News Column

ATOMIC PAINTBALL INC - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

July 10, 2014

The following discussion of our financial condition and results of operation for 2012 and 2011 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements.

Overview

We are a development stage company formed in 2001. Our business model is to own and operate paintball facilities and to provide services and products in connection with paintball sport activities at our facilities and through a website. Our actions taken to date have consisted of organizing our company, designing our business plan, including interviews with industry participants, visits to paintball field and retail facilities, evaluating website development firms, architectural firms, trademark attorneys, and suppliers of paintball markers, paintballs, and equipment, as well as real estate brokers.

As described later in this section, our ability to fully implement our business plan is dependent on raising sufficient capital to fund the further development of our company. Going forward, we expect that our efforts will be focused on achieving this goal. While we have raised funds in private offerings, there are no assurances, however, that we will be able to raise all of the necessary capital and without access to funding we will be unable to pursue other aspects of our business development and may have to cease operations completely.

Going Concern

We reported a net loss of $63,526 for 2012 and we have incurred accumulated losses of approximately $1.3 million since inception through December 31, 2012. The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2012 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our operating losses and need to raise additional capital. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to increase our revenues and report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

Plan of Operations

To date, we have funded our activities through debt as well as through working capital advances from a related party. In order to fully organize our company and implement the first phase of our business model, we will need to raise approximately $500,000. Given the development stage nature of our company and the current status of the capital markets, there are no assurances we will be able to raise the necessary capital. Even if we are ultimately able to raise the capital, there are no assurances that our business model will be successful or that we will ever develop any revenue generating operations. However, assuming we are able to raise the capital, we expect to begin the launch of phase one of operating plans within six to nine months of receiving the capital.

20 --------------------------------------------------------------------------------



Results of Operations

For the Year Ended December 31, 2012 Compared to the Year Ended December 31, 2011

During the years ended December 31, 2012 and 2011, we did not recognize any revenue from our operations. We do not expect to recognize revenues from our operations in 2013, as management is focused on raising sufficient capital to fund the further development of our company.

During the year ended December 31, 2012, we recognized operational expenses of $46,396 compared to $172,682 during the year ended December 31, 2011. The decrease of $126,286 or 73% was the result of reduced professional fees.

We expect that these expenses to increase during 2013 as we begin to further implement our business plan, although we are unable at this time to quantify the actual amount of this anticipated increase as it will be based upon our varying level of operations.

Material Changes in Financial Condition

From December 31, 2011 to December 31, 2012 cash and cash equivalents decreased from $522 to $134. Total current liabilities increased from $226,993 to $272,131. The increase in total current liabilities of $45,138 was attributable to increases in accounts payable of $13,722, accrued payroll of $14,285, and accrued interest of $17,131.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. At December 31, 2012, we had a working capital deficit of $271,997 as compared to a working capital deficit of $226,471 at December 31, 2011. Historically we have relied upon debt funding and advances and loans from related parties to fund our cash needs. Our current liabilities increased $45,138 at December 31, 2012 from December 31, 2011 primarily related to an increase in accounts payable of approximately $13,722, an increase in accrued payroll of $14,285, and an increase in accrued interest on our various debt obligations of $17,131.

As of December 31, 2012 we have $251,924 principal amount and $42,148 of accrued interest due under the terms of various promissory notes. These notes, which are unsecured, are all in default and we do not have sufficient funds to repay these obligations. As a result of the default, the note holders could enforce their rights under these notes at any time.

Net cash used in operating activities for the year ending December 31, 2012 was $388 as compared to net cash used in operating activities of $50,464 for the year ending December 31, 2011. During the year ending December 31, 2012, net cash used in operating activities included increases in accounts payable and accrued expenses. We did not generate or use any cash from investing activities as of December 31, 2012 and 2011. Net cash provided by financing activities in each of the year ended December 31, 2011, reflects proceeds from shareholder advances and related party line of credit facility. We did not generate or use any cash from financing activities as of December 31, 2012.

We have not generated any revenues and we are dependent upon advances from a related party to fund our ongoing general and administrative expenses and satisfy our obligations. We need to initially raise $500,000 to fund the initial launch of our business plan, in addition to funds necessary to satisfy our current obligations. We do not, however, have any agreements or understanding with any third party to provide this financing. Until we can raise the necessary funds, we will be unable to further implement our business plan. Given the development stage nature of our company and the thinly traded nature of the public market for our common stock, there are no assurances we will be able to raise the necessary capital. If we are unable to raise capital as necessary, our ability to continue as a going concern is in jeopardy and investors could lose their entire investment in our company.

21 --------------------------------------------------------------------------------



Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 1 to the financial statements included in this Report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.


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



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters