|
|
|
$
|
(140,638
|
)
|
For the year ended December 31, 2017 we recorded a net loss of $68,497. In comparison, for the year ended December 31, 2016 we recorded a net loss of $151,969, a decrease in net loss of $83,472 over the two years presented. This decrease came from a decrease in revenue of $20,093 that was mainly associated with services that were exchanged for Class C units of RavenBrick; decrease in the distribution income from Nexcore Companies LLC of $158,226. The decreases were offset by an increase in selling, general and administrative expenses of $301,809 that was associated with accrued liabilities; interest income of $2,357; and other income of $8,938 and income tax benefit of $345,203 that was mainly associated with the sale of our nonmarketable security to a related party.
The remaining variances of $140,638 consist of a decrease in noncash expenses of $498,321 and increase in operating assets and liabilities of $274,211. The non-cash expense decrease of $498,321 consists of decreases in impairment of marketable securities of $147,102; loss on impairment of nonmarketable securities of $60,000 that consisted of a $30,000 investment in RavenBrick and a $30,000 investment in Arogenne; interest income of $2,281 and income tax benefit for sale of nonmarketable securities to a related party of $194,452; offset by increase in deprecation of $572 and $4 for the loss on the sale of property and equipment.
The total variance increase of $274,211 in operating assets and liabilities relate to increases in prepaid expenses of $5,485 mainly due to annual fees for OTC Markets; $5,751 for accrued liabilities, related parties; $30,397 for income tax receivable; and $255,963 for accounts payable and accrued liabilities. Accrued liabilities in 2017 increased due to additional legal, contract work and compensation for a contemplated merger transaction along with additional fees for audit and tax work and services provided to process the year-end dividends that were paid to the Company's common shareholders. Increases were offset by decreases in accounts receivable of $17,385 and accounts receivable, related parties of $6,000 of which all receivables were paid in the respective 1st quarters of the following years.
Net cash used in investing activities was $-0- for the fiscal year ended December 31, 2017. Compared to $33,433 for the fiscal year ended December 31, 2016. In 2016, the Company invested $30,000 in a non-public company, along with the purchase and disposal of equipment of $3,433.
For the fiscal years ended December 31, 2017 and 2016 net cash flows used in financing activities were $447,507 and $-0-, respectively. In 2017, dividends were paid to common stockholders in the amount of $447,507.
The Board of Directors declared a cash dividend of $0.10 per share to all shareholders of record as of the close of business on December 1, 2017, except for shareholders WestMountain Blue, LLC. and BOCO Investments, LLC, who each have previously waived payment of the dividend. The dividend of $101,200 was paid to all remaining eligible shareholders on December 4, 2017.
The Board of Directors simultaneously declared two cash dividends. The first dividend was at $0.06 per share to all shareholders of record as of the close of business on December 29, 2017, except for shareholders WestMountain Blue, LLC. and BOCO Investments, LLC, who each have previously waived payment of the dividend. The second dividend was at $0.03 per share, payable to all shareholders of record as of the close of business on December 29, 2017, including shareholders WestMountain Blue, LLC. and BOCO Investments, LLC. The two dividends of $346,307 were paid to all eligible shareholders on December 28, 2017.
On December 19, 2016, the Board of Directors of NexCore Companies, LLC, authorized a $0.21 per unit cash distribution for 2016. The Company received a wire on December 29, 2016 in the amount of $322,726.
In November 2017, the Board of Directors of NexCore Companies, LLC, authorized a $0.10 per unit cash distribution for 2017. The Company received a wire on November 8, 2017 in the amount of $164,500.
On December 18, 2017, the Company entered into an Equity Purchase Agreement with a related party. The terms of this agreement are to transfer and assign, to the Buyer, the Company's rights, title and interest in the following assets and liabilities.
The Company sold its non-marketable security in Nexcore Companies, LLC for $526,400 to a related party. The purchase price was based upon an independent, third party valuation. The same related party also bought its' previously other than temporarily impaired investments in WestMountain Gold, Inc. (918,000 shares), Hangover Joe's Holding (868,463 shares), WestMountain Distressed Debt, Inc., ("WMDD") (80,000 shares) and SKRP, Inc. (200,000 shares) and the Company's impaired notes receivable from WMDD for $60,000 and RavenBrick for $42,500. All for a purchase price of $1.00.
