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EX-23.1 - EXHIBIT 23.1 CONSENT OF PLS CPA - Saleen Automotive, INC.f10k063012_ex23z1.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


  X . ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended June 30, 2012


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


For the transition period from ___________ to ___________


Commission file number  333-176388


W270, Inc.

(Exact name of small business issuer as specified in its charter)


Nevada

(State or other jurisdiction of incorporation or organization)


45-2808694

(I.R.S. Employer Identification No.)


4221 Camino Alegre, La Mesa, CA 91941

(Address of principal executive offices)


Phone: (619) 253-2129

(Registrant’s telephone number)


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes      . No   X  .


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes      . No   X  .


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   X  . No      .


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller 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   X  . No      .


State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $0 as of December 31, 2011.


The number of shares of the registrant’s common stock outstanding as of September 25, 2012 was 8,000,000.


Documents incorporated by reference: None





Table of Contents


 

 

 

 

PART I

ITEM 1.

Business

4

ITEM 1A.

Risk Factors 

7

ITEM 1B.

Unresolved Staff Comments

16

ITEM 2.

[Removed and Reserved]

16

ITEM 3.

Legal Proceedings

16

ITEM 4.

[Removed and Reserved]

16


PART II

ITEM 5.

Market for Company’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

17

ITEM 6.

Selected Financial Data

17

ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

17

ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

24

ITEM 8.

Financial Statements and  Supplementary Data

25

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

36

ITEM 9A.

Controls and Procedures

36

ITEM 9B.

Other Information

36



PART III

ITEM 10.

Directors, Executive Officers and Corporate Governance

37

ITEM 11.

Executive Compensation

38

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

38

ITEM 13.

Certain Relationships and Related Transactions, and Director Independence

39

ITEM 14.

Principal Accountant Fees and Services

39


PART IV

ITEM 15.

Exhibits, Financial Statements Schedules

40

 

 

 

SIGNATURES

40




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FORWARD-LOOKING STATEMENTS


This Annual Report on Form 10-K (“Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:


·

The availability and adequacy of our cash flow to meet our requirements;

·

Economic, competitive, demographic, business and other conditions in our local and regional markets;

·

Changes or developments in laws, regulations or taxes in our industry;

·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

·

Competition in our industry;

·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

·

Changes in our business strategy, capital improvements or development plans;

·

The availability of additional capital to support capital improvements and development; and

·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission (the 'SEC').

 

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Use of Term

 

Except as otherwise indicated by the context, references in this report to “Company”, “W270”, “we”, “us” and “our” are references to W270, Inc.  All references to “USD” or United States Dollars refer to the legal currency of the United States of America.




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PART I


ITEM 1.    BUSINESS


History of the Company


W270, Inc. was incorporated under the laws of the State of Nevada on June 24, 2011, at which time it acquired a business plan and client/customer list from Mr. Wesley E. Fry. As of September 25, 2012, we had one employee, our founder, president, and chief executive officer Mr. Fry. During the period June 24, 2011 (date of inception) through December 31, 2011, Mr. Fry devoted between five (5) hours per week to over thirty (30) hours per week as necessary for the business. For calendar year 2012, Mr. Fry has committed to devote at least twenty (20) hours a week to us but may increase that number as necessary to further develop the business. As of this date and through calendar year 2012 Mr. Fry will continue to provide these services at no cost to the Company. In addition to his relationship with the Company Mr. Fry provides his services to an unrelated business upon which he is compensated by as an employee.


The Company issued 5,000,000 shares of its common stock to Mr. Fry at inception in exchange for organizational costs/services incurred upon its incorporation. These services were valued at $5,000. Following our formation, we issued an additional 1,000,000 shares of our common stock to Mr. Fry, in exchange for a business plan along with a client/customer list related to his information technology consulting services. The cost incurred by Mr. Fry for the business plan and professional services in preparing it was approximately $1,000 which is the value placed upon the shares issued to pay Mr. Fry.


The Company on June 21, 2012 completed its offering pursuant to an effective registration statement filed on Form S-1. The Company issued 2,000,000 shares of its common stock to 22 investors. The investors paid $0.01 per share for a combined investment of $20,000.


We are an early stage company (“development stage”) and have limited financial resources. We have not established or attempted to establish a source of equity or debt financing, however, we intend to have discussions with a number of financial advisors and smaller investment banks regarding obtaining financing. Our auditors included an explanatory paragraph in their report on our financial statements that states that “the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern.” We are at the very earliest of stages in development of our business plan. We have a significant amount of work that needs to be done and funds that need to be raised in order to compete within the marketplace. To date, we have not developed any saleable products and cannot predict when a saleable product will be developed. We believe that we may have an advantage with our founder, president, and chief executive officer’s industry relationships and soliciting the help of these relationships in growing our business model.


Description of Business


We are currently developing software that is intended to significantly enhance the performance and functionality of Internet services used by medium sized businesses. The Company’s portal software acts as a software platform that simplifies the integration of other third party software into a company’s existing infrastructure, enables the software to be more easily used over the Internet, or in the cloud, and helps improve bandwidth utilization and Internet connectivity performance for all users that are on the respective company’s network The Company has completed its application specific scope of work and software development framework that details the features, functionality and purpose of the software, as well as the technology integration issues and software development initiatives that will need to be managed to create a completed software product that offers the capabilities of being used in conjunction with other third party software applications. Initial application development coding of the software has commenced based upon the aforementioned scope of work and development framework. Similar to Microsoft’s SharePoint software portal that provides a collaborative environment for sharing and managing files and documents, the Company’s portal software is intended to enable the integration of other third party software applications which also enables collaboration capabilities to share, edit, and manage files, documents and application resources within and across any of the organization’s applications. In addition, the Company is establishing relationships with a number of well established companies with the intention to create a reseller or distributor relationship with such companies which have an existing software platform, Internet access connectivity solutions, application integration services and/or related services from which the Company can resell such services and receive sales commissions and/or referral fees. These services are separate from the development of our software products, however, complement one another as an information technology integration and software solutions provider. The Company’s products and services are intended to use proprietary technology which will enable users to work collaboratively to obtain substantial improvements in performance, reliability and usability of their applications.




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Plan of Operations


Our business operations will be comprised of two distinct divisions; a) software products for Internet and/or Intranet applications and b) software integration services. The software products division initially intends to work in conjunction with an established software development firm.  The Company has started the development of an initial design and framework of its proposed portal platform through the efforts of its founder, president, and chief executive officer, as well as through the efforts of a  software development firm with which the Company has been working with on an as “needed basis.”  The portal platform acts as a software platform that simplifies the integration of other third party software into a businesses’ (or commonly referred to as an ‘enterprise’) existing infrastructure, that enables the software to be easily used over the Internet, or in the cloud, as well as helps improve bandwidth utilization and Internet connectivity performance for all users that are on the enterprise’s network. The Company has completed its application specific ‘scope of work’ and software ‘development framework’ that details features, functionality and purpose of the software, as well as technology integration issues and software development initiatives that need to be managed to create a completed software product that offers the capabilities of being used in conjunction with other third party software applications. In addition, initial development coding of the software has commenced based upon the aforementioned scope of work and development framework. Similar to Microsoft’s SharePoint software portal that provides a collaborative environment for sharing and managing files and documents, our portal platform is intended to enable the integration of other third party software applications which enables collaboration capabilities to share, edit, and manage files, documents and application resources within and across any of the enterprise’s applications. We have not had any material discussions surrounding the acquisition of any software products, nor do we have any agreements (written or oral) in place in order to do so. Once our intended initial technologies have been developed, or a software application distributor or reseller relationship has been formalized with an established industry participant, the Company intends to seek the help of outside sales and marketing consultants to develop a sales and marketing strategy to capitalize on these initial technologies. We intend to create and staff an in-house software development group, which we believe may develop new generations of acquired applications (if applications are acquired) and/or products of a similar nature and necessity to our business development. The Company is currently working on the development of its own products through the programming skills of its founder, president, and chief executive officer, as well as through a software development firm which has been working with us on an as needed basis and as our budget allows.  


The Company’s software integration business will entail management and oversight for specific small – medium sized business software integration projects. Integration management includes providing research, defining the project scope, setting timelines and milestones, and development oversight. Offering these services also includes performance appraisals, defining enhancements based upon client needs, and to tend to issues that may arise. The focus areas of our software integration services will be towards customer resource management (CRM) systems, and event resource planning (ERP) software programs. The Company has, through our founder and CEO, the experience and expertise to evaluate any CRM or ERP package from proprietary to open source solutions. These solutions will be provided with the objective of maximizing a client’s technology investment, enabling communication between a client’s CRM or ERP package and other software applications their respective enterprise runs, as well as to manage technology upgrades and migration issues as new technologies are developed and new software tools and standards are implemented.


To date no saleable product has been developed through these development and programming efforts. The software integration division intends to develop a management team with the appropriate technical skills necessary in technology and other enterprise resource planning (ERP) software. Contract sizes we believe will range from $10,000 to $100,000 initially and may expand beyond this range as we progress. This range is based solely upon the industry observations of our founder, president, and chief executive officer and not based on any formal studies conducted by the Company or that may be available outside of the Company. The Company believes initially integration clients will come primarily from referrals of business associates of our founder, president, and chief executive officer and/or other middleware software providers which our founder, president, and chief executive officer has professional relationships through his employment with an unrelated business, however, we cannot predict when those referrals will occur, or if at all.


