UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended March 31, 2014

 

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ______________ to _____________

 

Commission file number 333-177792

 

SSTL, INC.

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

 

Nevada	20-4168979
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

Susan Lokey, Chief Executive Officer

10508 Bailey Road, Suite 106

Cornelius, NC 28031

 

(Address of principal executive offices)

 

(404).918.3780

(Issuer’s telephone number)

 

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

 

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

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUES

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

 

There were 16,254,167 shares of the registrant’s common stock, $0.001 par value per share, outstanding on May 15, 2014.

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accredited filer, a non-accredited filer, (or a  smaller reporting company in Rule 12b-2 of the Exchange Act.(check one)

 

Large Accredited filer £

Accelerated filer £

 

Non-accredited filer £

Smaller reporting company S

 

 

SSTL, Inc.

 

TABLE OF CONTENTS

 

		Page
Part I – FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements:	1
	Condensed Balance Sheets at March 31, 2014 (unaudited) and December 31, 2013 (audited)	1
	Condensed Statements of Operations for the three month periods ended March 31, 2014 and, 2013, and for the period from November 10, 2010 (inception) through March 31, 2014 (unaudited)	2
	Condensed Statements of Changes in Stockholders’ Deficit for the period from November 10, 2010 (inception) through March 31, 2014 (unaudited)	3
	Condensed Statements of Cash Flows for the three month periods ended March 31, 2014 and March 31, 2013, and for the period from November 10, 2010 (inception) through March 31, 2014 (unaudited)	4
	Notes to Condensed Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
Part II – OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5	Other Information	15
Item 6.	Exhibits	16
Signatures		17

 

 

SSTL, Inc.

Financial Statements

(Unaudited)

 

 

TABLE OF CONTENTS

 

 

	Page
FINANCIAL STATEMENTS
Condensed Balance Sheets (unaudited)	1
Condensed Statements of Operations (unaudited)	2
Condensed Statements of Changes in Stockholders Deficit (unaudited)	3
Condensed Statements of Cash Flows (unaudited)	4
Notes to (unaudited) financial statements	5

 

 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

SSTL, INC.

FINANCIAL STATEMENTS

(Unaudited) 

Quarter Ended March 31, 2014

 

SSTL, Inc.

(A Development Stage Company)

CONDENSED BALANCE SHEETS

 

		March 31, 2014				December 31, 2013
		(Unaudited)				(audited)
ASSETS
Current assets
Cash		$	29,044			$	44,055
Accounts receivable			15,000				–
Total current assets			44,044				44,055
Fixed assets - net			54,999				65,415
Total Assets		$	99,043			$	109,470
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable		$	812			$	9,537
Accrued expenses			–				900
Accrued interest payable			6,180				402
Related party note payable			200,000				200,000
Total current liabilities			206,992				210,839
Total Liabilities			206,992				210,839
Stockholders' Deficit
Preferred stock, $.001 par value; 25,000,000 shares authorized; none issued and outstanding			–				–
Common stock, $.001 par value; 100,000,000 shares authorized; 16,254,167 shares issued and outstanding			16,254				16,254
Additional paid in capital			419,496				419,496
Deficit accumulated during the development stage			(543,699	)			(537,119	)
Total Stockholders' deficit			(107,949	)			(101,369	)
Total Liabilities and Stockholders' deficit		$	99,043			$	109,470

 

The accompanying notes are an integral part of the unaudited financial statements

 

 

SSTL, Inc.

(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

										Period From
										Nov. 10, 2010
		For the Three Months Ended								(Inception) To
		March 31, 2014				March 31, 2013				March 31, 2014
Revenues - Related Party		$	15,000			$	15,000			$	150,000
Operating expenses:
Amortization & depreciation			10,416				16,250				235,555
General and administrative			5,386				13,366				447,922
Total Operating Expenses			15,802				29,616				683,477
Income (loss) from Operations			(802	)			(14,616	)			(533,477	)
Other income (expense):
Insurance income			–				–				19,077
Gain on sale of equipment			–				16,555				16,555
Interest expense			(5,778	)			(4,813	)			(45,854	)
Total other income (expense)			(5,778	)			11,742				(10,222	)
Income (loss) before provision for income taxes			(6,580	)			(2,874	)			(543,699	)
Provision for income tax			–				–				–
Net income (loss)		$	(6,580	)		$	(2,874	)		$	(543,699	)
Net income (loss) per share Basic and Fully Diluted		$	(0.00	)*		$	(0.00	)*
Weighted average number of shares Basic and Fully Diluted			16,254,167				16,254,167

 

* denotes a loss less than $(0.01) per share

 

The accompanying notes are an integral part of the unaudited financial statements

 

 

SSTL, Inc.

