Forward-Looking Statements: No Assurances Intended
In addition to historical information, this Quarterly Statement contains
forward-looking statements, which are generally identifiable by use of the words
"believes," "expects," "intends," "anticipates," "plans to," "estimates,"
"projects," or similar expressions. These forward-looking statements represent
Management's belief as to the future of Electric Tractor, Corp. (formerly
Tabularasa, Inc.) Whether those beliefs become reality will depend on many
factors that are not under Management's control. Many risks and uncertainties
exist that could cause actual results to differ materially from those reflected
in these forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements. We undertake no obligation to
revise or publicly release the results of any revision to these forward-looking
We are a Canadian company that designs, produces and markets electric tractors
that are based on our patented electronic drive system. The original electric
tractors using this patented technology, the Electric OX, were produced by
Electric Tractor Corporation of Baden, Ontario (the "Baden Company"), between
1998 and 2005. In 2010, we acquired the patent to the electronic drive system
along with some other assets that were originally owned by the Baden Company. We
are currently developing a new generation of electric utility tractors called
the Electric OX2 utility Tractor. It is expected that we will require $2.5
million in investment over the next two years to execute our business plan.
Critical Accounting Policies and Estimates
This management's discussion and analysis of financial condition and results of
operations are based upon our unaudited consolidated financial statements, which
have been prepared without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The preparation of these consolidated
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses. We base our
estimates 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.
There have been no significant changes in our critical accounting policies as
disclosed in the Notes to our Financial Statements contained in our Annual
Report on Form 10-K for the year ended December 31, 2013 filed with the
Securities and Exchange Commission on June 13, 2014.
Comparison of Three Months ended June 30, 2014 and 2013
Due to our lack of funds, our operations are very limited. As a result, we
realized no revenue from August 14, 2006 (inception) to June 30, 2014.
During the period from August 14, 2006 (inception) to June 30, 2014, we realized
an accumulated deficit of $413,653. This deficit is primarily comprised of
continuous development expenses and maintenance of presentation materials and
our web site.
Our largest expense for the quarter ended June 30, 2014 was consulting fees in
the amount of $7,566 as compared with $45,317 for the same period in 2013.
$5,292 of the Consulting fees consisted of fees owed to our President and Vice
President of Marketing for their services. As of June 30, 2014, we had an
accumulated balance owed to these officers in the amount of $97,941.
Our Professional Fees increased to $9,131
for the quarter ended June 30, 2014
compared to $3,414
for the quarter ended June 30, 2013
. Professional fees
includes our Audit Fees, Legal Fees for patent registration and SEC
and advisory work.
General Operating Expense
We incurred $763
for office supplies in the quarters ended June 30,
and 2013, respectively.
Our rent was $3,300
for both the quarters ended June 30, 2014
We realized a net loss of $21,335
for the quarter ended June 30, 2014
compared to a loss of $52,136
for the quarter ended June 30, 2013
. The decrease
is primarily related to the decrease of $37,751
in consulting expenses, which
was partially offset by the increase in professional fees of $5,717
Liquidity and Capital Resources
Since we initiated our business operations in 2010, our operations have been
funded primarily by loans from RA Zirger Holdings, Inc.
, a company controlled by
our director and officer, Richard Zirger
. From inception through the period
ended June 30, 2014
, our operations were funded by loans from RA Zirger Holdings
in the amount of $303,763
. For the three month period-ended June 30, 2014
were funded by loans in the amount of $15,994
We currently have $0
of inventory and $0
cash on hand. Therefore, in order to
carry on our business, we must obtain additional capital.
We continue to actively seek investment capital. At the present time, we
continue to rely on funding from our majority shareholder RA Zirger Holdings,
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition or results
Plan of Operation
We expect to need $2.5 million
in investment over the next two years to execute
our business plan. Absent such investment to fund our two-year plan, as more
fully set forth below, we believe our majority shareholder intends to continue
subsidizing our administrative expenses and that our director and officer will
continue to provide his time without charge, during the next 12 months. While we
do not have formal repayment terms for the funds advanced on our behalf, we
expect that we will be required to pay back such funding in the future or to
issue shares of common stock in lieu of cash.
The initial use of proceeds will be used to upgrade components in our current
controller. We will also be updating the body design to provide improved curb
appeal and driver ergonomics. Funds will also be used to finance the startup of
the motor and gearbox manufacturing.
The following represents our expected use of proceeds should we succeed in
Manufacturing and production
? Drive Motors to be purchased from a source that we have identified, $20,000
for the first month and $30,000 per month thereafter for as long as the
tractors are being assembled.
? Frame tooling together with other metal components - $25,000.
? Most assembly tooling is available, therefore there is no immediate cost.
Small tools have to be repurchased as required by the assembly line. Estimated
total cost is $10,000.
? Body design update and tooling - over a 3 month period - $75,000
? Cutting Motors and Gear Boxes - Estimated at $35,000.
? Office and Plant - $12,000 for first and last month's rent. Manpower costs for
set up of equipment and production equipment - $6,000 per month, increasing
after 4 months.
? Production Engineer and plant manager - $18,000 per month.
Sales and Marketing
We expect that upon launch, sales will be directly handled by internal sales
staff responding to orders placed on our website until a dealer network is in
place. We are unable to initiate the launch of the products until we have
obtained adequate funding for our business plan. Currently, we have one
commissioned sales person who is receiving indications of interests through our