ALPINE 4 HOLDINGS, INC. - Annual Report: 2014 (Form 10-K)

---

---

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
 

[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
 

Delaware	46-5482689
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
15589 N. 77th Street, Suite B
Scottsdale, AZ	85260
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s telephone number, including area code: (949) 442 7565

 

 

 

[  ] Large Accelerated Filer	[  ] Accelerated Filer
[  ] Non-accelerated Filer (do not check if a smaller reporting company)	[X] Smaller Reporting Company

 

 

 

-	Knowing when a vehicle has left a specific geo-fence that a dealership can establish in Alpine 4’s proprietary system. With this product, dealership management can know the location of its inventory.
-	Knowing how many days any vehicle has been in the dealership’s new car inventory. The dealership’s sales team will know where the oldest vehicle on the lot is, resulting in a substantial savings in flooring fees.
-	Eliminating lost sales because the dealership team did not know a vehicle’s battery needed to be charged or the vehicle refueled before the customer did.  The LotWatch provides information about the vehicle’s status, including battery charge, fuel status, and the last time it was driven.
-	Keeping the dealership informed of customer and employee driving habits when a new vehicle leaves the lot.
-	Recording events specific to each of the dealership’s vehicles. Dealership management will know when and how many times any new vehicle on its lot has been driven!
-	Generating customized reports  on a pre-determined basis.  Dealership management can determine the scope and frequency of reports generated by the system.

-	Vehicle Awareness: real-time notifications of check-engine diagnostics and vehicle maintenance are sent to the owner of the vehicle and the selling dealership service department via text message or email.
-	Nationwide Service Support: the mobile application provides location-specific services, which can help refer a vehicle owner to the nearest dealership and recommend driving distances, based on diagnostics from the check-engine light and information obtained from the vehicle’s on board computer.
-	Convenient Access: the mobile app and a proprietary web-based interface provide vehicle owners with 24-hour convenient and easy access to vehicle information or location.
-	Lost or Stolen Vehicle Support: the embedded GPS feature enables the vehicle owner to assist local police departments with locating a lost or stolen vehicle through Alpine 4’s toll-free customer service line.
-	Personal Assistance: ServiceWatch includes Personal Assistance as an additional benefit.  Services include directory assistance, driving directions, and dining suggestions and reservations are examples of features that are available. Typical arrangements include a three-year contract for the vehicle owner which can be renewed directly with Alpine 4 if the owner desires.
-	Usage Visibility: this feature permits parents to effectively manage the safety of younger drivers by utilizing GPS services online or via the mobile app. The ability to obtain new driver habits, top speeds, panic stops, quick accelerations, curfew notifications and geo-fence guidelines are examples of the features available in ServiceWatch.

 

 

 

 

 

 

 

-	VAD (Value Added Distributor Agreement) from Sweratel with exclusive rights in North America, South America, and the Caribbean;

-	All related Sweratel inventory;

-	All equipment and other tangible assets;

-	Any contracts for Costa Rica, Bahamas, Turks and Caicos, and Conakry, Guinea;

-	All plans, drawings and specifications, and all books, records, and files, related to the intellectual property transferred, which PMI owns or both possesses and has the rights to assign to the Company.

-	Accept right, title, and interest in and to the Purchased Assets;

-	Issue 8,000,000 shares of the Company’s restricted common stock; and

-	Issue 500,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred”) to PMI.

-	Number of shares: Alpine 4 designated 500,000 shares of Series A Preferred Stock.

-	No dividends will accrue.

-	Except as otherwise required by law, the Series A Preferred Stock have no voting rights.

-	Redemption: Alpine 4 has the right to redeem the shares of Series A Preferred as follows:

o	One half of the shares of Preferred Stock shall be redeemable by Alpine 4 on the 12 month anniversary of the date of issuance of the shares of Preferred Stock;

o	One half of the shares of Preferred Stock shall be redeemable by Alpine 4 on the 18 month anniversary of the date of issuance of the shares of Preferred Stock; and

o	The “Redemption Price” shall be equal to the Stated Value of such shares of Preferred Stock, namely $1.00 per share.