The Company’s growth is intended to come from the application of the following strategies:


·

Focus on Internet and Intranet applications for software technologies acquired or developed through marketing and selling channels.

·

Leverage customer relationships and provide quality customer service.

·

Achieve technological leadership through its developed products and services.

·

Develop and leverage alliances with key business partners.

·

Develop vertical markets revolving around the three I’s; Internet, Intranet and Integration.


The Company's business objective is to be the preferred provider of software integration solutions and related services for small to medium sized business entities throughout the United States. The Company is pursuing the following strategies pertaining to software integration to achieve this objective:



5



 

Maintain and Enhance Technical Expertise-The Company will seek to create and maintain its technical expertise by the hiring of and training of the most proficient engineering personnel available. The Company will also create a training program to assist in maintaining its technical proficiency. The Company will focus on corporate culture, employment environment and incentive systems in order to motivate, reward and retain employees. Additionally, the Company will evaluate opportunities for strategic acquisitions of complementary professional services organizations, which have a proven record of delivering high quality technical services.

 

Create a National Presence-The Company will seek to create and enhance a national reputation and aggressively market its services. The Company will also evaluate opportunities to create a network through strategic acquisitions of professional services organizations located in diverse geographic markets.

 

Quality, Service and Customer Support-The Company's future engineers and technicians will follow documented and standardized methodologies to ensure a consistent approach to similar types of projects, thereby fostering uniform quality and more cost-efficient solutions for clients. The Company will assume responsibility for all aspects of its custom-designed solutions, providing clients with a single point of contact to address any concerns with respect to project implementation, thus allowing clients to avoid managing multiple service providers and product vendors.

 

Client Base-The Company's future comprehensive range of services will permit interaction with diverse points of contact and decision makers within a client's organization, including the founder, president, and chief executive officer, chief financial officer, chief information officer, divisional or department executives and purchasing managers. The Company will seek to utilize these multiple points of contact in order to expand its relationships with clients to obtain additional internetworking and applications projects, as well as generate recurring revenues by providing services such as network management and telecommunications services.

 

Alliances with Industry Leaders-The Company expects to create alliances and relationships with industry-participating product vendors, telecommunications carriers and Internet service providers. Our belief is that we will be provided introductions and opportunities to network with industry participants through referrals from business contacts of our founder, president, and chief executive officer. We believe that these business relationships of our founder, president, and chief executive officer will enhance the Company’s credibility and provide leads to new business opportunities. On certain occasions, the Company will also team with large systems integrators and consultants on complex projects for major enterprises. The Company will also pursue alliances and relationships to expand its service offerings and remain current with advances in computing and communications technology.

 

Multiple Sales Channels-The Company believes that it will create or attract a direct sales force that will focus exclusively on the sale of its services and applications. In addition to developing this direct sales force, the Company intends to utilize outside organizations and their sales staff for the generation of sales leads. The Company believes that it will receive sales leads from product and service vendors as well as large systems integrators and consultants.


Intellectual Property


We have no patents or trademarks.


Government Regulation and Industry Standards


There are an increasing number of laws and regulations in the United States and abroad pertaining to communications and commerce on the Internet. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments. Laws or regulations may be adopted with respect to the Internet relating to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of products and services. Moreover, the application to the Internet of existing laws governing issues such as intellectual property ownership and infringement, pornography, obscenity, libel, gaming, employment and personal privacy is uncertain and developing. Any such legislation or regulation, or the application or interpretation of existing laws, may decrease the growth in the use of the Internet in general, prevent us from delivering our software or services in different parts of the world and increase our costs of selling products or otherwise operating our business.


Furthermore, legislation regulating online content could limit the growth in use of the Internet generally and decrease the overwhelming acceptance of the Internet as an advertising and e-commerce medium.


Websites typically place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. We and many other Internet companies will use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive.



6




Some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. In addition, the European Union and many countries within the EU have adopted privacy directives or laws that strictly regulate the collection and use of information regarding Internet users that is identifiable to particular individuals. Privacy legislation has been proposed in the US as well, and the US Federal Trade Commission has taken action against website operators that do not comply with state privacy policies. These and other governmental efforts may limit our ability to target advertising or collect and use information regarding the use of our websites. Fears relating to a lack of privacy could also result in a reduction in the number of our users and subscribers which could harm our business and financial results.


Employees


As of September 25, 2012, we had one employee, our founder, president, and chief executive officer, Mr. Fry. During calendar year ending December 31, 2012 (dependent on financing and available working capital), Mr. Fry will devote at least twenty (20) hours a week to us and may increase the number of hours as necessary. Mr. Fry is allowed to devote this time to our Company as he is not limited or restricted from being involved with us by his current employer.  Mr. Fry is under no contractual agreement with the Company. However, our founder, president, and chief executive officer’s current plan is to provide all administrative and planning work as well as perform the basic coding for software and initial marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.


There is no written employment contract or agreement in place with our founder, president, and chief executive officer.


WHERE YOU CAN GET ADDITIONAL INFORMATION


We will be required to file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.


Reports to security holders


We are not currently required to deliver an annual report to our security holders and do not expect to do so for the foreseeable future.


ITEM 1A. RISK FACTORS


The following risk factors should be considered in connection with an evaluation of our business:


In addition to other information in this Report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition.  As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition.  If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.


W270 has virtually no financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.


W270 is an early stage company and has virtually no financial resources. We had a cash balance of $2,377 as of June 30, 2012. We have negative working capital of $69,655 and a stockholders’ deficit of $46,964 at June 30, 2012. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the period ended June 30, 2012 that states that Company losses from operations raise substantial doubt about its ability to continue as a going concern. We will seek additional financing beyond what we received from our offering. The financing sought may be in the form of equity or debt financing from various sources as yet unidentified. Most of our recent efforts have been spent completing the offering as well as further developing our business plan, however, we will seek the necessary additional financing to further pursue our business. No assurances can be given that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern.




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Our current resources and source of funds, which primarily consist of loans from our founder, president, and chief executive officer, as well as unaffiliated third parties, are sufficient to keep our business operations functioning for the next three to four months. We do not have a formal agreement with our founder, president, and chief executive officer to fund the Company’s working capital needs; however our founder, president, and chief executive officer’s current plan is to do almost of the work on his own without cash compensation while he seeks other sources of funding. The Company has started the development of an initial design and framework of its proposed portal platform through Mr. Fry’s efforts, as well as through the efforts of a software development firm which the Company has been working with on an as “needed basis.”  We currently spend between $2,000 and $3,000 per month in operational expenses. We owe our former legal counsel $15,000 for their services associated with the offering, and we owe our current legal counsel $18,750 for their services to date. We have not generated any revenues from our business, and our expenses will be accrued and deferred until sufficient financing is obtained or our founder, president, and chief executive officer or others who know our founder, president, and chief executive officer loans the necessary funds to pay for these expenses. No assurances can be given that we will be able to receive funds from our founder, president, and chief executive officer or others to continue our operations beyond a month-to-month basis.


W270 is and will continue to be completely dependent on the services of our founder, president, and chief executive officer, Wesley E. Fry, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.


W270’s operations and business strategy are completely dependent upon the knowledge and business connections of Mr. Fry our founder, president, and chief executive officer. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason or if he becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this report. We will fail without the services of Mr. Fry or an appropriate replacement(s).


We intend to acquire key-man life insurance on the life of Mr. Fry naming us as the beneficiary when and if we obtain the resources to do so and if he is insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors.


Mr. Fry’s current employment does not limit or restrict him from being involved with our Company, and his employment allows him the flexibility to provide at least 20 hours per week to our Company.


Because we have only recently commenced business operations, we face a high risk of business failure.


We were formed in June 2011. All of our efforts to date have related to completing of our offering, developing our business plan and beginning general business activities. Through June 30, 2012, we have had no operating revenues. We face a high risk of business failure. The likelihood of the success of the Company must be considered in light of the expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the competitive environment in which the Company will operate. There can be no assurance that future revenues from sales of the Company’s products and services will occur or be significant enough or that we will be able to sell its products and services at a profit, if at all. Future revenues and/or profits, if any, will depend on many various factors, including, but not limited to both initial and continued market acceptance of the Company’s products and services and the successful implementation of its planned growth strategy.


The Company has not yet acquired or internally developed any saleable products. We may not be able to acquire or internally develop any products in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire any products, we must be able to secure the necessary financing. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our founder, president, and chief executive officer providing almost all of the work on his own without any cash compensation. We are using the services of a software development firm with which the Company has been working with on an as “needed basis.” They perform their services on a deferral basis not requiring us to pay them immediately. This methodology could result in our development stage extending for at least two to three years. We however believe that our services division (once developed, if at all) may begin to generate revenues earlier than the software division (once developed, if at all). If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth beyond our initial public offering.




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In addition, the Company’s future profitability, if any, could be materially and adversely impacted if any one or more of its acquired or developed technological products were to experience poor operating results. The Company’s ability to achieve profitability will be dependent on the ability of its future products or services to generate sufficient operating cash flow to fund future growth and/or acquisitions. There can be no assurance that the Company’s future results of operations will be profitable or that its business strategy will be successful or even begin to generate any revenues.


We may not have or ever have the resources or ability to implement and manage our growth strategy.


