PIONEER POWER SOLUTIONS, INC. - Quarter Report: 2008 December (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
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[X]
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Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the quarterly period ended December 31,
2008
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[ ]
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Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period __________ to __________
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Commission
File Number: 333-155375
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Sierra Concepts,
Inc.
(Exact
name of small business issuer as specified in its charter)
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Nevada
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26-3387077
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(State
or other jurisdiction of incorporation or
organization)
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(IRS
Employer Identification
No.)
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6074 Citation Court, Reno , NV
89523
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(Address
of principal executive
offices)
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775-200-6853
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(Issuer’s
telephone number)
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_______________________________________________________________
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [X]
Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
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[ ]
Large accelerated filer
[ ]
Non-accelerated filer
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[ ]
Accelerated filer
[X]
Smaller reporting company
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes [ ] No
State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 8,400,000 common shares as of
February 11, 2009.
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TABLE OF
CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
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| Item 4T: | Controls and Procedures | |
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PART II – OTHER INFORMATION
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| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | |
PART
I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Our
unaudited financial statements included in this Form 10-Q are as
follows:
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| F-3 | Statement of Stockholders’ Equity from inception on September 16, 2008 (date of inception) through December 31, 2008 (unaudited); |
These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim
period ended December 31, 2008 are not necessarily indicative of the results
that can be expected for the full year.
SIERRA CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
As
of December 31, 2008 and September 30, 2008
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December
31, 2008
(unaudited)
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September
30, 2008
(audited)
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ASSETS
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|||||
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Current
assets
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|||||
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Cash
and equivalents
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$ | 18,000 | $ | 6,000 | |
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Total
assets
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$ | 18,000 | $ | 6,000 | |
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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LIABILITIES
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|||||
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Current
liabilities
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|||||
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Accrued
expenses
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$ | 6,250 | $ | 3,500 | |
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STOCKHOLDERS’
EQUITY:
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Common
stock, $.001 par value, 100,000,000 shares authorized,
8,400,000
shares issued and outstanding (September 30, 2008, 6,000,000
shares issued and outstanding)
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8,400 | 6,000 | |||
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Additional
paid in capital
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9,600 | -0- | |||
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Deficit
accumulated during the development stage
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(6,250) | (3,500) | |||
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Total
stockholders’ equity
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11,750 | 2,500 | |||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 18,000 | $ | 6,000 | |
See
accompanying notes to financial statements.
SIERRA CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS (unaudited)
For
the three months ended December 31, 2008
For
the period from September 16, 2008 (date of inception) through December 31,
2008
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Three
months ended December 31, 2008
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Period
from
September
16, 2008
(date
of inception) through
December
31, 2008
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General
and administrative expenses:
Professional
fees
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$ | 2,750 | $ | 6,250 | |
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Net
loss and comprehensive loss
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$ | (2,750) | $ | (6,250) | |
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Net
loss per share:
Basic
and diluted
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$ | (0.00) | $ | (0.00) | |
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Weighted
average shares outstanding:
Basic
and diluted
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6,800,000 | 6,000,000 | |||
See
accompanying notes to financial statements.
SIERRA CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF STOCKHOLDERS’ EQUITY (unaudited)
Period
from September 16, 2008 (date of inception) through December 31,
2008
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Common
stock
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Additional
paid-in
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Deficit
accumulated
during
the
development
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||||||||||||
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Shares
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Amount
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capital
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stage
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Total
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Issuance
of common stock for cash to
founders
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6,000,000 | $ | 6,000 | $ | - | $ | - | $ | 6,000 | |||||
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Net
loss for the period
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- | - | - | (3,500) | (3,500) | |||||||||
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Balance,
September 30, 2008
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6,000,000 | 6,000 | - | (3,500) | 2,500 | |||||||||
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Issuance
of common stock for cash at $.005
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2,400,000 | 2,400 | 9,600 | $ | 0 | 12,000 | ||||||||
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Net
loss for the period
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- | - | - | (2,750) | (2,750) | |||||||||
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Balance,
December 31, 2008
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8,400,000 | $ | 8,400 | $ | 9,600 | $ | (6,250) | $ | 11,750 | |||||
See
accompanying notes to financial statements.
