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 September 30, 2012

 

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.)

 

Jason White, Chief Executive Officer

128 Commercial Dr. Mooresville, NC

(Address of principal executive offices)

 

(804).306.8217

(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:

 

As of November 13, 2012, there was no public trading market for the registrant’s common stock.  There were 16,254,167 shares of the registrant’s common stock, $0.001 par value per share, outstanding on November 13, 2012.

 

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 x

 

 

 

SSTL, Inc

 

TABLE OF CONTENTS

 

			Page
Part I    FINANCIAL INFORMATION
	Item 1.	Condensed Financial Statements:
		Condensed Balance Sheets at September 30, 2012 (unaudited) and December 31, 2011 (audited)
		Condensed Statements of Cash Flows for the three months ended September 30, 2012, and for the period from November 10, 2010 (inception) through September 30, 2012 (unaudited)
		Notes to Condensed Financial Statements (unaudited)
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Part II  OTHER INFORMATION
	Item 1.	Legal Proceedings
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	Item 4.	Controls and Procedures
	Item 6.	Exhibits
		Signatures

 

 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

 

 

 

SSTL, INC.

 

FINANCIAL STATEMENTS

(Unaudited)

 

Quarter Ended September 30, 2012

 

 

 

 

 

SSTL, Inc.

Financial Statements

(Unaudited)

 

 

TABLE OF CONTENTS

 

			Page
FINANCIAL STATEMENTS
	Balance sheets		1
	Statements of operation		2
	Statements of cash flows		3
	Notes to financial statements		5

 

 

SSTL, Inc.

(A Development Stage Company)

BALANCE SHEETS

 

 

 

						September 30, 2012
		Dec. 31, 2011				(Unaudited)
ASSETS
Current assets
Cash		$	5,047			$	18,455
Accounts receivable			15,000				15,000
Total current assets			20,047				33,455
Fixed assets - net			239,861				176,111
Total Assets		$	259,908			$	209,566
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	1,179			$	8,774
Related party payable			35,000				25,000
Accrued interest payable			931				930
Note payable - current			100,000				175,000
Total current liabilties			137,110				209,704
Total Liabilities		$	137,110			$	209,704
Stockholders' Equity
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			(312,952	)			(435,888	)
Total Stockholders' Equity			122,798				(138	)
Total Liabilities and Stockholders' Equity		$	259,908			$	209,566

 

 

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

 

 

SSTL, Inc.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

 

																		Period From
																		Nov. 10, 2010
																		(Inception)
		For the Three Months Ending								For the Nine Months Ending								To
		September 30, 2012				September 30, 2011				September 30, 2012				September 30, 2011				September 30, 2012
Revenues		$	15,000			$	-			$	45,000			$	-			$	60,000
Operating expenses:
Amortization & depreciation			21,250				21,250				63,750				53,889				138,889
General and administrative			11,705				30,053				92,468				49,761				360,701
			32,955				51,303				156,218				103,650				499,590
Gain (loss) from operations			(17,955	)			(51,303	)			(111,218	)			(103,650	)			(439,590	)
Other income (expense):
Insurance income			-				-				-				-				19,077
Interest expense			(2,973	)			(1,260	)			(11,719	)			(1,890	)			(15,375	)
			(2,973	)			(1,260	)			(11,719	)			(1,890	)			3,702
Income (loss) before
provision for income taxes			(20,928	)			(52,563	)			(122,937	)			(105,541	)			(435,888	)
Provision for income tax			-				-				-				-				-
Net income (loss)		$	(20,928	)		$	(52,563	)		$	(122,937	)		$	(105,541	)		$	(435,888	)
Net income (loss) per share
(Basic and fully diluted)		$	(0.00	)		$	(0.00	)		$	(0.01	)		$	(0.01	)
Weighted average number of
common shares outstanding			16,254,167				12,866,667				16,254,167				12,866,667

 

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

 

 

SSTL, Inc.

