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EXCEL - IDEA: XBRL DOCUMENT - ATOMIC PAINTBALL INCFinancial_Report.xls
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

(Mark One)
Form 10-Q

[√] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2013

or

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________________

Commission file number: 0-52856

 
Atomic Paintball, Inc.
(Name of registrant as specified in its charter)
 
Texas
 
75-2942917
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
2600 E. Southlake Blvd., Suite 120-366, Southlake, TX
 
76092
(Address of principal executive offices)
 
(Zip Code)

(817) 491-8611
(Registrant's telephone number, including area code)

not applicable
(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 o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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

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

As of July 17, 2014, the Registrant has 4,418,549 shares of common stock issued and outstanding.

 
 

 

TABLE OF CONTENTS

   
Page No.
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements.
3
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
10
Item 4.
Controls and Procedures.
11
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings.
12
Item 1A.
Risk Factors.
12
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
12
Item 3.
Defaults Upon Senior Securities.
12
Item 5.
Other Information.
12
Item 6.
Exhibits.
12
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These forward-looking statements include, among others, the following:
 
·  
our ability to develop or acquire operations and exit shell status; 
·  
our ability to raise sufficient working capital necessary to continue to implement our business plan and satisfy our obligations as they become due;
·  
our ability to continue as a going concern;
·  
our ability to develop revenue producing operations; 
·  
our ability to establish our brand and effectively compete in our target market; and 
·  
risks associated with the external factors that impact our operations, including economic and leisure trends. 
 
Forward-looking statements are typically identified by use of terms such as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target” or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.  The forward-looking statements contained in this report are largely based on our expectations, which reflect estimates and assumptions made by our management.  These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors.  Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control.  In addition, management’s assumptions about future events may prove to be inaccurate.  Management cautions all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur.  Actual results may differ materially from those anticipated or implied in the forward-looking statements.   You should consider the areas of risk described in connection with any forward-looking statements that may be made herein.  You should also consider carefully the statements under Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2012 which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, including the risks described in Item 1A. - Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2012.  Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.  These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms “Atomic Paintball,” "we"", "our", the "Company" and similar terms refer to Atomic Paintball, Inc., a Texas corporation.  In addition, when used herein and unless specifically set forth to the contrary, “Second Quarter 2013” refers to the six months ended June 30, 2013, “Second Quarter 2012” refers to the six months ended June 30, 2012, and “2012” refers to the year ended December 31, 2012.
 
 
2

 
 
PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements.
 
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(Unaudited)

   
June 30,
   
December 31,
 
   
2013
   
2012
 
Current Assets
           
Cash & cash equivalents
  $ -     $ 134  
                 
TOTAL ASSETS
  $ -     $ 134  
                 
Current Liabilities
               
Accounts payable and accrued liabilities
  $ 184,727     $ 165,939  
Accrued payroll
    52,198       52,198  
Accrued interest
    50,628       42,148  
Note payable - related party
    11,846       11,846  
    Total current liabilities
    299,399       272,131  
                 
Long-Term Liabilities
               
Convertible note payable - related party
    143,733       143,733  
Line on credit - related party
    96,345       96,345  
    Total long-term liabilities
    240,078       240,078  
                 
TOTAL LIABILITIES
    539,477       512,209  
                 
COMMITMENTS AND CONTINGENCIES
               
                 
STOCKHOLDERS' DEFICIT
               
Preferred Stock, no par value: 2,000,000 shares authorized
    -       -  
Series A Convertible Preferred Stock, no par value;
               
400,000 shares authorized
               
no shares issued and outstanding
               
at June 30, 2013 and December 31, 2012
    -       -  
Common Stock, no par value: 10,000,000 shares authorized,
               
4,418,549 shares issued and outstanding
               
at June 30, 2013 and December 31, 2012
    629,790       629,790  
Additional paid in capital
    204,218       204,218  
Deficit accumulated during the development stage.
    (1,373,485 )     (1,346,083 )
      (539,477 )     (512,075 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ -     $ 134  
 
 
 
 
See accompanying Notes to Financial Statements.
 
