Item 1. Financial Statements.
POWERSTORM CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
Balance
Sheets as of March 31, 2014 and December 31, 2013 (Unaudited)
|
|
F-2
|
|
|
|
Statements of Operations for the three months ended March 31, 2014 and 2013, and for the period from October 10, 2011 (Inception) through March 31, 2014 (Unaudited)
|
|
F-3
|
|
|
|
Statements
of Cash Flows for the three months ended March 31, 2014 and 2013, and for the period from October 10, 2011 (Inception)
through March 31, 2014 (Unaudited)
|
|
F-4
|
|
|
|
Notes to the Financial Statements (Unaudited)
|
|
F
-5
|
POWERSTORM CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheets
(Unaudited)
|
|
March
31,
2014
|
|
|
December 31,
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5,252
|
|
|
$
|
7,543
|
|
Prepaid expenses
|
|
|
1,516
|
|
|
|
1,402
|
|
Total current assets
|
|
|
6,768
|
|
|
|
8,945
|
|
|
|
|
|
|
|
|
|
|
Furniture and office equipment, net
|
|
|
5,274
|
|
|
|
5,584
|
|
Trademarks
|
|
|
6,733
|
|
|
|
5,828
|
|
Other assets
|
|
|
2,500
|
|
|
|
2,500
|
|
TOTAL ASSETS
|
|
$
|
21,275
|
|
|
$
|
22,857
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
41,207
|
|
|
$
|
52,486
|
|
Advances from related party
|
|
|
-
|
|
|
|
24,171
|
|
Total Liabilities
|
|
|
41,207
|
|
|
|
76,657
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized; 0 shares issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock, par value $0.001 per share, 300,000,000 shares authorized; 20,852,901 and 20,116,381 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively
|
|
|
20,853
|
|
|
|
20,116
|
|
Additional paid-in capital
|
|
|
236,048
|
|
|
|
157,533
|
|
Deficit accumulated during the development stage
|
|
|
(276,833
|
)
|
|
|
(231,449
|
)
|
TOTAL STOCKHOLDERS’ DEFICIT
|
|
|
(19,932
|
)
|
|
|
(53,800
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT
|
|
$
|
21,275
|
|
|
$
|
22,857
|
|
The accompanying notes are an integral part of these unaudited financial statements.
POWERSTORM CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
Statements of Operations
(Unaudited)
|
|
Three Months
Ended
March 31,
2014
|
|
|
Three Months
Ended
March 31,
2013
|
|
|
From
October 10,
2011
(Inception)
to March
31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
12,850
|
|
|
$
|
2,200
|
|
|
$
|
44,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
71,949
|
|
|
|
27,857
|
|
|
|
333,739
|
|
Depreciation expense
|
|
|
310
|
|
|
|
249
|
|
|
|
2,300
|
|
Total operating expenses
|
|
|
72,259
|
|
|
|
28,106
|
|
|
|
336,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(59,409
|
)
|
|
|
(25,906
|
)
|
|
|
(291,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement of accounts payable
|
|
|
14,025
|
|
|
|
-
|
|
|
|
14,025
|
|
Other income
|
|
|
-
|
|
|
|
270
|
|
|
|
270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(45,384
|
)
|
|
$
|
(25,636
|
)
|
|
$
|
(276,833
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share - basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted
|
|
|
20,124,569
|
|
|
|
19,241,311
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited financial statements.
