U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 2008
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-53305
STONECREST ONE, INC.
(Exact name of registrant as specified in its charter)
| Nevada | | 26-2168614 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
16455 Honeycomb Circle, Charlotte, NC 28277
(Address of principal executive offices)
(704) 492-3986
(Registrant’s telephone number
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o 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 o | Accelerated filer o |
| | |
Non-accelerated filer o | 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). xYes oNo
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. o Yes o No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At February 11, 2009 there were 1,000,000 shares of common stock outstanding.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
| | Page |
| | |
| Balance Sheet – December 31, 2008 (Unaudited) | F-1 |
| | |
Statement of Operations- Three Months Ended December 31, 2008 (Unaudited) and cumulative since inception (March 5, 2008) | F-2 |
| | |
| Statement of Stockholders Deficit | F-3 |
| | |
Statement of Cash Flows – Three Months Ended December 31, 2008 (Unaudited) and cumulative since inception (March 5, 2008) | F-4 |
| | |
| Notes to Financial Statements (Unaudited) | F-5 |
| Stonecrest One, Inc. |
| Balance Sheet-Unaudited |
| As of December 31, 2008 |
| ASSETS | | | |
| | | | |
| CURRENT ASSETS: | | | |
| Cash | | $ | 100 | |
| TOTAL CURRENT ASSETS | | | 100 | |
| | | | | |
| TOTAL ASSETS | | $ | 100 | |
| | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | | |
| STOCKHOLDERS' EQUITY | | | | |
| Preferred stock ($0.0001 par value; 10,000,000 shares authorized: | | | | |
| none issued and outstanding at December 31, 2008) | | | - | |
| Common stock ($0.0001 par value; 100,000,000 shares authorized; | | | | |
| 1,000,000 shares issued and outstanding at December 31, 2008) | | | 100 | |
| TOTAL STOCKHOLDERS' EQUITY | | | 100 | |
| | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 100 | |
| Stonecrest One, Inc. |
| Statement of Operations-Unaudited |
| For the Period from March 5, 2008 (Inception) Through December 31, 2008 |
| REVENUES: | | | |
| Income | | $ | - | |
| Total Revenue | | | - | |
| | | | | |
| EXPENSES: | | | | |
| Selling, General, and Administrative | | | - | |
| Total Expenses | | | - | |
| | | | | |
| Loss from operations | | $ | - | |
| | | | | |
| Provision for income taxes | | | - | |
| | | | | |
| NET LOSS | | $ | - | |
| | | | | |
| Basic and fully diluted net loss per common share: | | $ | - | |
| | | | | |
| Weighted average common shares outstanding | | | 1,000,000 | |
| Stonecrest One, Inc. |
| Statement of Stockholders' Equity-Unaudited |
| For the Period March 5, 2008 (Inception) Through December 31, 2008 |
| | | | | | | | | | | | Additional | | | | |
| | | Common Stock | | | Preferred stock | | | Paid-in | | | Retained | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Earnings | |
| | | | | | | | | | | | | | | | | | | |
| Balances, March 5, 2008 (Inception) | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income/(loss) for the period | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Issuance of common shares | | | 1,000,000 | | | | 100 | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, December 31, 2008 | | | 1,000,000 | | | $ | 100 | | | | - | | | $ | - | | | $ | - | | | $ | - | |
| Stonecrest One, Inc. |
| Statement of Cash Flows-Unaudited |
| For the Period From March 5, 2008 (Inception) Through December 31, 2008 |
| | | Cumulative | |
| | | Totals | |
| | | Since | |
| | | Inception | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
| Net loss | | $ | - | |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | - | |
| | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
| Capital Stock purchase | | | 100 | |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | 100 | |
| | | | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | 100 | |
| | | | | |
| CASH AND CASH EQUIVALENTS, | | | | |
| BEGINNING BALANCE | | | - | |
| | | | | |
| ENDING BALANCE | | $ | 100 | |
| | | | | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | |
| CASH PAID DURING THE PERIOD FOR: | | | | |
| Interest | | $ | - | |
| Taxes | | $ | - | |
STONECREST ONE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2008
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity—The Stonecrest One, Inc., Inc. (the "Company”) was organized under the laws of the State of Nevada on March 5, 2008 as a corporation. The Company’s objective is to acquire or merge with a target business or company in a business combination.
