Continental Alloy Wheel Corp - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION - Continental Alloy Wheel Corp	cawc_ex321.htm
EX-32.2 - CERTIFICATION - Continental Alloy Wheel Corp	cawc_ex322.htm
EX-31.2 - CERTIFICATION - Continental Alloy Wheel Corp	cawc_ex312.htm
EX-31.1 - CERTIFICATION - Continental Alloy Wheel Corp	cawc_ex311.htm
EXCEL - IDEA: XBRL DOCUMENT - Continental Alloy Wheel Corp	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

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

Commission file number 333-173038

Continental Alloy Wheel Corporation

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

c/o Befumo & Schaeffer, PLLC

1629 K Street, NW, Suite 300

Washington, DC 20006

(Address of principal executive offices, including zip code.)

(202) 973-0186

(Registrant's telephone number, including area code)

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 o

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 o NO o

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	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes x No o

As of November 7, 2012, there are 12,200,000 shares of common stock outstanding.

All references in this Report on Form 10-Q to the terms “we”, “our”, “us”, the “Company”, “Continental”, “CAWC” and the “Registrant” refer to Continental Alloy Wheel Corporation unless the context indicates another meaning.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2011 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

Continental Alloy Wheel Corporation

(A Development Stage Company)

Financial Statements (Unaudited)

For the Period from

December 28, 2010 (Inception)

to September 30, 2012

Continental Alloy Wheel Corporation

(A Development Stage Company)

Index to the Financial Statements (Unaudited)

For the Period from December 28, 2010

(Inception) to September 30, 2012

Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011			5

Statements of Operations (Unaudited) for the three and nine-month periods ended September 30, 2012 and 2011, and for the period from December 28, 2010 (Inception) to September 30, 2012			6

Statements of Cash Flows (Unaudited) for the nine-month periods ended September 30, 2012 and 2011, and for the period from December 28, 2010 (Inception) to September 30, 2012			7

Notes to the Financial Statements (Unaudited)			8

Continental Alloy Wheel Corporation

(A Development Stage Company)

Balance Sheets

	September 30, 2012			December 31, 2011
	(Unaudited)

ASSETS
Cash	$	542		$	542
Total current assets		542			542
Restricted cash		22,000			-
Total assets	$	$22,542			542

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable - related party	$	21,631		$	325
Accounts payable		8,853			9,840
Total current liabilities		30,484			10,165

Redeemable common stock, par value $.001, 2,200,000 and 0 shares outstanding at September 30, 2012 and December 31, 2011, respectively		22,000			-

Stockholders' Deficit
Common Stock, par value $.001, 75,000,000 shares authorized, 10,000,000 and 10,000,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively		10,000			10,000
Additional paid-in capital		669			(2,701	)
Deficit accumulated during the development stage		(40,611	)		(16,922	)
Total stockholders' deficit		(29,942	)		(9,623	)

Total liabilities and stockholders' deficit	$	22,542		$	542

See accompanying notes to the financial statements (unaudited).

Continental Alloy Wheel Corporation

(A Development Stage Company)

Statements of Operations (Unaudited)

	For the Three Month Period Ended September 30, 2012			For the Three Month Period Ended September 30, 2011			For the Nine Month Period Ended September 30, 2012			For the Nine Month Period Ended September 30, 2011			For the Period from December 28, 2010 (Inception) to September 30, 2012

Revenues:	$	-		$	-		$	-		$	-		$	-

Operating expenses:
Selling, general and administrative		3,423			3,370			23,689			6,858			40,611
Operating loss before income taxes		(3,423	)		(3,370	)		(23,689	)		(6,858	)		(40,611	)

Income tax (expense) benefit		-			-			-			-			-

Net loss available to common stockholders	$	(3,423	)	$	(3,370	)	$	(23,689	)	$	(6,858	)	$	(40,611	)

Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding		11,291,304			10,000,000			10,433,577			10,000,000

See accompanying notes to the financial statements (unaudited).