POWERSTORM CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
(Unaudited)
|
|
Three Months
Ended
March 31, 2014
|
|
|
Three Months
Ended
March 31, 2013
|
|
|
From October 10,
2011 (Inception)
through March
31, 2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(45,384
|
)
|
|
$
|
(25,636
|
)
|
|
$
|
(276,833
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
600
|
|
|
|
-
|
|
|
|
27,013
|
|
Shares issued for expenses incurred
|
|
|
-
|
|
|
|
-
|
|
|
|
9,273
|
|
Gain on settlement of accounts payable
|
|
|
(14,025
|
)
|
|
|
-
|
|
|
|
(14,025
|
)
|
Depreciation expense
|
|
|
310
|
|
|
|
249
|
|
|
|
2,300
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
(114
|
)
|
|
|
(849
|
)
|
|
|
(2,616
|
)
|
Accounts payable
|
|
|
2,746
|
|
|
|
9,992
|
|
|
|
55,232
|
|
Net cash used in operating activities
|
|
|
(55,867
|
)
|
|
|
(16,244
|
)
|
|
|
(199,656
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of furniture and office equipment
|
|
|
-
|
|
|
|
(871
|
)
|
|
|
(7,574
|
)
|
Acquisition of trademarks
|
|
|
(905
|
)
|
|
|
(629
|
)
|
|
|
(3,808
|
)
|
Net cash used in investing activities
|
|
|
(905
|
)
|
|
|
(1,500
|
)
|
|
|
(11,382
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash
|
|
|
-
|
|
|
|
-
|
|
|
|
35,000
|
|
Advances from related party
|
|
|
54,481
|
|
|
|
16,033
|
|
|
|
181,290
|
|
Net cash provided by financing activities
|
|
|
54,481
|
|
|
|
16,033
|
|
|
|
216,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(2,291
|
)
|
|
|
(1,711
|
)
|
|
|
5,252
|
|
Cash and cash equivalents - beginning of period
|
|
|
7,543
|
|
|
|
3,559
|
|
|
|
-
|
|
Cash and cash equivalents - end of period
|
|
$
|
5,252
|
|
|
$
|
1,848
|
|
|
$
|
5,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for :
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for prepaid expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,800
|
|
Shares issued for capitalized trademarks
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,925
|
|
Shares issued for other assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,400
|
|
Shares issued to repay related party advances
|
|
$
|
73,652
|
|
|
$
|
13,780
|
|
|
$
|
176,290
|
|
Additional paid-in capital contribution by shareholder to pay accounts payable on behalf of the Company
|
|
$
|
5,000
|
|
|
$
|
-
|
|
|
$
|
5,000
|
|
The accompanying notes are an integral part of these unaudited financial statements.
POWERSTORM CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
(Unaudited)
NOTE 1 – GENERAL ORGANIZATION AND BUSINESS OPERATIONS
Powerstorm Capital Corp. (the “Company”)
is a development stage company incorporated in Delaware on October 10, 2011 and is located in Rancho Palos Verdes, California.
The Company was formed solely for the purpose of identifying and entering into business acquisitions within the telecommunications
infrastructure space. To date, the Company has not entered into any discussions or negotiations with any companies it would intend
to acquire. The Company’s management intends to focus on targets located primarily in Asia, South America, and Western and
Eastern Europe, as it believes that businesses with operating history and growth potential in these locations would benefit significantly
from access to the United States capital markets and may offer the potential for capital appreciation stemming from the economic
growth in such emerging markets.
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a normal
recurring nature, necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods
presented.
The accompanying unaudited interim financial statements
as of March 31, 2014, for the three months ended March 31, 2014 and 2013 and for the period from October 10, 2011 (inception)
through March 31, 2014 have been prepared in accordance with accounting principles generally accepted in the United States of
America (“U.S. GAAP”) for interim financial information and on the same basis as the annual audited financial statements.
In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a
normal recurring nature, necessary for a fair presentation of the financial position, results of operations, and cash flows for
the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The balance
sheet at December 31, 2013 has been derived from audited financial statements; however, the notes to the financial statements
do not include all of the information and notes required by accounting principles generally accepted in the United States of America
for complete financial statements. The accompanying unaudited interim financial statements should be read in conjunction with
the financial statements and notes thereto for the period from October 10, 2011 (inception) to December 31, 2013 included in 10-K
filed with SEC on April 15, 2014.
Development Stage Activities
The Company is presently in the development
stage, with no revenues. Accordingly, all of the Company’s operating results and cash flows reported in the accompanying
financial statements are considered to be those arising from the development stage activities and represent the ”cumulative
from inception” amounts from its development stage activities.
Use of Estimates
The preparation of financial statements in conformity with US
GAAP 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.
Cash and Cash Equivalents
The Company considers all highly liquid short-term
investments purchased with an original maturity of three months or less to be cash equivalents. These investments are carried
at cost, which approximates fair value.
Intangible Assets
The Company’s intangible assets consist
of trademarks with indefinite life. The Company capitalizes the filing and legal fees related to the trademark registrations, which
totaled $6,733 and $5,828 as of March 31, 2014 and December 31, 2013, respectively.
The Company reviews its indefinite-lived
intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets. If
these estimates change in the future, the Company may be required to record impairment charges for these assets. As of March 31,
2014, no impairment was recorded.