 
3

 
 
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
 

                           
From Inception
 
                           
(May 8, 2001)
 
   
Three Months Ended
   
Six Months Ended
   
Through
 
   
June 30,
   
June 30,
   
June 30,
 
   
2013
   
2012
   
2013
   
2012
   
2013
 
OPERATING EXPENSES
                             
General and Administrative
  $ 9,160     $ 5,203     $ 18,922     $ 41,463     $ 1,290,393  
Depreciation and amortization
    -       -       -       -       6,835  
    Total Operating Expenses
    9,160       5,203       18,922       41,463       1,297,228  
                                         
OPERATING LOSS
    (9,160 )     (5,203 )     (18,922 )     (41,463 )     (1,297,228 )
                                         
OTHER INCOME (EXPENSE)
                                       
Interest Expense
    (4,264 )     (4,264 )     (8,480 )     (8,527 )     (76,257 )
                                         
Loss before Income Taxes
    (13,424 )     (9,467 )     (27,402 )     (49,990 )     (1,373,485 )
                                         
Income tax expense
    -       -       -       -       -  
                                         
NET LOSS
  $ (13,424 )   $ (9,467 )   $ (27,402 )   $ (49,990 )   $ (1,373,485 )
                                         
NET LOSS PER COMMON SHARE
                                       
Basic & Diluted
  $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.01 )        
                                         
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                                       
Basic & Diluted
    4,418,549       4,418,549       4,418,549       4,413,384          
 
 
 
 
See accompanying Notes to Financial Statements.
 
 
4

 
 
ATOMIC PAINTBALL, INC.
(A DEVELOPMEMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
               
From Inception
 
               
(May 8, 2001)
 
   
For the Six Months Ended
   
Through
 
   
June 30,
   
June 30,
 
   
2013
   
2012
   
2013
 
CASH FLOW  FROM OPERATING ACTIVITIES
                 
                   
NET LOSS
  $ (27,402 )   $ (49,990 )   $ (1,373,485 )
                         
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
                       
CASH USED IN OPERATING ACTIVITIES
                       
Depreciation
    -       -       6,835  
Loss on Disposal of Fixed Assets
    -       -       3,464  
Issuance of Common Stock For Services
    -       18,000       374,944  
Capital contribution of services
    -       -       5,000  
Gain on Settlement of Liabilities
    -       -       (13,600 )
CHANGES IN OPERATING ASSETS & LIABILITIES
                       
Increase in accounts payable  and accrued liabilities
    18,788       8,656       357,060  
Increase in accrued interest
    8,480       22,812       118,983  
    Total Cash Flow Used In Operating Activities
    (134 )     (522 )     (520,799 )
                         
CASH FLOW FROM INVESTING ACTIVITIES
                       
Purchase of Fixed Assets
    -       -       (10,299 )
    Total Cash Flow Used In Investing Activities
    -       -       (10,299 )
                         
CASH FLOW FROM FINANCING ACTIVITIES
                       
Advances Under Loans From Shareholders
    -       -       300,598  
Advances Under Line of Credit - Related Party
    -       -       49,500  
Net Proceeds from Issuance of Common Stock
    -       -       106,000  
Net Proceeds from Issuance of Preferred Stock
    -       -       75,000  
    Total Cash Flow Provided By Financing Activities
    -       -       531,098  
                         
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS
    (134 )     (522 )     -  
                         
Cash and Cash Equivalents at the beginning of the period
    134       522       -  
Cash and Cash Equivalents at the end of the period
  $ -     $ -     $ -  
                         
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
                       
Cash paid for interest
  $ -     $ -     $ 207  
Cash paid for income tax
  $ -     $ -     $ -  
Conversion of accounts payable to long term debt
  $ -     $ -     $ 143,733  
Forgivesness of amounts owed to related party
  $ -     $ -     $ 199,218  
Conversion of preferred stock to common stock
  $ -     $ -     $ 75,000  
Reclass of due to related party balance to line of credit - related party
  $ -     $ -     $ 46,845  
 
 
 
 
See accompanying Notes to Financial Statements.
 
 
5

 

ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2013
(Unaudited)

NOTE 1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES.

NATURE OF OPERATIONS

Atomic Paintball, Inc. (the “Company”) is a development stage corporation incorporated on May 8, 2001 in the State of Texas which plans to own and operate  paintball facilities and to provide services and products in connection with paintball sport activities at its to be established facilities and through a website.  

During the six months ended June 30, 2013 and 2012, we focused on completing those actions necessary to implement our business plan.

BASIS OF PRESENTATION

Interim Accounting

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they 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 accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

The Company's 10-K for the year ended December 31, 2012, filed on July 10, 2014, should be read in conjunction with this report.

The Company has not earned any revenues from planned operations.  Accordingly, the Company's activities have been accounted for as those of a "Development Stage Company."  Among the disclosures required by Accounting Standards Codification (“ASC”) 915 Development Stage Entities are that the Company's financial statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.

SIGNIFICANT ACCOUNTING POLICIES

Accounting Basis

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

For the purpose of the financial statements cash equivalents include all highly liquid investments with an original maturity of three months or less.