SIERRA CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS (unaudited)
For
the three months ended December 31, 2008
For
the period from September 16, 2008 (date of inception) through December 31,
2008
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Three
months ended
December
31, 2008
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Period
from
September
16, 2008
(date
of inception) through
December
31, 2008
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CASH
FLOWS FROM OPERATING ACTIVITIES
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Net
loss and comprehensive loss
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$ | (2,750) | $ | (6,250) | |
| Change in non-cash working capital items | |||||
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Increase
in accrued expenses
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2,750 | 6,250 | |||
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CASH
FLOWS USED IN OPERATING ACTIVITIES
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- | - | |||
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CASH
FLOWS FROM FINANCING ACTIVITIES
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Proceeds
from sale of common stock
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12,000 | 6,000 | |||
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NET
INCREASE IN CASH
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6,000 | 6,000 | |||
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Cash,
beginning of period
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- | - | |||
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Cash,
end of period
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$ | 18,000 | $ | 6,000 | |
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SUPPLEMENTAL
CASH FLOW INFORMATION
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Interest
paid
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$ | - | $ | - | |
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Income
taxes paid
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$ | - | $ | - | |
See
accompanying notes to financial statements.
SIERRA CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
December
31, 2008
NOTE 1 -
BASIS OF PRESENTATION
The
accompanying unaudited interim financial statements of Sierra Concepts, Inc.
have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange
Commission (“SEC”), and should be read in conjunction with the audited financial
statements and notes thereto contained in the Company’s registration statement
filed with the SEC on Form S-1. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the results to
be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosure contained in the audited
financial statements for the most recent fiscal year 2008 as reported in Form
S-1, have been omitted.
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of
Business
Sierra
Concepts, Inc. (“Sierra” or the “Company”) was incorporated in Nevada on
September 16, 2008. Sierra is a Development stage company and has not
yet realized any revenues from its planned operations. Sierra is
currently in the process of developing a web-based service to assist consumers
with financial decisions.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the balance sheet. Actual results could
differ from those estimates.
Basic Loss Per
Share
Basic
loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
Comprehensive
Income
The
Company has adopted SFAS 130 “Reporting Comprehensive Income”, which establishes
standards for reporting and display of comprehensive income, its components and
accumulated balances. When applicable, the Company would disclose
this information on its Statement of Stockholders’
Equity. Comprehensive income comprises equity except those resulting
from investments by owners and distributions to owners. The Company has not had
any significant transactions that are required to be reported in other
comprehensive income.
SIERRA
CONCEPTS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
December
31, 2008
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income
Tax
Sierra
Concepts, Inc. (“Sierra” and the “Company”) follows SFAS 109, “Accounting for
Income Taxes.” Deferred income taxes reflect the net effect of (a) temporary
difference between carrying amounts of assets and liabilities for financial
purposes and the amounts used for income tax reporting purposes, and (b) net
operating loss carry-forwards. No net provision for refundable Federal income
tax has been made in the accompanying statement of loss because no recoverable
taxes were paid previously. Similarly, no deferred tax asset attributable to the
net operating loss carry-forward has been recognized, as it is not deemed likely
to be realized.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with the original maturities of
three months or less to be cash equivalents.
Fair Value of Financial
Instruments
Sierra’s
financial instruments consist of cash and cash equivalents and accrued expenses.
The carrying amount of these financial instruments approximates fair value due
either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial
statements.
Recent Accounting
Pronouncements
Sierra
does not expect the adoption of recently issued accounting pronouncements to
have a significant impact on the Company’s results of operations, financial
position or cash flow.
NOTE 3 -
GOING CONCERN
Sierra
has limited working capital and has a deficit accumulated during the development
stage of $6,250 as of December 31, 2008. Sierra's financial
statements are prepared using the generally accepted accounting principles
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. However,
Sierra has no current source of revenue. Without realization of additional
capital, it would be unlikely for Sierra to continue as a going
concern. Sierra's management plans on raising cash from public or
private debt or equity financing, on an as needed basis and in the longer term,
revenues from the acquisition and development of mineral interests, if
found. Sierra's ability to continue as a going concern is dependent
on these additional cash financings, and, ultimately, upon achieving profitable
operations through the development of mineral interests.
