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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
(Amendment No. 2)

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

For the Quarterly period ended   March 31, 2012

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

Commission File No. 0-53031

WESTMOUNTAIN DISTRESSED DEBT, INC.
(Exact Name of Issuer as specified in its charter)


Colorado
26-1315407
(State or other jurisdiction
(IRS Employer File Number)
of incorporation)
 
   
   
123North College Avenue, 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 [ü]  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 [ü]

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  [ü]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes []    No [ü]
 
The number of shares outstanding of the Registrant's common stock, as of the latest practicable date, March 31, 2012, was 1,808,150.
 



 
 
 
 
 
Explanatory Note
 
The purpose of this Amendment No. 2 to our Quarterly Report on Form 10-Q for the period ended March 31, 2012, as filed with the Securities and Exchange Commission on May 11, 2012, is to include signature dates for both the 10-Q and Chief Executive Officer and Chief Financial Offier certificaitons.
 
No other changes have been made to the Form 10-Q other than those described herein.
 

 
 

 

 
FORM 10-Q
West Mountain Distressed Debt, Inc.

TABLE OF CONTENTS
 
PART I  FINANCIAL INFORMATION
 
 
Item 1. Financial Statements
 
   
 Balance Sheets at March 31, 2012 (Unaudited) and December 31, 2011
3
      
 
 Statements of Operations (Unaudited) for the three months ended
                          March 31, 2012 and 2011 and for the period October 18, 2007 (inception) through
                             March 31, 2012
 
4
   
 Statement of Changes in Shareholders’ Equity (Unaudited) for the period
                           October 18, 2007 (inception) through March 31, 2012
5
   
 Statements of Cash Flows (Unaudited) for the three months ended
                           March 31, 2012 and 2011 and for the period October 18, 2007 (inception)
                            through March 31, 2012
   
 Notes to the Financial Statements
7
   
Item 2. Management’s Discussion and Analysis and Plan of Operation
9
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk
11
   
Item 4. Controls and Procedures
11
   
Item 4T. Controls and Procedures
11
   
PART II  OTHER INFORMATION
 
   
Item 1. Legal Proceedings
12
   
Item 1A. Risk Factors
12
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
16
   
Item 3. Defaults Upon Senior Securities
16
   
Item 4. Submission of Matters to a Vote of Security Holders
16
   
Item 5. Other Information
17
   
Item 6. Exhibits
17
   
Signatures
18
   

 
2

 
 
PART I  FINANCIAL INFORMATION

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

ITEM 1.  FINANCIAL STATEMENTS
 
WestMountain Distressed Debt, Inc.
           
(A Development Stage Company)
           
Balance Sheets
           
   
(Unaudited)
       
   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
                                      Assets
           
Cash
  $ 120,733     $ 135,400  
Prepaid expenses
    473       1,849  
      Total assets
  $ 121,206     $ 137,249  
                 
                Liabilities and Shareholders' Equity
               
Liabilities:
               
   Accrued liabilities, related parties
  $ 700     $ 400  
   Accrued liabilities
    4,717       10,600  
      Total liabilities
    5,417       11,000  
                 
Commitments and contingencies
               
                 
Shareholders' equity:
               
   Preferred stock, $.10 par value; 1,000,000 shares authorized,
    -       -  
      -0- shares issued and outstanding 2012 and 2011
               
   Common stock, $.001 par value; 200,000,000 shares authorized,
    1,808       1,808  
      1,808,150 shares issued and outstanding 2012 and 2011
               
   Additional paid-in-capital
    367,407       367,407  
   Deficit accumulated during development stage
    (253,426 )     (242,966 )
      Total shareholders' equity
    115,789       126,249  
Total liabilities and shareholders' equity
  $ 121,206     $ 137,249  
                 
 
The accompanying notes are an integral part of these financial statements.

 
3

 
 
WestMountain Distressed Debt, Inc.
                 
(A Development Stage Company)
                 
Statements of Operations (Unaudited)
                 
For the three months ended March 31, 2012 and 2011 and for the
 
period October 18, 2007 (inception) through March 31, 2012
 
                   
               
October 18, 2007
 
         
(Inception)
 
    For the three months ended,      Through  
   
March 31,
   
 March 31,
 
   
2012
   
2011
   
2012
 
                   
Operating expenses
                 
   Sales, general and administrative expense
  $ 10,460     $ 15,839     $ 266,875  
Total operating expenses
    10,460       15,839       266,875  
                         
Net loss from operations
    (10,460 )     (15,839 )     (266,875 )
                         
Other income/(expense)
                       
  Interest income
    0       6       13,449  
Net loss before income taxes
    (10,460 )     (15,833 )     (253,426 )
Provision for income taxes
    -       -       -  
Net loss
  $ (10,460 )   $ (15,833 )   $ (253,426 )
                         
                         
Basic and diluted loss per share
  $ (0.01 )   $ (0.01 )        
Basic and diluted weighted average common
                       
   shares outstanding
    1,808,150       1,808,150          
                         
 
The accompanying notes are an integral part of these financial statements.