Although the Company expects to experience growth based on being able to implement its business plan, actual operations may never occur because the business plan may never be implemented because of lack of funds to do so. If the Company’s business plan and growth strategy are implemented, of which no assurances can be given, a significant strain on the Company’s management, operating systems and/or financial resources will be imposed. Failure by the Company’s management to manage this growth, if it occurs, or unexpected difficulties encountered during growth, could have a material adverse impact on the Company’s results of operations or financial condition.


The Company’s ability to operate profitable product lines (if we are able to establish any product or product lines at all) will depend upon a number of factors, including (i) identifying distribution channels, (ii) generating sufficient funds from our then existing operations or obtaining third-party financing or additional capital to develop new product lines, (iii) the Company’s management team and its financial and accounting controls and (iv) staffing, training and retaining of skilled personnel, if any at all. Certain of these factors will be beyond the Company’s control and may be adversely affected by the economy or actions taken by competing companies. Moreover, potential products that may meet the Company’s product focus and other criteria for developing new products or services, if we are able to develop or acquire at all, are believed to be limited. There can be no assurance that the Company will be able to execute and manage a growth strategy effectively or at all.


We may not be successful in hiring technical personnel because of the competitive market for qualified technical people.


The Company's future success depends largely on its ability to attract, hire, train and retain highly qualified technical personnel to provide the Company's services. Competition for such personnel is intense. There can be no assurance that the Company will be successful in attracting and retaining the technical personnel it requires to conduct and expand its operations successfully and to differentiate itself from its competition. The Company's results of operations and growth prospects could be materially adversely affected if the Company were unable to attract, hire, train and retain such qualified technical personnel.


Our reliance on referrals from outside contacts to develop business may not be effective.


The Company initially will rely on our founder, president, and chief executive officer, Mr. Fry, for a majority of its leads and believes that independent outside sales reps will also be an important source of sales referrals in the foreseeable future. However, as is typical within the industry, there are no contractual requirements that an outside sales person use or recommend the Company's professional services in connection with product sales. We currently have no contracts or agreements in place with any outside sales professional. No assurances can be given that using independent outside sales reps will result in any meaningful numbers of sales leads or referrals.


Fluctuations in our financial results make quarterly comparisons and financial forecasting difficult.


The Company's future or projected quarterly operating results may vary and reduced levels of earnings or losses may be experienced in one or more quarters. Fluctuations in the Company's quarterly operating results could result from a variety of factors, including changes in the levels of revenues derived from internetworking, applications development, and managed services, the size and timing of significant project orders, changes in the mix of employee and subcontractor technicians on projects, the timing of new service offerings by the Company or its competitors, new office openings by the Company, changes in pricing policies by the Company or its competitors, market acceptance of new and enhanced services offered by the Company or its competitors, changes in operating expenses, availability of qualified technical personnel, disruptions in sources of related products and services, the effect of potential acquisitions and industry and general economic factors. The Company will have limited or no control over many of these factors. The Company's expense levels we believe will be based upon, in part, on its expectations as to future or projected revenues. If revenue levels are below expectations, operating results are likely to be adversely affected.


Because of these fluctuations and uncertainties, our future operating results may fail to meet the expectations of investors. If this happens, any trading price of our common stock, if and when a trading market is established for our common stock, would almost certainly be materially adversely affected.



9




We will face competition from companies with significantly greater resources and name recognition.


The markets in which the Company will operate are characterized by intense competition from several types of solution and technical service providers. These include value added resellers (VARs), systems integrators and consultants, and computer or other hardware and software providers. In addition, there can be no assurance that the Company's potential clients will not seek to further develop their in-house capabilities and perform internally more of the services that the Company offers. The Company expects to face further competition from new market entrants and possible alliances among competitors in the future as the convergence of information processing and telecommunications continues. Many of the Company's current and potential competitors have significantly greater financial, technical, marketing and other resources than the Company. As a result, they may be better able to respond or adapt to new or emerging technologies and changes in client requirements or to devote greater resources to the development, marketing and sales of their services than the Company. There can be no assurance that the Company will be able to compete successfully. The Company expects to encounter intense competition in the Internet/software industry. The Company will also compete for revenues with other Internet software providers. In addition, the Company will be faced with numerous competitors, both strategic and financial, in attempting to obtain competitive products. Many actual and potential competitors we believe are part of much larger companies with substantially greater financial, marketing and other resources than the Company, and there can be no assurance that the Company will be able to compete effectively against any of its future competitors.


There are significant potential conflicts of interest.


Our personnel will be required to commit substantial time to our affairs and, according­ly, these individual(s) (particularly our founder, president, and chief executive officer) may have conflicts of interest in allocating management time among various business activities. In the course of other business activities, certain key personnel (particularly our founder, president, and chief executive officer) may become aware of business opportu­nities which may be appropriate for presenta­tion to us, as well as other entities with which they are affiliated. As such, there may be con­flicts of interest in determining to which entity a particular business opportunity should be presented.


In an effort to resolve such potential conflicts of interest, we entered into a written agreement with Mr. Fry specifying that any business opportunities that he may become aware of independently or directly through his association with us (as opposed to disclosure to him of such business opportunities by management or consultants associated with other entities) would be presented by him solely to us..


We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective.


Because we have nominal assets and no revenue, we are considered a "shell company" and will be subject to more stringent reporting requirements.


The Securities and Exchange Commission ("SEC") adopted Rule 405 of the Securities Act and Exchange Act Rule 12b-2 which defines a shell company as a registrant that has no or nominal operations, and either (a) no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or (c) assets consisting of any amount of cash and cash equivalents and nominal other assets. Our balance sheet reflects that we have no cash or any other tangible asset and, therefore, we are defined as a shell company. The new rules prohibit shell companies from using a Form S-8 to register securities pursuant to employee compensation plans. However, the new rules do not prevent us from registering securities pursuant to S-1 registration statements. Additionally, the new rule regarding Form 8-K requires shell companies to provide more detailed disclosure upon completion of a transaction that causes it to cease being a shell company. If an acquisition is undertaken (of which we have no current intention of doing), we must file a current report on Form 8-K containing the information required pursuant to Regulation S-K within four business days following completion of the transaction together with financial information of the acquired entity. In order to assist the SEC in the identification of shell companies, we are also required to check a box on Form 10-Q and Form 10-K indicating that we are a shell company, for which we have on this Report. To the extent that we are required to comply with additional disclosure because we are a shell company, we may be delayed in executing any mergers or acquiring other assets that would cause us to cease being a shell company. The SEC adopted a new Rule 144 effective February 15, 2008, which makes resales of restricted securities by shareholders of a shell company more difficult.




10




Following the effective date of our Registration Statement, which went effective on May 9, 2012, we are subject to the periodic reporting requirements of Section 15(d) of the Exchange Act that requires us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.


Following the effective date of our registration statement, which occurred on May 9, 2012, we are required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm has to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel is required to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major affect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be exposed to potential risks resulting from any new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.


Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.


Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


·

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

·

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and

·

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.


Our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.


The costs of being a public company could result in us being unable to continue as a going concern.


As a public company, we will have to comply with numerous financial reporting and legal requirements, including those pertaining to audits, quarterly reporting and internal controls. The costs of this compliance we believe to be significant. If our revenues are insufficient, and/or we cannot satisfy many of these costs through the issuance of our shares, we may be unable to satisfy these costs through the normal course of business which would result in our being unable to continue as a going concern.


Having only one director limits our ability to establish effective independent corporate governance procedures and increases the control of our founder, president, and chief executive officer.


We have only one director who also serves as our founder, president, and chief executive officer. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, currently a vote of board members is decided in favor of the chairman (who is our founder, president, and chief executive officer), which gives him complete control over all corporate issues.


Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our founder, president, and chief executive officer’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.




11




Risks Related to Our Common Stock


Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.


We have no committed source of financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized (100,000,000) shares but unissued (92,000,000) shares. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, further diluting common stock book value, and that dilution may be material.


The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our company.


Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our company.


Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.


Our Articles of Incorporation at Article XI provide for indemnification as follows: "No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification."


We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.


Currently, there is no established public market for our securities, and there can be no assurances that any established public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.


Through to date there has been no established trading market for our common stock, and most likely in the near future no established public market will ever be created for our securities. Our application to quote the shares of our common stock on the OTCBB, maintained by FINRA, was approved, and our trading symbol is “WSTY”, however, there can be no assurances as to whether


(i)

any market for our shares will develop;

(ii)

the prices at which our common stock will trade; or

(iii)

the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.




12




Since our shares of common stock are approved to be quoted on the OTCBB, we will try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.


In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.


Because of the anticipated low price of our shares, many brokerage firms may not be willing to effect transactions in our common stock. Purchasers of our common stock should be aware that any market that develops in our stock will be subject to the penny stock restrictions.


We are an “emerging growth company” and we cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.


We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual non-binding advisory vote on executive compensation and nonbinding stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.


In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.


The trading of our securities, if any, will be on the OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.


Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.


For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.



13




The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:


·

the basis on which the broker or dealer made the suitability determination, and

·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.


Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.


The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.


Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:


·

Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

·

Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

·

"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;

·

Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

·

Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.


Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.


There is currently no established trading market for our common stock, and there can be no assurance that any established trading market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17 states which do not offer manual exemptions (or may offer manual exemptions but may not to offer one to us if we are considered to be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one.


Our board of directors (consisting of one person, our founder, president, and chief executive officer) has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.


Our articles of incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.




14




The ability of our founder, president, and chief executive officer to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.