The Company recorded a note receivable of $526,400 for this sale transaction. The note carried a 12% annual interest rate with a maturity date of January 18, 2018. Accrued interest of $2,281 was recorded as of December 31, 2017. The note receivable
, including interest,
was paid on January 2, 2018 in the amount of $529,208. This included a principal amount of $526,400, additional securities of $1 and accrued interest of $2,807.
Currently, we believe that we have sufficient capital to implement our business operations or to sustain them at our present level through March 15, 2019. In the fiscal year ended December 31, 2017 and continuing to the present, we have had ongoing discussions with possible acquisition candidates. At this time, no definitive agreement has been reached concerning any potential acquisition.
We operate out of one office in Colorado. We have no specific plans at this point for additional offices.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements with any party.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of our financial statements. From time to time, we evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. Below is a discussion of accounting policies that we consider critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.
Fair Value Measurements
ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
|
|
|
Level 1:
|
|
Quoted prices in active markets for identical assets or liabilities;
|
|
|
|
Level 2:
|
|
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
|
|
|
|
Level 3:
|
|
Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
|
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Revenue Recognition
We act primarily as a fee-based marketing and media consultant to public companies. As a consultant, we provide investor relations, website development, video production, and associated marketing and media services to clients. We are paid fees for our services by our clients under written consulting agreements.
The Company recognizes revenue for its services generally when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured.
In the general course of business, we receive stock-based compensation for our services. In many cases, the underlying stock is thinly traded and determining the value of revenue requires substantial judgment. If the underlying stock is traded in an active market, the value used to record revenue is based on the quoted market value of the stock. If there is not an active market, then the value is determined using other inputs.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued a comprehensive new revenue recognition standard that supersedes the revenue recognition requirements in Topic 605,
Revenue Recognition
. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring those goods or services. The new standard also requires significantly expanded disclosure regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures of the standard's application impact to individual financial statement line items.
In March, April, May and December 2016, the FASB issued new guidance in Topic 606,
Revenue from Contracts with Customers
, to address the following potential implementation issues of the new revenue standard: (a) to clarify the implementation guidance on principal versus agent considerations, (b) to clarify the identification of performance obligations and the licensing implementation guidance and (c) to address certain issues in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company follows the sales method of accounting for its revenues from customers, which is generally consistent with the revenue recognition provision of the new standard.
The Company has completed the process of evaluating the effect of the adoption and determined there were no changes required to our reported revenues as a result of the adoption. The majority of our revenue arrangements generally consist of a single performance obligation to transfer promised goods and/or services. Based on our evaluation process and review of our contracts with customers, the timing and amount of revenue recognized based on the standard is consistent with our revenue recognition policy under previous guidance. The Company adopted the new standard effective January 1, 2018, using the modified retrospective approach, and will expand our financial statement disclosures in order to comply with the standard. We have determined the adoption of the standard will not have a material impact on our results of operations, cash flows, or financial position.
The FASB issued ASU 2016-13, Financial Instruments —Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments
. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020 for calendar year entities). Management does not believe this amendment will have a material impact on the Company.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information in this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
TABLE OF CONTENTS
|
|
Page
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
F - 2
|
|
|
|
|
|
|
Consolidated Balance Sheets at December 31, 2017 and 2016
|
|
|
F - 3
|
|
|
|
|
|
|
Consolidated Statements of Operations and Comprehensive (Loss) for the Years
ended December 31, 2017 and December 31, 2016
|
|
|
F - 4
|
|
|
|
|
|
|
Consolidated Statement of Shareholders' Equity for the Years ended December 31, 2017 and December 31, 2016
|
|
|
F - 5
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the Years ended December 31, 2017 and December 31, 2016
|
|
|
F - 6
|
|
|
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
F - 7
|
|
|
|
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
WestMountain Company
Fort Collins, Colorado
OPINION ON THE FINANCIAL STATEMENTS
We have audited the accompanying consolidated balance sheets of WestMountain Company (the "Company") as of December 31, 2017 and 2016, and the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows, for each year in the two‑year period ended December 31, 2017, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each year in the two‑year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
BASIS FOR OPINION
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
.
/s/ EKS&H LLLP
March 15, 2018
Denver, Colorado
We have served as the Company's auditor since 2016.