Fair Value of Financial Instruments

The accounting guidance establishes a fair value hierarchy based on whether the market participant assumptions used in determining fair value are obtained from independent sources (observable inputs) or reflect the Company's own assumptions of market participant valuation (unobservable inputs). A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value:
 
·  
Level 1—Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
 
 
 
6

 
 
 
·  
Level 2—Quoted prices for identical assets and liabilities in markets that are inactive; quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; or
·  
Level 3—Prices or valuations that require inputs that are both unobservable and significant to the fair value measurement.
 
The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate the Company's or the counterparty's non-performance risk is considered in determining the fair values of liabilities and assets, respectively.

 
Fair Value Measurements at Reporting Date Using
 
Description
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
               
Convertible note payable – related party – December 31, 2012
 
$
-
   
$
-
   
$
143,733
 
Convertible note payable – related party – June 30, 2013
 
$
-
   
$
-
   
$
143,733
 
 
Stock Compensation

The Company follows FASB Accounting Standards Codification 718 – Compensation – Stock Compensation for share based payments to employees.  The Company follows FASB Accounting Standards Codification 505 for share based payments to Non-Employees.

Earnings (Loss) per Share

The basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no diluted shares outstanding.
   
Dividends

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

Income Taxes

The Company provides for income taxes in accordance with ASC 740 – Income Taxes.  ASC 740 requires the use of an asset and liability approach in accounting for income taxes.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward.

Advertising

The Company expenses advertising as incurred. The advertising since inception has been $0.
 
 
 
7

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue and Cost Recognition

The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
Management does not feel that the adoption of any recently issued, but not yet effective pronouncements, will have a material impact on the Company’s financial statements or financial condition.
 
NOTE 2. GOING CONCERN.
 
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues to cover its operating costs and allow it to continue as a going concern. For the six months ended June 30, 2013, the Company had incurred a net loss of $27,402. Accumulated deficit from May 8, 2001 (date of inception) through June 30, 2013 totaled $1,373,485. The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. NOTES PAYABLE

Our former President and then sole director, Barbara J. Smith, loaned us a total of $11,846 to pay for further research and development and for general corporate overhead.  This loan bears interest at an annual rate of 6.5%, was due on July 15, 2004 and was convertible at Ms. Smith's option into shares of our common stock at $0.25 per share.  This loan has not been repaid and Ms. Smith has declined to convert the outstanding balance into shares.  Accordingly, the entire balance of the loan continues to be outstanding and we continue to accrue interest on the balance outstanding.  As of June 30, 2013 and December 31, 2012 accrued interest amounted to $7,510 and $7,129, respectively.

NOTE 4. RELATED PARTY TRANSACTIONS.

On March 29, 2010, the Company entered into a $143,733 Convertible Promissory Note with J.H. Brech LLC, a related party. The Note accrues interest at 6% per annum and was due March 29, 2012.  Under the terms of the Note, J.H. Brech LLC has the right to convert all or part of the principal balance and accrued interest due under the Note into shares of the Company’s common stock at a conversion price of $0.50 per share. As of June 30, 2013 and December 31, 2012, accrued interest amounted to $28,093 and $23,816, respectively.
 
On July 28, 2011, the Company entered into an Executive Employment Agreement with Don Mark Dominey, Chief Executive Officer, effective August 8, 2011, for a period of three (3) years and may be extended for additional one (1) year periods by written notice given by us to Mr. Dominey at least 60 days before the expiration of the term or the renewal term, as the case may be, unless the agreement shall have been earlier terminated pursuant to its terms. Mr. Dominey shall be (i) paid a base salary at an annual rate of one hundred thousand dollars ($100,000), (ii) entitled to an annual bonus equal to two percent (2%) of our annual revenues, payable monthly, not to exceed eighty thousand dollars ($80,000), and (iii) granted 240,000 shares of Atomic Paintball’s restricted common stock each year, accruing in increments of 20,000 shares each month of his term.  Each monthly allotment shall be fully vested and stock certificates will be made available to him, at his request, and will be provided by the company through the transfer agent in a reasonable amount of time to fulfill the transaction.  As of June 30, 2013, the Company recorded an accrual of $52,198 for salary owed to Don Mark Dominey. On February 21, 2012, Don Mark Dominey resigned as the Company’s Chief Executive Officer to facilitate the hiring of Darren C. Dunckel.  The Board then appointed Mr. Dunckel as Chief Executive Officer and Chairman of the Board.  There were no disagreements between Mr. Dominey and our Company that led to his resignation.  

