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EX-31.1 - EXHIBIT 31.1 - WESTMOUNTAIN GOLD, INC.wmindex10q63010x31_8910.htm
EX-32.1 - EXHIBIT 32.1 - WESTMOUNTAIN GOLD, INC.wmindex10q63010x32_8910.htm

 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended   June 30, 2010

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

Commission File No. 0-53028

WESTMOUNTAIN INDEX ADVISOR, INC.
(Exact Name of Issuer as specified in its charter)

Colorado
26-1315498
   
(State or other jurisdiction
(IRS Employer File Number)
of incorporation)
 
   
   
123 North College Ave, Ste 200
 
Fort Collins, Colorado
80524
(Address of principal executive offices)
(zip code)

(970) 212-4770
 (Registrant's telephone number, including area code)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]  No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(Section 232.405 of this chapter) during the preceding 12 months(or such shorter period that the registrant was required to submit and post such files. Yes []  No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer []       
 Accelerated filer []
Non-accelerated filer [] (Do not check if a smaller reporting company)  
 Smaller reporting company  [X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes []    No [X ]
 
The number of shares outstanding of the Registrant's common stock, as of the latest practicable date, June 30, 2010, was 9,013,250.
 
 

 
- 1 -

 


FORM 10-Q
West Mountain Index Advisor, Inc.

TABLE OF CONTENTS


PART I  FINANCIAL INFORMATION
 
 
Item 1. Financial Statements
 
   
 Balance Sheets at June 30, 2010 (Unaudited) and December 31, 2009
3
      
 
 Statements of Operations (Unaudited) for the three months ended June 30, 2010
                          and 2009 and for the six months ended June 30, 2010 and 2009 and
                          for the period October 18, 2007 (inception) through June 30, 2010
 
4
   
 Statement of Changes in Shareholders’ Equity (Unaudited) for the period
                           October 18, 2007 (inception) through June 30, 2010
5
   
 Statements of Cash Flows (Unaudited) for the six months ended June 30, 2010
                            and 2009 and for the period October 18, 2007 (inception) through June 30, 2010
   
 Notes to the Financial Statements
7
   
Item 2. Management’s Discussion and Analysis and Plan of Operation
11
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk
14
   
Item 4. Controls and Procedures
14
   
Item 4T. Controls and Procedures
14
   
PART II  OTHER INFORMATION
 
   
Item 1. Legal Proceedings
15
   
Item 1A. Risk Factors
15
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
20
   
Item 3. Defaults Upon Senior Securities
20
   
Item 4. Submission of Matters to a Vote of Security Holders
20
   
Item 5. Other Information
20
   
Item 6. Exhibits
20
   
Signatures
21
   

 

 
- 2 -

 



PART I  FINANCIAL INFORMATION

References in this document to "us," "we," or "Company" refer to West Mountain Index Advisor, Inc.

ITEM 1.  FINANCIAL STATEMENTS

             
WestMountain Index Advisor, Inc.
           
(A Development Stage Company)
           
Balance Sheets
           
At June 30, 2010 and December 31, 2009
           
             
             
   
June 30,
   
December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
                                     Assets
           
Cash and cash equivalents  (note 1 and note 8)
  $ 20,763     $ 12,798  
Certificates of deposit  (note 2)
    189,814       224,233  
Prepaid expenses
    4,110       3,183  
Property and equipment, net (note 3)
    2,278       2,965  
      Total assets
  $ 216,965     $ 243,179  
                 
                 Liabilities and Shareholders' Equity
               
Liabilities:
               
   Accounts payable
  $ -     $ -  
   Indebtedness to related parties  (note 6)
    1,400       800  
   Accrued liabilities
    2,700       12,000  
      Total liabilities
    4,100       12,800  
                 
Shareholders' equity:  (note 5)
               
   Preferred stock, $.10 par value; 1,000,000 shares authorized,
    -       -  
      -0- shares issued and outstanding for 2010 and 2009
               
   Common stock, $.001 par value; 50,000,000 shares authorized,
    9,013       9,013  
      9,013,250 shares issued and outstanding for 2010 and 2009
               
   Additional paid-in-capital
    357,452       357,452  
   Deficit accumulated during development stage
    (153,600 )     (136,086 )
      Total shareholders' equity
    212,865       230,379  
Total liabilities and shareholders' equity
  $ 216,965     $ 243,179  
                 

The accompanying notes are an integral part of these financial statements.


 
- 3 -

 


                               
WestMountain Index Advisor, Inc.
                             