SIERRA
CONCEPTS, INC.
(AN
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
December
31, 2008
NOTE 4 –
COMMON STOCK
At
inception, Sierra issued 6,000,000 shares of stock to its founding shareholder
for $6,000 cash.
During
the period ended December 31, 2008, Sierra issued 2,400,000 shares of stock for
cash of $ 12,000.
NOTE 5 –
INCOME TAXES
The
provision for Federal income tax for the three months ended December 31, 2008
consists of the following:
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December
31, 2008 |
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Refundable
Federal income tax attributable to:
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Current
Operations
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$ | 935 |
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Less:
valuation allowance
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(935) | |
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Net
provision for Federal income taxes
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$ | - |
The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
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September
30, 2008 |
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Deferred
tax asset attributable to:
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Net
operating loss carryover
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$ | 2,125 |
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Less:
valuation allowance
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(2,125) | |
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Net
deferred tax asset
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$ | - |
At
December 31, 2008, Sierra had an unused net operating loss carryover
approximating $6,250 that is available to offset future taxable income; it
expires beginning in 2027.
NOTE 6 –
COMMITMENTS
Sierra
neither owns nor leases any real or personal property. An officer has provided
office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to
the financial statements and accordingly are not reflected
herein. The officers and directors are involved in other business
activities and most likely will become involved in other business activities in
the future.
Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements generally are identified
by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. We intend
such forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of complying with
those safe-harbor provisions. Forward-looking statements are based on
current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a material
adverse affect on our operations and future prospects on a consolidated basis
include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and
uncertainties should also be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements. We undertake no
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise. Further
information concerning our business, including additional factors that could
materially affect our financial results, is included herein and in our other
filings with the SEC.
Company
Overview and Plan of Operation
We were
incorporated as Sierra Concepts, Inc. on September 16, 2008 in the State of
Nevada for the purpose of developing a web-based service for consumers designed
to assist them with proper household budgeting, setting financial priorities,
and dealing effectively with debt. Our service, which we plan to
offer through the website www.24yearfitness.com,
is currently in the early stages of development.
Our
planned service will feature a series of exercises and tools which members can
access through the website in order to address different areas of personal
financial health and different issues which commonly affect the typical
consumer. In exchange for a reasonable monthly fee, our members will
be able to access our various personal planning and decision making tools any
time they wish. Through use of our service over time, members will
have the ability to gradually improve the long term health and soundness of
their personal finances. The name of our service and website – “24
Year Fitness” – reflects our philosophy that one must put forth continual effort
year after year in order to maintain a fit and healthy financial
life.
Our
founder and executive officer, David Davis, is the inventor of the “24 Year
Fitness” concept and is the primary developer of our web-based
service. Currently, several of the core tools to be featured on our
website are under development. As we go forward, these tools will be
tested, modified, and improved through interaction with real
individuals. Our current goal is to go live with our website by the
end of 2009.
Through
this offering, we are seeking funding for the purpose of continuing and
completing the initial development of our “24 Year Fitness” service and for
building and launching the website through which the service will be offered to
the public.
The
“24 Year Fitness” Service
The “24
Year Fitness” service will be centered on the customer’s use of a group of
ongoing exercises designed to assist the user to gain positive control over both
their short term and long term personal financial life. Although we
anticipate that we will develop and improve our service and add to its component
exercises on a continual basis, the initial website will be built aroung three
basic financial tools for consumers: (1) the “Sisyphus” system; (2) the
“Decider” tool; and (3) a utility known as the “List.”
(1) The Sisyphus
System
Named for
the mythological Greek king Sisyphus, who was compelled by the gods to roll a
huge rock up a steep hill over and again for eternity, this financial tool is
built around the idea that continual effort is required in order put one’s
personal finances in order and to keep them there. Sisyphus
begins with an interview of the customers about their financial situation.
