High Sierra Technologies, Inc. - Quarter Report: 2009 September (Form 10-Q)

GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

See Notes to Financial Statements.

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GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

See Notes to Financial Statements.

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GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

September 30, 2009 and 2008

NOTE 1:

SUMMARY OF HISTORY AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Company was incorporated in the State of Colorado on May 9, 1996.  The Company originally intended to engage in the business of marine transportation.  These plans did not materialize, and the Company is currently considering alternative business opportunities.

Development Stage Company

The financial statements present the Company as a development stage company in accordance with ASC Topic 915 (SFAS No. 7) , “Accounting and Reporting by Development Stage Enterprises,” because of its short operating history and minimal operations.  

Income Taxes

The Company utilizes the liability method of accounting for income taxes as set forth in ASC Topic 740 (SFAS No. 109), “Accounting for Income Taxes.”  Under the liability method, deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.  An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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

For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

Revenue Recognition

The Company plans to recognize revenue when the following four conditions are present: (1) persuasive evidence of an agreement exists, (2) the price is fixed or determinable, (3) delivery has occurred or services are rendered, and (4) collection is reasonably assured.

Income (Loss) Per Common Share

Income (Loss) per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the periods presented.  The Company has no potentially dilutive securities, such as preferred stock, options, or warrants, outstanding during the periods presented.  Accordingly, basic and dilutive loss per common share are the same.

Reclassifications

The principal and interest components of the Notes Payable – Related Parties (Note 4) for the year ended December 31, 2008 and from inception have been reclassified within the Statements of Cash Flows to conform to current quarter financial statement presentation.  

Recently Issued Accounting Pronouncements

In June 2009 the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

Statement of Financial Accounting Standards ("SFAS") SFAS No. 165 (ASC Topic 855), "Subsequent Events", SFAS No. 166 (ASC Topic 810), "Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140", SFAS No. 167 (ASC Topic 810), "Amendments to FASB Interpretation No. 46(R)", and SFAS No. 168 (ASC Topic 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162" were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.

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GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

September 30, 2009 and 2008

NOTE 1:

SUMMARY OF HISTORY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements (Continued)

Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2009-15 which contain technical corrections to existing  guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

NOTE 2:

INCOME TAXES

At September 30, 2009, the Company had a net operating loss carryover of $145,401 which expires as follows:

However, due to the fact that the Company will most likely enter a new line of business and has had a change in control, the loss will most likely never be utilized.

At September 30, 2009, the Company had a deferred tax asset in the amount of $49,436.  The amount has been reserved 100% due to the Company’s history of losses.

The increase in the valuation allowance was $5,687 and $5,489 for the nine months ended September 30, 2009, and 2008, respectively.

Components of income tax are as follows:

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GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

September 30, 2009 and 2008

NOTE 2:

INCOME TAXES (Continued)

A reconciliation of the provision for income tax expense with the expected income tax computed by applying the federal statutory income tax to income before provision for income taxes is as follows:

NOTE 3:

COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

Management of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates that have not been disclosed.

NOTE 4:

NOTES PAYABLE - RELATED PARTIES

At September 30, 2009, the Company owed $62,807 to related parties for money advanced to the Company or expenses paid on behalf of the Company; $31,735 is non-interest bearing, $2,600 bears annual interest at 24%, $1,000 bears annual interest at 18%, $12,820 bears annual interest at 9%, and $3,500 bears annual interest at 7%.  Total principal and accrued interest at September 30, 2009, was $51,654 and $11,153, respectively, resulting in total payable balance of $62,807.

During the year ended December 31, 2007, the Company converted two notes into its common stock. One note for $5,000 was due on October 13, 2005, and accrued a total interest of $2,500 on that date.  This note was converted to common stock at $.07 per share for 71,429 shares.  The $2,500 interest on the note is also convertible to common stock at $.07 per share which approximated the fair market value of the stock on the date the loan was made. The interest was not converted into common stock during the period, and is included in the payable balance at September 30, 2009.

A second note for $2,500 was converted to common stock during the year ended December 31, 2007, at $.07 per share for 35,714 shares. Accrued interest on the note was not converted during the period, and is included in the payable balance at September 30, 2009.

NOTE 5:

STOCK TRANSACTIONS

Shortly after inception in May 1996, the Company raised $811 from various individuals from the sale of its common stock.  A Form “D” was filed with the Securities and Exchange Commission to report the sales.  $3,000 was also raised from the sale of preferred stock, which was later cancelled during an ownership change of the Company.  50,000 shares of common stock were issued in 2003 for services valued at $500.

The preferred stock has the following preferences: [a] the stock is non-voting; [b] holders of the stock have the right to receive a mandatory dividend of 10% of the Company’s adjusted gross profit as reflected on the annual tax return, and the dividend is to be paid within ten days of the filing of the tax return (to date no dividends have been required to be paid); [c] upon dissolution or winding up of the Company, 10% of the Company’s assets shall be distributed to the holders of the preferred stock prior to division and distribution of assets to the holders of the Company’s common stock.

In April 2005, the Company purchased and retired 59,050 shares of its common stock.  The Company paid $5,000 for the shares, resulting in a $4,970 loss that was recorded as an increase in accumulated deficit.

In March 2007, the Company converted two notes totaling $7,500 into 107,143 shares of its common stock (Note 4).

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GULF & ORIENT STEAMSHIP COMPANY, LTD.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

September 30, 2009 and 2008

NOTE 6:

GOING CONCERN

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  At September 30, 2009, the Company had an accumulated deficit of $150,371 and a working capital deficit of $138,590.

The Company’s continued existence is dependent on its ability to generate sufficient cash flow to cover operating expenses and to invest in future operations.  Management is actively pursuing possible business opportunities.  The Company will look to related parties to fund continuing operations until a suitable business opportunity is identified.

NOTE 7 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through November 2, 2009, and determined there are no events to disclose.

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