UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2016

 

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

 

For the transition period from ______________ to _____________

 

Commission file number 333-177792

 

THE TEARDROPPERS, INC.

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

 

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

 

4653 Spice St.

Lancaster, CA. 93536

(Address of principal executive offices)

 

949-751-2173

(Issuer’s telephone number)

 

_______________________________________________

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

 

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

 

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 x No o

 

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

 

Large 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 o No x

 

There were 38,000,000 shares of the registrant’s common stock, $0.001 par value per share, outstanding on June 30, 2016.

 

 

THE TEARDROPPERS, INC.

 

TABLE OF CONTENTS

 

			Page
Part I – FINANCIAL INFORMATION			3
	Item 1.	Condensed Financial Statements:	3
		Condensed Balance Sheets at June 30, 2016 and December 31, 2015 (unaudited)	3
		Condensed Statements of Operations for the three and six month periods ended June 30, 2016 and 2015 (unaudited)	4
		Condensed Statements of Cash Flows for the six month period ended June 30, 2016 and June 30,2015 (unaudited)	5
		Condensed Statements of Changes in Stockholders’ Equity (Deficit) for the period from December 31, 2013 (inception) through June 30, 2016 (unaudited)	6
		Notes to Condensed Financial Statements (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
	Item 4.	Controls and Procedures	15
Part II – OTHER INFORMATION			16
	Item 1.	Legal Proceedings	16
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
	Item 3.	Defaults Upon Senior Security	16
	Item 4.	Mine Safety Disclosures	16
	Item 5.	Other Information	16
	Item 6.	Exhibits	16
		Signatures	17

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

The Teardroppers, Inc.

CONDENSED BALANCE SHEETS

(UNAUDITED)

 

		June 30,				December 31,
		2016				2015
ASSETS
Current assets
Cash		$	80,606			$	46,899
Total current assets			80,606				46,899
Fixed assets:
Cost			10,859				41,785
Less accumulated depreciation			(1,806	)			(3,047	)
Fixed assets, net			9,053				38,738
Total Assets		$	89,659			$	85,637
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable		$	74,763			$	52,763
Accounts payable - related parties			128,359				67,500
Customer deposits			14,500				14,500
Loan payable			450,000				450,000
Lines of credit from related parties			123,860				75,835
Accrued interest			66,831				44,300
Accrued interest -related parties			4,052				2,003
Total current liabilities			862,365				706,901
Total Liabilities			862,365				706,901
Stockholders' Equity (Deficit)
Preferred stock, par value $0.001, authorized 20,000,000 shares, issued shares 0
Common stock, par value $0.001, authorized 100,000,000 shares issued 37,750,000 and 38,000,000 shares, respectively			37,750				38,000
Additional paid in capital			36,528				69,385
Accumulated deficit			(846,984	)			(728,649	)
Total Stockholders' Equity (Deficit)			(772,706	)			(621,264	)
Total Liabilities and Stockholders' Equity (Deficit)		$	89,659			$	85,637

 

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

 

 

The Teardroppers, Inc.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2016				2015				2016				2015
Revenues		$	6,010			$	–			$	6,010			$	–
Total revenue			6,010				–				6,010				–
Cost of sales			–				–				–				–
Gross margin			6,010				–				6,010				–
Operating expenses:
Consulting			–				2,500				–				13,000
Consulting - related parties			28,000				–				55,500				44,889
General and administrative			10,903				1,950				23,537				18,874
Professional fees			17,734				14,501				20,728				35,263
			56,637				18,951				99,765				112,026
Operating income (loss)			(50,627	)			(18,951	)			(93,755	)			(112,026	)
Other income (expense):
Interest expense - related parties			(1,241	)			(140	)			(2,049	)			(162	)
Interest expense - unrelated parties			(10,942	)			(11,079	)			(22,531	)			(21,474	)
			(12,183	)			(11,219	)			(24,580	)			(21,636	)
Net Income Before Taxes			(62,810	)			(30,170	)			(118,335	)			(133,662	)
Income Tax Provision			–				–				–				–
Net income (loss)		$	(62,810	)		$	(30,170	)			(118,335	)			(133,662	)
Net income (loss) per share
(Basic and fully diluted)		$	(0.00	)*		$	(0.00	)*			(0.00	)*			(0.00	)*
Weighted average number of common shares outstanding			37,793,956				37,750,000				37,896,409				37,756,630

 

* denotes a loss of less than $(.01) per share.