-

Conversion: The shares of Series A Preferred are convertible only upon the Company’s determination to not exercise its right to redeem the Series A Preferred. If the Company determines to not redeem any tranche of the Series A Preferred, the holder may submit a conversion notice to the Company with respect to that tranche.

•	the number of customers Alpine 4 is able to attract and retain over time;
•	the economy, and in periods of rapidly declining economic conditions, customers may defer purchases of new vehicles, which will impact the sales and deployment of products such as ours;
•	the competitive environment in the automotive aftermarket product market may force us to reduce prices below our desired pricing level or increase promotional spending; and
•	the ability to anticipate changes in consumer preferences and to meet customers’ needs in a timely cost effective manner.

•	the ability to establish, maintain and eventually grow market share in a competitive environment.
•	delivery of its information globally, geopolitical changes, changes in liquor regulations, currency fluctuations, natural disasters, pandemics and other factors beyond our control may increase the cost of items it purchases, create communication issues or render product delivery difficult which could have a material adverse effect on its sales and profitability.

		The competitive environment in the automotive repair service industry that may force us to reduce prices below the optimal pricing level or increase promotional spending;
		Our ability to anticipate changes in consumer preferences and to meet customers’ needs for our products in a timely cost effective manner; and



Our ability to establish, maintain and eventually grow market share in a competitive environment.



there is no guarantee that we will enter into definitive agreements with distributors and on acceptable terms;

		hiring and training qualified personnel in local markets;
		managing marketing and development costs at affordable levels;

		cost and availability of labor;
		the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards; and



securing required governmental approvals in a timely manner when necessary.

•	announcements of new products, brands, commercial relationships, acquisitions or other events by us or our competitors;
•	regulatory or legal developments in the United States and other countries;
•	fluctuations in stock market prices and trading volumes of similar companies;
•	general market conditions and overall fluctuations in U.S. equity markets;
•	variations in our quarterly operating results;
•	changes in our financial guidance or securities analysts' estimates of our financial performance;
•	changes in accounting principles;
•	our ability to raise additional capital and the terms on which we can raise it;
•	sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;
•	additions or departures of key personnel;
•	discussion of us or our stock price by the press and by online investor communities; and
•	other risks and uncertainties described in these risk factors.

None.

 

There are statements in this Report that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Report carefully, especially the risks discussed under “Risk Factors.” Although management believes that the assumptions underlying the forward looking statements included in this Report are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Report will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We expressly disclaim any obligation to update or revise any forward-looking statements.

 

-	Knowing when a vehicle has left a specific geo-fence that a dealership can establish in Alpine 4’s proprietary system. With this product, dealership management can know the location of its inventory.
-	Knowing how many days any vehicle has been in the dealership’s new car inventory. The dealership’s sales team will know where the oldest vehicle on the lot is, resulting in a substantial savings in flooring fees.
-	Eliminating lost sales because the dealership team did not know a vehicle’s battery needed to be charged or the vehicle refueled before the customer did.  The LotWatch provides information about the vehicle’s status, including battery charge, fuel status, and the last time it was driven.
-	Keeping the dealership informed of customer and employee driving habits when a new vehicle leaves the lot.
-	Recording events specific to each of the dealership’s vehicles. Dealership management will know when and how many times any new vehicle on its lot has been driven.
-	Generating customized reports on a pre-determined basis.  Dealership management can determine the scope and frequency of reports generated by the system.

-	Vehicle Awareness: real-time notifications of check-engine diagnostics and vehicle maintenance are sent to the owner of the vehicle and the selling dealership service department via text message or email.
-	Nationwide Service Support: the mobile application provides location-specific services, which can help refer a vehicle owner to the nearest dealership and recommend driving distances, based on diagnostics from the check-engine light and information obtained from the vehicle’s on board computer.
-	Convenient Access: the mobile app and a proprietary web-based interface provide vehicle owners with 24-hour convenient and easy access to vehicle information or location.
-	Lost or Stolen Vehicle Support: the embedded GPS feature enables the vehicle owner to assist local police departments with locating a lost or stolen vehicle through Alpine 4’s toll-free customer service line.
-	Personal Assistance: ServiceWatch includes Personal Assistance as an additional benefit.  Services include directory assistance, driving directions, and dining suggestions and reservations are examples of features that are available. Typical arrangements include a three-year contract for the vehicle owner which can be renewed directly with Alpine 4 if the owner desires.
-	Usage Visibility: this feature permits parents to effectively manage the safety of younger drivers by utilizing GPS services online or via the mobile app. The ability to obtain new driver habits, top speeds, panic stops, quick accelerations, curfew notifications and geo-fence guidelines are examples of the features available in ServiceWatch.