WestMountain Company
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
235,573
|
|
|
$
|
685,128
|
|
Accounts receivable, related parties
|
|
|
12,000
|
|
|
|
6,000
|
|
Accounts receivable
|
|
|
950
|
|
|
|
-
|
|
Income tax receivable
|
|
|
30,732
|
|
|
|
40,501
|
|
Note receivable, related party
|
|
|
528,682
|
|
|
|
-
|
|
Prepaid expenses
|
|
|
1,333
|
|
|
|
4,563
|
|
Total current assets
|
|
|
809,270
|
|
|
|
736,192
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation of
|
|
|
-
|
|
|
|
4,918
|
|
$-0- and $4,687, respectively
|
|
|
|
|
|
|
|
|
Investments in nonmarketable securities, at cost
|
|
|
-
|
|
|
|
1,645
|
|
Total assets
|
|
$
|
809,270
|
|
|
$
|
742,755
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
292,600
|
|
|
$
|
40,385
|
|
Total current liabilities
|
|
|
292,600
|
|
|
|
40,385
|
|
Total liabilities
|
|
|
292,600
|
|
|
|
40,385
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.10 par value; 1,000,000 shares authorized,
|
|
|
-
|
|
|
|
-
|
|
none issued and outstanding
|
|
|
|
|
|
|
|
|
Common stock, $.001 par value; 50,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
9,517,402 shares issued and outstanding
|
|
|
9,518
|
|
|
|
9,518
|
|
Additional paid-in-capital
|
|
|
479,848
|
|
|
|
927,355
|
|
Accumulated earnings (deficit)
|
|
|
27,304
|
|
|
|
(234,503
|
)
|
Total shareholders' equity
|
|
|
516,670
|
|
|
|
702,370
|
|
Total liabilities and shareholders' equity
|
|
$
|
809,270
|
|
|
$
|
742,755
|
|
The accompanying notes are an integral part of these consolidated financial statements.
WestMountain Company
|
|
Consolidated Statements of Operations and Comprehensive (Loss)
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Advisory/consulting fees, related parties
|
|
$
|
153,901
|
|
|
$
|
157,970
|
|
Advisory/consulting fees
|
|
|
4,025
|
|
|
|
20,049
|
|
Total revenue
|
|
|
157,926
|
|
|
|
178,019
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
630,181
|
|
|
|
328,372
|
|
Total operating expenses
|
|
|
630,181
|
|
|
|
328,372
|
|
|
|
|
|
|
|
|
|
|
Net (loss) from operations
|
|
|
(472,255
|
)
|
|
|
(150,353
|
)
|
|
|
|
|
|
|
|
|
|
Other income/(expense)
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,281
|
|
|
|
(76
|
)
|
Other income
|
|
|
13,500
|
|
|
|
4,562
|
|
Distribution income on nonmarketable securities
|
|
|
164,500
|
|
|
|
322,726
|
|
Loss on impairment of nonmarketable securities
|
|
|
-
|
|
|
|
(60,000
|
)
|
Loss on impairment of available for sale marketable securities
|
|
|
-
|
|
|
|
(147,102
|
)
|
Total other income/(expense)
|
|
|
180,281
|
|
|
|
120,110
|
|
|
|
|
|
|
|
|
|
|
Net (loss) before income taxes
|
|
|
(291,974
|
)
|
|
|
(30,243
|
)
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
|
(223,477
|
)
|
|
|
121,726
|
|
Net (loss)
|
|
$
|
(68,497
|
)
|
|
$
|
(151,969
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
Realized and unrealized income on investments in marketable equity securities, net of tax
|
|
|
-
|
|
|
|
18,934
|
|
Comprehensive income (loss)
|
|
$
|
(68,497
|
)
|
|
$
|
(133,035
|
)
|
|
|
|
|
|
|
|
|
|
Basic and Diluted net (loss) per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
Basic and Diluted weighted average common shares outstanding
|
|
$
|
9,517,402
|
|
|
$
|
9,517,402
|
|
The accompanying notes are an integral part of these consolidated financial statements.