(A Development Stage Company)

CONDENSED CHANGES IN SHAREHOLDERS’ DEFICIT

(Unaudited)

 

 

		Issue		Common Stock				Amount				Additional Paid in				Accumulated During The Developmental				Shareholders
		Date		Shares				($.001 Par)				Capital				Stage				Deficit
Balances at (inception) November 10, 2010		-			–			$	–			$	–			$	–			$	–
Net income (loss) for the period		-															–				–
Shares issued for services		Nov-10			2,100,000				2,100				44,368				–				46,468
Balances at December 31, 2010					2,100,000				2,100				44,368				–				46,468
Shares issued for cash		-			100,000				100				1,000				–				1,000
Capital contributions - related party		Feb-11			–				–				5,000				–				5,000
Shares issued for assets		Feb-11			9,666,667				9,667				280,333				–				290,000
Shares issued for services		Feb-11			1,000,000				1,000				21,128				–				22,128
Shares issued for services		Aug-11			800,000				800				16,902				–				17,702
Shares issued for services		Sep-11			800,000				800				16,902				–				17,702
Shares issued for cash		Jul-11			1,025,000				1,025				19,475				–				20,500
Shares issued for cash		Aug-11			125,000				125				2,375				–				2,500
Shares issued for cash		Sep-11			575,000				575				10,925				–				11,500
Shares issued for cash		Oct-11			62,500				63				1,188				–				1,251
Net income (loss) for the year		-			–				–				–				(312,952	)			(312,952	)
Balances at December 31, 2011					16,254,167				16,254				419,596				(312,952	)			122,798
Net income (loss) for the year		-			–				–				–				(156,347	)			(156,347	)
Balances at December 31, 2012					16,254,167				16,254				419,596				(469,299	)			(33,549	)
Net income (loss) for the year		-			–				–				–				(67,820	)			(67,820	)
Balances at December 31, 2013					16,254,167				16,254				419,596				(537,119	)			(101,369	)
Net income (loss) for the quarter		-			–				–				–				(6,580	)			(6,580	)
Balances at March 31, 2014					16,254,167			$	16,254			$	419,596			($	543,699	)		($	107,949	)

 

The accompanying notes are an integral part of the unaudited financial statements

 

 

SSTL, Inc.

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

										Period From
										Nov. 10, 2010
		For the Three Months Ended								(Inception) To
		March 31, 2014				March 31, 2013				March 31, 2014
Cash Flows From Operating Activities:
Net income (loss)		$	(6,580	)		$	(2,874	)		$	(543,699	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Amortization & depreciation			10,416				16,250				235,555
Compensatory stock issuances			–				–				104,000
Gain on fixed asset sales			–				(16,555	)			(16,555	)
Changes in operating assets and liabilities
Accounts receivable			(15,000	)			–				(15,000	)
Accrued expenses and Accounts Payable			(3,848	)			2,915				31,993
Net cash provided by (used for) operating activities			(15,011	)			(264	)			(203,706	)
Cash Flows From Investing Activities:
Fixed assets - purchases			–				–				(25,000	)
Fixed assets - sales			–				41,000				41,000
Net cash provided by (used for) investing activities			–				41,000				16,000
Cash Flows From Financing Activities:
Note payable - borrowings			–				–				225,000
Note payable - payments			–				–				(50,000	)
Issuance of stock for cash			–				–				36,750
Paid in capital			–				–				5,000
Net cash provided by (used for) financing activities			–				–				216,750
Net Increase (Decrease) In Cash			(15,011	)			40,736				29,044
Cash At The Beginning Of The Period			44,055				5,234				–
Cash At The End Of The Period		$	29,044			$	45,970			$	29,044
Schedule Of Non-Cash Investing And Financing Activities
Common stock issued for assets		$	–			$	–			$	–
Supplemental Disclosure:
Cash paid for interest		$	–			$	–			$	–
Cash paid for income taxes		$	–			$	–			$	–

 

The accompanying notes are an integral part of the unaudited financial statements

 

SSTL, Inc.