 
8

 

NOTE 5. REVOLVING LINE OF CREDIT – RELATED PARTY

On July 13, 2011, the Company entered into an 8% revolving line of credit with J.H. Brech LLC, a related party, to provide access to funding for its operations up to $500,000.  As of June 30, 2013 and December 31, 2012 we owed $96,345 in principal and accrued interest of $15,025 and $11,203, respectively.  Funding under this line of credit is presently in abeyance, but management expects funding will restart in the next several months.  In the meantime, management is evaluating other, short-term, related party financing, although as of the date of this Report, no definitive agreements have been entered into for any additional financing.  
 
Interest is payable at 8% per annum on the outstanding principal amount due under the revolving line of credit and is payable semi-annually on June 30 and December 31 of each year commencing June 30, 2011.  The principal and any accrued but unpaid interest is due on July 13, 2014.  At our sole discretion, we can pay the interest in shares of our common stock valued as follows:

·  
if our common stock is not listed for trading on an exchange or quoted for trading on the OTC Bulletin Board or the Pink Sheets, interest shares are valued at the greater of $0.50 per share or the fair market value as determined in good faith by us based upon the most recent arms-length transaction, or

·  
if our common stock is listed for trading on an exchange or quoted for trading on the OTC Bulletin Board or the OTC Markets Group (formerly, the Pink Sheets), interest shares will be valued at the greater of (A) the closing price of our common stock on the trading day immediately preceding the date the interest payment is due and payable, or (B) the average closing price of the common stock for the five trading days immediately preceding the date the interest payment is due and payable.

We may prepay the note at any time without penalty.  Upon an event of default, J.H. Brech LLC has the right to accelerate the note.  Events of default include:
 
·  
our failure to pay the interest and principal when due, 

·  
a default by us under the terms of the note, 

·  
appointment of a receiver, filing of a bankruptcy provision, a judgment or levy against our company exceeding $50,000 or a default under any other indebtedness exceeding $50,000, 

·  
a liquidation of our company or a sale of all or substantially all of our assets, or 

·  
a change of control of our company as defined in the note. 

Although we have not made the contractual payments, J.H. Brech LLC has not declared a default as of the date of this Report.

NOTE 6. COMMITMENTS AND CONTINGENCIES.

At management’s option, the Company has the right to convert $94,362 of legal invoices included in accounts payable to common stock at the price of $.50 per share. As of the date this Report is filed, management has not exercised the right.

Management is not aware of any pending or threatened litigation involving the Company.
 
NOTE 7. SUBSEQUENT EVENTS
 
Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.

 
9

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations for the three months and six months ended June 30, 2013 and 2012 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A. Risk Factors and Cautionary Notice Regarding Forward-Looking Statements and Business sections of our Annual Report on Form 10-K for the year ended December 31, 2012.  We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

We are a development stage company formed in 2001.  Our business model is to own and operate paintball facilities and to provide services and products in connection with paintball sport activities at our facilities and through a website.  Our actions taken to date have consisted of organizing our company, designing our business plan, including interviews with industry participants, visits to paintball field and retail facilities, evaluating website development firms, architectural firms, trademark attorneys, and suppliers of paintball markers, paintballs, and equipment, as well as real estate brokers.

Going Concern

We reported a net loss of $27,402 for the six months ended June 30, 2013 and we have incurred net losses of approximately $1.4 million since inception through June 30, 2013.  The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2012 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our operating losses and need to raise additional capital.  These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.  There are no assurances we will be successful in our efforts to increase our revenues and report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our Company.

Plan of Operations

To date, we have funded our activities through debt and equity financing, as well as through working capital advances from a related party.  Although we have entered into a $500,000 revolving line of credit provided to us by a related party, of which $96,345 was outstanding as of June 30, 2013, this credit line is not sufficient to fund all costs necessary to implement the first phase of our business model and our access to this line is presently in abeyance.  In order to fully organize our company and implement the first phase of our business model, we will need to raise approximately $500,000 in additional capital.  Given the development stage nature of our company and the current status of the capital markets and our designation as a shell company under Federal securities laws, there are no assurances we will be able to raise the necessary capital.  Even if we are ultimately able to raise the capital, there are no assurances that our business model will be successful or that we will ever develop any revenue generating operations.  However, assuming we are able to raise the capital, we expect to begin the launch of phase one of operating plans within six to nine months of receiving the capital.