(Development Stage Company)

STATEMENTS OF STOCKHOLDERS' EQUITY

 

														Deficit
														Accumulated
		Common Stock												During The				Stock-
						Amount				Additional				Development				holders'
		Shares				($.001 Par)				Paid in Capital				Stage				Equity
Balances at November 10, 2010			-			$	-			$	-			$	-			$	-
Shares issued for cash			100,000				100				900				-				1,000
Shares issued for assets			9,666,667				9,667				280,333				-				290,000
Capital contributions - related party			-				-				5,000				-				5,000
Net income (loss) for the period															(18,556	)			(18,556	)
Balances at March 31, 2011			9,766,667			$	9,767			$	286,233			$	(18,556	)		$	277,444
Shares issued for cash			1,787,500				1,787				33,963				-				35,750
Shares issued for services			4,700,000				4,700				99,300				-				104,000
Net income (loss) for the period															(294,396	)			(294,396	)
Balances at December 31, 2011			16,254,167			$	16,254			$	419,496			$	(312,952	)		$	122,798
Net income (loss) for the period															(84,068	)			(84,068	)
Balances at March 31, 2012			16,254,167			$	16,254			$	419,496			$	(397,020	)		$	38,730
Net income (loss) for the period															(17,941	)			(17,941	)
Balances at June 30, 2012			16,254,167			$	16,254			$	419,496			$	(414,961	)		$	20,789
Net income (loss) for the period															(20,928	)			(20,928	)
Balances at Sept. 30, 2012			16,254,167			$	16,254			$	419,496			$	(435,889	)		$	(139	)

 

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

 

 

SSTL, Inc.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

 

										Period From
										Nov. 10, 2010
										(Inception)
		For the Nine Months Ended								To
		September 30, 2012				September 30, 2011				September 30, 2012
Cash Flows From Operating Activities:
Net income (loss)		$	(122,937	)		$	(105,541	)		$	(435,888	)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Amortization & depreciation			63,750				53,889				138,889
Accounts receivable			-				-				(15,000	)
Compensatory stock issuances			-				-				104,000
Accrued payables			7,595				4,486				9,704
Net cash provided by (used for)
operating activities			(51,592	)			(47,165	)			(198,295	)
Cash Flows From Investing Activities:
Fixed assets			-				-				(25,000	)
Net cash provided by (used for)
investing activities			-				-				(25,000	)

 

 

 

 

(Continued on Following Page)

 

 

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

 

 

SSTL, Inc.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

(Continued From Previous Page)

 

 

										Period From
										Nov. 10, 2010
										(Inception)
		For the Nine Months Ended								To
		September 30, 2012				September 30, 2011				September 30, 2012
Cash Flows From Financing Activities:
Note payable - borrowings			75,000				85,000				225,000
Note payable - payments			(10,000	)			-				(60,000	)
Issuance of stock for cash			-				10,500				34,840
Paid in capital			-				5,000				5,000
Net cash provided by (used for)
financing activities			65,000				100,500				204,840
Net Increase (Decrease) In Cash			13,408				53,335				(18,455	)
Cash At The Beginning Of The Period			5,047				-				-
Cash At The End Of The Period		$	18,455			$	53,335			$	(18,455	)
Schedule Of Non-Cash Investing And Financing Activities
Common stock issued for assets		$	-			$	-			$	290,000
Supplemental Disclosure:
Cash paid for interest		$	13,157			$	-			$	15,884
Cash paid for income taxes		$	-			$	-			$	-

 

 

 

 

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

 

 

SSTL, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

 

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. 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.

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

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.

 

Property and equipment

 

Property and equipment are recorded at cost and depreciated under accelerated or straight line methods over each item's estimated useful life.

 

 

 

 SSTL, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

 

Revenue recognition

 

Revenue is recognized on an accrual basis as earned under contract terms.

 

Advertising costs

 

Advertising costs are expensed as incurred.

 

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.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.

 

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.

 

 

 

SSTL, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

 

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.

 

 

 

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

 

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

 

Revenues

 

Total revenues for the three months ended September 30, 2012 were $15,000 compared to $nil for the same period ending September 30, 2011 representing a 100%  increase over the same period in 2011. The increase in revenue for the period was due to an increase in receipts for the rental of  super speedway race trucks used in the NASCAR Camping World Truck Series events during the period. 

 

Cost of Revenues

 

There were no costs of revenues for the three months ended September 30, 2012 or the three months ended September 30, 2011.

 

Operating Expenses

 

Operating expenses for the three months ended September 30, 2012 were $32,955 or 220% of revenue compared to $51,303 with $0 revenue for the same period ended June 30, 2011.  The decrease in operating expenses was  due to an overall decrease in general and administrative expenses.  Depreciation and amortization expenses for the three months ended September 30, 2012 were $21,250 or 141% of revenue compared to $21,250 with no revenue for the same period in 2011. 