WestMountain Company
|
|
Consolidated Statement of Shareholders' Equity
|
|
Years Ended December 31, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Accumulated
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Par
|
|
|
|
|
|
Par
|
|
|
Paid-in
|
|
|
(Deficit)
|
|
|
Comprehensive
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Capital
|
|
|
Earnings
|
|
|
Income (Loss)
|
|
|
Total
|
|
Balance at December 31, 2015
|
|
|
-
|
|
|
$
|
-
|
|
|
|
9,517,402
|
|
|
$
|
9,518
|
|
|
$
|
927,355
|
|
|
$
|
(82,534
|
)
|
|
$
|
(18,934
|
)
|
|
$
|
835,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on investments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,934
|
|
|
|
18,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(151,969
|
)
|
|
|
-
|
|
|
|
(151,969
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
|
-
|
|
|
$
|
-
|
|
|
|
9,517,402
|
|
|
$
|
9,518
|
|
|
$
|
927,355
|
|
|
$
|
(234,503
|
)
|
|
$
|
-
|
|
|
$
|
702,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution of dividends to common stockholders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(447,507
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(447,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of investment in nonmarketable securities, related party, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
330,304
|
|
|
|
-
|
|
|
|
330,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(68,497
|
)
|
|
|
-
|
|
|
|
(68,497
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2017
|
|
|
-
|
|
|
$
|
-
|
|
|
|
9,517,402
|
|
|
$
|
9,518
|
|
|
$
|
479,848
|
|
|
$
|
27,304
|
|
|
$
|
-
|
|
|
$
|
516,670
|
|
.
The accompanying notes are an integral part of these consolidated financial statements.
WestMountain Company
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(68,497
|
)
|
|
$
|
(151,969
|
)
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,202
|
|
|
|
2,630
|
|
Loss on disposal of property and equipment
|
|
|
1,716
|
|
|
|
1,712
|
|
Interest on note receivable
|
|
|
(2,281
|
)
|
|
|
-
|
|
Income tax benefit on sale of nonmarketable securities, related party
|
|
|
(194,452
|
)
|
|
|
-
|
|
Loss on impairment of available-for-sale marketable securities
|
|
|
-
|
|
|
|
147,102
|
|
Loss on impairment of nonmarketable securities
|
|
|
-
|
|
|
|
60,000
|
|
Deferred income tax
|
|
|
-
|
|
|
|
95,062
|
|
Changes in operating assets and operating liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
3,230
|
|
|
|
(2,255
|
)
|
Accounts receivable
|
|
|
(950
|
)
|
|
|
16,435
|
|
Accounts receivable, related parties
|
|
|
(6,000
|
)
|
|
|
-
|
|
Accounts payable and accrued liabilities
|
|
|
252,215
|
|
|
|
(3,748
|
)
|
Accrued liabilities, related parties
|
|
|
-
|
|
|
|
(5,751
|
)
|
Income tax receivable
|
|
|
9,769
|
|
|
|
(20,628
|
)
|
Net cash (used in) provided by operating activities
|
|
|
(2,048
|
)
|
|
|
138,590
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of equipment
|
|
|
-
|
|
|
|
(3,433
|
)
|
Purchases of nonmarketable securities
|
|
|
-
|
|
|
|
(30,000
|
)
|
Net cash (used in) investing activities
|
|
|
-
|
|
|
|
(33,433
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Dividends paid to common stockholders
|
|
|
(447,507
|
)
|
|
|
-
|
|
Net cash (used in) financing activities
|
|
|
(447,507
|
)
|
|
|
-
|
|
Net change in cash and cash equivalents
|
|
|
(449,555
|
)
|
|
|
105,157
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
$
|
685,128
|
|
|
$
|
579,971
|
|
Cash and cash equivalents, end of period
|
|
$
|
235,573
|
|
|
$
|
685,128
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
11,000
|
|
|
$
|
71,020
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non cash investing and financing activities
|
|
|
|
|
|
|
|
|
Purchase of non security investment shares in exchange for accounts receivable
|
|
$
|
-
|
|
|
$
|
21,000
|
|
Unrealized loss on investments in marketable equity securities, net of tax
|
|
$
|
-
|
|
|
$
|
(22,838
|
)
|
Sale of $1,650 non-marketable security in exchange for note receivable
|
|
$
|
526,401
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these consolidated financial statements.
WestMountain Company
Notes to Consolidated Financial Statements
(1) Nature of Organization and Summary of Significant Accounting Policies
Nature of Organization and Basis of Presentation
WestMountain Company ("we", "our" or the "Company"), formerly known as WestMountain Asset Management, Inc. was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations.