 

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

 

 

The Teardroppers, Inc.

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)

 

																		Additional								Total Stockholders'
		Preferred Stock								Common Stock								Paid In				Accumulated				Equity
		Shares				Amount				Shares				Amount				Capital				Deficit				(Deficit)
Balances December 31, 2015			–			$	–				38,000,000			$	38,000			$	69,385			$	(728,649	)		$	(621,264	)
Asset transferred for cancellation of shares											(250,000	)			(250	)			(32,857	)							(33,107	)
Net loss for the period																							(118,335	)			(118,335	)
Balances June 30, 2016			–			$	–				37,750,000			$	37,750			$	36,528			$	(846,984	)		$	(772,706	)

 

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

 

 

The Teardroppers, Inc.

 CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		Six Months Ended
		June 30,				June 30,
		2016				2015
Cash Flows From Operating Activities:
Net income (loss)		$	(118,335	)		$	(133,662	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Depreciation			2,437				2,000
Changes in Operating Assets and Liabilities
Increase (decrease) in accounts payable			22,000				–
Increase (decrease) in accounts payable - related parties			55,000				–
Increase in accrued interest			22,531				21,474
Increase in accrued interest-related parties			2,049				162
Net cash used for operating activities			(14,318	)			(110,026	)
Cash Flows From Investing Activities:			–				–
Cash Flows From Financing Activities:
Shares repurchased and cancelled			–				(1,000	)
Proceeds from line of credit to related party			140,225				84,000
Repayments on line of credit to related party			(92,200	)			–
Net cash provided by financing activities			48,025				83,000
Net Increase (Decrease) In Cash			33,707				(27,026	)
Cash At The Beginning Of The Period			46,899				27,125
Cash At The End Of The Period			80,606			$	99
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest		$	–			$	–
Franchise and income tax		$	–			$	–
Non-cash investing and financing activities:
Fixed Assets acquired with accounts payable			5,859				–
Asset transferred for cancellation of shares		$	(33,107	)		$	–

 

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

  

 

THE TEARDROPPERS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

For the Three and Six Months Ended June 30, 2016 and 2015

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

On June 3, 2013, Teardroppers, Inc. (the “Company”), was incorporated under the laws of the state of Nevada.

 

We intend to enter the business of mobile billboard advertising by offering to provide billboard advertising space on custom designed "Teardrop Trailers". Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind small economy sized vehicles and pickup trucks.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Statements

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 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 our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2016. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 filed with the SEC.

Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP 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. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

 

Cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At June 30, 2016 and December 31, 2015, the Company had no cash equivalents.

 

Fair value of financial instruments

 

The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Fair Value Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

 

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short maturity of those instruments. The Company’s note payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2016 and December 31, 2015.

 

The Company had no assets or liabilities measured at fair value on a recurring basis for as of June 30, 2016 and December 31, 2015, respectively, using the market and income approaches.

 

Property and equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three (3) years for equipment, five (5) years for automobile, and seven (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

 

Revenue recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB ASC for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers mobile advertising revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer with an invoice delivered to the customer, (iii) the sales price is fixed or determinable and (iv) collectability is reasonably assured. In addition, the Company records allowances for accounts receivable that are estimated to not be collected.

 

Net income (loss) per share

 

The Company computes basic and diluted earnings per share amounts pursuant to ASC 260-10-45. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period

 

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

There were no potentially dilutive shares outstanding as of June 30, 2016 and December 31, 2015, respectively.

 

Reclassification

 

Prior year amounts have been reclassified to conform to current year presentation.

 

 

Recently issued accounting pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 – GOING CONCERN

 

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expenses. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

 

NOTE 4 – LINE OF CREDIT FROM RELATED PARTY

 

On February 25, 2014, the Company entered into a line of credit with DEVCAP Partners, LLC, a California limited liability company, for an amount up to $450,000 with a maturity date of June 1, 2017, bearing interest of 10% per annum. DEVCAP Partners, LLC is a related party to the Company as it is the majority shareholder of the Company. As of June 30, 2016 and December 31, 2015, the balance of the line of credit was $98,860 and $50,835, respectively. The Company recorded accrued interest of $1,849 and $2,203 on the line of credit at June 30, 2016 and December 31, 2015, respectively.