 
4

 
 
WestMountain Distressed Debt, Inc.
                                         
(A Development Stage Company)
                                         
Statement of Changes in Shareholders' Equity  (Unaudited)
             
For the period October 18, 2007 (inception) through March 31, 2012
                       
                                 
Deficit
       
                                 
Accumulated
       
   
Preferred Stock
   
Common Stock
   
Additional
   
During
       
         
Par
         
Par
   
Paid-in
   
Development
       
   
Shares
   
Value
   
Shares
   
Value
   
Capital
   
Stage
   
Total
 
Balance at October 18, 2007
    -     $ -       -     $ -     $ -     $ -     $ -  
                                                         
November 19, 2007 common stock shares sold
                                                       
   at $0.001 per share
    -       -       58,000       58       232       -       290  
                                                         
November 20, 2007 common stock shares sold
                                                       
   at $0.01 per share
    -       -       47,000       47       2,303       -       2,350  
                                                         
November 28, 2007 common stock shares sold
                                                       
   at $0.04 per share
    -       -       1,610,000       1,610       318,390       -       320,000  
                                                         
November 30, 2007 common stock shares sold
                                                       
   at $0.10 per share
    -       -       93,150       93       46,482       -       46,575  
                                                         
Net loss, October 18, 2007 (inception) through
    -       -       -       -       -       (29,376 )     (29,376 )
   December 31, 2007
                                                       
                                                         
Balance at December 31, 2007
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (29,376 )   $ 339,839  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2008
    -       -       -       -       -       (51,974 )     (51,974 )
                                                         
Balance at December 31, 2008
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (81,350 )   $ 287,865  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2009
    -       -       -       -       -       (54,190 )     (54,190 )
                                                         
Balance at December 31, 2009
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (135,540 )   $ 233,675  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2010
    -       -       -       -       -       (49,180 )     (49,180 )
                                                         
Balance at December 31, 2010
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (184,720 )   $ 184,495  
                                                         
Net loss, for the year ended
                                                       
     December 31, 2011
    -       -       -       -       -       (58,246 )     (58,246 )
                                                         
Balance at December 31, 2011
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (242,966 )   $ 126,249  
                                                         
Net loss, for the quarter ended
                                                       
     March 31, 2012
    -       -       -       -       -       (10,460 )     (10,460 )
                                                         
Balance at March 31, 2012
    -     $ -       1,808,150     $ 1,808     $ 367,407     $ (253,426 )   $ 115,789  
                                                         
 
The accompanying notes are an integral part of these financial statements.

 
5

 
 
WestMountain Distressed Debt, Inc.
                 
(A Development Stage Company)
                 
Statements of Cash Flows (Unaudited)
             
For the three months ended March 31, 2012 and 2011 and for the
       
period October 18, 2007 (inception) through March 31, 2012
       
               
October 18, 2007
 
         
(Inception)
 
   
For the three months ended,
March 31,
   
Through
 March 31,
 
   
2012
   
2011
   
2012
 
                   
                   
Cash flows from operating activities:
                 
Net loss
  $ (10,460 )   $ (15,833 )   $ (253,426 )
Adjustments to reconcile net loss to net cash used by operating activities:
                       
  Depreciation and asset write off
    -       444       9,474  
    Changes in operating assets and operating liabilities:
                       
      Prepaid expenses
    1,376       (34 )     (473 )
      Indebtedness to related parties and accrued liabilities
    (5,583 )     8,119       5,417  
        Net cash (used in) operating activities
    (14,667 )     (7,304 )     (239,008 )
                         
Cash flows from investing activities:
                       
      Purchases for property and equipment
    -       -       (9,474 )
      Redemption of (purchase of) certificates of deposit
    -       (6 )     -  
        Net cash provided by(used in) investing activities
    -       (6 )     (9,474 )
                         
Cash flows from financing activities:
                       
     Proceeds from sale of common stock
    -       -       369,215  
        Net cash provided by financing activities
    -       -       369,215  
                         
Net change in cash
    (14,667 )     (7,310 )     120,733  
                         
Cash, beginning of period
    135,400       41,774       -  
                         
Cash, end of period
  $ 120,733     $ 34,464     $ 120,733  
                         
 
The accompanying notes are an integral part of these financial statements.

 
6

 
 
WestMountain Distressed Debt, Inc.
(A Development Stage Company)
Notes to the Financial Statements
(Unaudited)
 
 
1)    Nature of Organization and Summary of Significant Accounting Policies

Nature of Organization and Basis of Presentation
WestMountain Distressed Debt, 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.  The Company’s plan is to act as an acquirer of all forms of distressed debt that are being sold at a discount to the original purchase price.
 