As a consultant to both public and private companies, we promote public visibility and market acceptance for our clients. We use a number of techniques to achieve these objectives for our clients, including developing public recognition of their business plans and strategic goals, managing investor relations, and engaging in website development and media production. We also utilize various social media outlets and services to deliver our client's message. We are paid fees for our services by our clients under written consulting agreements.
Principles of Consolidation
Property holding entities and other subsidiaries of which we own 100% of the equity or have a controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and transactions are eliminated.
The accompanying consolidated financial statements include the accounts of WestMountain Company and the following 100% owned subsidiaries, which were active at December 31, 2017 and 2016:
WestMountain Business Consulting, Inc.
WestMountain Allocation Analytics, Inc.
WestMountain Valuation Services, Inc.
Use of Estimates
The preparation of
the consolidated
financial statements in accordance with generally accepted accounting principles 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 consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents as of December 31, 2017 and 2016. The Company periodically monitors its positions with, and the credit quality of, the financial institutions with which it invests. Throughout the year, the Company has maintained balances in excess of the federally insured limits.
Accounts Receivable
Accounts receivable consists of amounts due to us for consulting fees associated with marketing and media consulting due from a related party. The Company considers accounts more than 30 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. Management records reasonable allowances to fairly represent accounts receivable amounts that are collectible. For the years ended December 31, 2017 and 2016, the Company did not record any allowance against our accounts receivable balance.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. In 2017 and 2016, the Company recorded various related party transactions.
Revenue
We act primarily as a fee-based marketing and media consultant to public companies. As a consultant, we provide investor relations, website development, video production, and associated marketing and media services to clients. We are paid fees for our services by our clients under written consulting agreements.
The Company recognizes revenue for its services generally when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured.
In the general course of business, we receive stock-based compensation for our services. In many cases, the underlying stock is thinly traded and determining the value of revenue requires substantial judgment. If the underlying stock is traded in an active market, the value used to record revenue is based on the quoted market value of the stock. If there is not an active market, then the value is determined using other inputs.
Concentrations
During the year ended December 31, 2017, three related party customers, Bohemian Asset Management, Inc., Nexcore Healthcare Capital Corporation and Peter Kloepfer accounted for approximately 97% of total revenue (51%, 45% and 1%, respectively). In addition, during the year ended December 31, 2016, these same three related parties, accounted for 89% of total revenue (45%, 41% and 3%, respectively). At December 31, 2017 and 2016, one related party customer, Nexcore Healthcare Capital Corp. accounted for 100% of total accounts receivable, related party.
Fair Value of Financial Instruments
Authoritative guidance
defines fair value
and
establishes a framework for measuring fair value and enhances disclosures about fair value measures. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company's significant market assumptions.
The valuation policies are determined by the Chief Financial Officer and approved by the Company's Board of Directors.
The three levels of the hierarchy are as follows:
Level 1: Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, default rates, etc.) or can be corroborated by observable market data.
Level 3: Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the assumptions that market participants would use.
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of financial assets require
d
to be measured at fair value on a recurring basis including cash, accounts receivable and accounts payable and accrued liabilities are carried at cost when approximates fair value due to the short maturity of these investments.
Available-for-sale securities are recorded at fair value. We primarily owned securities in smaller public companies that are thinly traded. Determining fair value requires substantial judgment. For common stock securities, we first determine whether or not the stock is traded in an active market. Securities traded in an active market are marked-to-market using the quoted market price of the stock and are classified as Level 1 inputs. Securities that do not have an active market are measured using unobservable inputs, and are classified as Level 3 inputs.
Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.
A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.
Available-for-sale securities were accounted for on a specific identification basis. As of December 31, 2016, all available-for-sale securities were deemed to be other than temporarily impaired and thus their carrying values have been written down to $0. During the year ended December 31, 2017, all of our available-for-sale securities were sold to a related party for $1.
Property and Equipment
Computers are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets of three years. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing computers are capitalized and depreciated. Upon retirement or disposition of computers and intangibles, the cost and related accumulated depreciation is removed from the accounts and any resulting gain or loss is recognized in the consolidated statements of operations. As of December 31, 2017, the Company recognized a loss on disposal of assets of $1,716.
