SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2016

 

OR

 

¨	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               000-55391

 

POWERCOMM HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Delaware	47-3152668
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

 

3429 Ramsgate Terrace

Alexandria, VA 22309

(Address of principal executive offices (zip code)

 

571-259-8773

(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 of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x   No  ¨

 

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  ¨	Accelerated Filer  ¨
Non-accelerated filer  ¨	Smaller reporting company  x
(do not check if a 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  x      No  ¨

 

Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date.

 

Class		Outstanding at
Common Stock, par value $0.0001		20,500,000
Documents incorporated by reference:		None

  

 

UNAUDITED FINANCIAL STATEMENTS
Unaudited Financial Statements		2-4
Notes to Unaudited Financial Statements		5-8

 

 

POWERCOMM HOLDINGS INC.

BALANCE SHEETS

 

		September 30, 2016				December 31, 2015
		(UNAUDITED)
ASSETS
Total assets		$	-			$	-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accrued expenses			11,000				6,500
Total liabilities			11,000				6,500
Stockholders' deficit
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of September 30,2016			-				-
Common stock, $0.0001 par value, 100,000,000 shares authorized and 20,500,000 shares issued and outstanding as of September 30, 2016			2,050				2,050
Discount on Common Stock			(2,050	)			(2,050	)
Additional paid-in capital			1,058				1,058
Accumulated deficit			(12,058	)			(7,558	)
Total stockholders' deficit			(11,000	)			(6,500	)
Total liabilities and stockholders' deficit		$	-			$	-

 

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

 

 

POWERCOMM HOLDINGS INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

														For the period
														from January 12
		For the three				For the three				For the nine				2015 (Inception)
		Months ended				Months ended				Months ended				to
		September 30, 2016				September 30, 2015				September 30, 2016				September 30, 2015
Revenue		$	-			$	-			$	-			$	-
Cost of revenue			-				-				-				-
Gross profit			-				-
Operating expenses			1,500				1,727				4,500				2,439
Loss before income taxes			(1,500	)			(1,727	)			(4,500	)			(2,439	)
Income tax expense			-				-				-				-
Net loss		$	(1,500	)		$	(1,727	)		$	(4,500	)		$	(2,439	)
Loss per share- Basic and diluted		$	-			$	-			$	-			$	-
Weighted average Shares- Basic and Diluted			20,500,000				19,869,565				20,500,000				19,952,191

 

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

 

 

POWERCOMM HOLDINGS INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

						For the period from
		For the nine				January 12, 2015
		months ended				(Inception) to
		September 30, 2016				September 30, 2015
OPERATING ACTIVITIES
Net loss		$	(4,500	)		$	(2,439	)
Non-cash adjustments to reconcile net loss to net cash:
Expenses paid for by stockholder and contributed as capital							939
Changes in Operating Assets and Liabilities:
Accrued expenses			4,500				1,500
Net cash used in operating activities			-				-
Net increase in cash			-				-
Cash, beginning of period			-				-
Cash, end of period		$	-			$	-
Interest paid		$	-			$	-
Income tax paid		$	-			$	-

 

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

 

 

POWERCOMM HOLDINGS INC.

Notes to Unaudited Financial Statements

 

NOTE 1  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

NATURE OF OPERATIONS

 

PowerComm Holdings Inc. (formerly White Grotto Acquisition Corporation), (“PowerComm or the “Company") was incorporated on January 12, 2015 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

 

On September 14, 2015, the Company effected a change in control by the redemption of 19,500,000 shares of then outstanding 20,000,000 shares of common stock. The current officers and directors resigned and David Kwasnik was named the sole officer and director of the company. Pursuant to the change in control, the company changed its name to PowerComnm Holdings, Inc. On September 15, 2015, the Company issued 20,000,000 shares of common stock to David Kwasnik.

 

The Company intends to develop through a business combination with an ongoing company otherwise a company designed to serve as a holding company for certain privately owned power transmission, distribution, telecommunications, fiber optic, cellular communications, excavation, dredging, gas and oil pipeline, road and bridge, wind and solar, alternative energy, bio-fuels, and bio-coal construction companies.

 

The Company has been in the developmental stage since inception.

 

The Company will attempt to locate and negotiate with a business entity for the combination of the target company with the Company. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange.

