UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

(Mark One)

 

x

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

 

For the quarterly period ended September 30, 2013

Or

 

¨

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: 000-54403

 

POWERSTORM CAPITAL CORP.

(Name of registrant as specified in its charter)

 

DELAWARE		45-3733512
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

2321 Rosecrans Avenue, Suite 4265

El Segundo, CA 90245

(Address of principal executive offices) (Zip Code)

 

(310) 297-6807

(Registrant's telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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  ¨  No  x

 

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  ¨  No  x

 

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	¨		Small Reporting Company	x

(Do not check if smaller reporting company)

 

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

 

As of November 14, 2013, there were 20,082,385  shares of common stock issued and outstanding.

 

 

TABLE OF CONTENTS

 

		Page
	PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	17
Item 4.	Controls and Procedures.	17
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.
Item 1A.	Risk Factors.	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	17
Item 3.	Defaults Upon Senior Securities.	18
Item 4.	Mine Safety Disclosures.	18
Item 5.	Other Information.	18
Item 6.	Exhibits.	19

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “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”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

 

PART 1 - FINANCIAL INFORMATION

 

Item 1.   Financial Statements.

 

POWERSTORM CAPITAL CORP.

(A DEVELOPMENT STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS

 

Balance Sheets as of September 30, 2013 and December 31, 2012 (Unaudited)	5
Statements of Operations for the Three and Nine Months Ended September 30, 2013 and for the period from October 10, 2011 (Inception) through September 30, 2013 (Unaudited)	6
Statements of Cash Flows for the Nine Months Ended September 30, 2013 and for the period from October 10, 2011 (Inception) through September 30, 2013 (Unaudited)	7
Notes to the Financial Statements (Unaudited)	8

 

 

POWERSTORM CAPITAL CORP.

(A DEVELOPMENT STAGE COMPANY)

Balance Sheets

(Unaudited)

 

		September 30, 2013				December 31, 2012
ASSETS
CURRENT ASSETS
Cash		$	1,182			$	3,559
Accounts receivable			2,018				-
Prepaid expenses			8,025				255
Total current assets			11,225				3,814
Furniture and office equipment, net			5,328				5,269
Trademarks			5,749				4,570
Deposits			1,400				1,400
TOTAL ASSETS		$	23,702			$	15,053
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable		$	32,108			$	14,644
Advances from related party			-				13,780
Total liabilities			32,108				28,424
Commitments and contingencies
STOCKHOLDERS' DEFICIT
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized, none issued and outstanding			-				-
Common stock, par value $0.001 per share, 300,000,000 shares authorized; 20,082,385 and 19,226,000 shares issued and outstanding at September 30, 2013 and at December 31, 2012, respectively			20,082				19,226
Additional paid-in capital			154,167				69,385
Deficit accumulated during the development stage			(182,655	)			(101,982	)
TOTAL  STOCKHOLDERS' DEFICIT			(8,406	)			(13,371	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	23,702			$	15,053

 

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

 

 

POWERSTORM CAPITAL CORP.

(A DEVELOPMENT STAGE COMPANY)

Statements of Operations

(Unaudited)

 

		Three Months Ended September 30, 2013				Three Months Ended September 30, 2012				Nine Months Ended September 30, 2013				Nine Months Ended September 30, 2012				From October 10, 2011 (Inception) Through September 30, 2013
REVENUES		$	15,160			$	-			$	21,760			$	-			$	21,760
OPERATING EXPENSES:
General and administrative			39,494				12,321				101,891				48,977				203,000
Depreciation expense			282				238				812				635				1,685
Total operating expenses			39,776				12,559				102,703				49,612				204,685
Loss from operations			(24,616	)			(12,559	)			(80,943	)			(49,612	)			(182,925	)
Other income			-				-				270				-				270
NET LOSS		$	(24,616	)		$	(12,559	)		$	(80,673	)		$	(49,612	)		$	(182,655	)
Loss per common share - basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted			19,838,586				18,806,000				19,512,340				18,732,453

 

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

 

 

POWERSTORM CAPITAL CORP.