We have limited operations and are actively seeking merger, reverse merger, acquisition or business combination opportunities with an operating business or other financial transaction opportunities in order to improve earnings and shareholder value. As of the day of this Report, we have no current arrangement, agreement or understanding with respect to engaging in a business combination with a specific entity, and no particular industry or specific business within an industry has been selected for a target company. There can be no assurance that we will be successful in identifying and evaluating suitable business opportunities or in concluding a business combination. There is no assurance that we will be able to negotiate a business combination on terms favorable to the Company, if at all.

Results of Operations

Our general and administrative expenses primarily include legal and accounting fees, transfer agent fees and non-cash compensation expense for our executive officer and independent director.  General and administrative expenses decreased for the six months ended June 30, 2013 from the comparable period in 2012 primarily as a result of decreased accounting, legal and travel expenses. General and administrative expenses increased for the three months ended June 30, 2013 from the comparable period in 2012 primarily as a result of increased accounting expenses.   We expect general and administrative expenses will increase once we begin to further implement our business plan, although we are unable at this time to quantify the actual amount of this anticipated increase as it will be based upon our varying level of operations.

Interest expense represents interest on a note payable in the principal amount of $11,846 due to a former officer which is presently past due, as well as interest on a related party convertible note payable in the principal amount of $143,733 which was due in March 2012, and interest on the related party revolving line of credit. Interest expense for the three and six months ended June 30, 2013 was $4,264 and $8,480 compared with $4,264 and $8,527 for the three and six months ended June 30, 2012.

 
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Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash.  As of June 30, 2013 we had a working capital deficit of $299,399 as compared to a working capital deficit of $271,997 at December 31, 2012.  Our total liabilities increased approximately 5.3% as of June 30, 2013 from December 31, 2012 primarily related to an increase in accounts payable, accrued liabilities and accrued interest.  Accounts payable and accrued liabilities increased approximately 11%.
 
Net cash used in operating activities in the six months ended June 30, 2013 was $134 as compared to net cash used by operating activities of $522 in the six months ended June 30, 2012.  During the period ended June 30, 2012, net cash used by operating activities included $18,000 in non-cash expense for stock-based compensation, and an increase in accounts payable and accrued liabilities and accrued interest.  During the period ended June 30, 2013, net cash used in operating activities principally included an increase of $27,268 in accounts payable and accrued liabilities and accrued interest.   We did not generate or use any cash from investing and financing activities in either the 2013 or the 2012 six month periods covered by this Report.  

We do not currently have any revenue producing operations and we are dependent upon availability under a $500,000 revolving line of credit extended to us by J.H. Brech LLC, a related party, in July 2011 to provide funds for our ongoing general and administrative expenses and satisfy our current obligations.  However, our access to this working capital line is currently in abeyance.  As of June 30, 2013 we owed J.H. Brech LLC $96,345 for advances under this credit line.  This credit line is not sufficient for the development of our operations.  We need to initially raise an additional $500,000 to fund the initial launch of our business plan.  We do not have any agreements or understanding with any third party to provide this financing.  Until we can raise the necessary funds, we will be unable to further implement our business plan.  Given the development stage nature of our company and the thinly traded nature of the public market for our common stock and our status as a shell company under Federal securities laws, there are no assurances we will be able to raise the necessary capital.  If we are unable to raise capital as necessary, our ability to continue as a going concern is in jeopardy and investors could lose their entire investment in our company.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 1 to the financial statements included in this report.  Our management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934.  In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met.  Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Based on his evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the period covered by this Report, our Chief Executive Officer who also serves as our principal financial and accounting officer, has concluded that our disclosure controls and procedures were ineffective such that the information relating to our Company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

 
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Changes in Internal Control over Financial Reporting
 
Other than as disclosed in the Annual Report on Form 10-K for the year ending December 31, 2012, there have not been any changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances.  We are not aware of any pending or threatened litigation against us or our officers and directors in their capacity as such that could have a material impact on our operations or finances

Item 1A. Risk Factors.

Not applicable for a smaller reporting company.
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.
 
No.
 
Description
     
31.1
 
Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *
31.2
 
Rule 13a-14(a)/ 15d-14(a) Certification of principal financial and accounting officer *
32.1
 
Section 1350 Certification of Chief Executive Officer and principal financial and accounting officer *
101
 
Interactive Data Files +
101.SCH
 
XBRL Taxonomy Extension Schema Document +
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document +
101.LAB
 
XBRL Taxonomy Extension Labels Linkbase Document +
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document +
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document +
 
* filed herewith
 
+ Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
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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.
 

 
Atomic Paintball, Inc.
   
   
July 17, 2014
By: /s/ Darren C. Dunckel
 
Darren C. Dunckel, Chief Executive Officer
and Principal Financial/Chief Accounting Officer
 
 

 
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