(A Development Stage Company)

NOTES TO (UNAUDITED) FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2014 AND 2013 AND THE PERIOD FROM NOVEMBER 10, 2010 (INCEPTION) TO MARCH 31, 2014

 

 

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

SSTL, Inc. (the “Company”) was incorporated in the State of Nevada on November 10, 2010 (Inception). The Company designs and assembles motorsport racing vehicles for its own use, and plans to compete in organized racing events. The Company has currently only conducted limited activities and is considered to be in the development stage.

 

Unaudited Interim Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

Accounting Basis

 

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted December 31 fiscal year end.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 

Recent accounting pronouncements

 

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

 

 

Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

 

Accounts receivable

 

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At March 31, 2014 the Company had no balance in allowance for doubtful accounts.

 

Property and equipment

 

Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life. The Company uses a three year life for racing vehicles, and five years for transport vehicles and furniture and fixtures.

 

Revenue recognition

 

The Company shall follow the guidance of the Securities and Exchange Commission's Staff Accounting Bulletin 104 for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. Subscription revenues shall be recognized over the period benefited. Deferred revenues shall be recorded when cash has been collected, however the related service has not yet been provided.

 

Advertising costs

 

Advertising costs are expensed as incurred. The Company recorded no advertising costs for the three months ending March 2014 and 2013.

 

Income tax

 

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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.

 

Net income (loss) per share

 

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. No potentially dilutive debt or equity instruments were issued or outstanding during the three month periods ended March 31, 2014 and 2013.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, including accounts receivable, accounts payable, accrued interest payable, related party note payable and note payable approximate their fair value due to the short maturities of these financial instruments.

 

Long-Lived Assets

 

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

 

Products and services, geographic areas and major customers

 

The Company currently earns revenue from leasing its racing vehicles on a month to month basis. All Company revenues during the three months ended March 2014 and 2013 were from one customer, a company related by common control.

 

Stock based compensation

 

The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

NOTE 2. RELATED PARTY TRANSACTIONS

 

At March 31, 2014 and 2013, the Company owed an officer $25,000 for working capital advances on a verbal, 10% interest bearing, due on demand basis. In 2011 a major shareholder was issued 9,666,667 common shares for fixed assets valued at $290,000, 1,000,000 shares for consulting services provided to the Company valued at $30,000, and purchased 100,000 shares for $1,000 cash. Other founders were issued 3,700,000 common shares for services valued at $74,000. All Company revenues during the three month period ending March 31, 2014 and 2013 of $15,000 and $15,000 and the accompanying accounts receivable balances were derived from month to month equipment lease fees from a company controlled by a major shareholder. The Company occupies racing storage and shop space from a Company under common control on a verbal, as agreed, month to month basis and pays no rent.

 

NOTE 3. FIXED ASSETS

 

Fixed asset values recorded at cost are as follows:

 

		March 31,				Dec. 31,
		2014				2013
Racing vehicles and equipment		$	105,000			$	105,000
Transport vehicles			150,000				150,000
			255,000				255,000
Less accumulated depreciation			(200,001	)			(189,585	)
Total		$	54.999			$	65,415

 

Depreciation expense for quarter ending March 31, 2014 and 2013 was $10,416 and $16,250, respectively.

 

NOTE 4. NOTES PAYABLE RELATED PARTY

 

As at March 31, 2014 and 2013, the Company owed an officer $25,000 for working capital advances on a verbal, 10% interest bearing, due on demand basis.

 

As at March 31, 2014 and 2013 had notes payable to a related party company under common control for $175,000, unsecured, and bears interest at 10% per annum, with $175,000 currently due. Interest expense for the period ending March 31, 2014 and 2013 was $5,778 and $4,813, respectively with accrued interest payable at March 31, 2014 and December 31, 2013 of $6,180 and $402, respectively.