Continental Alloy Wheel Corporation

(A Development Stage Company)

Statements of Cash Flows (Unaudited)

	For the Nine Month Period Ended September 30, 2012			For the Nine Month Period Ended September 30, 2011			For the Period from December 28, 2010 (Inception) to September 30, 2012

Cash flows from operating activities:
Net loss	$	(23,689	)	$	(6,858	)	$	(40,611	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase (decrease) in accounts payable - related party		21,306			-			21,631
Increase (decrease) in accounts payable		(987	)		(2,601	)		8,853
Net cash used in operating activities		(3,370	)		(4,257	)		(10,127	)

Cash flows from investing activities:		-			-			-
Net cash provided by investing activities		-			-			-

Cash flows from financing activities:
Cash received from common stock issuances		-			1,000			1,000
Contributed capital		3,370			3,799			9,669
Net cash provided by financing activities		3,370			4,799			10,669

Net increase in cash		-			542			542
Cash at beginning of period		542			-			-
Cash at end of period	$	542		$	542		$	542
Non-Cash Investing and Financing Activities: Issuance of common stock for subscriptions receivable	$	-		$	1,000		$	1,000
Issuance of redeemable common stock for Restricted cash		22,000			-			22,000
	$	22,000		$	1,000		$	23,000
Supplemental Disclosures:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

See accompanying notes to the financial statements (unaudited).

Continental Alloy Wheel Corporation

(A Development Stage Company)

Notes to the Financial Statements (Unaudited)

For the Period from December 28, 2010 (Inception) to September 30, 2012

1)	ORGANIZATION

The Company is defined as a "shell" company, whose sole purpose at this time is to locate and consummate a merger or acquisition with a private entity. The Company will utilize word of mouth to locate a merger or acquisition candidate. The Company must locate a merger or acquisition candidate within 18 months of the effectiveness of its S-1 registration statement or refund investors’ funds as described in the S-1 filing. It is anticipated that the most likely consideration for such merger or acquisition will be in common stock of the Company. To date, the Company’s activities have been limited to its formation, minimal operations, and the raising of equity capital. The Company’s Form S-1 registration statement became effective on August 15, 2012.

DEVELOPMENT STAGE COMPANY

The Company is considered to be in the development stage as defined in ASC 915 “Accounting and Reporting by Development Stage Enterprises.” The Company’s efforts have been devoted primarily to raising capital, borrowing funds and attempting to implement its planned, principal activities.

2)	SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

Continental Alloy Wheel Corporation

(A Development Stage Company)

Notes to the Financial Statements (Unaudited)

For the Period from December 28, 2010 (Inception) to September 30, 2012

2)	SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $542 in cash and cash equivalents as of September 30, 2012 and December 31, 2011, respectively.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Various Accounting Standards Updates (ASU’s) through ASU No. 2012-07 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant. All tax years from inception are open to examination by the Internal Revenue Service.

3)	RESTRICTED CASH AND REDEEMABLE COMMON STOCK

In August, 2012 the Company sold 2,200,000 shares of common stock for $22,000. Since the Company must locate a merger or acquisition candidate within 18 months of the effectiveness of its S-1 registration statement or refund investors’ funds, the transaction has been recorded outside of stockholders’ equity, and excluded from cash.

Continental Alloy Wheel Corporation

(A Development Stage Company)

Notes to the Financial Statements (Unaudited)

For the Period from December 28, 2010 (Inception) to September 30, 2012

4)	STOCKHOLDERS’ EQUITY

CAPITAL CONTRIBUTIONS

During the nine-month periods ended September 30, 2012 and 2011, the Company’s President and Director contributed $3,370 and $3,799, respectively, to fund certain operating expenses. This amount has been recorded in additional paid-in capital as of September 30, 2012 and December 31, 2011.

COMMON SHARE ISSUANCES

In August, 2012, the Company sold 2,200,000 shares of common stock, par value $0.001 per share, to 25 individual shareholders for $22,000. The Company has not used any of the subscription proceeds, which remain in escrow.

5)	PROVISION FOR INCOME TAXES

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under ASC 718-740-20 to give effect to the resulting temporary differences which may arise from differences in the basis of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

Minimal development stage deferred tax assets arising as a result of net operating loss carry forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carry forwards totaled $40,611 for the period from December 28, 2010 (Inception) through September 30, 2012 and will begin to expire in 2030. Accordingly deferred tax assets of approximately $13,808 were offset by a valuation allowance.

The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1, on December 28, 2010. As a result of the implementation of ASC 740-10-65-1, the Company recognized approximately no increase in the liability for unrecognized tax benefits.

The Company has no tax position at September 30, 2012 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties as of September 30, 2012 and December 31, 2011. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended development stage activities.