 

On August 13, 2015 the company entered into a line of credit with General Pacific Partners, LLC, a California limited liability company, for an amount up to $450,000. The line of credit is a demand loan bearing interest of 10% per annum. General Pacific Partners, LLC is a related party to the Company as it is owned by a majority shareholder of the Company. As of June 30, 2016 and December 31, 2015 the balance of the line of credit was $25,000. The Company recorded accrued interest of $2,203 and $959 at June 30, 2016 and December 31, 2015, respectively.

 

NOTE 5 – OTHER RELATED PARTY TRANSACTIONS

 

Office space

 

We currently occupy approximately 1,500 square feet of office and garage space at 3500 75th Street West, Rosamond, California. We share this space with Matthew D. Jackson, our Chief Marketing Officer. Presently, we do not incur any expenses for the use of this facility.

 

Line of credit from related party

 

The Company has two line of credit agreements with related parties. DEVCAP Partners, LLC is also the majority shareholder in the Company. General Pacific Partners is owned by the party that owns DEVCAP Partners, LLC. See Note 4 for further disclosure.

 

 

Consulting expense to related party (DEVCAP Partners, LLC)

 

On January 1, 2014, the Company executed a three year consulting agreement with DEVCAP Partners, LLC, (“DEVCAP”), whereby the Company agreed to pay $7,500 a month for consulting services to be provided to the Company such as marketing, architectural development, accounting, finance, corporate structure and tax planning. For the three and six months ended June 30, 2016, the Company recorded consulting fee expense to DEVCAP of $22,500 and $45,000, respectively. For the three and six months ended June 30, 2015, the Company recorded consulting fee expense to DEVCAP of $0 and $34,889, respectively The amount due but unpaid is $97,500 and $52,500 at June 30, 2016 and December 31, 2015, respectively, and is included on the balance sheet as accounts payable- related parties.

 

Ray Gerrity had consulting expenses of $5,000 for the six months ended ended June 30, 2016 compared to $10,000 for the same period ended December 31, 2015. Robert Wilson had consulting expenses of $5,000 for the six months ended June 30, 2016 compared to $5,000 for the same period ended December 31, 2015.

 

Purchase of asset through accounts payable

 

On June 13, 2016, the Company purchased equipment for $5,859. The president of the seller is a family member of the majority shareholder of Company and therefore a related party.

 

Sale of asset to related party

 

On April 16, 2016, the Company returned a 1966 Ford Mustang previously purchased from DEVCAP Partners, LLC in exchange for cancellation of 250,000 shares of stock. The value of the cancelled shares was deemed to be the net book value of the vehicle on the date of transfer, $33,107.

 

Purchase of Asset from Related Party

 

On June 13, 2016 the company purchased a cargo trailer to be used in its primary business from a related party of our majority shareholder for $5,859 paid in cash.

 

NOTE 6 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

At the time of incorporation, the Company was authorized to issue 10,000 shares of common stock and 1,000 shares of preferred stock with a par value of $0.001. The Company amended its articles of incorporation to increase its authorized shares to 100,000,000 shares of common stock and 20,000,000 shares of preferred stock, both $0.001 par value.

 

On October 5, 2015, the Company purchased a 1966 Ford Mustang in exchange for 250,000 shares of common stock. On April 16, 2016, the Company returned the vehicle and cancelled the shares. The value of the cancelled shares was deemed to be the book value of the vehicle at the date of cancellation, $33,107.

 

NOTE 7 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist.

 

 

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

 

Safe Harbor for Forward-Looking Statements

 

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

 

Business of The Company

 

The Teardroppers, Inc., (the “Company”), is a Nevada corporation which was formed in June of 2013.

 

Mobile Billboard Advertising

 

We intend to enter the business of mobile billboard advertising by offering to provide billboard advertising space on custom designed "Teardrop Trailers". Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind small economy sized vehicles and pickup trucks. A Teardrop Trailer, also known as a "Teardrop Camper Trailer", is a streamlined, compact, lightweight travel trailer, which gets its name from its teardrop profile. We have ordered the assembly of one Teardrop Trailer from an independent partnership (the "Partnership"), based upon Teardrop Trailer designs provided by the Partnership and approved by us. This Teardrop Trailer was delivered on January 15, 2015. In addition, we ordered a "Kit" from the Partnership, along with a custom chassis from an independent supplier recommended by the Partnership, which enables us to assemble our first Teardrop Trailer. The Teardrop Trailer assembled from this Kit was assembled by an independent contractor and was delivered to us on December 31, 2014. Due to manufacturing limitations of the Partnership, we determined that it would be faster and more efficient to assemble a completed Teardrop Trailer from a Kit then to wait for delivery of a completed Teardrop Trailer from the Partnership. In the future, we intend to obtain additional Teardrop Trailers by using a Kit and independent contractors to assemble the Kit.