 

NOTE 5. INCOME TAXES

 

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

 

At March 31, 2014 and December 31, 2013 the Company had net operating loss carryforwards of approximately $544,000 and $537,000, respectively, which begin to expire in 2031. The deferred tax asset of $109,000 and $108,000 created by the net operating loss has been offset by a 100% valuation allowance.

 

NOTE 6. GOING CONCERN

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As at March 31, 2014 the Company had current assets, comprising of cash and accounts receivable, of $44,044, current liabilities of $206,992 and a working capital deficit of $162,948. The Company has incurred losses since Inception to March 31, 2014 of $543,699 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed.

 

Continued losses could cause the Company to be unable to continue in the racing industry or to meet debt obligations. The Company believes that racing requires significant capital outlays on a continual basis to successfully fund operations, but with adequate funding that profitable operations can be achieved.

 

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions. By doing so, the Company hopes to generate profits from racing activities. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

 

NOTE 7. – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from March 31, 2014 through the date the financial statements were available to be issued on May 9, 2014 and has determined that there are no items to disclose.

 

 

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Safe Harbor for Forward-Looking Statements

 

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed under the “Item 2.  Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.

 

Business of the Company

 

The Company was incorporated in the State of Nevada on November 10, 2010 (Inception) as GB Race Leasing, Inc. The name was changed to SSTL, Inc. on April 14, 2011. We are a developmental stage motorsports equipment leasing company that intends to offer to lease custom built racing vehicles for use in the National Association for Stock Car Auto Racing ("NASCAR") "Camping World” truck racing series. . Each vehicle consists of a chassis and a truck body, with no engine or transmission, (the vehicles are referred to in the motorsports industry as “Racing Trucks" or "Race Truck Chassis "). The vehicles are offered for lease to potential clients that compete exclusively in the NASCAR Camping World Truck Series (“NCWTS”) of sanctioned NASCAR oval track racing events at intermediate and superspeedway tracks. We intend to offer to lease our vehicles to qualified companies and individuals for their use in racing competitions in the United States.

 

Our revenue is and is expected to be generated from leasing of race truck chassis and our RV to motorsports organizations competing in the NASACAR Camping World Truck Series. To date, all of our revenues have been from Pro-Driver Development, Inc., a corporation which is controlled by Mr. Steven Urvan. Mr. Urvan owns a majority interest in GB Investments, Inc., which owns approximately sixty six percent (66%) of our outstanding common stock Pro-Driver provides funding, development and training to inexperienced race drivers specifically for NASCAR sanctioned racing. Mr. Urvan is also the majority shareholder of GB Investments, Inc.

 

We intend to offer to lease our Racing Truck Chassis on a short term basis, usually from 7 to 10 days. Our Racing Trucks comply with NASCAR rules (the "Rules"). The Rules are established in an annual rule book published by NASCAR.

 

The Rules provide that each team that intends to compete in a sanctioned NASCAR event must have their competition racing trucks pass a complete technical inspection that is completed by NASCAR racing officials. The Rules specify the weight of vehicle, engine size, engine RPM limits, tire size and templates for body specifications, certain limits and other technical specifications.

  

Technical inspection is commenced by NASCAR before the first practice session of each race event. No competitor can enter the race track for practice without having completed a pre-practice technical inspection and having received a NASCAR official distributed practice decal, which is then attached to the front windshield of the race truck. A second technical inspection is required before the main qualifying event for the racing event.

 

We believe that our Racing Truck Chassis are in full compliance with NASCAR Rules. Our Racing Truck Chassis have previously been inspected and approved in race day directed NASCAR pre-practice technical and pre-qualifying NASCAR mandated inspections.

 

Our lessees must supply and install their own engines transmissions, driver seats and racing tires. Our Racing Trucks are designed to race at ½ mile oval tracks, intermediate distance oval tracks (1 mile to 1.5 mile) and "superspeedway" tracks, such as those tracks located at Daytona, Florida and Talladega, Alabama.

 

Engines for use in our Racing Trucks are available to be leased from independent engine builders and lessors on a per race basis, or certain engines may be purchased from independent engine suppliers. We do not lease or offer to sell engines.