Upon completing our offering on June 21, 2012, our founder, president, and chief executive officer decreased his beneficial ownership from 100% to 75% of our outstanding common stock. Because of his beneficial stock ownership, our founder, president, and chief executive officer is in a position to continue to elect our board of directors, decide all matters requiring stockholder approval and determine our policies. The interests of our founder, president, and chief executive officer may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. Minority shareholders would have no way of overriding decisions made by our founder, president, and chief executive officer. This level of control may also have an adverse impact on the market value of our shares because our founder, president, and chief executive officer may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.


A vast majority of our presently issued and outstanding common shares are restricted under Rule 144 of the Securities Act, as amended. When the restriction on any or all of these shares is lifted, and the shares are sold in the open market, the price of our common stock could be adversely affected.


A majority of our presently outstanding shares of common stock (8,000,000), six million (6,000,000 shares) to be exact are "restricted securities" as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. Rule 144 provides in essence that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six (6) months if purchased from a reporting issuer or twelve (12) months (as is the case herein) if purchased from a non-reporting company, may, under certain conditions, sell all or any of his shares without volume limitation, in brokerage transactions. Affiliates, however, may not sell shares in excess of 1% of the Company’s outstanding common stock every three months. As a result of revisions to Rule 144 which became effective on February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.


The ‘restricted securities” representing 6,000,000 issued and outstanding shares of our common stock are owned by our founder, president, and chief executive officer, which consists of 5,000,000 shares issued for organizational expenses and 1,000,000 shares issued as payment for a business plan and customer/client relationships and may be sold commencing one year from the date the Company is no longer a “shell” company.


We do not expect to pay cash dividends in the foreseeable future.


We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.


Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.


The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.


Because none of our directors (currently one person) are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.



15




We intend to comply with all corporate governance measures relating to  director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.


You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.


As of the effective date of our registration statement (May 9, 2012), we became subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. Except during the year that our registration statement became effective, these reporting obligations may (in our sole discretion) be automatically suspended under Section 15(d) of the Exchange Act if we have less than 500 shareholders and do not file a registration statement on Form 8A (of which we have no current plans to file). If this occurs after the year in which our registration statement became effective, we will no longer be obligated to file periodic reports with the SEC and your access to our business information would then be even more restricted. We may be required to deliver periodic reports to security holders, however, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act. Previously, a company with more than 500 shareholders of record and $10 million in assets had to register under the Exchange Act. However, the JOBS Act raises the minimum shareholder threshold from 500 to either 2,000 persons or 500 persons who are not "accredited investors" (or 2,000 persons in the case of banks and bank holding companies). The JOBS Act excludes securities received by employees pursuant to employee stock incentive plans for purposes of calculating the shareholder threshold. This means that access to information regarding our business and operations will be limited.  


For all of the foregoing reasons and others set forth herein, an investment in our securities in any market that may develop in the future involves a high degree of risk.


ITEM 1B. UNRESOLVED STAFF COMMENTS


None


ITEM 2. [REMOVED AND RESERVED]


ITEM 3. LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 4. [REMOVED AND RESERVED]




16




PART II


ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Common Stock


Our common stock is currently listed on the OTC Bulletin Board. Our common stock has been listed on the OTC Bulletin Board since August 9, 2012 under the symbol “WSTY.OB”. Our common stock however has not been quoted through the date of this Report. Because we are eligible to be quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


Since our common stock was approved for listing, not approved for trading, and lacks quotation of a bid-ask after the date of this Report, we have no share price information to provide for the quarterly period occurring during the year ending June 30, 2012.


Shareholders of Record


As of September 25, 2012, an aggregate of 8,000,000 shares of our common stock were issued and outstanding and were owned by 23 shareholders of record.

 

Recent Sales of Unregistered Securities


None.


Re-Purchase of Equity Securities


None.


Dividends


There are no restrictions that would limit the Company from paying dividends. We have not paid any cash or stock dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.


Securities Authorized for Issuance Under Equity Compensation Plans

 

None.


ITEM 6. SELECTED FINANCIAL DATA


Not applicable.


ITEM 7. MANAGEMENTS’ DISCUSSION AND ANALYSIS 


Forward Looking Statements:  Statements About Our Future Expectations Are "Forward-Looking Statements" And Are Not Guarantees Of Future Performance.  When Used Herein, The Words "May," "Will," "Should," "Anticipate," "Believe," "Appear," "Intend," "Plan," "Expect," "Estimate," "Approximate," And Similar Expressions Are Intended To Identify Such Forward-Looking Statements. These Statements Involve Risks And Uncertainties Inherent In Our Business, Including Those Set Forth Under The Caption "Risk Factors," In This Disclosure Statement, And Are Subject To Change At Any Time. Our Actual Results Could Differ Materially From These Forward-Looking Statements.  This Form 10-K Does Not Have Any Statutory Safe Harbor For This Forward Looking Statement.  We Undertake No Obligation To Update Publicly Any Forward-Looking Statement.


Management’s Discussion and Analysis should be read in conjunction with the financial statements included in this Annual Report on Form 10-K (the “Financial Statements”).  The financial statements have been prepared in accordance with generally accepted accounting policies in the United States (“GAAP”).  Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis are quoted in United States dollars.




17




Overview


We were incorporated under the laws of the State of Nevada on June 24, 2011, at which time it acquired the business plan and client/customer list from our founder, president, and chief executive officer. As of September 25, 2012, we had one employee, our founder, president, and chief executive officer, Mr. Fry. For the remainder of fiscal year 2012, Mr. Fry will devote at least twenty (20) hours a week to us but may increase the number of hours as necessary.


The Company issued 5,000,000 shares of its common stock to Mr. Fry at inception in exchange for organizational expenses incurred upon incorporation. Following our formation, we issued an additional 1,000,000 shares of our common stock to Mr. Fry, in exchange for a business plan and a client/customer list.


The Company on June 21, 2012 completed its offering pursuant to an effective registration statement filed on Form S-1. The Company issued 2,000,000 shares of its common stock to 22 investors. The investors paid $0.01 per share for a combined investment of $20,000.


We are a development stage company and have no financial resources. We have not established or attempted to establish a source of equity or debt financing. Our independent registered public accounting firm has included an explanatory paragraph in their report emphasizing the uncertainty of our ability to remain a going concern. We are at the very earliest of stages in development of our business plan. We have a significant amount of work that needs to be completed and funds that need to be raised in order to compete within this marketplace. To date, we have not developed any product and cannot predict when a product will be internally developed or acquired. We believe that we may have an advantage with our founder, president, and chief executive officer industry relationships and soliciting the help of these relationships in growing our business model.


Results of Operations for the Fiscal Year ended June 30, 2012 and the Period June 24, 2011 (inception) to June 30, 2011:


Our operating results for the year ended June 30, 2012 and the period June 24, 2011 (inception) to June 30, 2011 are summarized as follows:


 

 

Period ended

June 30, 2012

 

Period ended

June 30, 2011

Revenue

$

$

Consulting and other expense

$

40,349

$

Amortization expense

$

1,000

$

Organization expense

$

$

5,615

Net loss

$

(41,349)

$

(5,615)


Revenues


We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future.


Expenses


Consulting and other expense


Consulting and other expenses were $40,349 and none, for the year ended June 30, 2012 and for the period June 24, 2011 (inception) to June 30, 2011, respectively. Consulting fees during the year ended June 30, 2012 totaled $36,600 which was incurred on behalf of developing the framework for our first product to bring to market. During the year ended June 30, 2012 we incurred accounting and auditing fees of $1,500, and other expense for our public reporting of $2,249. We expect to incur significant legal and accounting, and other professional fees due to our public reporting requirements, as well as development costs of our products to be brought to market. These costs may require us to seek additional financing.


Amortization expense


During the year ended June 30, 2012 we amortized our client lists purchased from our founder. This amounted to $1,000 for the year ended June 30, 2012.


Organization expenses


During the period June 24, 2011 (inception) to June 30, 2011 we incurred organization expenses amounting to $5,615. This consisted of compensation to our founder ($5,000), and incorporation fees ($615).



18




Net Loss


We incurred a net loss of $(41,349) for the twelve months ended June 30, 2012 compared with a net loss of $(5,615) for the period June 24, 2011 (inception) to June 30, 2011. Net loss for the year ended June 30, 2012 included costs associated with our software development which are not capitalized.


Liquidity and Capital Resources


Our financial position as of June 30, 2012 and June 30, 2011 are as follows:


Net Working Capital (Deficiency)

 

 

 

 

  

 

As of

June 30, 2012

 

As of

June 30, 2011

 

 

 

 

 

Current Assets

$

2,377

$

-

Current Liabilities

 

72,032

 

615

Net Working Capital (Deficiency)

 

(69,655)

 

(615)


Our net working capital deficiency increased from $615 at June 30, 2011 to $69,655 at June 30, 2012 as a result of increases in accrued expenses and loans entered into by the Company.


Cash Flows

 

 

 

 

  

 

Year ended

June 30, 2012

 

Period ended

June 30, 2011

 

 

 

 

 

Net cash (used in) Operating Activities

$

(7,749)

$

-

Net cash (used in) Investing Activities

 

 

 

-

Net cash provided by Financing Activities

 

10,126

 

-

Increase (Decrease) in Cash during the Year

 

2,377

 

-

Cash, Beginning of Year

 

-

 

-

Cash, End of Year

   $

2,377

   $

-


Since the June 24, 2011 (inception) to June 30, 2012, we secured $20,000 though an offering of our common shares; $15,552 from loans of which we paid back $14,265 by June 30, 2012. As of June 30, 2012 we had cash on hand of $2,377. The Company recognized deferred offering costs of $48,691 in expenses that we incurred in going public against additional paid in capital (offering proceeds in excess of par value ($0.001 per share)) of $18,000. The Company will need to seek additional financing either through debt or equity to continue to pursue its business plan.