During the interview, the user will input the sum total of their monthly bills
and other expenses, the sum total of their savings and other liquid assets, and
the total of their monthly or other periodic income. Based on this
and similar information, Sisyphus will use proprietary algorithms and other
coding to design a group of concrete goals for each individual
user. Each user’s group of concrete goals will be his financial
workout 'set' and will feature MIN, MID, and IDEAL levels for each
area.
As an
example, Sisyphus might determine the following types of goals for a particular
user based on the information given during the interview stage:
Exercise 1 – maintain appropriate
checking account balance
MIN: $200
MID: $1,500
IDEAL: 1 month’s income
Exercise 2 – maintain appropriate savings
account balance
MIN: $500
MID: $1,500
IDEAL: 6 month’s income
Exercise 3 – make scheduled monthly
payments for utilities and secured debts
MIN: make minimum mortgage payment due;
pay minimum car payment due plus1% of outstanding balance; pay utilities payment
due
MID: all MIN requirements, except pay
minimum car payment due plus 3% of theoutstanding balance
IDEAL: car is paid off, no mortgage
payments projected after age 50
Exercise 4 – make scheduled monthly
payments for unsecured debts (credit cards)
MIN: minimum payment, plus second
monthly payment = 10% of total balance
MID: minimum payment, plus second
monthly payment = 30% of total balance
IDEAL: pay balances in full
monthly
Exercise 5 – eliminate unnecessary
expenses
MIN: eliminate cable TV bill (may
reinstate after MID level achieved)
Exercise 6 – limit consumption
expenses
MIN: limit gas and restaurant food to
$120 per week (may revise slightly afterMID level achieved)
The
user’s personal financial fitness zone will be determined by his ability to
complete all of the assigned these types of assigned financial exercise 'sets'
over time. The program will feature a levels system based upon three
color-coded “zones” of personal financial fitness. The three zones
are described as follows:
Red
Zone – Users in the Red Zone are unable to meet their minimum basic
requirements for personal financial responsibility. One or more of
the MIN level goals established by Sisyphus is not being met by the user. These
users are advised to cease spending except for their most basic
needs. Depending on the situation, the user may be advised to consult
a financial professional.
Yellow
Zone – Users in the Yellow Zone are meeting all of their MIN level goals
and their personal financial situation is stable or improving. Users
in this zone are actively working toward achieving their MID level
goals. Generally, Yellow Zone users will be advised to improve on
their rate of savings and to be prudently cautious with their spending
habits.
Green
Zone – Users in the Green Zone are meeting all of their MID level goals
and are working toward achieving their IDEAL goals. These users will
have established consistent and disciplined personal spending
habits. Users in this zone will typically have established a strong
habit of personal savings. Depending on the circumstances, these
users may be referred to a licensed investment advisor to explore
wealth-building strategies beyond the simple personal savings account.1
Over
time, the system will also become progressive in the MIN requirements it sets
for the user until the IDEAL level for each set is reached. Once a
MIN level is reached, the criteria stay at that level indefinitely. The idea is
to allow a user who is not in good financial position to hit some goals without
feeling completely overwhelmed. As steady progress is made, the goal criteria
are raised until the MIN criteria are at certain standard levels.
We
believe the Sisyphus system will give our users a unique ability to set
personalized financial goals, to progress systematically toward their goals, and
to maintain personal financial fitness once it has been achieved.
(2) The Decider
Tool
A common
financial problem for consumers is the overwhelming number of choices they face
in the marketplace for most types of major purchases. Consumers often
have difficult choices to make with options to choose from and many factors to
consider. Because major consumer choices can cause a lot of stress,
"The Decider" will help the users make the best individual decisions for
them.
If the
user is choosing from some well-known product decisions, much of the basic
information will already be entered for them in a proprietary database. For
example, if the user is trying to choose the right vehicle for them, "The
Decider" will already know about most of the product details for the vehicles
they are considering. For less common product decisions, the user will need
assist the system by typing in the key attributes of each product.
In
addition to the basic product information, users will be able to prioritize
which aspects are more
important to them than others. When choosing vehicles, for example, the user
will be able to say that 'color' is more important than 'mileage' which is more
important than ‘number of seats’ and the tool will help them find the right
vehicle automatically.