(A DEVELOPMENT STAGE COMPANY)

Statements of Cash Flows

(Unaudited)

 

		Nine Months Ended September 30, 2013				Nine Months Ended September 30, 2012				From October 10, 2011 (Inception) through  September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(80,673	)		$	(49,612	)		$	(182,655	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation			-				7,900				23,013
Shares issued for expenses incurred			-				-				9,273
Depreciation expense			812				635				1,685
Changes in operating assets and liabilities:
Accounts receivable			(2,018	)			-				(2,018	)
Prepaid expenses			(7,770	)			(606	)			(8,025	)
Accounts payable			17,464				975				32,108
Net cash used in operating activities			(72,185	)			(40,708	)			(126,619	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and office equipment			(871	)			(6,142	)			(7,013	)
Acquisition of trademarks			(1,179	)			(1,225	)			(2,824	)
Net cash used in investing activities			(2,050	)			(7,367	)			(9,837	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of common stock for cash			25,000				10,000				35,000
Advances from related party			46,858				39,065				102,638
Net cash provided by financing activities			71,858				49,065				137,638
Net change in cash			(2,377	)			990				1,182
Cash at beginning of period			3,559				-				-
Cash at end of period		$	1,182			$	990			$	1,182
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest		$	-			$	-			$	-
Income taxes		$	-			$	-			$	-
Non-cash investing and financing activities:
Shares issued for prepaid expenses		$	-			$	-			$	2,800
Shares issued for capitalized trademarks		$	-			$	2,925			$	2,925
Shares issued for other assets		$	-			$	1,400			$	1,400
Shares issued to pay for the related party advances		$	60,638			$	-			$	102,638

 

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

 

 

POWERSTORM CAPITAL CORP.

(A DEVELOPMENT STAGE COMPANY)

Notes To Financial Statements

(Unaudited)

 

NOTE 1 – GENERAL ORGANIZATION AND BUSINESS OPERATIONS

 

Powerstorm Capital Corp. (the “Company”) is a development stage company incorporated in Delaware on October 10, 2011 and is located in El Segundo, California. The Company was formed solely for the purpose of identifying and entering into business acquisitions within the telecommunications infrastructure space. To date, the Company has not entered into any discussions or negotiations with any companies it would intend to acquire. The Company’s management intends to focus on targets located primarily in Asia, South America, and Western and Eastern Europe, as it believes that businesses with operating history and growth potential in these locations would benefit significantly from access to the United States capital markets and may offer the potential for capital appreciation stemming from the economic growth in such emerging markets.

 

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim financial statements as of September 30, 2013, for the three and nine months ended September 30, 2013 and for the period from October 10, 2011 (inception) through September 30, 2013 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and on the same basis as the annual audited financial statements. In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented.

 

The results for interim periods are not necessarily indicative of results for the entire year. The balance sheet at December 31, 2012 has been derived from audited financial statements; however, the notes to the financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto for the period from October 10, 2011 (inception) to December 31, 2012 included in Form S-1/A filed with SEC on April 12, 2013.

 

Development Stage Activities

 

The Company is presently in the development stage, with insignificant revenues. Accordingly, all of the Company’s operating results and cash flows reported in the accompanying financial statements are considered to be those arising from the development stage activities and represent the ”cumulative from inception” amounts from its development stage activities.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Intangible Assets

 

The Company’s intangible assets consist of trademarks with indefinite life. The Company capitalizes the filing and legal fees related to the trademark registrations, which totaled $5,749 and $4,570 as of September 30, 2013 and December 31, 2012, respectively.

 

 

The Company reviews its indefinite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets. If these estimates change in the future, the Company may be required to record impairment charges for these assets. As of September 30, 2013, no impairment was recorded.