Furniture and Office Equipment
Furniture and office equipment is stated
at cost and depreciated using the straight-line method over 7 years, the estimated life of the asset. Computers and software developed
or obtained for internal use are depreciated using the straight-line method over the estimated useful life of 5 years. Repairs
and maintenance are charged to expense as incurred.
Income Taxes
The Company uses the asset and liability
method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences
between financial reporting and income tax carrying amounts of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse. The Company reviews deferred tax assets for a valuation
allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance,
if necessary, is provided against deferred tax assets, based upon management’s assessment as to their realization.
Revenues Recognition
The Company’ revenue generated during the
development stage consisted of revenues from consulting and advisory services. Revenue is recognized at the time when a price
is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is
assured.
Stock-Based Compensation
The Company expenses the cost of employee
services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the
service period.
Equity instruments issued to parties other
than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair
value of the instruments issued in exchange for such services, whichever is more reliably measurable.
Net Loss per Common Share
Basic net loss per common share is computed
by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common
share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive
effect of common stock equivalents. In periods when losses are reported, the diluted weighted-average number of common shares outstanding
excludes common stock equivalents because their inclusion would be anti-dilutive. There were no potentially dilutive securities
as of March 31, 2014 and December 31, 2013.
Subsequent Events
The Company evaluates subsequent events
through the date when financial statements are issued for disclosure consideration.
New Accounting Pronouncements
The Company does not expect adoption of
the new accounting pronouncements will have a material effect on the Company’s financial statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements were
prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and depends upon the Company’s
ability to establish itself as a profitable business. The Company is a development stage company and has incurred an accumulated
loss of $276,233 since inception. The Company has negative working capital of $34,439 and will require additional funds to
finance its business plan for the next twelve months. Due to the start-up nature of the Company, the Company expects to incur
additional losses in the immediate future. The Company’s ability to continue as a going concern is dependent upon its ability
to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they become due. To date, the Company’s founders have provided funding
for operations until the Company raises sufficient capital to provide for the first-year operating expenses.
The Company is planning to obtain financing
either through the issuance of equity or debt. To the extent that funds generated from any private placements, public offerings,
and/or bank financings are insufficient, the Company will have to raise additional working capital through other sources.
NOTE 4 – FURNITURE AND OFFICE
EQUIPMENT, NET
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
Furniture and equipment
|
|
$
|
5,391
|
|
|
$
|
5,391
|
|
Computers and software
|
|
|
2,183
|
|
|
|
2,183
|
|
Less: accumulated depreciation
|
|
|
(2,300
|
)
|
|
|
(1,990
|
)
|
Furniture and office equipment, net
|
|
$
|
5,274
|
|
|
$
|
5,584
|
|
During the three months ended March 31, 2014 and 2013, the Company
recorded depreciation expense of $310 and $249, respectively.
NOTE 5 – RELATED PARTY TRANSACTIONS
From October 10, 2011 (inception) through
March 31, 2014, a related party entity advanced to the Company and made payments to several of the Company’s vendors on behalf
of the Company for a total of $181,290. The Company’s President and Chairman of the Board of Directors serves as the president
of this related party entity. The advances are due on demand and bear no interest.
On October 15, 2012, the Company issued 420,000 shares of common
stock to this related party entity as reimbursement for the advances and payments made on behalf of the Company. The shares were
valued at the fair value of the expense reimbursement of $42,000.
On March 22, 2013, the Company issued 137,800 shares of common
stock to this related party entity as reimbursement for the advances and payments made on behalf of the Company. The shares were
valued at the fair value of the expense reimbursement of $13,780.
On June 30, 2013, the Company issued 245,180 shares of common
stock to this related party entity in full reimbursement for the advances and payments made on behalf of the Company. The shares
were valued at the fair value of the expense reimbursement of $24,518.
On September 30, 2013, the Company issued 223,401 shares of
common stock to this related party entity in full reimbursement for the advances and payments made on behalf of the Company. The
shares were valued at the fair value of the expense reimbursement of $22,340.
On March 31, 2014, the Company issued 736,520
shares of common stock to this related party entity in full reimbursement for the advances and payments made on behalf of the Company
of $73,652. The shares were valued at the fair value of $0.1 per share.
As of March 31, 2014 and December 31, 2013, the Company owed to this related party entity $0 and $24,171,
respectively.
NOTE 6 – EQUITY
Common shares
The Company is authorized to issue 305,000,000
shares of capital stock. These shares are divided into two classes with 300,000,000 shares designated as common stock at $0.001
par value and 5,000,000 shares designated as preferred stock at $0.01 par value.