The user
can search for 2 or more choices to compare. (For example, Ford vs.
Chevy).
All
choices must share a common 'category' to be comparable.
Sample
screen:
|
|| Choice
-->
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||
Ford
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||
Chevy
|
|
||
(Parameter)
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||
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|| Color
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Black
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Red
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|| Mileage
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12 mpg
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20 mpg
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|| Seats
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4
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2
|
1 Sierra Concepts, Inc. will not
provide any services as an investment advisor within the definition of the
Investment Advisors Act of 1940. We will not provide our customers
any advice as to value of any securities or as to the advisability of investing
in, purchasing, or selling any securities.
The user
will be able to drag the order of parameters to sort which ones are more
important. In this example, the user can specify that Color is more important to
them than Mileage, which is more important than Number of Seats. The Decider
will allow the user to click on the choice they prefer for each parameter (i.e.:
"Black" vs. "Red"), and will then weight their parameter choices with the order
of the choices and output a "which is better?" decision that is customized to
the user's personal preferences.
(3) The List
Consumers
are often in the habit of buying things based on impulse and many of them may
find it difficult to prioritize and/or to limit compulsive
spending.
"The
List" is a utility designed to help consumers take control of their spending
habits by deferring and prioritizing purchases. The basic concept
behind the List is that users will, whenever they feel the urge to purchase
something, add it to a running list which tracks their interest in purchasing
particular items. The List is a simple management program that allows
its data to be easily be imported, sorted, and exported.
Users
will be assigned an email address such as joe_plumber@list.24yearfitness.com.
Security measures will help pair incoming addresses to this account. When a
compulsory urge hits while the user is in a store or elsewhere, the user can
text message (SMS) a description of the item desired to the assigned email
address. Users will also have the option of assigning an initial priority or
“want level” to each item. Email can also be sent from a regular
account.
Full-text
searching will help the user determine which items are similar and combine them
on 'the list'. When items are combined, their explicit prioritization will be
increased. Priority levels will be integer: -2, -1, 0, +1, +2, etc. Anytime a
duplicate request is made, the priority will be increased by +1.
For
example, if the same 'special Barbie' is requested every time, the 'list' will
help it 'bubble up' by determining that it is a consistent request, grouping
similar items together, either automatically or by suggestion with manual
intervention.
Items
will be manually taken off the list. They can also be taken off by sending an
email such as "remove __".
The core
of the List is a proprietary system which:
|
·
|
tracks
when an item is added -- the older an item is, when it remains on the
list, the more 'valid' the item is
|
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·
|
track
the 'want' level explicitly entered by the
user
|
|
·
|
automatically
sort the list
|
|
·
|
allow
easy import and export of data
|
The idea
is to create an easy outlet for either an entire family, or an individual,
whenever an 'I want' situation arises. Lists can be coordinated and viewed by
family members, especially useful on special occasions (i.e.:
birthdays).
A
scheduled (daily, weekly, monthly) report of the list can be sent out to users.
The list will show the top 3 items at any time. Longer reports may be generated
at 'special' times of the year (Christmas, Birthday, etc.).
Pricing
and Revenue Model
The base
of our intended pricing structure will be monthly subscription dues paid to
access the Sisyphus system, which we believe will be core feature of our
service. The Decider and the List will be included with a Sisyphus
subscription, but may also be available separately. After the initial
sign-up, monthly fees will be charged automatically to the user’s credit or
debit card. An initial minimum subscription of six months will be
required for Sisyphus, with subscription renewing monthly thereafter until
cancelled. We anticipate that our initial fee structure will be as
follows:
Subscription to
Sisyphus: $40
sign-up fee, plus $20 per month
Six month minimum original contract,
with automaticrenewal thereafter until cancelled. The List and the
Deciderare also included.
Subscription to the List
only:
$5 per month, with automatic renewal thereafter untilcancelled.