 

Furniture and Office Equipment

 

Furniture and office equipment is stated at cost and depreciated using the straight-line method over 7 years, the estimated life of the asset. Computers and software developed or obtained for internal use are depreciated using the straight-line method over the estimated useful life of 5 years. Repairs and maintenance are charged to expense as incurred.

 

Income Taxes

 

The Company uses the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance, if necessary, is provided against deferred tax assets, based upon management’s assessment as to their realization.

 

Stock-Based Compensation

 

The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period.

 

Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.

 

Net Loss per Common Share

 

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the diluted weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. There were no potentially dilutive securities as of September 30, 2013 and 2012.

 

Subsequent Events

 

The Company evaluates subsequent events through the date when financial statements are issued for disclosure consideration.

 

New Accounting Pronouncements

 

The Company does not expect adoption of the new accounting pronouncements will have a material effect on the Company’s financial statements.

 

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements were prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and depends upon the Company’s ability to establish itself as a profitable business. The Company is a development stage company and has incurred an accumulated loss of $182,655 since inception. The Company has negative working capital of $20,883 and will require additional funds to finance its business plan for the next twelve months. Due to the start-up nature of the Company, the Company expects to incur additional losses in the immediate future. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. To date, the Company’s founders have provided funding for operations until the Company raises sufficient capital to provide for the first-year operating expenses.

 

The Company is planning to obtain financing either through the issuance of equity or debt. To the extent that funds generated from any private placements, public offerings, and/or bank financings are insufficient, the Company will have to raise additional working capital through other sources.

 

NOTE 4 – FURNITURE AND OFFICE EQUIPMENT

 

		September 30, 2013				December  31, 2012
Furniture and equipment		$	4,830			$	4,830
Computers and software			2,183				1,312
Accumulated depreciation			(1,685	)			(873	)
Furniture and office equipment, net		$	5,328			$	5,269

 

During the three months ended September 30, 2013 and 2012, the Company recorded depreciation expense of $282 and $238, respectively. During the nine months ended September 30, 2013 and 2012, the Company recorded depreciation expense of $812 and $635, respectively.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

Through September 30, 2013, a related party entity advanced to the Company and made payments to several of the Company’s vendors on behalf of the Company for a total of $102,638 of which $46,858 were advanced during the nine months period ended September 30, 2013. The Company’s President and Chairman of the Board of Directors serves as the president of this related party entity. The advances are due on demand and bear no interest.

 

On March 22, 2013, the Company issued 137,800 shares of common stock to this related party entity as a reimbursement for the advances and payments made and on behalf of the Company. The shares were valued at the fair value of the expense reimbursement of $13,780.

 

On June 30, 2013, the Company issued 245,184 shares of common stock to this related party entity in full reimbursement for the advances and payments made and on behalf of the Company. The shares were valued at the fair value of the expense reimbursement of $24,518.

 

On September 30, 2013, the Company issued 223,401 shares of common stock to this related party entity in full reimbursement for the advances and payments made and on behalf of the Company. The shares were valued at the fair value of the expense reimbursement of $22,340.

 

As of September 30, 2013 and December 31, 2012, the Company owed to this related party entity $0 and $13,780, respectively.

 

NOTE 6 – EQUITY

 

The Company is authorized to issue 305,000,000 shares of capital stock. These shares are divided into two classes with 300,000,000 shares designated as common stock at $0.001 par value and 5,000,000 shares designated as preferred stock at $0.01 par value.

 

 

During the nine months ended September 30, 2013, the Company issued:

 

-

137,800 shares of common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $13,780.

 

-

50,000 shares of common stock to a third party for cash proceeds of $5,000.

 

-

100,000 shares of common stock to a third party for cash proceeds of $10,000.

 

-

245,184 shares of common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $24,518.

 

-

100,000 shares of common stock to a third party for cash proceeds of $10,000.

 

-

223,401 shares of common stock to related party entities for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement of $22,340.