(A Development Stage Company)
                             
Statements of Operations
                             
For the quarters ended June 30, 2010 and 2009 and for the
                   
six months ended June 30, 2010 and 2009 and for the
                             
period October 18, 2007 (inception) through June 30, 2010
                   
(Unaudited)
                             
                               
   
For the quarters ended
June 30,
   
For the six months ended
June 30,
   
October 18, 2007
(Inception)
through June 30,
 
   
2010
   
2009
   
2010
   
2009
   
2010
 
                               
Operating Expenses  (note 7)
                             
  Sales, general and administrative expense
  $ 8,987     $ 13,249     $ 18,111     $ 20,138     $ 166,651  
  Total operating expenses
    8,987       13,249       18,111       20,138       166,651  
                                         
Net loss from operations
    (8,987 )     (13,249 )     (18,111 )     (20,138 )     (166,651 )
                                         
Other income/(expense)
                                       
  Interest income
    238       1,281       597       2,516       13,051  
Net loss before income taxes
    (8,749 )     (11,968 )     (17,514 )     (17,622 )     (153,600 )
                                         
Provision for income taxes  (note 4)
    -       -       -       -       -  
Net loss
  $ (8,749 )   $ (11,968 )   $ (17,514 )   $ (17,622 )   $ (153,600 )
                                         
                                         
Basic and diluted loss per share
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
Basic and diluted weighted average common
                                       
   shares outstanding
    9,013,250       9,013,250       9,013,250       9,013,250          
                                         
 
The accompanying notes are an integral part of these financial statements.


 
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WestMountain Index Advisor, Inc.
                                         
(A Development Stage Company)
                                         
Statement of Changes in Shareholders' Equity
                                         
For the period from October 18, 2007 (inception) through June 30, 2010
                               
(Unaudited)
                                         
   
 
   
 
   
 
   
 
       
    Preferred Stock     Common Stock    
Additional
   
Deficit
Accumulated
During
       
   
Shares
   
Par
Value
   
Shares
   
Par
Value
   
Paid-in
Capital
   
Development
Stage
   
Total
 
                                           
Balance at October 18, 2007
    -     $ -       -     $ -     $ -     $ -     $ -  
                                                         
November 19, 2007 common stock shares sold
                                                       
   at $0.001 per share
    -       -       290,000       290       -       -       290  
                                                         
November 20, 2007 common stock shares sold
                                                       
   at $0.01 per share
    -       -       235,000       235       2,115       -       2,350  
                                                         
November 28, 2007 common stock shares sold
                                                       
   at $0.04 per share
    -       -       8,050,000       8,050       311,950       -       320,000  
                                                         
November 30, 2007 common stock shares sold
                                                       
   at $0.10 per share
    -       -       438,250       438       43,387       -       43,825  
                                                         
Net loss, October 18, 2007 (inception) through
    -       -       -       -       -       (29,376 )     (29,376 )
   December 31, 2007
                                                       
                                                         
Balance at December 31, 2007
    -       -       9,013,250       9,013       357,452       (29,376 )     337,089  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2008
    -       -       -       -       -       (52,184 )     (52,184 )
                                                         
Balance at December 31, 2008
    -       -       9,013,250       9,013       357,452       (81,560 )     284,905  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2009
    -       -       -       -       -       (54,526 )     (54,526 )
                                                         
Balance at December 31, 2009
    -       -       9,013,250       9,013       357,452       (136,086 )     230,379  
                                                         
Net loss, for the six months ended
                                                       
     June 30, 2010
    -       -       -       -       -       (17,514 )     (17,514 )
                                                         
Balance at June 30, 2010
    -     $ 0       9,013,250     $ 9,013     $ 357,452     $ (153,600 )   $ 212,865  
                                                         
 
The accompanying notes are an integral part of these financial statements.

 

 
- 5 -

 


 
                   
WestMountain Index Advisor, Inc.
                 
(A Development Stage Company)
                 
Statements of Cash Flows
                 
For the six months ended June 30, 2010 and 2009 and for the
                 
period October 18, 2007 (inception) through June 30, 2010
                 
(unaudited)
                 
   
 
   
 
 
   
For the six months ended
June 30,
   
October 18, 2007
(Inception)
through June 30,
 
   
2010
   
2009
   
2010
 
                   
                   
Cash flows from operating activities:
                 
Net loss
  $ (17,514 )   $ (17,622 )   $ (153,600 )
Adjustments to reconcile net loss to net cash used by operating activities:
                       
  Depreciation
    1,622       1,425       7,608  
    Changes in operating assets and operating liabilities:
                       
      Prepaid expenses
    (927 )     (1,020 )     (4,110 )
      Accounts payable and accrued liabilities  (note 1)
    (8,700 )     (5,290 )     4,100  
        Net cash (used in) operating activities
    (25,519 )     (22,507 )     (146,002 )
                         
Cash flows from investing activities:
                       
      Purchases of property and equipment  (note 3)
    (935 )     -       (9,886 )
      Payments for and proceeds from certificates of deposit  (note 2)
    34,419       (1,153 )     (189,814 )
        Net cash provided by/(used in) provided by investing activities
    33,484       (1,153 )     (199,700 )
                         