Basis of Presentation—The financial statements included herein were prepared under the accrual basis of accounting.
Cash and Cash Equivalents—For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
Management’s Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
Revenue Recognition—The Company’s policy is to recognize income when it is earned.
Comprehensive Income (Loss)—The Company adopted Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Deferred Taxes—Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS No. 109), “Accounting for Income Taxes.” A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, some portion or all of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Fair Value of Financial Instruments—The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.
Stock-Based Compensation—The Company accounts for stock-based compensation using the fair value method of Financial Accounting Standard No. 123R. This Statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Accounts Receivable—Accounts deemed uncollectible are written off in the year they become uncollectible. As of December 31, 2008 the balance in Accounts Receivable was $0.
Impairment of Long-Lived Assets—The Company evaluates the recoverability of its fixed assets and other assets in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144’). SFAS 144 requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the period ended December 31, 2008.
Recent Accounting Pronouncements—In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. Effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. No entity is permitted to apply the Statement retrospectively to fiscal years preceding the effective date unless the entity chooses early adoption. The choice to adopt early should be made after issuance of the Statement but within 120 days of the beginning of the fiscal year of adoption, provided the entity has not yet issued financial statements, including required notes to those financial statements, for any interim period of the fiscal year of adoption.
Early adoption of this standard is not expected to have a material effect on the Company’s results of operations or its financial position, but the Company is evaluating the Statement to determine what impact, if any, it will have on the Company.
In December 2007, the FASB issued SFAS 141(revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting for business combinations in a number of areas including the treatment of contingent consideration, contingencies, acquisition costs, IPR&D and restructuring costs. In addition, under SFAS 141R, changes in deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination after the measurement period will impact income tax expense. SFAS 141R is effective for fiscal years beginning after December 15, 2008. The Company has not yet determined the impact, if any, of SFAS 141R on its consolidated financial statements.
In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests (NCI) and classified as a component of equity. This new consolidation method will significantly change the account with minority interest holders. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The Company has not yet determined the impact, if any, of SFAS 160 on its consolidated financial statements.
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Recent Accounting Pronouncements (cont’d)
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”. This Statement requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of this standard is not expected to have a material effect on the Company’s results of operations or financial position.
NOTE B—SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information from inception through December 31, 2008 are summarized as follows:
Cash paid during the year ended December 31, 2008 for interest and income taxes:
NOTE C—SEGMENT REPORTING
In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information.” This statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services, geographic areas and major customers. The Company determined that it did not have any separately reportable operating segments as of December 31, 2008.
NOTE D—GOING CONCERN
As shown in the accompanying audited financial statements, the Company has yet to generate any operating income or an internal cash flow. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in regard to this matter are to raise equity capital and seek strategic relationships and alliances in order to increase sales in an effort to generate positive cash flow. Additionally, the Company must continue to rely upon equity infusions from investors in order to improve liquidity and sustain operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE E—CAPITAL STOCK
NOTE F—CAPITAL STOCK
The Company is authorized to issue 100,000,000 common shares at $.0001 par value per share.
During the period from March 5, 2008 (Inception) through December 31,, 2008, the Company issued 1,000,000 to the following:
| Name | | Number of shares | | Cash or Services | | Price per share | | | Total value | |
| Ashland Global Corp. | | | 375,000 | | founder shares | | $ | 0.0001 | | | $ | 37.50 | |
| C3 Strategic Capital, LLC | | | 250,000 | | founder shares | | $ | 0.0001 | | | $ | 25.00 | |
| Enverdia, LLC | | | 75,000 | | founder shares | | $ | 0.0001 | | | $ | 7.50 | |
| Sagacity Investments, LLC | | | 300,000 | | founder shares | | $ | 0.0001 | | | $ | 30.00 | |
| | | | 1,000,000 | | | | | | | | $ | 100 | |
The Company is authorized to issue 10,000,000 preferred shares at $.0001 par value per share. During the period from March 5, 2008 through December 31, 2008, the Company issued no preferred shares.