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion is intended to assist you in understanding our business and results of operations together with the Company’s present financial condition. This section should be read in conjunction with our historical combined and consolidated financial data included elsewhere in this Report. Statements in the Company’s discussion may be forward-looking statements. These forward-looking statements involve risks and uncertainties. The Company cautions that a number of factors could cause future production, revenues and expenses to differ materially from our expectations. Please see “Cautionary Note Regarding Forward-Looking Statements.”

 

Overview

 

Powerstorm Capital Corporation (the “Company” or “Powerstorm”), is a development stage company formed solely for the purpose of identifying and consulting with companies related to telecommunications infrastructure. We intend to focus on targets based primarily in Asia, South America, and Europe for two reasons. First, we believe that businesses with an operating history and growth potential in these locations would benefit significantly from access to the United States markets. Second, companies in emerging markets may offer the potential of capital appreciation as those markets experience economic growth.

 

Our Strategy

 

We intend to capitalize on the continued increase in the use of wireless communication services and the resulting infrastructure requirements for current and future generations of wireless communication technologies. We are focused on strategy, business incubation and funding of emerging telecommunication infrastructure companies with particular interest in the mobile telephony space. In addition to incubation, business development support and facilitated access to funding, the Company is looking to be at the NextGen supply-chain forefront in e-Learning.

 

Our strategy includes a specific focus on: (1) creative and localized business thinking; (2) focus on quality; (3) commitment and dependability; (4) outstanding client care; (5) delivering genuine value and efficiency; and (6) durability. To that end, we are focusing on three segments of the telecom infrastructure market:

 

·

Extending connections to un-served or underserved areas rural, off-grid;

·

Optimizing to higher capacity, via increased transmission microwave or via installing fiber optic cables instead of copper cables;

·

Offering Access to Power via Optimized and Hybrid Solutions;

 

We are excited about exploring the prospect of supporting the emerging sector of open online courses and other e-leaning opportunities.

 

Due to the continued increase in subscribers for wireless personal communication and phone services, we expect wireless carriers will need to add a significant number of cell sites to maintain the performance of their networks in the areas they currently cover and to extend service to new markets. In addition, we believe that as wireless data services, such as e-mail, Internet access, and video, are deployed on a widespread basis, wireless carriers will need to augment the cell density of their existing networks. The widespread deployment of those services also may necessitate an overlay of new technology equipment and increase the demand for geographic expansion of network coverage.

 

 

Management is strongly rooted in the telecom industry and with strong understanding of the geographical and cultural differences of the industry; we are an active player with geographical focus in Africa and South-East Asia.

 

As part of its strategy to build new business over three continents during 2013, Powerstorm evaluated solutions to reduce network opex across 60 networks that introduced a turnkey hybrid power component. Powerstorm met and discussed integration of hybrid power with infrastructure development of telecommunication companies including, but not limited to: Ericsson, Eltek, Flexenclosures, Huawei, ZTE, and NSN.

 

Powerstorm identified technical and financial gaps as opportunities to propose more compelling hybrid power solutions as global operators are continually seeking ways to reduce network opex and increase efficiencies by deploying hybrid technologies.

 

Powerstorm looks forward to serving global operators’ need to reduce network opex by deploying hybrid technologies. As we streamline efficiencies, knowledge of our success will rapidly spread throughout the telecommunications community that will lead to a healthy client base for us. It does not take a visionary to understand that access to renewable and cost-effective energy will positively impact opex for new clients. Given Powerstorm’s targeted experience and resources, management is confident of its ability to thrive in this sector.

