UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

	☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended September 30, 2014

 

	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ___ to ___

 

Commission file number: 000-52855

 

PRESTIGE CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	93-0945181 (I.R.S. Employer Identification No.)
2157 S. Lincoln Street, Suite 220, Salt Lake City, Utah (Address of principal executive offices)	84106 (Zip Code)

(801) 323-3295

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐ The registrant does not have a Web site.

 

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 ☐ Non-accelerated filer ☐

Accelerated filer ☐ Smaller reporting company ☑

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☑ No ☐

 

The number of shares outstanding of the registrant’s common stock as of November 6, 2014 was 2,532,200.

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Balance Sheets	3
	Condensed Statements of Operations	4
	Condensed Statements of Cash Flows	5
	Notes to the Condensed Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	11
Item 4.	Controls and Procedures	11
PART II - OTHER INFORMATION
Item 6.	Exhibits	12
	Signatures	13

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

 

 

 

 

PRESTIGE CAPITAL CORPORATION

 

Condensed Financial Statements

 

September 30, 2014

 

(Unaudited)

 

PRESTIGE CAPITAL CORPORATION

Condensed Balance Sheets

 

		September 30,				December 31,
		2014				2013
		(Unaudited)
ASSETS
Current Assets
Cash		$	2,349			$	3,051
Total Current Assets			2,349				3,051
Total Assets		$	2,349			$	3,051
Liabilities and Stockholders' Deficit
Liabilities
Current Liabilities
Accounts payable		$	—			$	—
Accounts payable – related party			40,600				32,600
Accrued interest			48,901				40,593
Loan payable - related party			129,462				129,462
Loan payable - other			10,500				5,500
Total Current Liabilities			229,463				208,155
Total Liabilities			229,463				208,155
Stockholders' Deficit
Preferred stock - 10,000,000 shares authorized - None issued and outstanding			—				—
Common Stock - 100,000,000 shares authorized having a par value of $0.001 per share, 2,532,200 shares issued and outstanding at September 30, 2014 and December 31, 2013			2,532				2,532
Additional paid in capital			547,677				547,677
Accumulated deficit			(777,323	)			(755,313	)
Total Stockholders' Deficit			(227,114	)			(205,104	)
Total Liabilities and Stockholders' Deficit		$	2,349			$	3,051

 

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

PRESTIGE CAPITAL CORPORATION

Condensed Statements of Operations

(Unaudited)

 

			Three				Three				Nine				Nine
			Months Ended				Months Ended				Months Ended				Months Ended
			Sept 30,				Sept 30,				Sept 30,				Sept 30,
			2014				2013				2014				2013
Revenues		$	—			$	—			$	—			$	—
Operating Expenses
General and Administrative			3,909				5,859				13,702				19,763
Loss from Operations			(3,909	)			(5,859	)			(13,702	)			(19,763	)
Non-Operating Income (Expense)
Related party interest expense			(2,589	)			(2,590	)			(7,768	)			(7,647	)
Other interest expense			(210	)			(101	)			(540	)			(101	)
Related party interest income			—				—				—				—
Total non-operating expense			(2,799	)			(2,691	)			(8,308	)			(7,748	)
Net loss before income taxes			(6,708	)			(8,550	)			(22,010	)			(27,511	)
Income taxes			—				—				—				—
Net Loss		$	(6,708	)		$	(8,550	)		$	(22,010	)		$	(27,511	)
Basic and Diluted Loss Per Share		$	(0.00	)		$	(0.00	)		$	(0.01	)		$	(0.01	)
Basic and Diluted Weighted Average Number of Common Shares Outstanding			2,532,200				2,532,200				2,532,200				2,532,200

 

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

PRESTIGE CAPITAL CORPORATION

Condensed Statements of Cash Flows

(Unaudited)

 