NOTE H – DEVELOPMENT STAGE COMPANY
The Company is in the development stage as of December 31, 2008 and to date has had no significant operations. Recovery of the Company’s assets is dependent on future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately, to attaining profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure.
Item 2. Management’s Discussion and Analysis or Plan of Operation.
Overview.
Stonecrest One, Inc. (“we”, “us” or the “Company”) was organized in the State of Nevada on March 5, 2008 to serve as a vehicle to acquire, through a reverse acquisition, merger, capital stock exchange, asset acquisition or other similar business combination (“Business Combination”), an operating or development stage business (a "Target Business") which desires to utilize our status as a reporting company under the Securities Exchange Act of 1934. We have neither engaged in any operations nor generated any revenues since our inception.
We are currently in the process of identifying and evaluating targets for a Business Combination. We are not presently engaged in, and will not engage in, any substantive commercial business operations unless and until we consummate a Business Combination.
Our management has broad discretion in identifying and selecting a prospective Target Business. We have not established any specific attributes or criteria (financial or otherwise) for prospective Target Businesses. Our sole officer and director has never served as an officer or director of a development stage public company that has successfully completed a Business Combination of the type contemplated by our company. Accordingly, he may not successfully identify a Target Business or conclude a Business Combination. To the extent we affect a Business Combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. If we consummate a Business Combination with a foreign entity, we will be subject to all of the risks attendant to foreign operations. Although our management will endeavor to evaluate the risks inherent in a particular Target Business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
We expect that in connection with any Business Combination, we will issue a significant number of shares of our common stock (equal to at least 80% of the total number of shares outstanding after giving effect to the transaction, in order to ensure that Business Combination qualifies as a “tax free” transaction under federal tax laws). The issuance of additional shares of our capital stock:
| · | will significantly reduce the equity interest of our stockholders; and |
| · | will cause a change and in likely result in the resignation or removal of our present officer and director. |
Our management anticipates that the Company likely will be able to affect only one Business Combination, due primarily to our financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a Target Business in order to achieve a tax free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against potential gains from another.
Liquidity and Capital Resources.
During the next twelve months we anticipate incurring costs and expenses related to filing of Securities Exchange Act reports and investigating and consummating a Business Combination. Management expects to fund additional costs and expenses which may be incurred in connection with due diligence activities and a Business Combination through loans or further investment in the Company, as and when necessary. We cannot provide investors with any assurance that we will have sufficient capital resources to identify a suitable Target Business, to conduct effective due diligence as to any Target Business or to consummate a Business Combination.
Results of Operations.
Since our inception, we have neither engaged in any operations nor generated any revenue. We do not expect to engage in any activities, other than seeking to identify a Target Business, unless and until such time as we enter into a Business Combination with a Target Business, if ever. We cannot provide investors with any assessment as to the nature of a Target Business’s operations or speculate as to the status of its products or operations, whether at the time of the Business Combination it will be generating revenues or its future prospects.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4T. Controls and Procedures.
As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer, who is our principal executive officer and our principal financial officer. Based on this evaluation, management has concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Disclosure controls and procedures are our controls and other procedures 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 SEC’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 under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not a party to any legal proceeding or litigation.
Item 1A. Risk Factors.
Smaller reporting companies are not required to provide the information required by this item.
Item 2. Changes in Securities and Small Business Issuer Purchase of Equity Securities.
(a) During the three months ended December 31 2008, the Company did not issue any securities.
(b) None.
(c) None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
| Exhibit | Description |
| | |
| 31.1 | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008. |
| | |
| 32.1 | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused the Report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | STONECREST ONE, INC. |
| | | | |
Date: February 11, 2009 | | By: | /s/ George C. Critz, III |
| | | | George C. Critz, III, President |
| | | | (Principal Executive Officer and |
| | | | Principal Financial Officer) |