 

 

 

 

		Payments due by Period
		Less than				One to				Three to				More Than
		One Year				Three Years				Five Years				Five Years				Total
Notes payable		$	50,000			$	-			$	-			$	-			$	50,000
Purchase order for devices (1)			82,000				-				-				-				82,000
Interest on notes payable			-				-				-				-				-
Total		$	132,000			$	-			$	-			$	-			$	132,000

 

(1)

Purchase orders to CalAmp Wireless Data Systems, Inc., for purchase of CalAmp devices to be used in connection with CalAmp Connect PULS Master Service Agreement, discussed above.

The Company will account for its revenue per the guidance in ASC 605-25-25 by allocating the total contract amount between the product and service elements.  When a vehicle is sold to the driving consumer who purchases the ServiceWatch™ service, the cost of the service is added to the price of the car and the amount collected by the dealership for this service is remitted to the Company.  At the time of the vehicle is purchased, the Company recognizes revenue for the retail value of the telematics device that has been installed in the vehicle and the remaining amount is recognized over the service period of generally 24 to 36 months.

ITEM 9.                    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

 

 

PART III

Name	Age	Officer/Position	Board Member/Position
Richard Battaglini (1)	48	Former President	Former Chairman of the Board
Kent B. Wilson (2)	42	Chief Executive Officer, Chief Financial Officer, President	Director
Charles Winters (3)	38	-	Chairman of the Board
Scott Edwards	60	-	Director

 

 

 

 

As noted above, on April 29, 2015, Mr. Battaglini resigned from all positions with Alpine 4.

Section 16(a) beneficial ownership reporting compliance. Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2014, the following persons failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 2014:

Name and Principal Position	Number  of Late Reports	Transactions  not Reported  in Timely Manner	Known Failures  to File a  Required Form
Richard Battaglini, Chairman of the Board, President	1	1	None
Kent Wilson, CEO, CFO, Director	2	2	None
Charles Winters, Director	1	1	None
Scott Edwards, Director	1	1	None

-	The term of Mr. Battaglini’s employment began on July 16, 2014 and automatically renews at the end of each year, unless Mr. Battaglini’s employment with the Company is terminated.
-	Mr. Battaglini’s base salary during the initial 60 days of employment shall be $150,000 per year. Thereafter, his annual salary will be $300,000 per year. Compensation shall be payable twice per month and the Company is entitled to deduct any applicable deductions and remittances as required by law. He is also to be provided an annual increase of 10% in base salary automatically applied at the beginning of each year. Upon the event that the Company’s stock price trades above $3.00 per share, the Company will pay Mr. Battaglini a $250,000 performance bonus. Additionally, the Company issued to Mr. Battaglini, 123,200,000 restricted common shares of stock.  (As discussed more fully below. Mr. Battaglini agreed to cancel 78,000,000 of these shares on October 23, 2014.)
-	Mr. Battaglini is entitled to a company vehicle or a $1,500 per month car allowance.
-	Mr. Battaglini is required to devote full time efforts to the Company pursuant to the Battaglini Agreement.