The Decider
only:
$5 for one-time use, or unlimited use for $10 per month
We
believe this pricing model offers an affordable point of entry for the types of
consumers who will be most attracted to our “24 Year Fitness”
service. At the same time, however, we believe that it will position
us to begin earning residual revenues without significant addition costs beyond
the development and launching of our website.
Competition
We
believe that our planned service will be relatively unique once it is fully
developed and offered to the public. Currently, there are numerous
non-profit websites and related organizations dedicated to providing general
financial advice and counseling, but these all lack the type of customization,
personal tailoring, and ongoing interaction and guidance that we believe our
planned service can provide.
Packaged
financial management software (like “Quickbooks”) is, of course, widely
available, but these systems typically require micro-management of finances.
Detailed line item dual-entry accounting transactions must be accurately
maintained for these types of programs to create great value for the customer.
Our planned service will work at a manageable and practical macro-level, with
the minimum resolution being a monthly view of the consumer’s
finances.
If we are
successful in generating traffic to our website and in providing a quality
experience to our first users, we believe that the customization and ease of use
over time featured by our system will provide a significant competitive
advantage.
Website
Development
The “24
Year Fitness” service is currently in development. We expect
continued design and programming activities, directed principally by our
President, Mr. Davis, to constitute the bulk of our activity for the first two
quarters of our first full fiscal year. We estimate that sometime
during our third quarter, we will launch the “beta” version of our
website. The site will then be tested, modified, and perfected based
on the experience and feedback of real-world volunteer users who will be allowed
to use the service for free in exchange for sharing their experiences and
working with us on the development and improvement of the “24 Year Fitness”
service.
If
development of our website goes as planned over the course of the current fiscal
year, we estimate that the fully-functional service will “go live” at www.24yearfitness.com
by the end of 2009. Inevitably, the experience and feedback of paying
customers to site will lead to additional improvements and developments for the
“24 Year Fitness” service.
Initial
Marketing Efforts
Our
initial efforts to direct traffic to our website will include generating "buzz"
among Internet users about our service through postings on online communities
such as Yahoo! Groups and other methods of getting Internet users to refer
others to our website by e-mail or word of mouth and search engine
optimization. Our President, Mr. Davis, will be primarily responsible
for these efforts. In addition we may chose to market our website via
search engines by purchasing sponsored placement in search results on a limited
basis. In addition, we may enter into affiliate marketing
relationships with other website providers to increase our access to Internet
consumers Until our planned service establishes positive cash flow, however, we
expect to rely on viral marketing as the primary source of traffic to our
website, with search engine optimization and affiliate marketing as secondary
sources.
During
the first year of operations, our sole officer and director, David Davis, will
provide his time to the business at no charge. Mr. Davis will be responsible for
all administrative duties as well as overseeing the ongoing development,
testing, improvement, and the launch of the “24 Year Fitness” online
service.
As we
have limited financial resources, Mr. Davis has committed to dedicating
approximately 10-15 hours per week in order to attend to needs of the
business.
Business
Operations Goals For the Fiscal Year Beginning October 1, 2008 and
beyond
We plan
to achieve the following operational goals during or shortly after our first
full fiscal year:
|
Goal
|
Expected
fulfillment
|
|
· Complete
initial development of the “24 Year Fitness” service; beta site ready for
use
|
By
end of second quarter (March 31, 2009)
|
|
· Complete
test use and documentation of customer experience feedback from
approximately 10 volunteer users
|
By
end of fourth quarter (September 30, 2009)
|
|
· Launch
live “24 Year Fitness” service at www.24yearfitness.com, concurrent with
viral marketing campaign
|
By
end of calendar year
2009
|
Expense
Budget For The Fiscal Year Beginning October 1, 2008
| Expenses incidental to development, testing and perfection of website |
$3,000
|
| Costs of equipment needed for website launch and maintenance |
$5,000
|
| General and administrative |
$4,000
|
| Total |
$12,000
|
Expected
Changes In Number of Employees, Plant, and Equipment
We do not
have plans to purchase any physical plant or any significant equipment or to
change the number of our employees during the next twelve months.
