News Column


May 8, 2014

Executive Overview

We are a development stage company that has not recorded revenues since our reactivation in 2006. The Company intends to rely upon advances or loans from management, significant stockholders or third parties to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated to provide funds to us in the future. These factors raise doubt as to our ability to continue as a going concern. Our plan is to combine with an operating company to generate revenue.

As of the date of this report, we have not had any discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although we will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

We anticipate that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of securities. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

We anticipate that the struggling global economy will restrict the cash available for such transactions and will restrict the number of business opportunities available to us. There can be no assurance in the current economy that we will be able to acquire an interest in an operating company.


If we obtain a business opportunity, then it may be necessary to raise additional capital. We anticipate that we will sell our common stock to raise this additional capital. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.

Liquidity and Capital Resources

We have not recorded revenues from operations since inception and we have not established an ongoing source of revenue sufficient to cover our operating costs. We have relied upon loans and advances from related parties to fund our operations. During the three months ended March 31, 2014 ("2014 first quarter") we borrowed $5,000 from a third party to fund our operations. In addition, a stockholder provided or paid for administrative and professional services and out-of-pocket costs totaling $2,800 during the 2014 first quarter.

Our cash increased from $3,051 at December 31, 2013 to $5,017 at March 31, 2014 primarily due to proceeds from a third party loan. Our total liabilities also increased from $208,155 at December 31, 2013 to $218,665 at March 31, 2014 primarily due to additional loans and accounts payable paid on our behalf by related or third parties, along with increases in accrued interest on loans.

We intend to obtain capital from management, significant stockholders and third parties to cover minimal operations; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business opportunity with which we acquire or merge will affect our profitability for the long term.

During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through advances and loans provided by management, significant stockholders or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.

Results of Operations

We did not record revenues in either the 2014 or 2013 first quarters. General and administrative expense decreased from $7,995 for the quarterly period ended March 31, 2013 ("2013 first quarter") to $5,834 for the 2014 first quarter. The general and administrative expense decrease for the 2014 first quarter reflects reductions in operational costs.

Total other expense increased from $2,484 for the 2013 first quarter to $2,710 the 2014 first quarter primarily due to interest expense related to loans.

Our net loss decreased from $10,479 for the 2013 first quarter to $8,544 for the 2014 first quarter. Management expects net losses to continue until we acquire or merge with a business opportunity.


As of March 31, 2014 the Company borrowed $35,500 from First Equity Holdings Corp, a stockholder. These notes are unsecured, due on demand, and bear interest at 8% per annum. No payments for principle or interest have been made to date for these loans. The accrued interest on this loan was $5,942 at March 31, 2014. In addition, First Equity Holdings Corp. provided or paid on our behalf administrative and professional services and out-of-pocket costs in the amount of $2,800 during the 2014 first quarter.


During 2011 the Company owed $93,962 to Whitney O. Cluff, our former President. Mr. Cluff sold this loan to third parties in 2011. The accrued interest on this loan was $37,028 at March 31, 2014. This loan is due on demand and has interest imputed at an annual rate of 8%.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

We qualify as an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, among other things, we will not be required to:

Have an auditor report on our internal controls over financial reporting

pursuant to Section 404(b) of the Sarbanes-Oxley Act;

Submit certain executive compensation matters to stockholder advisory votes,

such as "say-on-pay" and "say-on-frequency"

Obtain stockholder approval of any golden parachute payments not previously

approved; and

Disclose certain executive compensation related items such as the correlation

between executive compensation and performance and comparisons of the Chief

Executives compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion; (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Edgar Glimpses

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters