SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2014
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-137293
(Exact name of small business issuer as specified in its charter)
Michigan 7370 27-1767418
---------------- ---------------------------- ----------------
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification
incorporation Code Number)
17033 S. Dixie Highway,
Miami, FL 33157
(Registrants telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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 x No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes X No
The number of shares of Common Stock, no par value, outstanding on was 3,654,000 shares as of July 24, 2015.
Transitional Small Business Disclosure Format (check one): Yes X No
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
Our financial statements included in this Form 10-Q are as follows:
Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013 (audited);
Statements of Operations for the three and six months June 30, 2014 and 2013, and for the Period from Inception (May 16, 2007) to June 30, 2014 (unaudited);
Statements of Cash Flows for the three and six months ended June 30, 2014 and 2013, and for the Period from Inception (May 16, 2007) to June 30, 2014 (unaudited);
(A DEVELOPMENT STAGE COMPANY)
Total current assets
Fixed assets, Net
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to shareholder
Preferred stock, no par value, authorized
1,000,000, issued 0 at June 30, 2014 and
December 31, 2013
Common Stock, no par value, authorized
4,000,000, issued and outstanding 3,654,000 and 654,000 at
June 30, 2014 and December 31, 2013
Additional paid-in capital
Total Stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
The accompanying notes are an integral part of these financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Three months ended
Six months ended
2007 to June
General and administrative
Other income (expense)
Abandonment of equipment
Total other income(expense)
Basic and diluted earnings per share
Weighted average number of shares outstanding
The accompanying notes are an integral part of these financial statements
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Six months ended
2007 to June
Cash flows from operating activities
Adjustment to reconcile net loss to net cash from operating activities
Stock issued for consulting to Officer
Loss on abandonment of equipment
Changes in operating assets and liabilities
Net cash used in operating activities
Cash flows from investing activities
Purchase of computer equipment
Net cash used in investing activities
Cash from financing activities
Advances from officers
Issuance of common stock
Net cash provided by financing activities
Increase(decrease) in cash
Cash beginning of period
Cash end of period
The accompanying notes are an integral part of these financial statements.
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Financial Statements
June 30, 2014
Note 1 - Organization and Summary of Significant Accounting Policies:
WTTJ CORP. (the Company) was organized in the State of Michigan on May 16, 2007. The Companys primary plan of operations is to promote travel services for Americans to gambling casinos in Macau through a website
The Companys fiscal year end is December 31.
Basis of Presentation Development Stage Company:
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America 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. For further information regarding the Companys significant accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on July 27, 2015.
The Company has not earned any revenues from limited principal operations. Accordingly, the Companys activities have been accounted for as those of a Development Stage Enterprise as set forth in Accounting Standards Codification No. 915 Development Stage Entities(ASC 915). Among the disclosures required by ASC 915 are that the Companys financial statements be identified as those of a development stage company, and that the statements of operations, stockholders equity (deficit) and cash flows disclose activity since the date of the Companys inception.
Basis of Accounting:
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. In the opinion of management, these interim financial statements include all items that are necessary in order to make them not misleading. The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below:
Cash and Cash Equivalents:
The Company considers all highly liquid debt instruments, purchased with an original maturity of three months or less, to be cash equivalents.
Use of Estimates:
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of assets and liabilities, and correspondingly revenues
and expenses, depends on future events, the preparation of financial statements for any period necessarily involves the use of estimates and assumption an example being assumptions in valuation of stock options. Actual amounts may differ from these estimates. These financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below.
Net Loss Per Share:
Net loss per share is based on the weighted average number of common shares and common shares equivalents outstanding during the period.
The Company accounts for share-based compensation under the fair value recognition provisions such that compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating the percentage of awards which will be forfeited, stock volatility, the expected life of the award, and other inputs. If actual forfeitures differ significantly from the estimates, share-based compensation expense and the Company's results of operations could be materially impacted.
The Company may also issue restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognizes these service expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. When stock is issued as payment for past services provided, accordingly, all shares issued are fully vested, and there is no unrecognized compensation associated with these transactions. If stock is issued in advance of service performance expense is recognized ratably over the requisite service period.
As of June 30, 2014 there was $0 of unrecognized expense related to non-vested stock-based compensation arrangements granted and no stock based compensation
Note 2 Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the period from inception through June 30, 2014, the Company has had limited operations. As of June 30, 2014, the Company has not emerged from the development stage. In view of these matters, the Companys ability to continue as a going concern is dependent upon the Companys ability to commence a commercially viable operation and to achieve a level of profitability. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 Federal Income Taxes:
ASC Codification Topic 740 for Income Taxes, which requires a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. All years since inception are open to IRS audit
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of June 30, 2014 are as follows:
Deferred tax assets:
Federal and state net operating loss $ 85,024
Equity instruments issued for compensation -
Total deferred tax assets 85,024
Less valuation allowance (85,024)
Note 4 Capital Stock:
On January 26, 2012 the Company amended its articles of incorporation, increasing the authorized shares of common stock, no par, to 4,000,000. Additionally, the Company authorized 1,000,000 shares of no par preferred stock. The preferred shares carry voting rights of 20 votes per share. No preferred shares have been issued, as of June 30, 2014.
The Company issued 500,000 shares of common stock for a cash consideration of $75 in 2007.
During 2011 the Company issued 151,000 shares of common stock for cash totaling $14,300.
In May 2012 the Company issued 3,000 shares of common stock for a cash consideration of $300.
In the three months ended June 30, 2014, the Company issued 3,000,000 shares of common stock for services rendered with a value of $60,000.
Note 5 Related Party Transactions
The Company is presently funding its operating expense through the support of the majority shareholder. These advances, which are non-interest bearing and due on demand, are considered temporary in nature. The majority shareholder does not have a commitment to fund future operations.
The sole officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities that become available. He may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.
The Company has limited need for office space. The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the sole officer and director of the Company to use at no charge.
During June of 2014 the Company issued 3,000,000 shares to the officer/director for consulting services.
The above transactions may not reflect the results had the terms and conditions been incurred with unrelated parties.
Note 6 Financial Accounting Developments:
Recently Issued Accounting Pronouncements
Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Companys financial statements upon adoption.
Note 7 Subsequent Events
Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment or disclosure.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward Looking Statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:
increased competitive pressures from existing competitors and new entrants;
our ability to raise adequate working capital;
deterioration in general or regional economic conditions;
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
loss of customers or sales weakness;
inability to achieve sales levels or other operating results;
the unavailability of funds for capital expenditures; and
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operations in this document.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Note Regarding Forward Looking Statements.
This quarterly report on Form 10-Q of WTTJ CORP for the period ended June 30, 2014, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.
an abrupt economic change resulting in an unexpected downturn in demand;
governmental restrictions or excessive taxes on land;
over-abundance of companies developing commercial properties to lease space or sell the developed building;
economic resources to support the development of our projects;
expansion plans, access to potential clients, and advances in technology; and
lack of working capital that could hinder the land acquisition for development of our projects.
Financial information provided in this Form 10-Q, for periods subsequent to June 30, 2014, is preliminary and remains subject to audit. As such, this information is not final or complete, and remains subject to change, possibly materially.
Managements Discussion and Analysis of Financial Condition and Results of Operations
The following managements discussion, analysis of financial condition should be read in conjunction with our financial statements and notes thereto contained elsewhere in this report.
WTTJ Inc. (The Company) was incorporated in Michigan on May 16, 2007. The Companys fiscal year end is December 31. We were inactive until May 1, 2010 when we began implemented our plan of operations. The Company has never been in bankruptcy or receivership.
The Company has a plan of operations to engage in the business of the promotion of travel services for Americans to gambling casinos in Macau through a website We plan on launching a website which will be a collection of news feeds related to travel and gaming opportunities in Macau, China. We expect that we will build out our website to have additional features for our projected audience of travelers.