-	The term of Mr. Wilson’s employment began on July 16, 2014 and automatically renews at the end of each year, unless Mr. Wilson’s employment with the Company is terminated.
-	Mr. Wilson’s principal duties, as Chief Executive Officer, include:
o	Monitor the overall performance of Alpine 4 Automotive Technologies, Ltd.;
o	Meet with management reporting to this position on a regular basis to establish goals, objective and long-range plans for:  Profit, Revenue, Expense, Capital, Sales & Marketing, and Business Development;
o	Provide budgetary guidelines;
o	Establish or approve all corporate policies, including: Operations Policy, Fiscal Policy, Sales and Marketing Policy, Compensation and Benefit Policy, Personnel Policy;
o	Meet with Chief Financial Officer/Controller to monitor the overall financial condition of Alpine 4 Automotive Technologies, Ltd.;
o	Establish and execute plans for purchase and/or replacement of equipment and facilities to ensure continued growth; and
o	Ensure that adequate working capital is available to operate the business.
-	Mr. Wilson’s principal duties as Chief Financial officer, include:
o	Work with the CEO and the Board of Directors (BOD) in the financial management and planning of Alpine 4 Automotive Technologies, Ltd.;
o	Plan:  Plan daily activities that accomplish correct completion of duties of financial reporting staff schedule to sufficiently maintain high levels of work processing and accuracy;
o	Direct: Develop Assigned Task Lists (ATL) and supervise the completion of duties of the financial reporting staff to assure the accomplishment of departmental goals and objectives;
o	Control: Performance is controlled through the Cash Flow, Executive Summary and Monthly Budget Variance Report and evaluating pertinent financial information and take action to correct variances; and
o	Take any reasonable action necessary to carry out the responsibilities of the position, while it is consistent with 1) established company policy, 2) sound business judgment and 3) the achievement of profit.
-	Mr. Wilson’s base salary during the initial 60 days of employment shall be $120,000 per year. Thereafter, his annual salary will be $300,000 per year. Compensation shall be payable twice per month and the Company is entitled to deduct any applicable deductions and remittances as required by law. He is also to be provided an annual increase of 5% in base salary automatically applied at the beginning of each year. Upon the event that the Company’s stock price trades above $3.00 per share, the Company will pay Mr. Wilson a $250,000 performance bonus. Additionally, the Company will issue to Mr. Wilson, 27,000,000 restricted common shares of stock.
-	Mr. Wilson shall also be entitled to a company vehicle or a $1,500 per month car allowance.

 

Name and principal position

Year

Salary ($)

Bonus ($)

Stock awards ($)

Option awards ($)

Nonequity incentive plan compensation ($)

Nonqualified deferred compensation earnings ($)

All other compensation ($)

Total ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Richard Battaglini, President

2014

$0 (see note 1)

$0 (see note 3)

$

2,700

0

0

0

$18,000 (see note 5)

$

20,700

Kent Wilson, Chief Executive Officer (Principal Executive Officer)

2014

$0 (see note 2)

$0  (see note 3)

$12,320 (see note 4)

0

0

0

$18,000 (see note 5)

$

30,320

1.	As noted above, pursuant to his employment agreement, Mr. Battaglini’s base salary during the initial 60 days of employment will be $150,000 per year. Thereafter, his annual salary will be $300,000 per year. Compensation shall be payable twice per month and the Company is entitled to deduct any applicable deductions and remittances as required by law. He is also to be provided an annual increase of 10% in base salary automatically applied at the beginning of each year.  Mr. Battaglini has elected to not take a salary from the Company until the Company has begun generating revenues, either from the LotWatch and ServiceWatch products, or from some other source.  As of the date of this Report, the Company has not accrued any salary for Mr. Battaglini.
2.	As noted above, Mr. Wilson’s base salary during the initial 60 days of employment shall be $120,000 per year. Thereafter, his annual salary will be $300,000 per year. Compensation shall be payable twice per month and the Company is entitled to deduct any applicable deductions and remittances as required by law. He is also to be provided an annual increase of 5% in base salary automatically applied at the beginning of each year.  Mr. Wilson has elected to not take a salary from the Company until the Company has begun generating revenues, either from the LotWatch and ServiceWatch products, or from some other source.  As of the date of this Report, the Company has not accrued any salary for Mr. Wilson.
3.	In the event that the Company’s stock price trades above $3.00 per share, the Company will pay Mr. Battaglini and Mr. Wilson a $250,000 performance bonus.
4.	As discussed more fully in this Report, Mr. Battaglini agreed to cancel 78,000,000 of these shares (with an aggregate value of $7,800) on October 23, 2014.
5.	Both Mr. Battaglini and Mr. Wilson are entitled to a company vehicle or a $1,500 per month car allowance.

As of December 31, 2014, the Company had no outstanding equity awards (options, units of unvested stock, or incentive plan awards).