Cash flows from financing activities:
                       
     Proceeds from sale of common stock  (note 5)
    -       -       366,465  
        Net cash provided by financing activities
    -       -       366,465  
                         
        Net change in cash
    7,965       (23,660 )     20,763  
                         
Cash and cash equivalents, beginning of period
    12,798       154,373       -  
                         
                         
Cash and cash equivalents, end of period
  $ 20,763     $ 130,713     $ 20,763  
                         
Supplemental disclosure of cash flow information:
                       
   Cash paid during the period for:
                       
     Income tax
  $ -     $ -     $ -  
     Interest
  $ -     $ -     $ -  
                         

The accompanying notes are an integral part of these financial statements.


 
- 6 -

 



WestMountain Index Advisor, Inc.
(A Development Stage Company)
Notes to the Financials


(1)    Nature of Organization and Summary of Significant Accounting Policies
 
Nature of Organization and Basis of Presentation
 
WestMountain Index Advisor, Inc. was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations.

The Company is a development stage enterprise in accordance with ASC 915 - “Accounting and Reporting by Development Stage Enterprises”, formerly SFAS No. 7.  The Company’s plan is to act as a developer of indexes that allow investors to access specific market niches or sub-markets.
 
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying financial statements, the Company is a development stage company with no history of operations, limited assets, and has incurred operating losses since inception.  These factors, among others, raise substantial doubt about its ability to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to obtain additional operating capital, commence operations, provide competitive services, and ultimately to attain profitability.
 
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of 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
The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents.  As of June 30, 2010 and December 31, 2009 there were no cash equivalents.

 

 
- 7 -

 


WestMountain Index Advisor, Inc.
(A Development Stage Company)
Notes to the Financials


(2)   Certificates of Deposit
 
The company has made it a policy to invest funds over and above the operating expenses in certificates of deposit.  The terms on the certificates have ranged from three to six months.  In June 2008 we switch from Bank B to Bank C.  Currently we have deposit accounts set up in Bank A and Bank C.  Each of the balances is covered through the banks’ FDIC insurance.

As of June 30, 2010 the Certificates of deposit are as follows:

                     
   
Principal
   
Interest
 
Maturity
 
Interest
 
   
Balancee
   
Earned
 
Date
 
Rate
 
                     
Bank A
    112,524       298  
Oct-10
    0.55%  
                           
Bank C
     77,290       282  
Jul-10
    0.50%  
                           
 

 (3)  Property and Equipment
 
The Company’s property and equipment consists of computer software that was placed into service during December 2007 at a value of $8,550.  During the third quarter of 2009 we purchased $402 of additional software for our Sarbanes-Oxley software program.  In February 2010 we purchased an additional computer in the amount of $935. The Company recorded depreciation expense of $824 for the quarter ended June 30, 2010 and $712 for the quarter ended June 30, 2009.  We recorded $1,622 and $1,425 in depreciation expense for the six months ended June 30, 2010 and 2009 respectively. Depreciation expense for the period of November 13, 2007 (inception) through June 30, 2010 was $7,608.


(4)   Income Taxes
 
The Company records its income taxes in accordance with Accounting Standards Codification (ASC") ASC-740 “Accounting for Income Taxes”.  The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes. 


(5)    Stockholders Equity

On November 19, 2007 the Company sold 290,000 shares of its common stock for $290 or $0.001 per share.

On November 20, 2007 the Company sold 235,000 shares of its common stock for $2,350 or $0.01 per share.

On November 28, 2007 the Company sold 8,050,000 shares of its common stock to WestMountain Purple, LLC, an affiliate, for a cash price of $320,000 or $0.04 per share.  The stock transaction made WestMountain Purple, LLC the Company’s majority shareholder.



 
- 8 -

 

 
WestMountain Index Advisor, Inc.
(A Development Stage Company)
Notes to the Financials


On November 30, 2007 the Company sold 438,250 shares of its common stock for $43,825 or $0.10 per share.  The stock sale was made in reliance on an exemption from registration of a trade in the United States under Rule 504 and/or Section 4(6) of the Act.  The Company relied upon exemptions from registration believed by it to be available under federal and state securities laws in connection with the offering.

A total of 9,013,250 shares were issued for a total cash price of $366,465.  All of the shares issued are considered to be “restricted stock” as defined in Rule 144 promulgated under the Securities Act of 1933.  As of June 30, 2008 the common stock issued and outstanding at par is $9,013 or $0.001 per share.  The amount over and above the $0.001 par value per share is recorded in the additional paid-in capital account in the amount of $357,452.

On April 9, 2008 the Company issued 50,000 shares of common stock in exchange for services that were to be provided for the Company.  Subsequent to the issuance of these shares the service agreement was terminated and the shares have been cancelled.  This transaction is not reflected on the financial statements.
  
 There were no changes in common stock and additional paid in capital for the quarters ended June 30, 2010 and 2009. 


(6)    Related Parties

On January 1, 2008, we entered into a Service Agreement with Bohemian Companies, LLC, to provide us with certain defined services. These services include financial, bookkeeping, accounting, legal and tax matters, as well as cash management, custody of assets, preparation of financial documents, including tax returns and checks, and coordination of professional service providers as may be necessary to carry out the matters covered by the Service Agreement. We will compensate Bohemian Companies, LLC by reimbursing this entity for the allocable portion of the direct and indirect costs of each employee of Bohemian Companies, LLC that performs services on our behalf.

We will receive invoices on a monthly basis from Bohemian Companies, LLC. This Service Agreement was for the term of one year, ending December 31, 2009 but was extended to December 31, 2010. Total expenses incurred with Bohemian Companies were $3,000 each for the quarters ending June 30, 2010 and 2009 and $6,000 each for the six months ending June 30, 2010 and 2009.  As of June 30, 2010 the Company had a balance due to Bohemian Companies, LLC of $1,000.

The Company entered into an agreement with SP Business Solutions (“SP”) to provide accounting and related services for the Company.  The owner, Joni Troska, was appointed Secretary of WestMountain Distressed Debt, Inc on October 15, 2009, and is considered to be a related party.  As of June 30, 2010 an accrual of $400 has been recorded for unpaid services.


(7)    Operating Expenses
 
The total administrative expense recorded on the financials for the quarter ended June 30, 2010 was $8,987.  For the quarter ended June 30, 2009 it was $13,249. For the six months ended June 30, 2010 operating expenses were 18,111 and $20,138 for the six month period ended June 30, 2009.  For the period October 18, 2007 (inception) through June 30, 2010 it was $166,651.  The decrease in services was attributable to professional and contract services.
  


 
- 9 -

 

WestMountain Index Advisor, Inc.
(A Development Stage Company)
Notes to the Financials



(8)    Concentration of Credit Risk for Cash
 
The Company has concentrated its credit risk for cash by maintaining deposits in financial institutions, which may at times exceed the amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation ("FDIC"). As of June 30, 2010 the Company has no risk for the excess of the deposit liabilities reported by the financial institution over the amount that would have been covered by FDIC. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk to cash.


(9)    Subsequent Events
 
No reportable subsequent events were noted.
 
 
- 10 -

 



ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q.  This item contains forward-looking statements that involve risks and uncertainties.  Actual results may differ materially from those indicated in such forward-looking statements.

Forward-Looking Statements
 
This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management.  Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words, and similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements.  Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.  However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly Annual Reports on Form 10-K, Quarterly reports on Form 10-Q and any Current Reports on Form 8-K. 
 
General
 
We act as a developer of indexes that allow investors to access specific market niches or sub-markets. We earn income by helping investors identify and access specific market niches or sub-markets using our index products. We will screen investments with emphasis towards finding opportunities with long term potential.

We do not focus on any particular industry but will look at any and all opportunities. We will screen investments with emphasis towards finding opportunities with long term potential.

We will develop a proprietary investment screening process to make our investments.  This process will be based upon the experience of Mr. Klemsz and outside consultants as we develop our company.  This process has not been developed at this time.

If we are not successful in our operations we will be faced with several options:

1.
Cease operations and go out of business;
2.
Continue to seek alternative and acceptable sources of capital;
3.
Bring in additional capital that may result in a change of control; or
4.
Identify a candidate for acquisition that seeks access to the public marketplace and its financing sources.
 
            Currently, we believe that we have sufficient capital to implement our business operations or to sustain them through December 31, 2010. If we can become profitable, we could operate at our present level indefinitely. To date, we have never had any discussions with any possible acquisition candidate nor have we any intention of doing so.
 


 
- 11 -

 

Our principal business address is 123 North College Avenue, Suite 200, Fort Collins, Colorado 80524. We operate out of one office in Colorado. We have no specific plans at this point for additional offices.  On January 1, 2008, we entered into a Service Agreement with Bohemian Companies, LLC to provide us with certain defined services. These services include financial, bookkeeping, accounting, legal and tax matters, as well as cash management, custody of assets, preparation of financial documents, including tax returns and checks, and coordination of professional service providers as may be necessary to carry out the matters covered by the Service Agreement.  We will compensate Bohemian Companies, LLC by reimbursing this entity for the allocable portion of the direct and indirect costs of each employee of Bohemian Companies, LLC who performs services on our behalf. We will receive invoices on an monthly basis from Bohemian Companies, LLC. This Service Agreement is for the term of one year, ending December 31, 2008, which has been extended and is now ended December 31, 2010.  Total expenses incurred with Bohemian Companies were $3,000 each for the quarters ending June 30, 2010 and 2009 and $6,000 each for the six months ending June 30, 2010 and 2009.  As of June 30, 2010 the Company had a balance due to Bohemian Companies, LLC of $1,000.