Our plan of operations is to build a website to be a site on the Internet for Americans interested in traveling to Macau for recreational gaming at the casinos.
Since our inception through June 30, 2014, we have not generated any revenues and have incurred a net loss of $85,024. Until May 2010, our only business activity was the formation of our corporate entity, creation of our business model, and analyzing the viability of our business, which included the development of our initial website. We anticipate the commencement of generating revenues in the next twelve months, of which we can provide no assurance. The capital raised in our offering has been budgeted to cover the costs associated with advertising on the Internet to draw attention to our website, costs associated with website enhancements, and covering various filing fees and transfer agent fees to complete our early money raise through our S-1 offering. We believe that advertising revenues and small amounts of equity will be sufficient to support the limited costs associated with our initial ongoing operations for the next twelve months. There can be no assurance that the actual expenses incurred will not
materially exceed our estimates or that cash flow from listing fees will be adequate to maintain our business. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors report to the financial statements included in the registration statement.
Results of Operations Continuing Operations
General and administrative expenses for the six months ended June 30, 2014 amounted to $60,000 compared to $390 for the same six months ended June 30, 2013. The 2014 expense resulted from consulting fees rendered by an officer for which 3,000,000 shares of common stock were issued..
Other income(expense) was $0 and $(1,430) for the three and six months ended June 30, 2014. This was a result of abandonment of computer equipment.
Liquidity & Capital Resources
The Company had cash of $3, and accumulated deficit of $85,024.
We anticipate that our future liquidity requirements will arise from the need to fund our growth from our new operations, pay debt obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from new operations and raising additional funds from private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability.
Critical Accounting Policies and Estimates
The policies discussed below are considered by our management to be critical to an understanding of our financial statements because their application places the most significant demands on our managements judgment, with financial reporting results relying on our estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described below. For these policies, our management cautions that future events rarely develop as forecasted, and that best estimates may routinely require adjustment.
The SEC has issued cautionary advice to elicit more precise disclosure about accounting policies management believes are most critical in portraying our financial results and in requiring managements most difficult subjective or complex judgments.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make judgments and estimates. On an ongoing basis, we evaluate our estimates, the most significant of which include establishing allowances for doubtful accounts and determining the recoverability of our long-lived tangible and intangible assets. The basis for our estimates are historical experience and various assumptions that are believed to be reasonable under the circumstances, given the available information at the time of the estimate, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from the amounts estimated and recorded in our financial statements.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
Basis of Presentation. The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principles require 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. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
Fair Value Instruments. The Companys balance sheets include the following financial instruments: cash, assets and liabilities of discontinued operations, and notes payable to shareholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying value of the loan from stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities.
The Company accounts for income taxes under FASB Codification Topic 740 which requires use of the liability method. Topic 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. A valuation allowance may be applied against the net deferred tax due to the uncertainty of its ultimate realization.
Off-Balance Sheet Arrangements
We have made no 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 that is material to investors.
Reclassification of Discontinued Operations
In accordance with the rules regarding the presentation of discontinued operations the assets, liabilities and activity of the leasing business have been reclassified as a discontinued operation for all periods presented.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 4. Controls and Procedures.
(a) Managements Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Companys internal control over financial reporting is a process designed under the supervision of the Companys Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
With respect to the period ending June 30, 2014, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.
Based upon our evaluation regarding the period ending June 30, 2014, the Companys management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Companys limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.
The Companys disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, the Companys management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
(b) Changes in Internal Controls.
There have been no changes in the Companys internal control over financial reporting during the period ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial report
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
We believe there are no changes that constitute material changes from the risk factors previously disclosed in the Companys 2013 Annual Report filed on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the six month period ending June 30, 2014, the Company issued 3,000,000 shares of common stock for services rendered. No cash proceeds were received in respect of these shares.
Item 3. Defaults Upon Senior Securities
Item 4. Mining Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
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.
By:/s/ Kris Kottmeier
Kris Kottmeier, President,
Chief Executive Officer
Chief Financial Officer
Date: July 27, 2015