During the three months ended March 31, 2014, the Company
issued:
-
|
736,520 shares of common stock to a related party entity for advances to the Company and payments made
on behalf of the Company of $73,652. These shares were valued at the fair value of $0.01 per share.
|
During the period from October 10, 2011 (inception) through
December 31, 2013, the Company issued:
|
-
|
51,000 shares of common stock to third-party providers for legal and consulting services received. These shares were valued at their grant date fair value of $5,100.
|
|
-
|
100,000 shares of common stock to third-party investors for cash proceeds of $10,000.
|
|
-
|
420,000 shares of common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $42,000.
|
|
-
|
15,000,000 shares of common stock to its founders at par value of $0.001 per share.
|
|
-
|
25,000 shares of common stock to one of its executive officers and a third party vendor for services provided to the Company. These shares were recorded at their fair value of $113.
|
|
-
|
3,630,000 shares of common stock to Key Media Management for payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $16,398.
|
|
-
|
On March 22, 2013 - 137,800 shares of common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $13,780.
|
|
-
|
On May 2, 2013 - 50,000 shares of common stock to a third party for cash proceeds of $5,000.
|
|
-
|
On May 17, 2013 - 100,000 shares of common stock to a third party for cash proceeds of $10,000.
|
|
-
|
On June 30, 2013 - 245,180 shares of common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $24,518.
|
|
-
|
On July 21, 2013 - 100,000 shares of common stock to a third party for cash proceeds of $10,000.
|
|
-
|
On September 30, 2013 – 223,401 shares of common stock to related party entities for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement of $22,340.
|
|
-
|
On December 31, 2013 – 34,000 shares of common stock to various third party providers for consulting and marketing services received. These shares were valued at the fair value of the service rendered of $3,400.
|
Stock-based compensation expense
During the three months ended
March 31, 2014, the Company appointed 5 new members to its board of advisors, and promised to issue 10,000 shares to each
advisor upon completion of their one year term. As of March 31, 2014, the Company has not issued a share to the board of
advisors. The Company recorded Share-based compensation and additional paid-in capital related to the shares of $600.
NOTE 7 – GAIN ON SETTLEMENT OF
ACCOUNTS PAYABLE
In 2014, the Company and one of its vendors reached a settlement
on an outstanding accounts payable. The Company’s vendor forgave a $14,025 accounts receivable on the previous services provided
and the Company recorded a gain on settlement of accounts payable of $14,025.
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
The following is management’s
discussion and analysis of the consolidated financial condition and results of operations of Powerstorm Capital Corp. (“Powerstorm”,
the “Company”, “we”, and “our”) for the three month period ended March 31, 2014. This discussion
contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as its plans, objectives,
expectations and intentions. Its actual results and the timing of certain events could differ materially from those anticipated
in these forward-looking statements. The following information should be read in conjunction with the consolidated interim financial
statements for the period ended December 31, 2013 and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this
“Report”).
Overview
Powerstorm provides equipment and services
for the emerging telecommunication infrastructure industry, particularly in energy storage and management, base stations, telecommunication
towers and related equipment.
The founders of Powerstorm have worked
in mobile telecommunications for the past decade. Our founders formed Powerstorm to pursue opportunities they had identified related
to growth and technology shifts in the industry, particularly as they relate to renew, upgrade and deploy new hybrid energy storage
solutions in emerging markets.
We are a development stage company, and
to date, our development efforts have been focused primarily on planning and development of our business model. To date we have
limited operating history for investors to evaluate the potential of our business. As such, we have not yet built our customer
base or fully defined our market position. We do not currently have any written or oral commitments to provide products services
to customers. In addition, our sources of cash are not adequate for the next 12 months of operations. If we are unable to raise
additional cash, we will either have to suspend or cease our expansion plans entirely.
Our Strategy
Powerstorm intends to serve the strong,
growing demand for telecommunications infrastructure worldwide, and in particular in emerging markets.
Due to the continued increase in subscribers
for wireless personal communication and phone services, we expect wireless carriers will need to add a significant number of cell
sites to maintain the performance of their networks in the areas they currently cover and to extend service to new markets. In
addition, we believe that as wireless data services, such as e-mail, Internet access, and video, are deployed on a widespread basis,
wireless carriers will need to augment the cell density of their existing networks throughout the emerging world. They will also
need to upgrade the technology used in their networks to accommodate the need for greater coverage and bandwidth, as well as increase
efficiency and reduce operating costs.