The Company entered into an agreement with SP Business Solutions (“SP”) to provide accounting and related services for the Company.  The owner, Joni Troska, was appointed Secretary of WestMountain Distressed Debt, Inc on October 15, 2009, and is considered to be a related party.  As of June 30, 2010 an accrual of $400 has been recorded for unpaid services.

We have not been subject to any bankruptcy, receivership or similar proceeding.
 
Results of Operations
 
The following discussion involves our results of operations for the quarter ended June 30, 2010, for the quarter ended June 30, 2009 and for the six months ended June 30, 2010 and 2009.

We had no revenues for the quarters ended June 30, 2010 or 2009, and for the six months ended June 30, 2010 or 2009. We had no revenues for the period October 18, 2007 (inception) through June 30, 2010.
 
Operating expenses, consisting primarily of selling, general and administrative costs were $8,987 for the quarter ended June 30, 2010, compared to $13,249 for the quarter ended June 30, 2009.  Selling, general and administrative costs were $18,111 for the six months ended June 30, 2010, compared to $20,138 for the six months ended June 30, 2009.  Most of the costs were attributable to professional and contract services. We do not anticipate these professional fees to be as significant in the future. However we believe that our selling, general and administrative costs will increase as we grow our business activities going forward.

We had a net loss of $8,749 for the quarter ended June 30, 2010, compared to a net loss of $11,968 for the quarter ended June 30, 2009.  We had a net loss of $17,514 for the six months ended June 30, 2010, compared to a net loss of $17,622 for the six months ended June 30, 2009.

Liquidity and Capital Resources

Our cash or cash equivalents on June 30, 2010 were $20,763.  We had an additional amount of $189,814 in Certificates of Deposit.

Cash flows used in operating activities were $25,519 for the six months ended June 30, 2010, compared to cash flows used in operating activities of $22,507 for the six months ended June 30, 2009.

Net cash provided by investing activities was $33,484 for the six months ended June 30, 2010, compared to net cash used in investing activities of $1,153 for the six months ended June 30, 2009.

Cash flows provided by financing activities were $-0- for the six months ended June 30, 2010 and June 30, 2009.

Over the next twelve months we do not expect any material capital costs in our operations. We plan to buy office equipment to be used in our operations.

 
- 12 -

 

 
Because we do not pay salaries, and our major professional fees have been paid for the year, operating expenses are expected to remain fairly constant.
 
To try to operate at a break-even level based upon our current level of business activity, we believe that we must generate approximately $50,000 in revenue per year. However, if our forecasts are inaccurate, we will need to raise additional funds. In the event that we need additional capital, WestMountain Purple, LLC has agreed to loan such funds as may be necessary through December 31, 2010 for working capital purposes.

On the other hand, we may choose to scale back our operations to operate at break-even with a smaller level of business activity, while adjusting our overhead to meet the revenue from current operations. In addition, we expect that we will need to raise additional funds if we decide to pursue more rapid expansion, the development of new or enhanced services or products, appropriate responses to competitive pressures, or the acquisition of complementary businesses or technologies, or if we must respond to unanticipated events that require us to make additional investments. We cannot assure that additional financing will be available when needed on favorable terms, or at all.

We expect to incur operating losses in future periods because we will be incurring expenses and not generating sufficient revenues. We expect approximately $50,000 in operating costs over the next twelve months. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues or additional financing when needed could cause us to go out of business.

Plan of Operation for January 1, 2010 to December 31, 2010

Our plan for the twelve months beginning January 1, 2010 is to make a profit by December 31, 2010. We act as a developer of indexes that allow investors to access specific market niches or sub-markets. We earn income by helping investors identify and access specific market niches or sub-markets using our index products. We will screen investments with emphasis towards finding opportunities with long term potential.

We do not focus on any particular industry but will look at any and all opportunities. We will screen investments with emphasis towards finding opportunities with long term potential.

We will develop a proprietary investment screening process to make our investments.  This process will be based upon the experience of Mr. Klemsz and outside consultants as we develop our company.  This process has not been developed at this time.

If we are not successful in our operations we will be faced with several options:

              1.
  Cease operations and go out of business;
              2.
  Continue to seek alternative and acceptable sources of capital;
              3.
  Bring in additional capital that may result in a change of control; or
              4.
  Identify a candidate for acquisition that seeks access to the public marketplace and its financing sources
 
Currently, we believe that we have sufficient capital to implement our business operations or to sustain them through December 31, 2010. If we can become profitable, we could operate at our present level indefinitely. To date, we have never had any discussions with any possible acquisition candidate nor have we any intention of doing so.