 

The Teardrop Trailer

 

Teardrop Trailers are designed to be towed behind small economy sized vehicles, pickup trucks and any qualified tow vehicles. A Teardrop Trailer, also known as a "Teardrop Camper Trailer", is a streamlined, compact, lightweight travel trailer, which gets its name from its teardrop profile. We have ordered the assembly of one Teardrop Mobile Trailer from the Partnership at a contract price of $5,000. The cost to assemble the Teardrop Trailer from the Kit is a total of $4,995($3,000 for the Kit, $495 for the chassis, and $1,500 for the services of the independent contractor to assemble the Kit on the chassis.)

 

Our Teardrop Trailers will be approximately 4 feet (1.2 m) in width and 10 feet (3.0 m) in length and 5 feet (1.5 m) in height Wheels and tires are outside the body and are covered by fenders. Our Teardrop Trailers will be covered with thin sheets of aluminum. Since Teardrop Trailers are relatively light, most vehicles can tow a Teardrop Trailer and have little effect on the vehicle's fuel consumption. We do not intend to lease our Teardrop Trailers for camping or recreational use. However, our first trailer will be configured in a camping trailer configuration so as to enhance the residual value of the trailer. We believe that some of our future rental customers, who will rent our trailers for longer periods, may use the interior space for their personnel's comfort or for storage.

 

Our trailers will be assembled upon a chassis that has tail lights, wiring, fenders, wheels and a trailer hitch that is compliant with Federal and State regulations. We have no formal relationship with any trailer chassis manufacturer, but we believe that many manufacturers will continue to offer a chassis that we will utilize in our trailers. In the event that chassis become unavailable, our business would be adversely affected as we would then have to adjust our designs to fit chassis available from other sources.

 

 

Marketing

 

We intend to market our advertising and design services through our website www.tdropmobile.com. We have hired an independent web-site developer to develop our website, which was completed on December 14, 2014. In addition, we intend to offer our mobile billboard advertising services through traditional marketing channels, such as trade journals, trade catalogues, yellow pages advertising, and through the personal contacts of our Management. Marketing of our mobile billboard advertising has already commenced as we have made several proposals to motor sports events and advertisers to use our services. We also market our consulting services through personal contacts of our officers and majority shareholder.

 

We have chosen the unique shape and look of a Teardrop Trailer as our advertising platform as we believe its "eye appeal" will be attractive to a target audience's view and retention of the adverting images which will appear on the Teardrop Trailer.

 

We intend to offer advertising space on our trailers. Advertisement will be installed by applying decals, large vinyl sheets as decals or by fastening one large sheet of vinyl to the sides and top of the trailer. In addition, we will offer to provide our tow vehicle and a driver.

 

We believe that the mobile billboard outdoor advertising will offer to advertisers:

 

·

Event Marketing

 

·

New Product Launches

 

·

Retail Store Openings

 

·

Grand Openings

 

·

Tradeshow Advertising

 

·

Political Advertising and Campaigning

 

·

Publicity

 

·

Concerts

 

·

Sporting Events

 

·

Conventions

 

·

Trade Shows

 

·

Outdoor Festivals

 

·

Beach Cities and Events

 

·

Grand Openings

 

·

Holiday Events

 

·

Motion Picture Premiers

 

 

We believe that mobile billboard outdoor advertising offers certain advantages to advertisers, among which include:

 

·

Mobile trailers are flexible providing one with a wide variety of space and cost options, which can be used for anything from short sales promotions to being part of a long-term brand awareness campaign.

 

·

Instead of hoping people see an advertisement, the advertisements are brought to them.

 

·

They are more cost effective than other forms of advertising.

 

·

We can park the trailer in front of a business or a competitor's.

 

·

We can thoroughly saturate a specific area unlike regular billboards, radio, TV or direct mail.

 

·

We can provide specific demographic routes so that there are multiple exposures.

 

·

Mobile billboards create impact because of their movement, size and prominence on the road and can go where other advertising can’t. They merely have to be visible to attract attention.

 

·

We can provide advertisements in the middle of all the activity at a special event like a tournament, fair, tradeshow, sporting event et. al.

 

·

As they are eye-level with consumers, the message is communicated directly, increasing the impact of the product.