Out of five million cellular towers worldwide,
three million are in emerging regions such as Africa and the Middle East. Of these, over one million are tied to unstable grids
and 640,000 are off-grid. To maintain and grow this network, telecommunication operators must ensure access to energy sources,
and must store, manage and deploy power efficiently and reliably. Navigant Research forecasts that revenue for off-grid base station
power will grow from $1.6 billion in 2012 to more than $10.5 billion in 2020.
Presently operators in emerging areas rely
principally on diesel generators as a primary energy source for cellular towers. These generators are costly to operate and maintain,
rely on fossil fuels, and cause harm to the environment. As a result, the industry is looking to alternative energy sources, including
solar, wind, and hydroelectric, to power mobile telecommunications over the coming decades. The ultimate goal is a “green
base station,” which will likely be powered by a combination of renewable energy and fuel cell technology. We believe that
this technology shift presents a compelling business opportunity.
Our founders and management team has significant
experience and relationships in the mobile telecommunications industry, with geographical focus in Africa, the Middle East, Eastern
Europe and Southeast Asia. Our founders’ legacy in providing replacement equipment to telecom operators has conferred an
understanding of the needs and technology acquisition behavior of these operators, and has given Powerstorm a recognizable brand
in this market. Accordingly, the Company believes it is well positioned to capitalize on the hybrid energy opportunity.
As part of its planning activities, Powerstorm
has evaluated solutions to reduce network operating expenditures. Powerstorm has met and discussed integration of hybrid power
with leading telecommunication operators, suppliers and integrators. Powerstorm identified general infrastructure deficiencies
and power management gaps as opportunities to propose more compelling hybrid power solutions to meet global operators demand to
reduce network costs and increase efficiencies by deploying hybrid technologies.
Powerstorm plans to start by offering branded
solutions that integrate equipment manufactured by existing suppliers. In the coming years, we intend to develop proprietary technology
solutions that offer advantages such as increased duty cycle, reduced installation cost, superior energy efficiency, and value-added
features. We intend to develop these solutions through internal research and development, as well as strategic initiatives such
as mergers and acquisitions, licenses, joint ventures, and joint development arrangements, among other activities.
Powerstorm has in his pipeline since the
end of the GSMA show Feb 2014 a possible deal flow of more than 300 sites for 2014 but has not closed any such offering and is
fiercely negotiating with the operators. The Company can not guarantee and positive outcome or give a timeline of deal closure.
Results of Operations
|
|
Three Months
Ended
March 31,
2014
|
|
|
Three Months
Ended
March 31,
2013
|
|
|
From
October 10,
2011
(Inception)
Through
March 31,
2014
|
|
Revenues
|
|
$
|
12,850
|
|
|
$
|
2,200
|
|
|
$
|
44,911
|
|
Total operating expenses
|
|
|
72,259
|
|
|
|
28,106
|
|
|
|
336,039
|
|
Gain on settlement of accounts payable
|
|
|
14,025
|
|
|
|
-
|
|
|
|
14,025
|
|
Other Income
|
|
|
-
|
|
|
|
270
|
|
|
|
270
|
|
Net loss
|
|
$
|
(45,384
|
)
|
|
$
|
(25,636
|
)
|
|
$
|
(276,833
|
)
|
For the three months ended March 31, 2014 and 2013
Revenues
We are still in our development stage and have generated some non-recurring revenues from consulting services
of $12,850 during the three months ended March 31, 2014 and $2,200 revenues during the three months ended March 31, 2013.
The increase of $10,650 over the prior year was primarily because we provided more consulting services provided.
Operating Expenses
We incurred total operating expenses of $72,259 and $28,106 for the three months ended March 31, 2014
and 2013, respectively. The increase of $44,153 over the prior year was primarily due to an increase in professional fees and filings
fees in connection with the preparation and filing of the registration statement with the Securities and Exchange Commission (the
“SEC”).
Net Loss
During the three months ended March 31, 2014 and 2013, we incurred a net loss of $45,384 and $25,636,
respectively. The increase of $19,748 in net loss over the prior same quarter was primarily due to an increase in consulting fees
in connection with the business development.
From October 20, 2011 (Inception) through March 31, 2014
Revenues
For the period from October 10, 2011 (Inception) to March 31,
2014, we generated some non-recurring revenues from consulting services of $44,911.