            We operate out of one office in Colorado. We have no specific plans at this point for additional offices.   
 
Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements with any party.


 
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Critical Accounting Policies

We adopted ASC 105 – “Statement of Financial Accounting”, formerly FASB 168, which were changes issued by Financial Accounting Standards Board ("FASB") to the authoritative hierarchy of generally accepted accounting principles in the United States ("GAAP").  These changes established the FASB Accounting Standards Codification™  ("Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP.  Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standard Updates.  Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification.  These changes and the Codification itself do not change GAAP.  Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on our consolidated financial statements.

We adopt changes issued by ASC 855 – “Subsequent Events”, formerly FASB 165, which establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The pronouncement requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, whether that date represents the date the financial statements were issued or were available to be issued.     In conjunction with the preparation of these financial statements, an evaluation of subsequent events was performed through March 15, 2010, which is the date the financial statements were issued.    

The Company accounts for income taxes under the provisions of ASC 740 – “Accounting for Income Taxes”, formerly SFAS 109 and FIN 48.  ASC 740 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
 
Recently Issued Accounting Pronouncements
 
In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends ASC 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements. This ASU became effective for us on January 1, 2010. We do not currently anticipate that this ASU will have a material impact on our consolidated financial statements upon adoption.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

None.


ITEM 4. CONTROLS AND PROCEDURES

Not applicable


ITEM 4T. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a -15(e) and 15(d)-15(e) under the Exchange Act), our Chief Executive Officer and the Chief Financial Officer has concluded that our disclosure controls and procedures are effective.

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Identified in connection with the evaluation required by paragraph (d) of Rule 240.13a-15 or Rule 240.15d-15 of this chapter that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There are no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.


ITEM 1A.  RISK FACTORS
 
You should carefully consider the risks and uncertainties described below; and all of the other information included in this document. Any of the following risks could materially adversely affect our business, financial condition or operating results and could negatively impact the value of your investment.
 
The occurrence of any of the following risks could materially and adversely affect our business, financial condition and operating result. In this case, the trading price of our common stock could decline and you might lose all or part of your investment.

Risks Related to Our Business and Industry

We, have a limited operating history, and have never been profitable.  As a result, we may never become profitable, and, as a result, we could go out of business.

We were formed as a Colorado business entity in October, 2007. At the present time, we have never been profitable. There can be no guarantee that we will ever be profitable.  We may never become profitable, and, as a result, we could go out of business.

Because we had incurred a loss and have no substantial operations, our accountants have expressed doubts about our ability to continue as a going concern.

     For our audit dated December 31, 2009, our accountants have expressed doubt about our ability to continue as a going concern as a result of a limited history of operations, limited assets, and operating losses since inception. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

our ability to find suitable investments; and

our ability to generate revenues.

     Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating sufficient revenues. We expect our operating costs to range between $60,000 and $100,000 for the fiscal year ending December 31, 2010. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues will cause us to go out of business.

Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. An investor could lose his entire investment.

We have a limited operating history. An investor has no frame of reference to evaluate our future business prospects. This makes it difficult, if not impossible, to evaluate us as an investment. An investor could lose his entire investment if our future business prospects do not result in our ever becoming profitable.

 
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If we do not generate adequate revenues to finance our operations, our business may fail.

             We have not generated revenues from our inception. As of June 30, 2010, we had a cash position of $20,763 and $189,814 in certificates of deposit.  We anticipate that operating costs will range between $60,000 and $100,000, for the fiscal year ending December 31, 2010. These operating costs include insurance, taxes, utilities, maintenance, contract services and all other costs of operations. We will use contract employees who will be paid on an hourly basis as each investment transaction is evaluated. However, the operating costs and expected revenue generation are difficult to predict. We expect to generate revenues in the next twelve months from making investments and receiving fees for the placement of capital. Since there can be no assurances that revenues will be sufficient to cover operating costs for the foreseeable future, it may be necessary to raise additional funds. Due to our lack of substantial operating history, raising additional funds may be difficult.

Competition in the investment industry is intense.
 
Our business plan involves acting as a developer of indexes that allow investors to access specific market niches or sub-markets. This business is highly competitive. There are numerous similar companies providing such services in the United States of America. Our competitors will have greater financial resources and more expertise in this business. Our ability to develop our business will depend on our ability to successfully market our services in this highly competitive environment. We cannot guarantee that we will be able to do so successfully.

The share control position of WestMountain Purple, LLC will limit the ability of other shareholders to influence corporate actions.
 