 

NASCAR is the only professional sanctioning body that conducts races in which our Racing Trucks complete. NASCAR was established in 1948 to organize, sanction, and sponsor professional race events in automobile oval track and road course racing in North America. NASCAR is a separate and distinct entity from us and we do not have any formal contractual arrangements with NASCAR. 

 

On February 15, 2011, the Company acquired seven (7) customized NASCAR Racing Trucks from GB Investments, Inc. Each of the Racing Trucks we acquired conforms to the rules of NASCAR and is eligible to compete in the NASCAR Camping World Truck Series. The total purchase price for the seven (7) Racing Trucks was $140,000 USD. We issued a total of 4,666,667 shares of our common stock valued at $.03 per share to GB Investments, Inc. as payment for the Racing Trucks.

 

Additionally on February 15, 2011, we acquired a motor coach ("RV") for a purchase price of $150,000 from GB Investments, Inc. We issued a total of 5,000,000 shares of our common stock valued at $.03 per share to GB Investments, Inc. as payment for the RV.

 

The Company intends to lease the RV as part of a "leasing package" which includes our Racing Trucks and the RV. We believe that offering the RV is desirable to potential lessees for the following reasons:

 

	o	The RV will provide overnight accommodations for lessee's personnel at less than the cost of lodging at a hotel or motel;
	o	The RV can be located on the grounds of the racing event, thereby saving time and expense of lessees personnel transportation between the lodging point and the track;
	o	Lessee’s personnel can travel to the event in the RV thereby saving on transportation costs.

 

We may attempt to acquire additional new or used Race Truck Chassis if our business grows and there is demand for more equipment than we have available. However, there can be no assurance that we will have available the necessary finances to acquire additional Race Truck Chassis, or even if we have the financial resources, that we will be able to obtain additional Race Truck Chassis at acceptable cost.

 

We intend to lease our Race Truck Chassis for any NASCAR Camping World Series events that are held at an approved track on the NASCAR race or test schedule(s). Our Race Truck Chassis and related transportation equipment such as our RV are also for rent for use on testing and practice days at various tracks and circuits.

 

Marketing of our Race Truck Chassis was conducted by Jason White, our former CEO, through March 4, 2013 directly with potential lessees. We are currently seeking to hire a marketing and sales person to provide the services formerly provided by Jason White. In addition, we intend to advertise the availability of our Race Truck Chassis in trade magazines and other trade periodicals.

  

Terms of Our Rental Agreement

 

As a condition to leasing our Race Truck Chassis or related equipment, potential lessees must provide us with evidence of their credit worthiness and ability to fulfill the leasing agreement, as well as the names of the drivers and ancillary personnel. We will determine from this information whether we will lease our Race Truck Chassis to the potential lessee.

 

Our Race Truck Chassis can lease for $15,000 per event or can be leased on a flat rate plan to be negotiated by the Company with the potential lessee. Our flat rate plan would include the use of the Race Truck Chassis over a set period of time for use in racing in multiple events for a specified type of racing track (superspeedway versus short track) as well as for use in promotional and non-competition events.

 

Under the flat rate plan, our Company will be able eliminate individual event preparation costs and race to race minor repair costs, by passing these costs to the lessee under a flat rate plan. We anticipate that lessees under a Flat Rate Plan will receive an approximate 20% reduction in price from our usual per race event option.

 

Our lease agreement stipulates the race and race track in which the truck is used, the make of the truck and the body design, and the amount of damage the renter is responsible for. We take responsibility for minor crash damage that occurs in a given event to a limit of $500 in labor and parts. Any damage in excess of this amount is the responsibility of the renter. The Company determines the extent of the damage and the costs to repair the damage. In certain instances, special insurance can be obtained private party to insure the Race Truck Chassis against loss.

 

Our Race Truck Chassis and related equipment are managed from a facility in Mooresville, North Carolina.

 

Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013 

 

Revenues

 

Total revenues for the three months ended March 31, 2014 were $15,000 unchanged for the $15,000 revenue for the same period ending March 31, 2013. In both periods the revenue was derived forma related party

 

Cost of Revenues

 

There were no costs of revenues for the three months periods ended March 31, 2014 or 2013.