Continental Alloy Wheel Corporation

(A Development Stage Company)

Notes to the Financial Statements (Unaudited)

For the Period from December 28, 2010 (Inception) to September 30, 2012

6)	GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2012, the Company had an accumulated deficit of $40,611. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and its ability to implement its planned, principal activities. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

7)	SUBSEQUENT EVENTS

The Company has evaluated its subsequent events from the balance sheet date through the date of this report and determined that there are no additional events to disclose.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is an overview of the important factors that management focuses on in evaluating our business; financial condition and operating performance should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of any number of factors, including those set forth in the Company’s reports filed with the SEC on Form 10-K, 10-Q and 8-K as well as in this Quarterly Report on Form 10-Q. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Our Company

Continental Alloy Wheel Corporation (the “Company”) was incorporated on December 28, 2010 in the State of Nevada. The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31. The Company was created for the purpose of having a corporation that could be used to consummate a merger or acquisition. Mr. Befumo serves as President, Secretary, Treasurer and Director, and currently owns 82% of the Company’s outstanding common shares. The Company has been in the developmental stage since inception and has no operations to date. Other than issuing shares to its original shareholder, the Company has never commenced any operational activities.

Results of Operations

The Company has earned no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of $40,611 for the period of December 28, 2010 (inception) to September 30, 2012, which consisted of incorporation costs and operating expenses.

Liquidity and Capital Resources

The Company has financed its expenses and costs thus far through equity financing. As of September 30, 2012, the Company had cash of $542. The Company incurred a net loss of $40,611 for the period of December 28, 2010 (inception) to September 30, 2012. The losses are a result of organizational expenses and expenses associated with setting up a Company structure in order to begin implementing its business plan. The Company anticipates that until these procedures are completed, it will not generate revenues, and may continue to operate at a loss thereafter, depending upon the performance of the business.

The Company has limited financial resources available, which has had an adverse impact on the Company's liquidity, activities and operations. There is no assurance that the Company will be able to raise sufficient funding to develop its business plan.

The Company as a whole may continue to operate at a loss for an indeterminate period thereafter, depending upon the performance of its new businesses. The Company may determine that it cannot raise sufficient capital to support its business on acceptable terms, or at all. Accordingly, there can be no assurance that any additional funds will be available on terms acceptable to the Company or at all.

Because our business plan consists entirely of seeking a business combination, our burn rate is negligible, and is anticipated to be less than $250 per month. Ongoing, monthly expenses consist primarily of accounting and bookkeeping costs. The Company currently has $542 in cash. Our sole officer and director, Andrew Befumo has agreed to pay our ongoing expenses and offering expenses, on an as-needed basis.

As of September 30, 2012 and December 31, 2011, accounts payable totaled $30,484 and $10,165, respectively.

On August 7, 2012, the Company closed its offering of shares pursuant to its Registration Statement on Form S-1. Pursuant to the Registration Statement, the Company sold Two Million Two Hundred Thousand (2,200,000) shares of its common stock to twenty-five shareholders for total proceeds of Twenty Two Thousand Dollars (US $22,000). The Company has not used any of the subscription proceeds, and 100% of the subscription proceeds remain in Trust with Underhill Securities Corp. pursuant to the terms of the Company’s Registration Statement on Form S-1. The Company must locate a merger or acquisition candidate within 18 months of the effectiveness of its S-1 registration statement or refund investors’ funds.

We currently have very little cash on hand and no other liquid assets. Therefore, in order to carry on our business, we must obtain additional capital. The Company intends to fund continuing operations through equity financing arrangements; however, we have no current prospects for any equity financing arrangements. Therefore, available capital may be insufficient to fund capital expenditures, required working capital, and other cash requirements for the next twelve months.

The successful execution of our business plan requires significant cash resources. Because of our limited operating history, equity or debt financing arrangements may not be available in amounts and on terms acceptable to us, if at all. Additionally, because we intend to rely upon the sale of additional equity securities, there is a risk that your shares will suffer additional dilution. Furthermore, if we incur additional indebtedness there is a risk that increased debt service obligations will restrict our operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

As of September 30, 2012 and December 31, 2011, we had no material commitments for capital expenditures.

Off Balance Sheet Arrangements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Currently we are not involved in any pending litigation or legal proceeding.

ITEM 1A. RISK FACTORS

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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.		Description

31.1		Section 302 Certification of Chief Executive Officer

31.2		Section 302 Certification of Chief Financial Officer

32.1		Section 906 Certification of Chief Executive Officer

32.2		Section 906 Certification of Chief Financial Officer

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

	CONTINENTAL ALLOY WHEEL CORPORATION

November 19, 2012	By:	/s/ Andrew J. Befumo
		Andrew J. Befumo, President

Continental Alloy Wheel Corp - FORM 10-Q - November 19, 2012

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Continental Alloy Wheel Corp Reports