Results
of Operations for the three months ended December 31, 2008
We have
not earned any revenues from inception through the period ending December 31,
2008. During the quarter ending December 31, 2008, we focused primarily on
completing our initial public offering and developing our planned web-based
service. We do not anticipate earning any revenues until the end of calendar
year 2008. We are presently in the development stage of our business
and we can provide no assurance that we will produce significant revenues from
the sale of our services or if revenues are earned, that we will be
profitable.
We
incurred operating expenses and net losses in the amount of $2,750 during the
three months ended December 31, 2008 and in the amount of $6,250 from our
inception on September 16, 2008 through the period ending December 31,
2008. Our operating expenses from inception through December 31,
2008 have consisted of general and administrative expenses. Our
losses are attributable to our operating expenses combined with a lack of
revenues during our current stage of development. We anticipate our operating
expenses will increase as we continue with our plan of operations.
Liquidity
and Capital Resources
As of
December 31, 2008, we had total current assets of $18,000, consisting entirely
of cash. We had current liabilities of $6,250 as of December 31,
2008. Accordingly, we had working capital of $11,750 as of December
31, 2008.
Operating
activities used no cash and generated no cash for the period from September 16,
2008 (Date of Inception) through December 31, 2008. Financing Activities during
the three months ended December 31, 2008 generated $12,000 in
cash. Financing activities have generated a total of $18,000 in cash
from September 16, 2008 (Date of Inception) through December 31,
2008.
As
outlined above, we expect to spend approximately $12,000 toward implementing our
business plan over the coming year. As of December 31, 2008, we had
$18,000 in cash. We believe out current cash reserves will be
adequate to fund our planned development and operations during the current
year. Our ability to operate beyond the next 12 months is contingent
upon us obtaining additional financing and/or upon realizing significant
revenues by the end of the current fiscal year. We intend to fund operations for
some time beyond the current year through debt and/or equity financing
arrangements, which may be insufficient to fund our capital expenditures,
working capital, or other cash requirements. We do not have any formal
commitments or arrangements for the sales of stock or the advancement or loan of
funds at this time. There can be no assurance that such additional financing
will be available to us on acceptable terms, or at all.
Off
Balance Sheet Arrangements
As of
December 31, 2008, there were no off balance sheet arrangements.
Going
Concern
Our
financial statements have been prepared on a going concern basis. We have a
working capital of $11,750 as of December 31, 2008 and have accumulated deficit
of $6,250 since inception. Our ability to continue as a going concern is
dependent upon our ability to generate profitable operations in the future
and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.
These factors raise substantial doubt that we will be able to continue as a
going concern. Management plans to continue to provide for our capital needs by
the issuance of common stock and related party advances.
Critical
Accounting Policies
In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis. The SEC indicated
that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. We believe that the following accounting policies fit this
definition.
Recently Issued Accounting
Pronouncements
We do not
expect the adoption of recently issued accounting pronouncements to have a
significant impact on our results of operations, financial position or cash
flow.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk
A smaller
reporting company is not required to provide the information required by this
Item.
Item 4T. Controls and Procedures
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2008. This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and our Chief Financial Officer, Mr. David
Davis. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, as of December 31, 2008, our disclosure
controls and procedures are effective. There have been no changes in
our internal controls over financial reporting during the quarter ended December
31, 2008.
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
PART
II – OTHER INFORMATION
Item 1. Legal Proceedings
We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
Item 1A. Risk Factors
A smaller
reporting company is not required to provide the information required by this
Item.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
None
Item 3. Defaults upon Senior
Securities
None
Item 4. Submission of Matters to a Vote
of Security Holders
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended December
31, 2008.
Item 5. Other Information
None
Item 6. Exhibits
|
Exhibit
Number
|
Description
of Exhibit
|
|
3.1
|
Articles
of Incorporation (1)
|
|
3.2
|
ByLaws
(1)
|
|
(1)
|
Previously
included as an exhibit to the Registration Statement on Form S-1 filed
with the Securities and Exchange Commission on November 14,
2008.
|
SIGNATURES
In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
Sierra
Concepts, Inc.
|
|
|
Date:
|
February
13, 2009
|
|
By: ___________________________
David
Davis
Title: Chief
Executive Officer and
Director
|