 

Operating Expenses

 

Operating expenses for the three months ended March 31, 2014 were $15,802 compared to $29,616 for the same period ended March 31, 2013, a decrease of $13,814. The decrease was due to an overall decrease in general and administrative expenses and depreciation and amortization expenses.  Depreciation and amortization expenses for the three months ended March 31, 2014 was $10,416 compared to $16,250, a difference of $5,834 for the same period in 2013. 

 

Interest and Financing Costs

 

Interest and financing costs for the three months ended March  31, 2014 were $5,778 compared to $4,813 for the period ended March 31, 2013. The increase for the three months period ended March 31, 2014 as compared to the same period in 2013 was due to an increase in the indebtedness of the Company.

 

Other Income (expense)

 

The Company realized a gain on the sale of equipment (truck sales) of $16,555 during the three month period ended March 31, 2013. The Company did not have any an such gain during the three month period ended March 31, 2014. 

 

During the three months ended March 31, 2014 we recognized interest expense of $5,778, broadly in line with the $4,813 interest expense we incurred in the three months ended March 31, 2013.

 

Net Loss

 

Net loss for the three months ended March 31, 2014 was $6,580 compared to $2,874 for the same period ended March 31, 2013 due to the factors discussed above. 

 

LIQUIDITY AND CAPITAL RESOURCES

 

Liquidity

 

The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern. The Company incurred a net loss of ($6,580) for the three months ended March 31, 2014 and used ($15,011) cash in operating activities for the period.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s current source of cash is revenue raised in its operations, loans from related parties and proceeds from the sale of its common stock. The Company will continue to explore other sources of capital to expand and fund its current operations.

 

Cash Flows for the Three Months Ended March 31, 2014.

 

Operating activities

 

During the three months ended March 31, 2014 we used $15,011 compared to $264 during the three months ended March 31, 2013. During the three months ended March 31, 2014 we incurred a loss of $6,580, of which $10,416 related to noncash amortization and depreciation, and used $15,000 in an increased balance of accounts receivable and $3,848 in a reduction in accrued expenses and accounts payable. By comparison during the three months ended March 31, 2013 we incurred a loss of $2,874, of which $16,250 related to noncash amortization and depreciation and $16,555 to the noncash gain on the sale of fixed assets, and generated $3,848 from an increase in accrued expenses and accounts payable

 

Investing activities

 

During the three months ended March 31, 2014 we neither generated nor used cash in investing activities. By comparison during the three months ended March 31, 2103 we generated $41,00 from the sale of fixed assets.

 

Financing activities

 

During the three months ended March 31, 2014 and 2013 we neither generated nor used cash in financing activities.

 

Stockholder Matters

 

As at March 31, 2014 the Company had a stockholders’ deficit of $107,949 on March 31, 2014 compared to $101,369 as at December 31, 2013. 

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company,” we are not required to provide the information under this Item 3.

 

ITEM 4. Controls and Procedures

 

(a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) required by Securities Exchange Act Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer/Chief Financial Officer has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.

 

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

 

 

 

PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

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

 

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

 

During the three months ended March 31, 2014, the Company did not sell or issue any shares.

 

ITEM 3. Default Upon Senior Securities

 

During the three months ended March 31, 2014, the Company had no senior securities issued and outstanding.

 

ITEM 4. Mine Safety Disclosures

 

Not applicable

 

ITEM 5. Other Information

 

None.

 

ITEM 6. Exhibits

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K

 

SEC Ref. No.		Title of Document
31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certification of the Principal Executive Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of the Principal Financial Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS*		XBRL Instance Document
101.SCH*		XBRL Schema Document
101.CAL*		XBRL Calculation Linkbase Document
101.DEF*		XBRL Definition Linkbase Document
101.LAB*		XBRL Label Linkbase Document
101.PRE*		XBRL Presentation Linkbase Document

 

* Filed herewith.

 

 

 

SIGNATURES

  

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SSTL, INC.

 

May 20, 2014

 

by: /s/ Susan Lokey                                   

Susan Lokey

Chief Executive Officer