Operating Expenses
We incurred total operating expenses of $336,039 for the period since inception on October 10, 2011 to
March 31, 2014, which consisted primarily of general and administrative expenses. For the three months ended March 31, 2014
our general and administrative expenses were comprised of audit and accounting fees of $5,689, legal fees of $4,044, consulting
fee of $37,573, rent expense of $7,500, filing fees of $936, marketing expenses of $3,266, and other expenses totaling $12,941.
The legal fees were primarily incurred in connection with the preparation and filing the registration statement with the SEC. The
increase in consulting fees was primary incurred in connection with the business development.
Net Loss
We had a net loss of $276,833 for the
period from October 10, 2011 (Inception) to March 31, 2014 due to incurred operating expenses and some non-recurring revenues.
Liquidity and Capital Resources
Our financial condition as of March 31,
2014 and December 31, 2013 is summarized as follows:
Working Capital:
|
|
March 31,
2014
|
|
|
December 31,
2013
|
|
Current assets
|
|
$
|
6,768
|
|
|
$
|
8,945
|
|
Current liabilities
|
|
|
(41,207
|
)
|
|
|
(76,657
|
)
|
Working capital (deficit)
|
|
$
|
(34,439
|
)
|
|
$
|
(67,712
|
)
|
Cash Flows:
|
|
Three Months
Ended
March 31,
|
|
|
From
October 10,
2011
(Inception)
through
March 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
Cash used in operating activities
|
|
$
|
(55,867
|
)
|
|
$
|
(16,244
|
)
|
|
$
|
(199,656
|
)
|
Cash used in investing activities
|
|
|
(905
|
)
|
|
|
(1,500
|
)
|
|
|
(11,382
|
)
|
Cash provided by financing activities
|
|
|
54,481
|
|
|
|
16,033
|
|
|
|
216,290
|
|
Net increase (decrease) in
cash
|
|
$
|
(2,291
|
)
|
|
$
|
(1,711
|
)
|
|
$
|
5,252
|
|
We are a development stage company and have incurred an accumulated loss of $276,833 since inception.
We had a working capital deficit of $34,439 for the three months ended March 31, 2014, which is not sufficient to finance over
business plan for the next twelve months. Our independent auditors have issued an audit opinion for us for the financial statements
ended December 31, 2013 and the period then ended, which includes a statement expressing substantial doubt as to our ability to
continue as a going concern due to our limited liquidity and our lack of revenues.
We have minimal operating expenses at the
present time due to our limited business activities. To date, our founders have provided funding for our operations. We will, however,
be required to raise additional capital over the next twelve months to meet our current administrative expenses.
We plan to secure financing either through
the issuance of equity or debt. To the extent that funds generated from any private placements, public offerings, and/or bank financings
are insufficient, we will need to raise additional working capital through other sources.
Our resources were insufficient to effectuate
our inaugural business plan dated October 10, 2011, that extended through the period ending March 31, 2014. We had expected to
incur a minimum of $150,000 in operating expenses during the subsequent 12 months of operations.
We had previously indicated that we would
have to raise the funds to pay for these expenses. We may have to borrow money from founders or shareholders, issue debt or equity,
or enter into a strategic arrangement with a third party. There is no assurance that we will secure additional capital. There currently
are no agreements, arrangements, or understandings that would enable Powerstorm to obtain funds through bank loans, lines of credit,
or any other source. If we are unable to raise funds for acquisitions it will have a severe negative impact on our ability to execute
our business.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The preparation of financial statements
in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to
make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
Intangible Assets
The Company’s intangible assets consist
of trademarks with indefinite life. The Company capitalizes the filing and legal fees related to the trademark registrations, which
totaled $6,733 and $5,828 as of March 31, 2014 and December 31, 2013, respectively. The Company reviews its indefinite-lived intangible
assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The
Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets. If these
estimates change in the future, the Company may be required to record impairment charges for these assets. As of March 31, 2014,
no impairment was recorded.
Revenues Recognition
The Company’ revenue generated during the development stage consisted of revenues from consulting
and advisory services. Revenue is recognized at the time when a price is fixed and determinable, persuasive evidence of an arrangement
exists, the service has been provided, and collectability is assured.
Stock-Based Compensation
The Company expenses the cost of employee
services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the
service period.
Equity instruments issued to parties other
than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair
value of the instruments issued in exchange for such services, whichever is more reliably measurable.
Recent Accounting Pronouncements
The Company does not expect adoption of the new accounting pronouncements
will have a material effect on the Company’s financial statements.