 

In most instances the target company will wish to structure the business combination to be within the definition of tax-free reorganization under Section 351 or section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The Company has been formed to provide a method for a foreign domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.

 

BASIS OF PRESENTATION

 

The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited financial statements. Such unaudited financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying unaudited financial statements.

 

Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") were omitted pursuant to such rules and regulations. The results for the three months ended September 30, 2016, are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

 

USE OF ESTIMATES

 

The preparation of unaudited financial statements in conformity with 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 periods.

Actual results could differ from those estimates.

 

CASH

 

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of September 30, 2016.

 

CONCENTRATION OF RISK

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of September 30, 2016.

 

 

POWERCOMM HOLDINGS

Notes to Unaudited Financial Statements

 

INCOME TAXES

 

Under ASC 740, "Income Taxes," deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of September 30, 2016 there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

 

LOSS PER COMMON SHARE

 

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock was exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of September 30, 2016, there are no outstanding dilutive securities.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the unaudited financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the unaudited financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

 

Level   1   inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level   2   inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

Level   3   inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.

 

NOTE 2 -   GOING CONCERN

 

The Company has not yet generated any revenue since inception to date and has sustained an operating loss of $4,500 from January 1,2016 to September 30, 2016. The Company had a working capital deficit of $11,000 and an accumulated deficit of $12,058 as of September 30, 2016. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.

 

 

POWERCOMM HOLDINGS INC.

Notes to Unaudited Financial Statements

 

The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability to do so. The unaudited financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.

 

NOTE 3 -   RECENT ACCOUNTING PRONOUNCEMENTS

 

On August 26, 2016, the FASB issued Accounting Standard Update 2016-15, Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force. The Update is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  The amendments in this Update provide guidance on the following eight specific cash flow issues: Issue 1 - Debt prepayment or debt extinguishment costs.  Issue 2 - Settlement of zero-coupon debt instruments. . Issue 3 - Contingent consideration payments made after a business combination.  Issue 4 - Proceeds from the settlement of insurance claims.  Issue 5 - Proceeds from the settlement of corporate-owned life insurance (COLI) policies, including bank-owned life insurance (BOLI) policies.  Issue 6 - Distributions received from equity method investments.  7 - Beneficial interests in securitization transactions. . Issue 8 - Separately identifiable cash flows and application of the predominance principle.  The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is still in progress of evaluating future impact of adopting this standard.

 

On November 20, 2015, FASB issued ASU-2015-17-Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company is still in the process of evaluating future impact of adopting this standard.

 

 

POWERCOMM HOLDINGS INC.

Notes to Unaudited Financial Statements

 

On June 12, 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) No. 2015-10-Technical Corrections and Improvements. The amendments in this Update cover a wide range of Topics in the Codification. The amendments in this Update represent changes to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2014-240-Technical Corrections and Improvements, which has been deleted. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this Update. Management is in the process of assessing the impact of this ASU on the Company's financial statements.

 

On April 30, 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) No. 2015-06 Earnings per Share (Topic 260): Effects on Historical Earnings per units of Master Limited Partnership Dropdown Transaction. Under Topic 260, Earnings per Share, Master Limited partnerships (MPLS) apply the two class method to calculate earnings per unit (EPU) because the general partner, limited partners, and incentive distribution rights holders each participate differently on the distribution of available cash. When a general partner transfers or (“drops down”) net assets to a master limited partnership and that the transaction is accounted for as a transaction between entities under common control, the statement of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as it occurred on the earliest date during which the entities were under common control. The amendments in this update specify that for the purpose of calculating historical EPU under the two-class method, the earning (losses) of a transferred business before the late dropdown transaction should be allocated entirely to the general partner interest, and previously reported EPU of the limited partners would not change as a result of a dropdown transaction. Qualitative disclosure about how the rights to earnings (losses) differ before and after the dropdown transaction occurs also are required. This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-14A Earnings Per Share Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (Topic 260), which has been deleted. Effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments in this Update should be applied retrospectively for all financial statements presented. Management is in the process of assessing the impact of this ASU on the Company's financial statements.

 

NOTE 4   ACCRUED EXPENSE

 

As of September 30, 2016, the Company had an accrued professional expense of $11,000.