 

Interest and Financing Costs

 

Interest and financing costs for the three months ended September 30, 2012 were ($2,973) or 20% of revenue compared to ($1,260) with $0 revenue for the period ended September 30, 2011. The increase for the three month period ended September 30, 2012 as compared to the same period in 2011 was due to a increase in the amount of funds loaned to the Company through its Line of Credit and an increase in the overall indebtedness of the Company.

 

Other Non-operating Income

 

The Company had non-operating income for the three month ended September 30, 2012 of $0 compared to nil for the same period in 2011. 

 

Net Loss

 

Net loss for the three months ended September 30, 2012 was $(20,928) or 139% of revenue compared to a net loss of $(52,563) with $0 revenue for the same period ended September 30, 2011. The decrease in the net loss for this period in 2012 is due to an increase in the revenues, and the decrease of general and administrative expenses of the company. 

 

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

 

 

Revenues

 

Total revenues for the nine months ended September 30, 2012 were $45,000 compared to $0 revenues  for the same period ending September 30, 2011, representing an increase  from the same period in 2011. The increase in revenue for the nine months ended September 30, 2012 was primarily a result of an increase in the revenue from the leasing of super speedway race equipment, specifically the NASCAR Camping World Truck Series. 

 

Cost of Revenues

 

There were no costs of revenues for the six months ended June 30, 2012 or the six months ended June 30, 2011.

 

Operating Expenses

 

Operating expenses for the nine months ended September 30, 2012 were $156,218 or 347% of revenue compared to $103,650 with no revenue for the same period ended September 30, 2011.  The increase in operating expenses was due to an overall increase in general and administrative expenses, including accounting expenses, and legal expenses.  Depreciation and amortization expenses for the nine months ended September 30, 2012 was $63,750 or 141% of revenue, compared to $53,889 with no revenue for the same period in 2011. 

   

Interest and Financing Costs

 

Interest and financing costs for the nine months ended September 30, 2012 were ($11,719) or 26% of revenue compared to ($1,890) with no revenue for the period ended September 30, 2011.  The increase for the nine months period ended September 30, 2012 as compared to the same period in 2011 was due to a increase in the overall indebtedness of  the Company.

 

Other Non-operating Income

 

The Company had no non-operating income for the nine month periods ended September 30, 2012 and 2011. 

 

Net Loss

 

Net loss for the nine months ended September 30, 2012 was $(122,937) or 273% of revenue compared to $(105,541) with no revenue for the same period ended September 30, 2011. The increase in the net loss for this period in 2012 is due to a increase in general and administrative costs, specifically legal and accounting costs.  

 

LIQUIDITY AND CAPITAL RESOURCES

 

Cash

 

Our primary source of liquidity is cash provided by operating, investing, and financing activities. Net cash used in operations for the nine months ended September 30, 2012 was $51,592 as compared to $47,165 for the period ended September 30, 2011.   During the nine months ended September 30, 2012 we used $51,592 in cash from operating activities.  

 

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 $(122,937) and utilized cash in operating activities of $(51,592) during the nine months ended September 30, 2012.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.  As of September 30, 2012 the Company had assets that exceeded liabilities by $(138).

 

 

The Company’s source of cash is from rental revenue and from its line of credit.  The Company will continue to explore other sources of capital to expand and fund its operations.

 

Cash Flows for the Nine Months Ended September  30, 2012.

 

Operating activities for the nine months ended September 30, 2012 produced no cash.  The accounts receivable for the Company is currently $15,000.  As of September 30, 2012 accounts payable increased to $8,774 compared to $1,179 for the same period in 2011.   Depreciation and amortization for the nine months ended September 30, 2012 totaled $63,750, an increase of $9,861 from a total of $53,889 for the same period in 2011. There were no prepaid expenses for the period.

 

Net cash provided by financing activities was $65,000 for the nine months ended September 30, 2012, compared to $100,500 for the same period of 2011.  There was a net increase in cash of $13,408 for the nine months ended September 30, 2012, as compared to $53,335 in cash for the same period in 2011.

 

Stockholder Matters

 

Stockholder’s equity was $(138) on September 30, 2012, or $ 0.000 per share outstanding.  As of September 30, 2011 stockholder’s equity was $224,357 or $.017 per share outstanding.

 

 

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 nine months ended September 30, 2012, the Company did not sell or issue any shares .

 

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.

 

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*

* Filed herewith.

 

 

 

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.

November 13, 2012

	By:	/s/ Jason White
		Jason White Chief Executive Officer