Long-Lived Assets
All long-lived assets are reviewed when events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. An impairment loss is recognized when estimated undiscounted cash flows that can be generated by those assets are less than the carrying value of the assets. When an impairment loss is recognized, the carrying amount is reduced to its estimated fair value based on appraisals or other reasonable methods to estimate fair value. There was no impairment of long-lived assets as of December 31, 2017 and 2016.
Investments in Marketable and Nonmarketable Securities
The Company reports its investments in marketable securities on the
consolidated
balance sheet as available
-
for
-
sale. Investments are deemed to be marketable when they are investments in public companies. Investments reflect the original cost of the investments and unrealized gain/loss amounts based on the market price as of the date of the
consolidated
financial statements. Any tax adjustment related to the unrealized gain/loss is reflected as a deferred tax asset or liability on the
consolidated
balance sheet.
The Company reports its investments in nonmarketable securities on balance sheet using the cost method. Investments are deemed to be nonmarketable when they are investments in private companies. Investments in nonmarketable securities reflect the original cost of the investment.
Other comprehensive income (OCI) is made up of the unrealized gain/loss amounts related to the available
-
for
-
sale investments of the Company. The OCI balance is recorded net of tax.
Equity Method Investments
For investments that represent significant influence in the investee, the Company follows ASC 323
Investments – Equity Method and Joint Ventures
when recognizing these investments in the consolidated financial statements. Under this method, any net income or net loss must be recorded against the Company's investment, not to exceed the original investment and recognized as additional income or loss on the Company's consolidated statement of operations. In 2008 the Company acquired 39% of the outstanding shares of Marine Exploration, Inc. for $50,000 and accounted for this investment under the equity method. As of the year ended December 31, 2017 and 2016, the Company's investment in Marine Exploration was $0 due to significant losses of the investee. During December 2017, Marine Exploration was sold to a related party, along with other investments, for $1.
Income Taxes
Deferred income tax assets and liabilities are recognized for the expected future income tax consequences of events that have been included in the consolidated financial statements or income tax returns. Deferred income tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the years in which the differences are expected to reverse.
In evaluating the ultimate realization of deferred income tax assets, management considers whether it is more likely than not that the deferred income tax assets will be realized. Management establishes a valuation allowance if it is more likely than not that all or a portion of the deferred income tax assets will not be utilized. The ultimate realization of deferred income tax assets is dependent on the generation of future taxable income, which must occur prior to the expiration of the net operating loss carry forwards.
Earnings per Share
Basic (loss) per share is computed by dividing net (loss) by the weighted average number of shares of common stock outstanding. Diluted (loss) per share is determined by dividing the net (loss) by the sum of (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of stock awards determined utilizing the treasury stock method.
As of December 31, 2017 and 2016, there were no outstanding awards to impact our earnings per share computation.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued a comprehensive new revenue recognition standard that supersedes the revenue recognition requirements in
Topic 605
, Revenue Recognition
. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring those goods or services. The new standard also requires significantly expanded disclosure regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures of the standard's application impact to individual financial statement line items.
In March, April, May and December 2016, the FASB issued new guidance in
Topic 606
, Revenue from Contracts with Customers
, to address the following potential implementation issues of the new revenue standard: (a) to clarify the implementation guidance on principal versus agent considerations, (b) to clarify the identification of performance obligations and the licensing implementation guidance and (c) to address certain issues in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.
The Company has completed the process of evaluating the effect of the adoption.The majority of our revenue arrangements generally consist of a single performance obligation to transfer promised goods and/or services. Based on our evaluation process and review of our contracts with customers, the timing and amount of revenue recognized based on the standard is consistent with our revenue recognition policy under previous guidance. The Company will adopt the new standard effective January 1, 2018, using the modified retrospective approach, and will expand our financial statement disclosures in order to comply with the standard. We have determined the adoption of the standard will not have a material impact on our results of operations, cash flows, or financial position.
The FASB issued ASU 2016-13, Financial Instruments —Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments.
Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e. January 1, 2020 for calendar year entities). Management does not believe this amendment will have a material impact on the Company.
(2) Investments
Investments in Available-for-Sale Marketable Securities
The Company's investments in available-for-sale marketable securities as of December 31, 2017 is zero and 2016 is summarized below.