 

Hybrid Projects

 

Country		Client		Project details		Subscribers No. client				Subscribers  No Country				Population				Market Share of Operator
Australia		Mining Company		Optimized Batteries Solution
USA		Manufacturer		Off Grid Solar + Batteries Solution
Mozambique		Fixedline Operator		Off Grid Solar + Batteries + Cooling Solution			88,000				88,000				23,000,000				100.0	%
Tajikistan		Wireless Operator		Free Cooling Solutions			2,500,000				7,000,000				7,600,000				35.7	%
Somalia		Wireless Operator		Off Grid Solar + Batteries Solution			530,000				2,200,000				10,000,000				24.1	%
Guyana		Wireless Operator		Off Grid Solar + Batteries Solution			350,000				700,000				750,000				50.0	%
South Sudan		Wireless Operator		Off Grid Hybrid Solutions			600,000				1,400,000				10,000,000				42.9	%
Nepal		Wireless Operator		Off Grid Hybrid Solutions			10,000,000				18,700,000				26,500,000				53.5	%
Rwanda		Wireless Operator		Off Grid Hybrid Solutions			1,600,000				5,000,000				11,000,000				32.0	%
Mauritania		Wireless Operator		Off Grid Hybrid Solutions			2,000,000				2,800,000				3,300,000				71.4	%
Niger		Wireless Operator		Off Grid Hybrid Solutions			400,000				3,800,000				16,000,000				10.5	%
DRC		Wireless Operator		Off Grid Solar + Batteries Solution			2,800,000				17,000,000				68,000,000				16.5	%
Mali		Wireless Operator		Off Grid Hybrid Solutions			5,400,000				10,000,000				16,000,000				54.0	%
Afghanistan		Wireless Operator		Free Cooling Solutions			3,500,000				17,000,000				35,000,000				20.6	%
Guinea		Wireless Operator		Off Grid Solar + Batteries Solution			300,000				6,000,000				10,000,000				5.0	%
Mexico		Wireless Operator		Hybrid Solutions			27,000,000				83,000,000				115,000,000				32.5	%
Burkina Faso		Wireless Operator		Off Grid Solar + Batteries Solution			2,000,000				8,000,000				17,000,000				25.0	%
Guinea-Bissau		Wireless Operator		Off Grid Solar + Batteries Solution			25,000				1,000,000				1,500,000				2.5	%
Armenia		Wireless Operator		Unstable Grid Solar + Battery Solution			600,000				2,800,000				3,100,000				21.4	%
South Sudan		Wireless Operator		Off Grid Solar + Batteries Solution			420,000				1,400,000				8,250,000				30.0	%
Azerbaijan		Wireless Operator		Wind + Solar Hybrid Solutions			2,000,000				8,000,000				9,300,000				25.0	%
Tajikistan		Fixedline Operator		Off Grid Hybrid Power + Power Redistribution Solutions			2,700,000				7,000,000				7,600,000				38.6	%
Gabon		Wireless Operator		Off Grid Solar + Batteries Solution			200,000				1,300,000				1,500,000				15.4	%
Morocco		Wireless Operator		Off Grid Solar + Batteries Solution			12,000,000				36,000,000				32,000,000				33.3	%
Peru		Wireless Operator		Off Grid Solar + Batteries + Cooling Solution			15,000,000				28,000,000				29,000,000				53.6	%
Jordan		Wireless Operator		Free Cooling Solutions			3,000,000				7,400,000				6,500,000				40.5	%

 

 

Results of Operations

 

		Three Months Ended September 30, 2013				Three Months Ended September 30, 2012				Nine Months Ended September 30, 2013				Nine Months Ended September 30, 2012				From October 10, 2011 (Inception) Through September 30, 2013
Revenues		$	15,160			$	-			$	21,760			$	-			$	21,760
Total operating expenses			39,776				12,559				102,703				49,612				204,685
Other Income			-				-				270				-				270
Net loss		$	(24,616	)		$	(12,559	)		$	(80,673	)		$	(49,612	)		$	(182,655	)

 

For the Three Months Ended September 30, 2013 and 2012

 

Revenues

 

We are still in our development stage and have generated insignificant revenues from consulting services of $15,160 during the three months ended September 30, 2013 and $0 revenues during the three months ended September 30, 2012. The revenue is generated from consulting service provided to a third party.