 

NOTE 5   STOCKHOLDERS' DEFICIT

 

On January 22, 2015, the Company issued 20,000,000 founders common stock to two directors and officers. On September 14, 2015, the Company redeemed 19,500,000 of then outstanding 20,000,000 shares at a redemption price of $.0001 per share for an aggregate redemption price of $1,950.

 

On September 15, 2015, the Company issued 20,000,000 shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933 at par, to David Kwasnik as a party of the change in control of the Company.

 

The Company is authorized to issue 100,000,000 Shares of common stock and 20,000,000 shares of preferred stock. As of September 30, 2016 20,500,000 shares of common stock and no preferred stock were issued and outstanding.

 

NOTE 6   SUBSEQUENT EVENT

 

Management has evaluated subsequent events through December 9, 2016, the date which the financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2016 have been incorporated into these financial statements.

 

On November 15, 2016, PowerComm Holdings Inc., a Delaware corporation (the “Company”), entered into a stock-for-stock acquisition agreement (the “Acquisition Agreement”) with PowerComm Construction, Inc., a private company organized under the laws of the Commonwealth of Virginia.

 

 

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

PowerComm Holdings Inc. was incorporated on January 12, 2015 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

 

PowerComm Holdings Inc. (“PowerComm” or the “Company”) is a blank check company and qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act which became law in April, 2012.

 

Since inception the Company’s operations to date of the period covered by this report have been limited to issuing shares of common stock to its original shareholders and filing a registration statement on Form 10 on March 2, 2015 with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 as amended to register its class of common Stock and effecting a change of control.

 

On September 14, 2015, the following events occurred in the change of control:

 

The Company redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $ 1,950.

 

James Cassidy and James McKillop, the then current officers and directors resigned.

 

David Kwasnik was named the sole director and officer of the Company.

 

On September 15, 2015, the Company issued 20,000,000 shares of its common stock to David Kwasnik.

 

The Company filed a Form 8-K noticing the change of control.

 

 

The Company has no operations nor does it currently engage in any business activities generating revenues. The Company intends to develop through a business combination with an ongoing company otherwise a company designed to serve as a holding company for certain privately owned power transmission, distribution, telecommunications, fiber optic, cellular communications, excavation, dredging, gas and oil pipeline, road and bridge, wind and solar, alternative energy, bio-fuels, and bio-coal construction companies.

 

A combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.

 

In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, licensing agreement or other arrangement with another corporation or entity. On the consummation of a transaction, it is likely that the present management and shareholders of the Company will no longer be in control of the Company. In addition, it is likely that the officer and director of the Company will, as part of the terms of the business combination, resign and be replaced by one or more new officers and directors.

 

As of September 30, 2016 the Company had not generated revenues and had no income or cash flows from operations since inception. For the nine months ended September 30, 2016 the Company had sustained a net loss of $4,500, and had an accumulated deficit of $12,058 as of September 30, 2016.

 

At present, the Company has no operations and the continuation of Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of that target company with PowerComm Holdings Inc.

 

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk.

 

Information not required to be filed by Smaller reporting companies.

 

ITEM 4.

Controls and Procedures.

 

Disclosures and Procedures

 

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company's principal executive officer (who is also the principal financial officer).

 

 

Based upon that evaluation, he believes that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports 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 an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Quarterly Report.

 

Changes in Internal Controls

 

There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 

PART II — OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the past three years, the Company has issued the following shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933:

 

On January 22, 2015, an aggregate of 20,000,000 shares to its then two officers and directors.

 

On the September 14, 2015, 19,500,000 of the outstanding 20,000,000 were redeemed.

 

On September 15, 2015, 20,000,000 shares were issued to David Kwasnik, the then new officer and director of the Company.

 

The total outstanding shares of common stock as of the date of this report is 20,500,000.

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

Not applicable.

 

ITEM 5.

OTHER INFORMATION

 

(a)

Not applicable.

(b)

Item 407(c)(3) of Regulation S-K:

 

During the quarter covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

 

ITEM 6.

EXHIBITS

 

(a)

Exhibits

 

31       Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32       Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

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.

 

		POWERCOMM HOLDINGS INC.
	By:	/s/ David Kwasnik
		President, Chief Financial Officer
Dated:   February 14, 2017