Purchase of Significant Equipment


We currently do not have plans to purchase any significant equipment over the next twelve months.


Proposed Business


There is no way of accurately predicting when product development will progress to the point of generating any revenue. The timing of development is a function of having sufficient working capital. There is no way of knowing when or if we will be able to raise the funds necessary. If we do, products could be ready within three to six months following when the necessary funds have been secured. If we do not raise sufficient financing, revenue producing activities of any kind will most likely not commence for at least 18 months, if ever.


We intend to acquire and/or develop and market software that has the ability to significantly enhance the performance and functionality of Internet services and applications used by medium sized businesses.  In addition, the Company intends to establish relationships with a number of well established companies with the intention to create a reseller or distributor relationship with such companies which have an existing software platform, Internet access connectivity solutions, application integration services and related services from which the Company can resell such services and receive sales commissions and referral fees. These services are separate from the development of our software products, however, complement one another as an information technology integration and software solutions provider.



19




Our business operations will be comprised of two distinct divisions; a) software products for Internet and/or Intranet applications and b) software integration services. The software products division initially intends to work in conjunction with an established software development firm.  The Company has started the development of an initial design and framework of its proposed portal platform through the efforts of its founder, president, and chief executive officer, as well as through the efforts of a  software development firm with which the Company has been working with on an as “needed basis.”  The portal platform acts as a software platform that simplifies the integration of other third party software into an enterprise’s existing infrastructure, that enables the software to be easily used over the Internet, or in the cloud, and helps improve bandwidth utilization and Internet connectivity performance for all users that are on the respective company’s network. The Company has completed its application specific scope of work and software development framework that details the features, functionality and purpose of the software, as well as technology integration issues and software development initiatives that need to be managed to create a completed software product that offers the capabilities of being used in conjunction with other third party software applications. In addition, initial development coding of the software has commenced based upon the aforementioned scope of work and development framework. Similar to Microsoft’s SharePoint software portal that provides a collaborative environment for sharing and managing files and documents, our portal platform is intended to enable the integration of other third party software applications which enables collaboration capabilities to share, edit, and manage files, documents and application resources within and across any of the enterprise’s applications.   


The Company’s software integration business will entail management and oversight for specific small – medium sized business software integration projects. Integration management includes providing research, defining the project scope, setting timelines and milestones, and development oversight. Offering these services also includes performance appraisals, defining enhancements based upon client needs, and tending to issues that may arise. The focus areas of our software integration services will be toward customer resource management (CRM) systems, and event resource planning (ERP) software programs. The Company has, through our founder and CEO, the experience and expertise to evaluate any CRM or ERP package from proprietary to open source solutions. These solutions will be provided with the objective of maximizing a client’s technology investment, enabling communication between a client’s CRM or ERP package and other software applications their respective enterprise runs, as well as to manage technology upgrades and migration issues as new technologies are developed and new software tools and standards are implemented.


To date no saleable product has been developed through these development and programming efforts. The software integration division intends to develop a management team with the appropriate technical skills necessary in technology and other enterprise resource planning (ERP) software. Contract sizes we believe will range from $10,000 to $100,000 initially and may expand beyond this range as we progress. This range is based solely upon the industry observations of our founder, president, and chief executive officer and not based on any formal studies conducted by the Company or that may be available outside of the Company. The Company believes initially integration clients will come primarily from referrals of business associates of our founder, president, and chief executive officer and/or other middleware software providers which our founder, president, and chief executive officer has professional relationships through his employment with an unrelated business, however, we cannot predict when those referrals will occur, or if at all.


The Company’s growth is intended to come from the application of the following strategies:


·

Focus on Internet and Intranet applications for software technologies acquired or developed through marketing and selling channels.

·

Leverage customer relationships and provide quality customer service.

·

Achieve technological leadership through its developed products and services.

·

Develop and leverage alliances with key business partners.

·

Develop vertical markets revolving around the three I’s; Internet, Intranet and Integration.


The Company's business objective is to be the preferred provider of software integration solutions and related services for small to medium sized business entities throughout the United States. The Company is pursuing the following strategies pertaining to software integration to achieve this objective:


Maintain and Enhance Technical Expertise-The Company will seek to create and maintain its technical expertise by the hiring of and training of the most proficient engineering personnel available. The Company will also create a training program to assist in maintaining its technical proficiency. The Company will focus on corporate culture, employment environment and incentive systems in order to motivate reward and retain employees. Additionally, the Company will evaluate opportunities for strategic acquisitions of complementary professional services organizations, which have a proven record of delivering high quality technical services.


Create a National Presence-The Company will seek to create and enhance a national reputation and aggressively market its services. The Company will also evaluate opportunities to create a network through strategic acquisitions of professional services organizations located in diverse geographic markets.



20




Quality, Service and Customer Support-The Company's future engineers and technicians will follow documented and standardized methodologies to ensure a consistent approach to similar types of projects, thereby fostering uniform quality and more cost-efficient solutions for clients. The Company will assume responsibility for all aspects of its custom-designed solutions, providing clients with a single point of contact to address any concerns with respect to project implementation, thus allowing clients to avoid managing multiple service providers and product vendors.

 

Client Base-The Company's future comprehensive range of services will permit interaction with diverse points of contact and decision makers within a client's organization, including the founder, president, and chief executive officer, chief financial officer, chief information officer, divisional or department executives and purchasing managers. The Company will seek to utilize these multiple points of contact in order to expand its relationships with clients to obtain additional internetworking and applications projects, as well as generate recurring revenues by providing services such as network management and telecommunications services.

 

Alliances with Industry Leaders-The Company expects to create alliances and relationships with industry-participating product vendors, telecommunications carriers and Internet service providers. Our belief is that we will be provided introductions and opportunities to network with industry participants through referrals from business contacts of our founder, president, and chief executive officer. We believe that these business relationships of our founder, president, and chief executive officer will enhance the Company’s credibility and provide leads to new business opportunities. On certain occasions, the Company will also team with large systems integrators and consultants on complex projects for major enterprises. The Company will also pursue alliances and relationships to expand its service offerings and remain current with advances in computing and communications technology.

 

Multiple Sales Channels-The Company believes that it will create or attract a direct sales force that will focus exclusively on the sale of its services and applications. In addition to developing this direct sales force, the Company intends to utilize outside organizations and their sales staff for the generation of sales leads. The Company believes that it will receive sales leads from product and service vendors as well as large systems integrators and consultants.


Government Regulation and Industry Standards


There are an increasing number of laws and regulations in the United States and abroad pertaining to communications and commerce on the Internet. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments. Laws or regulations may be adopted with respect to the Internet relating to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of products and services. Moreover, the application to the Internet of existing laws governing issues such as intellectual property ownership and infringement, pornography, obscenity, libel, gaming, employment and personal privacy is uncertain and developing. Any such legislation or regulation, or the application or interpretation of existing laws, may decrease the growth in the use of the Internet in general, prevent us from delivering our content in different parts of the world and increase our costs of selling products or otherwise operating our business.


Furthermore, legislation regulating online content could limit the growth in use of the Internet generally and decrease the overwhelming acceptance of the Internet as an advertising and e-commerce medium.


Websites typically place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. We and many other Internet companies will use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive.


Some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. In addition, the European Union and many countries within the EU have adopted privacy directives or laws that strictly regulate the collection and use of information regarding Internet users that is identifiable to particular individuals. Privacy legislation has been proposed in the US as well, and the US Federal Trade Commission has taken action against website operators that do not comply with state privacy policies. These and other governmental efforts may limit our ability to target advertising or collect and use information regarding the use of our websites. Fears relating to a lack of privacy could also result in a reduction in the number of our users and subscribers which could harm our business and financial results.




21




Employees


As of September 25, 2012, we had one employee, our founder, president, and chief executive officer, Mr. Fry. During calendar year ending December 31, 2012 (dependent on financing and available working capital), Mr. Fry will devote at least twenty (20) hours a week to us and may increase the number of hours as necessary. Mr. Fry is allowed to devote this time to our Company as he is not limited or restricted from being involved with us by his current employer.  Mr. Fry is under no contractual agreement with the Company. However, our founder, president, and chief executive officer’s current plan is to provide all administrative and planning work as well as perform the basic coding for software and initial marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.


Mr. Fry has been initially compensated through the form of common stock or equity in the Company, and will continue to forego cash payments for his services. Beyond Mr. Fry’s services, we have currently been working with an independent software development firm, which has been utilized on an “as needed” basis, and we may in the future use other independent contractors and consultants to assist in many aspects of our business on an “as needed” or per project basis pending adequate financial resources being available or their ability to defer payment for their services.


There is no written employment contract or agreement in place with our founder, president, and chief executive officer.


Property


Our office and mailing address is 4221 Camino Alegre, La Mesa, CA 91941. The space is provided to us by Mr. Fry. Mr. Fry incurs no incremental costs as a result of our using this space. Therefore, he does not charge us for its use. There is no written lease agreement.


Litigation


We are not party to any pending, or to our knowledge, threatened litigation of any type.