 

 

 

Name		Fees earned  or paid in cash ($)				Stock awards ($)				Option awards ($)				Non-equity  incentive plan compensation ($)				Nonqualified  deferred compensation  earnings ($)				All other compensation ($)				Total ($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)
Richard Battaglini		$	0				0			$	0			$	0			$	0			$	0			$	0
Kent Wilson		$	0				0			$	0			$	0			$	0			$	0			$	0
Charles Winters		$	0			$	100			$	0			$	0			$	0			$	0			$	100
Scott Edwards		$	0			$	100			$	0			$	0			$	0			$	0			$	100

 

-	99,791,390 shares of Alpine 4 outstanding prior to the Share Exchange;
-	25,000,000 shares of AutoTek outstanding prior to the Share Exchange; and
-	0 shares of AutoTek common stock outstanding following the Share Exchange (assumes that all AutoTek stockholders participate fully in the Share Exchange, although there can be no guarantee that any of the AutoTek stockholders or how many will participate in the Share Exchange).

 

 

Name and Address of beneficial owner (1)		Amount of beneficial ownership  prior  to Share  Exchange				Percentage of Class  prior to Share Exchange				Amount of beneficial  ownership following Share Exchange				Percentage of  Class  following  Share Exchange (2)
Richard Battaglini, Chairman of the Board and President			55,226,000				55.34	%			55,226,000				22.11	%
Kent B. Wilson, Chief Executive Officer, Chief Financial Officer, Director			34,316,890				34.39	%			34,316,890				13.74	%
Scott Edwards, Director			2,000,000				2.00	%			2,000,000				0.80	%
Charles Winters, Director			2,000,000				2.00	%			2,000,000				0.80	%
All Officers and Directors As a Group (4 persons)			93,542,890				93.74	%			93,260,890				37.45	%

 

(1)	Except as otherwise indicated, the address of the stockholder is: Alpine 4 Automotive Technologies Ltd., 15589 N. 77th Street, Suite B., Scottsdale, AZ 85260.
(2)	The percentages listed in the table are based on 99,791,390 shares of Alpine 4 common stock prior to the Share Exchange, and following a hypothetical exchange of all 25,000,000 shares of AutoTek common stock (constituting 100% of the known outstanding shares of AutoTek common stock) for 150,000,000 shares of Alpine 4 common stock, an aggregate of 249,791,390 shares of Alpine 4 common stock outstanding.  There can be no guarantee as to the total number of shares of AutoTek common stock that will be exchanged in the Share Exchange.

 

 

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm		F-1
Financial Statements:
	Balance Sheet as of December 31, 2014	F-2
	Statement of Operations for the Period from April 22, 2014 (Inception) through December 31, 2014	F-3
	Statement of Stockholders’ Deficit for the Period from April 22, 2014 (Inception) through December 31, 2014	F-4
	Statement of Cash Flows for the Period from April 22, 2014 (Inception) through December 31, 2014	F-5
	Notes to Financial Statements	F-6

Exhibit  Number		Description
2.1		Asset Purchase and Share Exchange Agreement (included as Annex A to the joint proxy statement/prospectus forming part of Alpine 4’s registration statement, previously filed with the SEC).
3.1		Certificate of Incorporation of Alpine 4 Automotive Technologies Ltd. (incorporated by reference to Exhibit 3.1 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
3.2		Certificate of Amendment to Certificate of Incorporation, dated June 27, 2014 (incorporated by reference to Exhibit 3.3 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014).
3.3		Certificate of Amendment to Certificate of Incorporation, dated June 30, 2014 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014).
3.4		By-Laws of Alpine 4 (incorporated by reference to Exhibit 3.2 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
10.1		Pure Mobility Asset Purchase Agreement (incorporated by reference to Exhibit 99 to Alpine 4’s Current Report on Form 8-K filed with the Commission on December 17, 2014)
10.2		PULS™ Master Service Agreement by and between Alpine 4 and CalAmp Wireless Data Systems, Inc., dated as of August 15, 2014. Portions of this exhibit were redacted pursuant to a request for confidential treatment submitted to the Securities and Exchange Commission on January 15, 2015.
10.3		Rescission of Asset Purchase Agreement with Pure Mobility (incorporated by reference to Exhibit 99 to Alpine 4’s Current Report on Form 8-K filed with the Commission on February 25, 2015)
10.4		Clean Choice Solar Membership Purchase Agreement (incorporated by reference to Exhibit 99 to Alpine 4’s Current Report on Form 8-K filed with the Commission on January 30, 2015)
31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1		Form of Proxy Card of AutoTek Incorporated (incorporated by reference to Exhibit 99.1 to Alpine 4’s Registration Statement on Form S-4, Amendment No. 1, filed with the Commission on January 20, 2015)
99.2		Form of Share Exchange Election Form for AutoTek Incorporated stockholders (incorporated by reference to Exhibit 99.2 to Alpine 4’s Registration Statement on Form S-4, filed with the Commission on November 4, 2014)

Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALPINE 4 AUTOMOTIVE TECHNOLOGIES LTD.
Date: May 4, 2015	By:	/s/ Kent B. Wilson
	Name:	Kent B. Wilson,
	Title:	Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer) President and Director

 

/s/ Kent B. Wilson	Chief Executive Officer, President	May 4, 2015
Kent B. Wilson	Chief Financial Officer, Director
/s/ Scott Edwards	Director	May 4, 2015
Scott Edwards
/s/ Charles Winters	Chairman of the Board	May 4, 2015
Charles Winters

		Page
Report of Independent Registered Public Accounting Firm		F-2
Financial Statements:
	Balance Sheet as of December 31, 2014	F-3
	Statement of Operations for the Period from April 22, 2014 (Inception) through December 31, 2014	F-4
	Statement of Stockholders’ Deficit for the Period from April 22, 2014 (Inception) through December 31, 2014	F-5
	Statement of Cash Flows for the Period from April 22, 2014 (Inception) through December 31, 2014	F-6
	Notes to Financial Statements	F-7

 

 

 

 

		December 31,
		2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	758
Inventory			224,100
Total current assets			224,858
TOTAL ASSETS		$	224,858
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable		$	359,626
Accrued expenses			16,498
Notes payable			50,000
Total current liabilities			426,124
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized,  none issued and outstanding			-
Common stock, $0.0001 par value, 500,000,000 shares authorized, 85,050,390 shares issued and outstanding			8,505
Additional paid-in capital			395,463
Accumulated deficit			(605,234	)
Total stockholders' deficit			(201,266	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	224,858

 

		For the Period From
		April 22, 2014
		(Inception) through
		December 31,
		2014
Revenue		$	-
Operating expenses:
General and administrative expenses			605,234
Total operating expenses			605,234
Loss from operations			(605,234	)
Loss before income tax			(605,234	)
Income tax			-
Net loss		$	(605,234	)
Weighted average shares outstanding :
Basic			90,113,336
Diluted			90,113,336
Loss per share
Basic		$	(0.01	)
Diluted		$	(0.01	)

 

										Additional								Total
		Common Stock								Paid-in				Accumulated				Stockholders'
		Shares				Amount				Capital				Deficit				Deficit
Balance, April 22, 2014 (Date of inception)			-			$	-			$	-			$	-			$	-
Issue shares of common stock for cash			10,300,390				1,030				91,848				-				92,878
Issue shares of common stock for services			152,750,000				15,275				259,945								275,220
Cancellation of previously issued shares			(78,000,000	)			(7,800	)			7,800								-
Capital contribution from majority stockholder											35,870								35,870
Net loss			-				-				-				(605,234	)			(605,234	)
Balance, December 31, 2014		$	85,050,390			$	8,505			$	395,463			$	(605,234	)		$	(201,266	)

 

STATEMENT OF CASH FLOWS

		For the Period From
		April 22, 2014
		(Inception) through
		December 31,
		2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(605,234	)
Adjustments to reconcile net loss to net cash used in operating activities:
Issuance of common stock for services			275,220
Change in current assets and liabilities:
Inventory			(224,100	)
Accounts payable			359,626
Accrued expenses			16,498
Net cash used in operating activities			(177,990	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock			92,878
Capital contribution from majority stockholder			35,870
Proceeds from issuances of notes payable			50,000
Net cash provided by financing activities			178,748
NET INCREASE IN CASH AND CASH EQUIVALENTS			758
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE			-
CASH AND CASH EQUIVALENTS, ENDING BALANCE		$	758
CASH PAID FOR:
Interest		$	-
Income taxes		$	-