         Our largest shareholder, WestMountain Purple, LLC, of which Mr. Klemsz is a 16.8% member, owns 8,050,000 shares and thereby controls approximately 89.3% of our outstanding shares. Because WestMountain Purple, LLC individually beneficially controls more than a majority of the outstanding shares, other shareholders, individually or as a group, will be limited in their ability to effectively influence the election or removal of our directors, the supervision and management of our business or a change in control of or sale of our company, even if they believed such changes were in the best interest of our shareholders generally.
 
Our future success depends, in large part, on the continued service of our President and our Treasurer and the continued financing of WestMountain Purple, LLC.
 
          We depend almost entirely on the efforts and continued employment of Mr. Klemsz, our President and Treasurer. Mr. Klemsz is our primary executive officer, and we will depend on him for nearly all aspects of our operations. In addition, WestMountain Purple, LLC, is our only source of financing. We do not have an employment contract with Mr. Klemsz, and we do not carry key person insurance on his life. The loss of the services of Mr. Klemsz through incapacity or otherwise, would have a material adverse effect on our business. It would be very difficult to find and retain qualified personnel such as Mr. Klemsz and a financing source to replace WestMountain Purple, LLC.

Our revenue and profitability fluctuate, particularly inasmuch as we cannot predict the timing of realization events in our business, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause volatility in the price of our shares.

We may experience significant variations in revenues and profitability during the year and among years because we are paid incentive income from certain funds only when investments are realized, rather than periodically on the basis of increases in the funds’ net asset values. The timing and receipt of incentive income generated by our funds is event driven and thus highly variable, which contributes to the volatility of our revenue, and our ability to realize incentive income from our funds may be limited. We cannot predict when, or if, any realization of investments will occur. If we were to have a realization event in a particular quarter, it may have a significant impact on our revenues and profits for that particular quarter which may not be replicated in subsequent quarters. In addition, our investments are adjusted for accounting purposes to fair value at the end of each quarter, resulting in revenue attributable to our principal investments, even though we receive no cash distributions from our funds, which could increase the volatility of our quarterly earnings.

 
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Difficult market conditions can adversely affect our funds in many ways, including by reducing the value or performance of the investments made by our funds and reducing the ability of our funds to raise or deploy capital, which could materially reduce our revenue and results of operations.

If economic conditions are unfavorable our funds may not perform well and we may not be able to raise money in existing or new funds. Our funds are materially affected by conditions in the global financial markets and economic conditions throughout the world. The global market and economic climate may deteriorate because of many factors beyond our control, including rising interest rates or inflation, terrorism or political uncertainty. In the event of a market downturn, our businesses could be affected in different ways. Our funds may face reduced opportunities to sell and realize value from their existing investments, and a lack of suitable investments for the funds to make. In addition, adverse market or economic conditions as well as a slowdown of activities in a particular sector in which portfolio companies of these funds operate could have an adverse effect on the earnings of those portfolio companies, and therefore, our earnings.

A general market downturn, or a specific market dislocation, may cause our revenue and results of operations to decline by causing:
 
● 
the net asset value of the assets under management to decrease, lowering management fees;

lower investment returns, reducing incentive income;

material reductions in the value of our fund investments in portfolio companies which reduce our ‘‘surplus’’ and, therefore, our ability to realize incentive income from these investments; and
 
investor redemptions, resulting in lower fees.
 
     Furthermore, while difficult market conditions may increase opportunities to make certain indexed investments, such conditions also increase the risk of default with respect to investments held by our funds with debt investments.

The success of our business depends, in large part, upon the proper selection of investments, which may be difficult to find, acquire and develop.
 
We believe that the identification, acquisition and development of appropriate investments are key drivers of our business. Our success depends, in part, on our ability to obtain these investments under favorable terms and conditions and have them increase in value. We cannot assure you that we will be successful in our attempts to find, acquire, and/or develop appropriate investments will not be challenged by competitors, which may put us at a disadvantage. Further, we cannot assure you that others will not independently develop similar or superior programs or investments, which may imperil our profitability.
Risks Related to an Investment in Our Common Stock
 
The lack of a broker or dealer to create or maintain a market in our stock could adversely impact the price and liquidity of our securities.
 
     We have no agreement with any broker or dealer to act as a market maker for our securities and there is no assurance that we will be successful in obtaining any market makers. Thus, no broker or dealer will have an incentive to make a market for our stock. The lack of a market maker for our securities could adversely influence the market for and price of our securities, as well as your ability to dispose of, or to obtain accurate information about, and/or quotations as to the price of, our securities.


 
- 17 -

 

We have limited experience as a public company.

We have only been trading as a public company since January, 2010. We trade on the OTC Bulletin Board under the trading symbol WMTN. Thus, we have limited experience in complying with the various rules and regulations which are required of a public company. As a result, we may not be able to operate successfully as a public company, even if our operations are successful. We plan to comply with all of the various rules and regulations which are required of a public company. However, if we cannot operate successfully as a public company, your investment may be materially adversely affected. Our inability to operate as a public company could be the basis of your losing your entire investment in us.