Critical Accounting Policies


The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.


An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.


Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2 to the financial statements, included elsewhere in this report, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.


On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act), which establishes a new category of issuer called an emerging growth company (EGC). Under the JOBS Act, an EGC is defined as an issuer with total annual gross revenues less than $1 billion during its most recently completed fiscal year. An issuer continues to be eligible for EGC status until the earliest of (1) the last day of the fiscal year during which it had total annual gross revenues of $1 billion or more (as indexed for inflation in the manner set forth in the JOBS Act), (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of its IPO, (3) the date on which it issued more than $1 billion in non-convertible debt in the previous three-year period, or (4) the date on which it became a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934.




22




The JOBS Act exempts an EGC from the following requirements during the period of eligibility:


·

Having an independent auditor assess its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. However, an EGC would still have to comply with the Section 404(a) requirement that management assess its internal control over financial reporting, generally beginning with its second annual report on Form 10-K.


·

Adopting new or revised accounting standards that are effective for public companies. Instead, the effective dates of such accounting standards for private companies would apply.


·

Complying with “say-on-pay” vote requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act. An EGC would satisfy executive compensation disclosures in a manner consistent with a smaller reporting company.


·

Complying with future changes to PCAOB auditing standards related to mandatory audit firm rotation and an Auditors Discussion & Analysis statement (if adopted). Other new standards would not apply to audits of EGCs unless the SEC decides that they should after considering the protection of investors and whether the action will promote efficiency, competition and capital formation.


With the exception of the treatment for accounting standards, each of these exemptions is voluntary and an EGC may choose to operate as an EGC as it deems appropriate. Section 107(b) of the JOBS Act permits an EGC to “opt out” of the exemption to adopt new or revised accounting standards when they are effective for private companies and instead apply such standards on the same basis as a public company. Under section 107(b)(3), such decision to opt-out is irrevocable, and the EGC must continue to comply with such standards to the same extent that a public company is required for as long as the company remains an EGC.


Under the JOBS Act, we meet the definition of an EGC. During the period we continue to be eligible for EGC status, we will apply new or revised accounting standards following the effective dates for private companies.


Seasonality


We have not noted a significant seasonal impact in our business (or businesses like ours) although having just commenced operations it is too early to tell.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.


Material Events and Uncertainties


Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable early stage companies in mineral resource markets. The continuation of our business is dependent upon obtaining further financing, a successful effort of software development, marketing and sales, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.


There are no assurances that we will be able to obtain further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.




23




Critical Accounting Policies

 

The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.


Our significant accounting policies are summarized in Note 2 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We have not entered into derivative contracts either to hedge existing risk or for speculative purposes.




24




ITEM 8. FINANCIAL STATEMENTS and SUPPLEMENTARY DATA



INDEX TO FINANCIAL STATEMENTS



 

Page

 

 

Report of Independent Registered Public Accounting Firm

26

 

 

Financial Statements for the year ended June 30, 2012 and for the period June 24 (inception) through June 30, 2011:

 

 

 

Balance Sheets

27

Statements of Operations

28

Statement of Stockholders’ Equity (Deficit)

29

Statements of Cash Flows

30

Notes to Financial Statements

31




25




PLS CPA, A PROFESSIONAL CORP.

t 4725 MERCURY STREET #210 t SAN DIEGO t CALIFORNIA 92111t

t TELEPHONE (858)722-5953 t FAX (858) 761-0341  t FAX (858) 433-2979

t E-MAIL changgpark@gmail.com t



Report of Independent Registered Public Accounting Firm



To the Board of Directors and Stockholders

W270, Inc.


We have audited the accompanying balance sheets of W270, Inc. (A Development Stage “Company”) as of June 30, 2012 and 2011, and the related statements of operations, changes in shareholders’ equity and cash flows for the year ended 2012 and period from June 24, 2011 (inception) to June 30, 2011 and period from June 24, 2011 (inception) to June 30, 2012. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation.  We believe that our audit provides a reasonable basis for our opinion.  


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of W270, Inc. as of June 30, 2012 and 2011, and the result of its operations and its cash flows for the period from the year ended June 2012 and June 24, 2011 (inception) to June 30, 2011 and June 24, 2011 (inception) to June 30, 2012  in conformity with U.S. generally accepted accounting principles.


The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/PLS CPA

PLS CPA, A Professional Corp.


September 25, 2012

San Diego, CA. 92111



26




Registered with the Public Company Accounting Oversight Board


W270, INC.

(a Development Stage Company)

Balance Sheets


 

 

June 30,

2012

 

June 30,

2011

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash

$

2,377

$

-

Prepaid expense

 

-

 

-

 Total Current Assets

 

2,377

 

-

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS:

 

 

 

 

Deferred offering costs

 

-

 

-

Intangible asset – Client/Customer list, net

 

-

 

1,000

 Total Other Assets

 

-

 

1,000

 

 

 

 

 

TOTAL ASSETS

$

2,377

$

1,000

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Accrued expenses

$

70,745

$

615

Loans – unrelated parties  

 

1,287

 

-

TOTAL LIABILITIES

 

72,032

 

615

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT):

 

 

 

 

Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding

 

-

 

-

Common stock, $0.001 par value; 100,000,000 shares authorized; 8,000,000 and 6,000,000 shares issued and outstanding, respectively

 

8,000

 

6,000

 Additional paid in capital

 

(30,691)

 

-

 Deficit accumulated during development stage

 

(46,964)

 

(5,615)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

 

(69,655)

 

385

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$

2,377

$

1,000



See notes to the financial statements.



27




W270, INC.

(a Development Stage Company)

Statements of Operations


 

 

For the

year ended June 30,

2012

 

For the period

June 24, 2011

(inception)

through

June 30,

2011

 

For the period

June 24, 2011

(inception)

through

June 30,

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

Consulting and other expense

 

40,349

 

-

 

40,349

Amortization expense

 

1,000

 

-

 

1,000

Organization expenses

 

-

 

5,615

 

5,615

Loss before provision for income tax

 

41,349

 

5,615

 

46,964

 

 

 

 

 

 

 

Provision for income tax

 

-

 

-

 

-

 

 

 

 

 

 

 

Net loss

$

(41,349)

$

(5,615)

$

(46,964)

 

 

 

 

 

 

 

Basic and diluted loss per share

$

 (0.01)

$

 (0.00)

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic and diluted

 

6,049,180

 

6,000,000

 

 



See notes to the financial statements.




28




W270, INC.

(a Development Stage Company)

Statement of Stockholders’ Equity (Deficit)


 

Common

Stock

 

Common

Stock

Amount

 

Additional

Paid-in-capital

 

Retained

Deficit

 

Total

Balance - June 24, 2011 (date of inception) Shares issued for organizational costs

5,000,000

$

5,000

$

-

$

-

$

5,000

Shares issued for business plan and client/customer list on June 28, 2011

1,000,000

 

1,000

 

-

 

-

 

1,000

Net loss

-

 

-

 

-

 

(5,615)

 

(5,615)

Balance - June 30, 2011

6,000,000

 

6,000

 

-

 

(5,615)

 

385

Shares issued in initial public offering completed on June 21, 2012

2,000,000

 

2,000

 

18,000

 

-

 

20,000

Deferred offering costs applied to additional paid in capital on June 21, 2012

-

 

-

 

(48,691)

 

-

 

(48,691)

Net loss

-

 

-

 

-

 

(41,349)

 

(41,349)

Balance - June 30, 2012

8,000,000

$

8,000

$

(30,691)

$

(46,964)

$

(69,655)



See notes to the financial statements.




29




W270, INC.

(a Development Stage Company)

Statements of Cash Flows


 

 

For the

year ended

June 30,

2012

 

For the period

June 24, 2011

(inception)

through

June 30,

2011

 

For the period

June 24, 2011

(inception)

through

June 30,

2012

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

$

(41,349)

$

(5,615)

$

(46,964)

Amortization

 

1,000

 

-

 

1,000

Shares issued for organizational expense

 

-

 

5,000

 

5,000

Adjustments to reconcile net loss to cash (used in) operating activities:

 

 

 

 

 

 

Change in prepaid expense

 

-

 

-

 

-

Change in accrued expenses

 

32,600

 

615

 

33,215

Change in deferred expenses

 

-

 

-

 

-

Net Cash Provided by (Used in) Operating Activities

 

(7,749)

 

-

 

(7,749)

CASH FLOW FROM INVESTING ACTIVITIES

 

-

 

-

 

-

CASH FLOW FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Common stock issued for cash

 

20,000

 

-

 

20,000

Deferred offering costs paid in cash

 

(11,161)

 

-

 

(11,161)

Loans from unrelated parties

 

15,552

 

-

 

15,552

Repayment of loans from

unrelated party

 

(14,265)

 

-

 

(14,265)

Net Cash Provided by (Used in) Financing Activities

 

10,126

 

-

 

10,126

CHANGE IN CASH

 

2,377

 

-

 

2,377

CASH AT BEGINNING OF PERIOD

 

-

 

-

 

-

CASH AT END OF PERIOD

$

2,377

$

-

$

2,377

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

Interest

$

-

$

-

$

-

Income taxes

$

-

$

-

$

-

Non-cash investing and financing activities:

 

 

 

 

 

 

Stock issued for intangible asset -client/customer list

$

-

$

1,000

$

1,000

 

 

 

 

 

 

 



See notes to the financial statements.




30



W270, INC.