			Nine Months Ended				Nine Months Ended
			September 30,				September 30,
			2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		$	(22,010	)		$	(27,511	)
Adjustments to reconcile Net Income to net cash provided by operations:
Changes in assets and liabilities
Increase (decrease) in accounts payable			8,000				11,020
Increase in accrued interest			8,308				7,748
Net cash used in operating activities			(5,702	)			(8,743	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party loans			—				8,000
Proceeds from other loans			5,000				5,500
Net cash provided by financing activities			5,000				13,500
Net Increase (Decrease) in Cash			(702	)			4,757
Beginning Cash Balance			3,051				93
Ending Cash Balance		$	2,349			$	4,850
Supplemental Disclosures
Cash paid for:
Interest expense		$	—			$	—
Income taxes		$	—			$	—

 

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

Prestige Capital Corporation

Notes to the Unaudited Condensed Financial Statements

September 30, 2014

 

 

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the period ended September 30, 2014 and for all periods presented have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements as reported in its Form 10-K. The results of operations for the nine-month period ended September 30, 2014 are not necessarily indicative of the operating results for the full year ended December 31, 2014.

 

NOTE 2 – GOING CONCERN

 

The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

The accompanying condensed financial statements are prepared on the basis of accounting principles generally accepted in the United States of America.

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Prestige Capital Corporation

Notes to the Unaudited Condensed Financial Statements

September 30, 2014

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

 

Recent Pronouncement

On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915).   Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders’ equity, (2) label the financial statements as those of a development stage entity;  (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.  The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued.  The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Shareholder Loans – A former shareholder and officer of the Company has covered corporate expenses and loaned cash to the Company for which the Company is now indebted to this related party amounting to $93,962 as of September 30, 2014 and December 31, 2013, respectively.  No amounts were repaid to the shareholder.  As of September 30, 2014 and December 31, 2013, the amount due to the shareholders for accrued interest was $40,787 and $35,149, respectively. The interest expense on the loans for the nine months ended September 30, 2013 and 2014 totaled $5,638 and $5,638, respectively. The above mentioned shareholder loans are due on demand and had interest imputed at an annual rate of 8%.

 

The Company is indebted to another related party in the amount of $35,500 for loans through the period ended September 30, 2014. The notes are unsecured, due on demand, and bear interest at 8% per annum. Interest expense for the nine months ended September 30, 2013 and 2014 totaled $2,008 and $2,130, respectively. No payments on principal or interest have been made to date.

 

NOTE 5 – SUBSEQUENT EVENTS

 

The Company’s management reviewed all material events through the date of this filing and has determined that there are no material subsequent events to report.

In this report references to “Prestige,” “the Company,” “we,” “us,” and “our” refer to Prestige Capital Corporation.

 

FORWARD LOOKING STATEMENTS

 

The U. S. Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “intend,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

 

 

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

 

Executive Overview

 

We have not recorded revenues since our reactivation in 2006. The Company intends to rely upon advances or loans from management, significant stockholders or third parties to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated to provide funds to us in the future. These factors raise doubt as to our ability to continue as a going concern. Our plan is to combine with an operating company to generate revenue.

 

As of the date of this report, we have not had any discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although we will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

 

We anticipate that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of securities. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

 

We anticipate that the struggling global economy will restrict the cash available for such transactions and will restrict the number of business opportunities available to us. There can be no assurance in the current economy that we will be able to acquire an interest in an operating company.

 

If we obtain a business opportunity, then it may be necessary to raise additional capital. We anticipate that we will sell our common stock to raise this additional capital. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.

Liquidity and Capital Resources

 

We have not recorded revenues from operations since inception and we have not established an ongoing source of revenue sufficient to cover our operating costs. We have relied upon loans and advances from related parties to fund our operations. During the nine month period ended September 30, 2014 (“2014 nine month period”) we borrowed $5,000 from a third party to fund our operations. In addition, a stockholder provided or paid for administrative and professional services and out-of-pocket costs totaling $8,000 during the 2014 nine month period.