We may be required to register under the Investment Company Act of 1940, or the Investment Advisors Act, which could increase the regulatory burden on us and could negatively affect the price and trading of our securities.

Because our business involves the acting as a developer of indexes that allow investors to access specific market niches or sub-markets, we may be required to register as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law. While we believe that we are currently either not an investment company or an investment advisor or are exempt from registration as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law, either the SEC or state regulators, or both, may disagree and could require registration either immediately or at some point in the future. As a result, there could be an increased regulatory burden on us which could negatively affect the price and trading of our securities.

Our stock has a limited public trading market and there is no guarantee an active trading market will ever develop for our securities.

There has been, and continues to be, a limited public market for our common stock. An active trading market for our shares has not, and may never develop or be sustained. If you purchase shares of common stock, you may not be able to resell those shares at or above the initial price you paid. The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, including the following:

*    
actual or anticipated fluctuations in our operating results;
   
*    
changes in financial estimates by securities analysts or our failure to perform in line with such estimates;
   
*    
changes in market valuations of other companies, particularly those that market services such as ours;
   
*    
announcements by us or our competitors of significant innovations,  acquisitions, strategic partnerships, joint ventures or capital commitments;
   
*    
introduction of product enhancements that reduce the need for the products our projects may develop;
   
*    
departures of key personnel.

Of our total outstanding shares as of June 30, 2010, a total of 8,325,000, or approximately 92.4%, will be restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

As restrictions on resale end, the market price of our stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.


 
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Applicable SEC rules governing the trading of “Penny Stocks” limit the liquidity of our common stock, which may affect the trading price of our common stock.
 
Our common stock is currently quoted on the OTC Bulletin Board and trades well below $5.00 per share. As a result, our common stock is considered a “penny stock” and is subject to SEC rules and regulations that impose limitations upon the manner in which our shares can be publicly traded.  These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock and the associated risks.  Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the written purchaser’s agreement to a transaction prior to purchase.  These regulations have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.
 
The over-the-counter market for stock such as ours is subject to extreme price and volume fluctuations.

The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in the our industry and in the investment markets generally, as well as economic conditions and quarterly variations in our operational results, may have a negative effect on the market price of our common stock.

Buying low-priced penny stocks is very risky and speculative.

Our common shares are defined as a penny stock under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in the public markets.
 
 Issuances of our stock could dilute current shareholders and adversely affect the market price of our common stock, if a public trading market develops.
 
     We have the authority to issue up to 50,000,000 shares of common stock, 1,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our common stock without stockholder approval. Although no financing is planned currently, we may need to raise additional capital to fund operating losses. If we raise funds by issuing equity securities, our existing stockholders may experience substantial dilution. In addition, we could issue large blocks of our common stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval.

        The issuance of preferred stock by our board of directors could adversely affect the rights of the holders of our common stock. An issuance of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over the common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our board of directors' authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve.


 
- 19 -

 

Colorado law and our Articles of Incorporation protect our directors from certain types of lawsuits, which could make it difficult for us to recover damages from them in the event of a lawsuit.
 
     Colorado law provides that our director will not be liable to our company or to our stockholders for monetary damages for all but certain types of conduct a director. Our Articles of Incorporation require us to indemnify our director and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our director caused by his negligence, poor judgment or other circumstances. The indemnification provisions may require our company to use our assets to defend our director and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

We do not expect to pay dividends on common stock.

We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Earnings, if any, that we may realize will be retained in the business for further development and expansion. 


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
 
None


ITEM 5.  OTHER INFORMATION

              None


ITEM 6.  EXHIBITS


 
Exhibit
Number
 
 
Description                                                                                                                                            
   
3.1*
Articles of Incorporation
3.2*
Bylaws
10.1**
Service Agreement With Bohemian Companies, LLC
31.1
Certification of CEO/CFO pursuant to Sec. 302
32.1
Certification of CEO/CFO pursuant to Sec. 906

            * Previously filed with Form SB-2 Registration Statement, January 2, 2008.
** Previously filed with Form 10-KSB, February 29, 2008.

Reports on Form 8-K

Reports on Form 8-K. No reports were filed under cover of Form 8-K for the fiscal quarter ended June 30, 2010.


 
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SIGNATURES

Pursuant to the requirements 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 on August 10, 2010.


 
WEST MOUNTAIN INDEX ADVISOR, INC.
     
 
By:
/s/ Brian L. Klemsz,
   
Brian L. Klemsz, President, Chief Executive Officer,Chief Financial Officer and
Director (Principal Executive, Accounting and Financial Officer)
     
     
 
 
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