(a Development Stage Company)

Notes to the Financial Statements

June 30, 2012


NOTE 1 – ORGANIZATION


W270, Inc. (the Company) was incorporated under the laws of the State of Nevada on June 24, 2011. The Company issued 5,000,000 shares of its common stock to its founder at inception in exchange for organizational costs incurred upon incorporation. Following its formation, the Company issued 1,000,000 shares of its common stock to our founder, as consideration for the purchase of a business plan along with client/customer list. Our founder paid approximately $1,000 for the business plan and the client/customer list which was acquired by Mr. Fry over time. The acquisition was valued at $1,000.


The Company has not generated revenues from its planned principal operations and is considered a development stage company as that term is defined by Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") 915, Development Stage Entities.


The Company will acquire and/or develop and market software and services that will significantly enhance the performance and functionality of the Internet services used by small to medium sized businesses. The Company’s products and services will use proprietary technology that will enable users to work collaboratively to obtain substantial improvements in performance, reliability and usability.


The Company on June 21, 2012 completed its offering pursuant to a registration statement filed on Form S-1. The Company issued 2,000,000 shares of its common stock to 22 investors. The investors paid $0.01 per share for a combined investment of $20,000.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a. Basis of Accounting


The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a June 30, year-end.


b. Cash Equivalents


For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.


c. Stock-based Compensation


The Company follows ASC 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options.


d. Use of Estimates and Assumptions


Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.


e. Earnings (Loss) per Share


The basic earnings (loss) per share is calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares during the period. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.



31




f. Income Taxes


Income taxes are provided in accordance with ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.


Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


No provision was made for Federal income tax.


g. Advertising


Advertising will be expensed in the period in which it is incurred. There has been no advertising expense in the reporting period presented.


h. Related Software Costs


Certain direct purchase and related development costs associated with software are capitalized and include external direct costs for services and payroll costs. These costs include employees devoting time to the software projects principally related to software coding, designing system interfaces and installation and testing of the software. These costs are recorded as property and equipment and will be amortized over a period of three to five years beginning when the asset is substantially ready for use. Costs incurred during the project stage, as well as maintenance and training costs are expensed as incurred.


i. Intangible Assets


Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment.


For the year ended June 30, 2012 we recognized $1,000 in amortization expense. Our customer list and business plan was placed in service on July 1st, 2011. We amortized these costs over twelve (12) months.


j. Recently Issued Accounting Pronouncements


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act), which establishes a new category of issuer called an emerging growth company (EGC). Under the JOBS Act, an EGC is defined as an issuer with total annual gross revenues less than $1 billion during its most recently completed fiscal year. An issuer continues to be eligible for EGC status until the earliest of (1) the last day of the fiscal year during which it had total annual gross revenues of $1 billion or more (as indexed for inflation in the manner set forth in the JOBS Act), (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of its initial public offering (IPO), (3) the date on which it issued more than $1 billion in non-convertible debt in the previous three-year period, or (4) the date on which it became a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934.


Among other requirements, the JOBS Act exempts an EGC from the requirements to adopt new or revised accounting standards that are effective for public companies. Instead, the effective dates for private companies for such standards will apply to an EGC. Section 107(b) of the JOBS Act permits an EGC to “opt out” of the accounting standard exemption and apply new or revised accounting standards on the same basis as a public company.


Under the JOBS Act, the Company meets the definition of an EGC. During the period it continues to be eligible for EGC status, the Company will apply new or revised accounting standards following the effective dates for private companies.



32




In July 2012, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update or ASU, 2012-02, Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment, that allows entities to have the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC 350-30. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In December 2011, the FASB issued the ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, that deferred the effective date for amendments to the presentation of reclassifications of items out of other comprehensive income. ASU 2011-12 was issued to allow the FASB time to re-deliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. During the re-deliberation period, entities will continue to report reclassifications out of accumulated other comprehensive income using guidance in effect before ASU 2011-05 was issued. ASU 2011-05 is to be applied retrospectively and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The Company does not expect the adoption of these provisions to have a material effect on its financial statements.


In September 2011, the FASB issued the ASU 2011-08, Intangibles—Goodwill and Other: Testing Goodwill For Impairment, that allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If any entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative two-step goodwill impairment test is required. An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment test. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In June 2011, the FASB issued the ASU 2011-05, Comprehensive Income: Presentation of Comprehensive Income. The new guidance requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2011. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In May 2011, FASB issued ASU 2011-04, which generally represents clarifications of Topic 820, Fair Value Measurement , but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU 2011-04 results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards, or IFRSs. ASU 2011-04 should be applied prospectively and is effective for annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not expect the adoption of this ASU 2011-04 to have an impact on its financial statements.


NOTE 3 – GOING CONCERN


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had negative working capital of $69,665 and a deficit accumulated during the development stage of $46,964 at June 30, 2012. As of June 30, 2012, the Company had not generated any revenue and had no committed sources of capital or financing.


While the Company is attempting to generate revenues from services or software products, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management believes that the actions presently being taken to further implement its business plan and generate additional products and revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to realize revenues and in its ability to raise additional funds, there can be no assurances that it will accomplish either. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.


The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.




33




NOTE 4 – SHARE CAPITAL


The Company is authorized to issue 100,000,000 shares of common stock ($0.001 par value) and 1,000,000 shares of preferred stock ($0.001 par value). The Company issued 5,000,000 shares of its common stock to its incorporator, chief executive officer and president for organization costs/services. These services were valued at $5,000. Following its formation, the Company issued 1,000,000 shares of common stock to our incorporator, chief executive officer and president, as consideration for the purchase of a business plan along with a client/customer list. Our incorporator, chief executive officer and president paid approximately $1,000 in producing that business plan and the client/customer list were acquired over time. The acquisition of the business plan and client/customer list was valued at $1,000.


The Company on June 21, 2012 completed its offering pursuant to a registration statement filed on Form S-1. The Company issued 2,000,000 shares of its common stock to 22 investors. The investors paid $0.01 per share for a combined investment of $20,000.


At June 30, 2012, there are 8,000,000 shares of common stock issued and outstanding.


NOTE 5 – LOANS - UNRELATED PARTIES


As of June 30, 2012 the Company received $1,287 in net loan proceeds from two unrelated parties who are business acquaintances of our shareholder and founder in order to fund working capital expenses. The Company received a total of $15,552 during the year ended June 30, 2012 of which the Company repaid $14,265 to these unrelated parties. These loans are unsecured and carry no interest rate or repayment terms.


NOTE 6 – DEFERRED OFFERING COSTS – ADDITIONAL PAID IN CAPITAL


Deferred offering costs consist principally of accounting fees, legal fees and other fees incurred through the balance sheet date that are related to the proposed common stock offering. Deferred offering costs related to the common stock offering were offset against the proceeds recorded as equity received from our common stock offering. On June 21, 2012, deferred offering costs $48,691 were offset against additional paid in capital received from the common stock offering of $18,000. The Company has paid $11,161 of the deferred offering costs in cash as of June 30, 2012 leaving a remaining balance of $37,530 to be paid.


NOTE 7 – INCOME TAXES


As of June 30, 2012 and 2011, the Company had net operating loss carry forwards of $46,964 and $5,615, respectively, that may be available to reduce future years’ taxable income through 2031.


 

 

As of June 30, 2012

 

As of June 30, 2011

 

 

 

 

 

Deferred tax assets:

 

 

 

 

Net operating tax carryforwards

$

18,316

$

2,190

Other

 

-

 

-

Gross deferred tax assets

 

18,316

 

2,190

Valuation allowance

 

(18,316)

 

(2,190)

 

 

 

 

 

Net deferred tax assets

$

-

$

-


Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.


Recently Issued Accounting Pronouncements


On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act), which establishes a new category of issuer called an emerging growth company (EGC). Under the JOBS Act, an EGC is defined as an issuer with total annual gross revenues less than $1 billion during its most recently completed fiscal year. An issuer continues to be eligible for EGC status until the earliest of (1) the last day of the fiscal year during which it had total annual gross revenues of $1 billion or more (as indexed for inflation in the manner set forth in the JOBS Act), (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of its initial public offering (IPO), (3) the date on which it issued more than $1 billion in non-convertible debt in the previous three-year period, or (4) the date on which it became a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934.



34




Among other requirements, the JOBS Act exempts an EGC from the requirements to adopt new or revised accounting standards that are effective for public companies. Instead, the effective dates for private companies for such standards will apply to an EGC. Section 107(b) of the JOBS Act permits an EGC to “opt out” of the accounting standard exemption and apply new or revised accounting standards on the same basis as a public company.


Under the JOBS Act, the Company meets the definition of an EGC. During the period it continues to be eligible for EGC status, the Company will apply new or revised accounting standards following the effective dates for private companies.


In July 2012, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update or ASU, 2012-02, Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment, that allows entities to have the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC 350-30. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In December 2011, the FASB issued the ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, that deferred the effective date for amendments to the presentation of reclassifications of items out of other comprehensive income. ASU 2011-12 was issued to allow the FASB time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. During the redeliberation period, entities will continue to report reclassifications out of accumulated other comprehensive income using guidance in effect before ASU 2011-05 was issued. ASU 2011-05 is to be applied retrospectively and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The Company does not expect the adoption of these provisions to have a material effect on its financial statements.