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.
 
Unaudited Interim Financial Statements
We have prepared our unaudited interim financial statements included herein pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to these rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly, in all material respects, our consolidated financial position as of March 31, 2012, the interim results of operations for the three ended March 31, 2012 and 2011, and cash flows for the three months ended March 31, 2012 and 2011. These interim statements have not been audited. The balance sheet as of December 31, 2011 was derived from our audited consolidated financial statements included in our annual report on Form 10-K. The interim condensed consolidated financial statements contained herein should be read in conjunction with our audited financial statements, including the notes thereto, for the year ended December 31, 2011. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.
 
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.

(2) 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.

(4) 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 Red, LLC, an affiliate, for a cash price of $320,000 or $0.04 per share. The stock transaction made WestMountain Red, LLC the Company’s majority shareholder.

On November 30, 2007 the Company sold 465,750 shares of its common stock for $46,575 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 9,040,750 shares were issued for a total cash price of $369,215. 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 December 31, 2007 the common stock issued and outstanding at par is $9,041 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 $360,174.


 
7

 
 
WestMountain Distressed Debt, Inc.
(A Development Stage Company)
Notes to the Financial Statements
(Unaudited)
 
5)    Related Parties

Bohemian Companies, LLC and BOCO Investments, LLC are two companies under common control. Mr. Klemsz, our President, has been the Chief Investment Officer of BOCO Investments, LLC since March 2007. Since there is common control between the two companies and a relationship with our Company President, we are considering all transactions with Bohemian Companies, LLC, to be related party transactions.

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, 2012. Total expenses incurred with Bohemian Companies were $3,000 for each of the quarters ended March 31, 2012 and 2011.  As of March 31, 2012 the Company did not have a balance due to Bohemian Companies, LLC.

We 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 March 31, 2012 an accrual of $700 has been recorded for unpaid services.

 
8

 

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 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
 
Our original plan was to earn income by holding distressed real estate properties for resale at a future date when market conditions are more favorable. We have decided to expand our business plan to include the potential acquisition of all forms of distressed debt, including real estate mortgages, securities such as promissory notes, and assets acquired through bankruptcy. We will screen investments with emphasis towards finding opportunities with long term potential. We have no prior history of operating firm in the distressed debt business.

We also continue to develop a proprietary investment screening process to make our investments.  This screening process will be refined as a result of the expanded nature of our business plan. This process will be based upon the experience of our management team and outside consultants.  This process has not been fully developed at this time.
 
 We plan to act as a holder of all forms of distressed debt by raising, investing and managing private equity and direct investment funds for third parties including high net worth individuals and institutions. As is the industry practice, we plan to earn management fees based on the size of the funds that we manage and incentive income based on the performance of these funds. We do not plan to focus on any particular industry but will look at any and all opportunities.

We are presently planning to develop and implement a web site based operation to gather additional potential investment opportunities beyond what we can generate through our network of contacts. We also plan to utilize the most current technology to analyze investments. We believe the technology will assist in the analysis of each opportunity.

   We operate out of one office in Colorado at123 North College Avenue, Suite 200, Fort Collins, Colorado 80524.  We have no specific plans at this point for additional offices.  However, in the future, we plan to occupy separate office facilities and obtain office furniture and equipment, depending office upon the development of our business plan. 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

Effective November 22, 2010, we amended our Articles of Incorporation to increase the number of authorized common shares to Two Hundred Million (200,000,000) shares from Fifty Million (50,000,000) shares. The par value of the common shares remains at $0.001 per share.

 
9

 
 
             Effective with the commencement of trading on November 22, 2010, we reverse split our Common Shares. New Common Shares were issued to shareholders in exchange for their Old Common Shares in the ratio of one New Common Share for each five Old Common Shares held, thus effecting a one-for-five reverse stock split. Fractional shares, if any, were rounded up to the next whole number. There was no change in the par value of the Common Shares.

Currently, we believe that we have sufficient capital to implement our proposed business operations or to sustain them through December 31, 2012.
 
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 not less than quarterly from Bohemian Companies, LLC. This Service Agreement matures on December 31, 2012.  Total expenses incurred with Bohemian Companies were $3,000 for the quarter ended March 31, 2012.  As of March 31, 2012 the Company had a balance due to Bohemian Companies, LLC of $-0- .

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 March 31, 2012, for the quarter ended March 31, 2011 and for inception through March 31, 2012.  We have not generated any revenues since our inception.
 
            The total administrative expense recorded on the financials for the quarters ended March 31, 2012 and 2011 were $10,460 and $15,839 respectively and for the period October 18, 2007 (inception) through March 31, 2012 was $266,875.  Most of these costs were attributable to professional and contract services related to maintaining our filing status with the SEC. 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 $10,460 for the quarter ended March 31, 2012, compared to $15,833 for the quarter ended March 31, 2011 and a net loss of $253,426 from October 18, 2007 (inception) through March 31, 2012.