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As of December 31, 2016
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Accumulated
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Fair
|
|
|
Unrealized
|
|
Company Name
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Shares
|
|
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Cost
|
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Price
|
|
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Value
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Gain/(Loss)
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Hangover Joe's Holding Corporation
|
|
|
868,463
|
|
|
$
|
99,750
|
|
|
|
-
|
|
|
$
|
99,750
|
|
|
$
|
(99,750
|
)
|
Silver Verde May Mining Co., Inc.
|
|
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246,294
|
|
|
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46,488
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|
|
|
-
|
|
|
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46,488
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|
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|
(46,488
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)
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WestMountain Gold, Inc.
|
|
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918,000
|
|
|
|
918
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|
|
|
-
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|
|
|
918
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|
|
|
(918
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)
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Investment totals
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2,032,757
|
|
|
$
|
147,156
|
|
|
|
|
|
|
$
|
147,156
|
|
|
$
|
(147,156
|
)
|
Subsequent to December 31, 2016, the Company determined that our investments in Hangover Joe's Holding Corporation and Silver Verde May Mining Co., Inc., were other than temporarily impaired due to the fact they did not have adequate trading volume, there were no financial statements available for review, and based on the Company's understanding of the financial conditions of the entities. WestMountain Gold, Inc. filed Chapter 11 of the Bankruptcy Code on March 1, 2017. Upon a complete review and analysis of the Company's available-for-sale marketable securities on December 31, 2016, management recorded a full impairment loss, of $147,102, to the consolidated statement of operations, on all securities.
In December 2017, we sold two of our available for sale marketable securities, Hangover Joe's Holding Corporation and WestMountain Gold, Inc., along with other investments, to a related party for $1. The remaining two available for sale marketable securities ceased operations, Omni Bio Pharmaceutical, Inc. and Silver Verde May Mining Co., Inc.
Investments in Nonmarketable Securities
The Company's investments in nonmarketable securities accounted for under the cost method as of December 31, 2016 as summarized below:
|
December 31, 2016
|
|
Company Name
|
Shares
|
|
Units
|
|
Cost
|
|
Nonmarketable Securities:
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|
|
|
|
|
|
SKRP 16, Inc.
|
|
|
200,000
|
|
|
|
-
|
|
|
$
|
-
|
|
Nexcore Companies LLC (Common Units)
|
|
|
-
|
|
|
|
1,645,000
|
|
|
|
1,645
|
|
WestMountain Distressed Debt, Inc.
|
|
|
80,000
|
|
|
|
-
|
|
|
|
-
|
|
RavenBrick (Class C Units)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Shares or Units
|
|
|
280,000
|
|
|
|
1,645,000
|
|
|
$
|
1,645
|
|
In December 2017, we sold two of our available for sale marketable securities and one nonmarketable security, Hangover Joe's Holding Corporation, WestMountain Gold, Inc. and WestMountain Distressed Debt, Inc., to a related party for $1. The remaining one nonmarketable security ceased operations, SKRP 16, Inc. Our remaining nonmarketable security, Nexcore Companies LLC, was sold to a related party, Lake Marie, LLC., for a note receivable of $526,400. On December 18, 2017, the Company recorded a note receivable for this sale transaction. The note carried a 12% annual interest rate with a maturity date of January 18, 2018. Accrued interest of $2,281 was recorded as of December 31, 2017. The note receivable was paid on January 2, 2018 in the amount of $529,208. This included a principal amount of $526,400, additional securities of $1 and accrued interest of $2,807.
During February 2016, the Company paid $30,000 for 6.98 of RavenBrick Class C unit shares. RavenBrick was an existing customer to whom we provide advisory services. These services consisted of, but were not limited to, developing public recognition of their business plans and strategic goals, and engaging in website development and media production. In addition, during the second quarter ended June 30, 2016, the Company exchanged advisory services for an additional 3.72 of RavenBrick Class C unit shares recognized at no value.
Upon a complete review and analysis of the Company's nonmarketable securities during 2016, management determined to record an other than temporary impairment loss of $60,000 related to SKRP 16, Inc. of $30,000 and RavenBrick of $30,000 based on the Company's understanding of the financial conditions of the two entities. This loss was posted to the consolidated statement of operations for all nonmarketable securities.