 

We will also offer to work closely with our clients to fully understand the client's marketing objectives. We will used our best efforts to identify the highest profile locations in our client's target market in order to provide the most efficient, high exposure, high impact and cost-effective mobile billboard advertising campaign.

 

At every stage of the process, our services will include design, branding and selection of graphics, to achieve maximum results. Audio, illumination, promotional sampling and other sensory elements can be added to further enhance an advertising message.

 

Our rates will be negotiated at time of agreement with our client. Our rates will be based upon the range of services, length of the advertising contract, number of vehicles used, miles traveled, length of campaign, ancillary costs and other variables. Generally, we anticipate our rates to be $995 for the design and application, and removal of graphics to a trailer; $295 per day for the use of the trailer; $175 per day for a tow vehicle and driver, based upon a 6 hour day. There will be a 3 day minimum for each trailer rental.

 

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015 

 

Revenues

 

The Company had $6,010 in revenue during the three months ended June 30, 2016 compared to no revenue for the same period ended June 30, 2015.

 

Operating Expenses

 

For the three months ended June 30, 2016 operating expenses were $56,137 compared to $18,951 for the same period in 2015 for an increase of $37,186. The increase was primarily a result of the increase in general and administrative expenses to $10,903 from $1,950 due to the company’s public company reporting costs, and an increase in related party consulting to $28,000 compared to zero for the same period in 2015.

 

Interest and Financing Costs

 

Interest expense was $12,183 for the three months ended June 30, 2016 compared to $11,219 in the three months ended June 30, 2015. Interest expense increased due to an increase in debt by the company.

 

Net Income (Loss)

 

The Company incurred losses of $62,810 in the three months ended June 30, 2016 compared to $30,170 during the three months ended June 30, 2015 due to the factors discussed above.

 

 

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015 

 

Revenues

 

The Company earned $6,010 in revenue during the six months ended June 30, 2016 and no revenue for the six months ended June 30, 2015.

 

Operating Expenses

 

For the six months ended June 30, 2016 operating expenses were $99,765 compared to $112,026 for the same period in 2015 for a decrease of $12,261.  The decrease was a result of a decrease in professional fees after the filing of the company’s registration statement which decreased to $20,728 from $35,263 for a difference of $14,535.  Consulting and consulting to related parties expenses decreased slightly to $55,500 from $57,889 for a decrease of $2,389.

 

Interest and Financing Costs

 

Interest expense was $24,580 for the six months ended June 30, 2016 compared to $21,636 in the six months ended June 30, 2015. The increase was due to an increase in borrowings made by the company

 

Net Income (Loss)

 

The Company incurred losses of $118,335 in the six months ended June 30, 2016 compared to $133,662 during the six months ended June 30, 2015 due to the factors discussed above. 

 

LIQUIDITY AND CAPITAL RESOURCES

 

The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expenses and has incurred losses since inception and anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

 

The Company had $80,606 in cash at June 30, 2016 with availability on our related party line of credit with General Pacific Partners, LLC of $425,000. We had a working capital deficit of $781,759.

 

Operating activities

 

During the six months ended June 30, 2016, we used $14,318 in cash for operating activities compared to $110,026 during the six months ended June 30, 2015, a decrease of $95,708. The decrease between the two periods was largely due to a $15,327 reduction in losses and less operating activities overall.

 

Investing activities

 

We neither generated nor used cash flows in investing activities during the three months ended June 30, 2016 and the same for the period in 2015.

 

Financing activities

 

During the six months ended June 30, 2016, we generated $48,025 from financing activities compared to $83,000 for the same period ended June 30, 2015, a decrease of $34,975.

 

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

 

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

 

ITEM 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.

 

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

This quarterly report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered independent public accounting firm.

 

Changes in Internal Control Over Financial Reporting

 

No changes in our internal control over financial reporting occurred during the six months ended June  30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

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

 

 

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

 

During the six months ended June 30, 2016, there were no sale of shares of the Company's common stock.

 

 

ITEM 3. Default Upon Senior Securities

 

During the six months ended June 30, 2016, the Company had no senior securities issued and outstanding.

 

 

ITEM 4. Mine Safety Disclosures

 

Not applicable to our Company.

 

 

ITEM 5. Other Information

 

None.

 

 

ITEM 6. Exhibits

 

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

 

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

 

*

Filed herewith.

 

 

SIGNATURES

  

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

 

 

THE TEARDROPPERS, INC.

 

August 12, 2016

 

By: /s/ Raymond Gerrity

Raymond Gerrity

Chief Executive Officer