Liquidity and Capital Resources

Our cash on March 31, 2012 was $120,733 compared to cash or cash equivalents on March 31, 2011 of $34,464.

Cash flows used in operating activities were $14,667 for the three months ended March 31, 2012, compared to $7,304 for the three months ended March 31, 2011. We had cash flows used in operating activities of $239,008 from our inception on October 18, 2007 through March 31, 2012.

Net cash used in investing activities was $-0- for the three months ended March 31, 2012, compared to net cash provided by investing activities of $6 for the three months ended March 31, 2011. Net cash used in investing activities was $9,474 from our inception on October 18, 2007 through March 31, 2012.

Cash flows provided by financing activities were $-0- for the three months ended March 31, 2012 and March 31, 2011.  We generated net proceeds of $369,215 during the period from our inception on October 18, 2007 through March 31, 2012 related to sales of our common stock.

Over the next twelve months we do not expect any material capital costs in our operations.

Because most of our costs are fixed in amount and are recurring in nature we expect our quarterly operating expenses to remain consistent throughout 2012.
 
We expect to incur operating losses in future periods because we will be incurring expenses and not generating sufficient revenues. We expect approximately $60,000 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.

 
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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 $60,000 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.  Currently, we believe that we have sufficient capital to implement our business operations or to sustain them through December 31, 2012. However, failure to generate sufficient revenues or sufficient financing when needed could cause us to go out of business.

Plan of Operation for January 1, 2012 to December 31, 2012

 Our plan for the twelve months beginning January 1, 2012 is to make a profit by December 31, 2012. We plan to earn income by holding distressed real estate properties for resale at a future date when market conditions are more favorable. We will screen investments with emphasis towards finding opportunities with long term potential. Our company has no prior history of operating as firm in the distressed real estate business.

 We act as a holder of distressed real estate properties by raising, investing and managing private equity and direct investment funds for third parties including high net worth individuals and institutions. As is the industry practice, we earn management fees based on the size of the funds that we manage and incentive income based on the performance of these funds. We do not focus on any particular industry in the real estate market but will look at any and all opportunities.

We are presently planning to develop and implement a web site based operation to gather additional potential investment opportunities beyond what we can generate through our network of contacts. We also plan to utilize the most current technology to analyze investments. We believe the technology will assist in the analysis of each opportunity.

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, 2012. 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.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

None.

ITEM 4. CONTROLS AND PROCEDURES

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURE

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.

 
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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.

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.

We have no substantial 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.  Even if we develop revenue, there is no assurance that we will become a profitable company. We may never become profitable, and, as a result, we could go out of business.

Because we had incurred a loss and have limited operations, our accountants have expressed doubts about our ability to continue as a going concern.

      For our audit as of December 31, 2011, 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 substantial 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, 2012. 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 lack of substantial 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 March 31, 2012, we had a cash position of $120,733.  We anticipate that operating costs will range between $60,000 and $100,000, for the fiscal year ending December 31, 2012. 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 operating history, raising additional funds may be difficult.

Competition in the investment industry is intense.
 
      Our business plan involves acting as an acquirer of real estate assets that are being sold at a discount to the original purchase price. 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 Red, LLC will limit the ability of other shareholders to influence corporate actions.
 
             Our largest shareholder, WestMountain Red, LLC, of which Mr. Klemsz is a 16.8% member, owns 8,050,000 shares and thereby controls approximately 89% of our outstanding shares. Because WestMountain Red, 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 Red, 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 Red, 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 Red, 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 distressed asset 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.

We have limited experience as a public company.

We have only operated as a public company since December, 2009. We have been listed to trade on the OTC Bulletin Board under the trading symbol WMDS since January, 2010. 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.

 
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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 acquisition of real estate assets that are being sold at a discount to the original purchase price., 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:

 
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 March 31, 2012, a total of 1,655,000, or approximately 92%, 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 the 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.

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.

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

Our shares are considered 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, exclusive of principal residence, 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 200,000,000 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.

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 as a director. Our Articles of Incorporation require us to indemnify our directors 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

 
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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
Certification of CEO/CFO pursuant to Sec. 302
Certification of CEO/CFO pursuant to Sec. 906
EX-101.INS XBRL INSTANCE DOCUMENT
EX-101.SCH
XBRL TAXONOMY EXTENSION SCHEMA
EX-101.CAL XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB XBRL TAXONOMY EXTENSION LABEL LINKBASE
EX-101.PRE
XBRL TACONOMY EXTENSION PRESENTATION LINKBASE 

* 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 March 31, 2012.

 
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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 May 11, 2012.

 
WEST MOUNTAIN DISTRESSED DEBT, 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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