In September 2011, the FASB issued the ASU 2011-08, Intangibles—Goodwill and Other: Testing Goodwill For Impairment, that allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If any entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative two-step goodwill impairment test is required. An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment test. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In June 2011, the FASB issued the ASU 2011-05, Comprehensive Income: Presentation of Comprehensive Income. The new guidance requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2011. The Company does not expect the adoption of these provisions to have a significant effect on its financial statements.


In May 2011, FASB issued ASU 2011-04, which generally represents clarifications of Topic 820, Fair Value Measurement , but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU 2011-04 results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards, or IFRSs. ASU 2011-04 should be applied prospectively and is effective for annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not expect the adoption of this ASU 2011-04 to have an impact on its financial statements.


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.



35




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


We have had no disagreements with accountants on accounting and financial disclosure.


ITEM 9A. CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing periods specified in the SEC's rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are t effective in reaching that level of assurance.


At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.


Management's Report on Internal Control over Financial Reporting


Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company's CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.


As of June 30, 2012, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company's internal control over financial reporting was effective as of June 30, 2012.


Changes in Internal Control over Financial Reporting


During the fourth quarter of the Company’s fiscal year ended June 30, 2012, no material changes were made to the Company’s internal control over financial reporting


Limitations on the Effectiveness of Controls


The Company has confidence in its internal controls and procedures. The Company’s management believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud, if any, within the Company have been detected.


ITEM 9B. OTHER INFORMATION


None.




36




PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT


(a) Directors and Executive Officers


The following table sets forth certain information regarding the executive officer and director of W270, Inc. as of June 30, 2012.


All directors of the Company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. Officers of the Company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:



Name

Positions Held

with the Company


Age

Date First Elected

or Appointed


Wesley Fry


Director, Chairman, President and Chief Executive Officer, Chief Financial Officer, and Secretary & Treasurer



51



June 24, 2011


The board of directors has no nominating, audit or compensation committee at this time.


Term of Office


Each director is elected by the Board of Directors and serves until his or her successor is elected and qualified, unless he or she resigns or is removed earlier. Each of our officers is elected by the Board of Directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is earlier removed from office or resigns.


WESLEY E. FRY - founded the Company in June 2011. Mr. Fry, through his wholly-owned corporation W270, SA, a Costa Rican corporation, over the past 12 years has provided services as an information technology consultant for several companies, including Home Depot, PetSmart, and Costco-Price Club. Mr. Fry also has been a subcontractor for the US Navy and, since 2008, serves as Network Operation Shift Manager and Lead for Jacobs Technology, Inc. a Department of Defense (DOD) contractor at the North Island Naval Air Station, San Diego. Mr. Fry has functioned in this capacity from 2008 through the present time. Mr. Fry previously served as Network Administrator for Candoit Solutions, Inc. a leading DOD contractor at the Naval Amphibious Base – Coronado, with which he served during 2006 and 2007. Mr. Fry received his Associates Degree from Grossmont College in San Diego with a concentration in Information Systems. Mr. Fry has attended and passed two industry specific certifications programs, Cisco Networks Engineer and Microsoft Systems Engineer certifications, respectively. Mr. Fry has a senior level security clearance with the DOD.


(b) Significant Employees.


None.


(c) Family Relationships.


None.


(d) Involvement in Certain Legal Proceedings.


There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Company during the past five years.


(e) The Board of Directors acts as the Audit Committee and the Board has no separate committees.


We have no qualified financial expert at this time because we have not been able to hire a qualified candidate. Further, we believe that we have inadequate financial resources at this time to hire such an expert. We intend to  search for a qualified individual for hire once we have the adequate financial resources.



37




Audit Committee


Although our bylaws provide for the appointment of one, we are not yet required to have an Audit Committee as a result of the fact that our common stock is not considered a “listed security” as defined in Rule 10A-3 of the Exchange Act. There are currently no audit committee members that meet the criteria of “Financial Expert,” however we intend to seek and appoint a “Financial Expert” once we are required to have an Audit Committee.


Code Of Ethics


We adopted a Code of Ethics (the “Code”) that applies to our directors, officers and employees, including our chief executive officer and chief financial officer. A written copy of the Code is available upon written request to the Company.


Employment Arrangements


None of the Company's officers, directors, advisors or key employees are currently party to employment agreements with the Company. The Company has no pension, health, annuity, bonus, insurance profit sharing or similar benefit plans; however, the Company may adopt such plans in the future. There are presently no personal benefits available for directors, officers or employees of the Company.


ITEM 11. EXECUTIVE COMPENSATION


The following table sets forth the salaries and director fees we paid to our current executive officers in our most recent fiscal year ended June 30, 2012 and for the period June 24, 2011(inception) through June 30, 2011:


SUMMARY COMPENSATION TABLE

Name and principal
position (a)

Year (b)

Salary ($)
(c)

Bonus ($)
(d)

Stock
Awards ($)
(e)

Option
Awards ($)
(f)

Non-Equity
Incentive Plan
Compensation ($)
(g)

Nonqualified
Deferred
Compensation
Earnings ($)
(h)

All Other
Compensation ($)
(i)

Total ($)
(j)

1 Wesley E. Fry

CEO, CFO and Director

2012

-

-

-

-

-

-

-

-

 

2011

-

-

-

-

-

-

5,000

5,000

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


The following table sets forth certain information concerning the number of shares of our Common Stock owned beneficially as of September 25, 2012, by: (i) our director; (ii) our named executive officer; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.



Name and Address of Beneficial Owner

Amount and Nature of Beneficial

Shares Owned(1)

Percent of Outstanding Ownership(2)


Wesley E. Fry (3)

CEO, CFO and Director

6,000,000 restricted common shares

75.0%

 

 

 

All Officers, Directors and Control Persons as a Group

6,000,000 restricted common shares

75.0%




38




Notes:


(1)  Based on 8,000,000 shares of common stock issued and outstanding as of September 25, 2012. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.


(2)  No officers, directors, or 5% shareholders, have the right to acquire any additional common shares of the Company within sixty (60) days of this report.


(3) Wesley E. Fry is the Company's President, CEO, CFO, Treasurer, Secretary and Director. Mr. Fry acquired five million (5,000,000) on June 24, 2011 for incorporation services and an additional one million (1,000,000) shares on June 28, 2011 in exchange of client lists, and other proprietary information.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE


Related Party Transactions


Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


Director Independence


For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  


According to the NASDAQ definition, Wesley Fry is not an independent director because he is also an officer of the Company.


Review, Approval or Ratification of Transactions with Related Persons


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


The following table presents the fees for professional audit services rendered by PLS CPAs, A Professional Corp. for the audit of the Company’s annual financial statements for the year ended June 30, 2012 and for the period June 24, 2011 (inception) through June 30, 2011 and fees billed for other services rendered by PLS CPAs, A Professional Corp. during those periods. All services reflected in the following fee table for 2012 and 2011 were pre-approved, respectively, in accordance with the policy of the Board of Directors.


 

June 30, 2012

 

June 30, 2011

 

 

 

 

Audit fees (1)  - PLS CPAs

$8,000

 

$0

Audit-related fees - PLS CPAs

-

 

-

Tax fees - PLS CPAs

-

 

-

All other fees - PLS CPAs

-

 

-

TOTAL FEES

$8,000

 

$0


NOTES:


(1) Audit fees consist of audit and review services, consents and review of documents filed with the SEC.


In its capacity as the Audit Committee, the Board of Directors pre-approves all audit (including audit-related) and permitted non-audit services to be performed by the independent auditors. The Board of Directors will annually approve the scope and fee estimates for the year-end audit to be performed by the Company’s independent auditors for the fiscal year. With respect to other permitted services, the Board of Directors pre-approves specific engagements, projects and categories of services on a fiscal year basis, subject to individual project and annual maximums. To date, the Company has not engaged its auditors to perform any non-audit related services. Currently, the Company does not have an audit committee




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PART IV


ITEM 15. EXHIBITS


W270, Inc. includes by reference the following exhibits:


*3.1

 

Articles of Incorporation

*3.2

 

By-Laws

*10.1

 

Agreement between W270, Inc., and its counsel

*10.2

 

Agreement regarding Conflict of Interest

**10.3

 

Termination Agreement between W270, Inc., and Gary B. Wolff, P.C.

23.1

 

Consent of PLS CPA, A Professional Corp.

31.1

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*99.01

 

Form of Subscription Agreement

*99.02

 

Escrow Agreement between the Company and Gary B. Wolff, P.C.

**99.03

 

Amended Escrow Agreement between the Company and Mintz & Fraade, P.C.

**99.04

 

Amended Form of Subscription Agreement

101

 

INS XBRL Instance Document

101

 

SCH XBRL Taxonomy Extension Schema

101

 

CAL XBRL Taxonomy Extension Calculation Linkbase

101

 

DEF XBRL Taxonomy Extension Definition Linkbase

101

 

LAB XBRL Taxonomy Extension Labels Linkbase

101

 

PRE XBRL Taxonomy Extension Presentation Linkbase


*Filed with the SEC on August 18, 2011 as part of our Registration Statement on Form S-1 and incorporated herein by this reference.


** Filed with the SEC on April 16, 2012 as part of our Registration Statement on Form S-1 Pre-effective Amendment #4 and incorporated herein by this reference.





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.



Dated: September 25, 2012

W270, INC.

(the registrant)


By: /s/ Wesley E. Fry        

By: Wesley E. Fry, President, CEO, Principal Executive Officer,

Treasurer, Chairman, Principal Financial Officer and

Principal Accounting Officer





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