 

Operating Expenses

 

We incurred total operating expenses of $39,776 and $12,559 for the three months ended September 30, 2013 and 2012, respectively. These expenses primarily consisted of general and administrative expenses incurred in connection with the day-to-day operation of our business, the preparation of our periodic reports, and stock-based compensation to third-party providers for legal and consulting services received.

 

Net Loss

 

During the three month ended September 30, 2013 and 2012, we incurred a net loss of $24,616 and $12,559, respectively. We are incurring more expenses due to start-up phase of our proposed business operations.

 

For the Nine Months Ended September 30, 2013 and 2012

 

Revenues

 

We are still in our development stage and have generated insignificant revenues from consulting services of $21,760 during the nine months ended September 30, 2013 and $0 revenues during the nine months ended September 30, 2012. The revenue is generated from consulting service provided to a third party.

 

Operating Expenses

 

We incurred total operating expenses of $102,703 and $49,612 for the nine months ended September 30, 2013 and 2012, respectively, which consisted of general and administrative expenses incurred in connection with the day-to-day operation of our business, the preparation of our periodic reports, and stock-based compensation to third-party providers for legal and consulting services received.

 

Net Loss

 

During the nine month ended September 30, 2013 and 2012, we incurred a net loss of $80,673 and $49,612, respectively. The increase of the net loss is due to increased operating expenses and insufficient revenue generated.

 

 

From October 20, 2011 (Inception) through September 30, 2013

 

Revenues

 

For the period from October 10, 2011 (Inception) to September 30, 2013, we generated insignificant revenues from consulting services of $21,760.

 

Operating Expenses

 

We incurred total operating expenses of $204,685 for the period since inception on October 10, 2011 to September 30, 2013, which consisted primarily of general and administrative expenses. The legal fees were primarily incurred in connection with the preparation and filing of the registration statement with the SEC.

 

Net Loss

 

We had a net loss of $182,655 for the period from October 10, 2011 (Inception) to September 30, 2013 due to incurred operating expenses and insignificant revenues.

 

Liquidity and Capital Resources

 

Our financial condition as of September 30, 2013 and December 31, 2012 and for the nine months ended September 30, 2013 and 2012 is summarized as follows:

 

Working Capital:

 

		September 30, 2013				December 31, 2012
Current assets		$	11,225			$	3,814
Current liabilities			(32,108	)			(28,424	)
Working capital (deficit)		$	(20,883	)		$	(24,610	)

 

Cash Flows:

		Nine Months  Ended September 30,								From October 10, 2011 (Inception) through September 30,
		2013				2012				2013
Cash used in operating activities		$	(72,185	)		$	(40,708	)		$	(126,619	)
Cash used in investing activities			(2,050	)			(7,367	)			(9,837	)
Cash provided by financing activities			71,858				49,065				137,638
Net increase in cash		$	1,182			$	990			$	1,182

 

We are a development stage company and have incurred an accumulated loss of $182,655 since inception. Powerstorm has working capital deficit of $20,883 at September 30, 2013, which is not sufficient to finance its business plan for the next twelve months. Our independent auditors have issued an audit opinion for us for the financial statements ended December 31, 2012 and the period then ended, which includes a statement expressing substantial doubt as to our ability to continue as a going concern due to our limited liquidity and our lack of revenues.

 

We have minimal operating expenses at the present time due to our limited business activities. To date, our founders have provided funding for our operations. We will, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses.

 

 

We are planning to obtain financing either through the issuance of equity or debt. To the extent that funds generated from any private placements, public offerings, and/or bank financings are insufficient, we will have to raise additional working capital through other sources.

 

We didn’t have sufficient resources to effectuate our business plan from October 10, 2011 (Inception) through the period ended September 30, 2013. We expected to incur a minimum of $150,000 in expenses during the next 12 months of operations.