 

Our cash decreased from $3,051 at December 31, 2013 to $2,349 at September 30, 2014. Our total liabilities increased from $208,155 at December 31, 2013 to $229,463 at September 30, 2014 primarily due to additional loans from third parties and accounts payable paid on our behalf by related parties, along with increases in accrued interest on loans.

 

We intend to obtain capital from management, significant stockholders and third parties to cover minimal operations; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business opportunity with which we acquire or merge will affect our profitability for the long term.

 

During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through advances and loans provided by management, significant stockholders or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.

 

Results of Operations

 

We did not record revenues in either the 2014 or 2013 nine month periods. General and administrative expense decreased to $13,702 for the 2014 nine month period compared to $19,763 for the nine month period ended September 30, 2013 (“2013 nine month period”). General and administrative expense decreased to $3,909 for the three month period ended September 30, 2014 (“2014 third quarter”) compared to $5,859 for the three month period ended September 30, 2013 (“2013 third quarter”). The general and administrative expense decrease for the 2014 interim periods reflects reductions in operational costs.

 

Total other expense increased to $8,308 for the 2014 nine month period compared to $7,748 for the 2013 nine month period. Total other expense increased to $2,799 for the 2014 third quarter compared to $2,691 for the 2013 third quarter. The increases are primarily due to interest expense related to loans.

 

Our net loss decreased to $22,010 for the 2014 nine month period compared to $27,511 for the 2013 nine month period and decreased to $6,708 for the 2014 third quarter compared to $8,550 for the 2013 third quarter. Management expects net losses to continue until we acquire or merge with a business opportunity.

Commitments and Obligations

 

As of September 30, 2014 the Company has borrowed $35,500 from First Equity Holdings Corp, a stockholder. These notes are unsecured, due on demand, and bear interest at 8% per annum. No payments for principle or interest have been made to date for these loans. The accrued interest on these loans was $2,130 at September 30, 2014. In addition, First Equity Holdings Corp. provided or paid on our behalf administrative and professional services and out-of-pocket costs in the amount of $8,000 during the 2014 nine month period.

 

During 2011 the Company owed $93,962 to Whitney O. Cluff, our former President. Mr. Cluff sold this loan to third parties in 2011. The accrued interest on this loan was $40,787 at September 30, 2014. This loan is due on demand and has interest imputed at an annual rate of 8%.

 

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Critical Accounting Policies

 

We qualify as an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, among other things, we will not be required to:

 

•

Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

•

Submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency”

 

•

Obtain stockholder approval of any golden parachute payments not previously approved; and

 

•

Disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executives compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion; (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to smaller reporting companies.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Our President, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and he determined that our disclosure controls and procedures were ineffective due to a control deficiency. During the period we did not have additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Due to the size and operations of the Company we are unable to remediate this deficiency until we acquire or merge with another company.

 

Changes to Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of our internal control over financial reporting and determined that there were no changes made in our internal control over financial reporting during the quarter ended September 30, 2014 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

 

ITEM 6. EXHIBITS

 

Part I Exhibits

No.		Description
31.1		Principal Executive Officer Certification
31.2		Principal Financial Officer Certification
32.1		Section 1350 Certification

 

Part II Exhibits

No.		Description
3(i)		Articles of Incorporation (Incorporated by reference to exhibit 3(i) to Form 10-KSB, filed December 3, 1999)
3(i)(a)		Amended Articles of Incorporation (Incorporated by reference to exhibit 3(i)(a) to Form 10-KSB, filed April 15, 2008)
3(ii)		Bylaws  (Incorporated  by reference to exhibit 3(ii) to Form 10-KSB, filed December 3, 1999)
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document

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.

 

		PRESTIGE CAPITAL CORPORATION
Date: November 12, 2014	By:	/s/ Joseph C. Cannella
		Joseph C. Cannella
		President and Director
		Principal Financial Officer

 

 

 

13