 

We indicated that we would have to raise the funds to pay for these expenses. We may have to borrow money from founders or shareholders, issue debt or equity, or enter into a strategic arrangement with a third party. There is no assurance that we will secure additional capital. There currently are no agreements, arrangements, or understandings that would enable Powerstorm to obtain funds through bank loans, lines of credit, or any other source. If we are unable to raise funds for acquisitions it will have a severe negative impact on our ability to execute our business.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

 

Estimates

 

In preparing our financial statements, we make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methods. In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment. We periodically evaluate our estimates and judgments that are most critical in nature. We believe that the following discussion of critical accounting policies address all important accounting areas where the nature of accounting estimates or assumptions is material due to the levels of subjectivity and judgment. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

 

Intangible Assets

 

The Company’s intangible assets consist of trademarks with indefinite life. The Company capitalizes the filing and legal fees related to the trademark registrations, which totaled $5,749 and $4,570 as of September 30, 2013 and December 31, 2012, respectively. The Company reviews its indefinite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets. If these estimates change in the future, the Company may be required to record impairment charges for these assets. As of September 30, 2013, no impairment was recorded.

 

Stock-Based Compensation

 

The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period.

 

Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.

 

 

Recent Accounting Pronouncements

 

The Company does not expect adoption of the new accounting pronouncements will have a material effect on the Company’s financial statements.

 

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 under this item.

 

Item 4.

Controls and Procedures.

 

Disclosure of Controls and Procedures

 

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer have reviewed the effectiveness of our disclosure controls and procedures as of September 30, 2013 and, based on his evaluation, and has concluded that the disclosure controls and procedures were not effective due to the material weaknesses, which is that we did not sufficiently segregate duties over incompatible functions at our corporate headquarters.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the three months ended September 30, 2013 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II. - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 1A. Risk Factors

 

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

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On June 30, 2013, the Company issued 245,184 shares of the Company’s common stock to a related party entity for advances to the Company and payments made on behalf of the Company. These shares were valued at the fair value of the expense reimbursement and assets purchased of $24,518.

 

On July 21, 2013, the Company issued 100,000 shares of the Company’s common stock to a third party for cash proceeds of $10,000.

 

 

On September 30, 2013, the Company issued 223,401 shares of the Company’s common stock to this related party entity in full reimbursement for the advances and payments made and on behalf of the Company. The shares were valued at the fair value of the expense reimbursement of $22,340.

 

The above issuances of shares are exempt from registration, pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other information

 

On June 1, 2013, Anamaria Pruteanu resigned as Chief Executive Officer of the Company and Michel Freni resigned as President of the Company. Ms. Pruteanu and Mr. Freni’s resignations are not a result of any disagreement with the Company or its executive officers, or any matter relating to the Company’s operations, policies or practices. On the same day, the Company’s Board of Directors (the “Board”) appointed Michel Freni, the Company’s Chief Financial Officer and Chairman of the Board to serve as Chief Executive Officer of the Company and Anamaria Pruteanu to serve as President of the Company.

 

Biographical information for Mr. Freni and Ms. Pruteanu has previously been disclosed on the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on April 12, 2013.

 

Family Relationships

 

The Company’s Chief Executive Officer and Chief Financial Officer, Michel Freni, is married to our President, Anamaria Pruteanu.

 

Related Party Transactions

 

Related party transactions with Mr. Freni and Ms. Pruteanu have previously been disclosed on the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on April 12, 2013.

 

Employment Agreement

 

There is no employment agreement between the Company and Mr. Freni or Ms. Pruteanu.

 

 

Item 6. Exhibits

 

Exhibits
31.1		Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

 

*In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

 

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.

 

	POWERSTORM CAPITAL CORP.
Date: November 15, 2013
	By:	Michel Freni
		Michel Freni
		Chief Executive Officer and Chief Financial Officer
		(Duly Authorized, Principal Executive
		Officer and Principal Financial Officer)