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: September 30, 2009
¨ 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.) |
605 Bonita Way, Prescott, Arizona 86301
(Address of principal executive offices)
928-642-3473
(Registrant’s telephone number
16455 Honeycomb Circle, Charlotte, NC 28277 (704) 492-3986
(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 ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
¨ Yes ¨ No
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). xYes ¨No
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. ¨ Yes ¨ 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 November 13, 2009 there were 1,000,000 shares of common stock outstanding.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
| | Page |
| Balance Sheet as of September 30, 2009 (Unaudited) | F-1 |
| Statement of Operations- Three and nine months ended September 30, 2009 and 2008 (Unaudited) and cumulative since inception (March 5, 2008) | F-2 |
| Statement of Stockholders Deficit | F-3 |
| Statement of Cash Flows – Nine months ended September 30, 2009 (Unaudited) and cumulative since inception (March 5, 2008) | F-4 |
| Notes to Financial Statements (Unaudited) | F-5 |
|
| (A Development Stage Company) |
| Balance Sheet |
| | | As of | |
| | | September 30, 2009 | | | June 30, 2009 | |
| | | (unaudited) | | | (audited) | |
| | | | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash | | $ | 100 | | | $ | 100 | |
| TOTAL CURRENT ASSETS | | | 100 | | | | 100 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 100 | | | $ | 100 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Note Payable to Related Party | | | 8,295 | | | | 8,295 | |
| Accrued Expenses | | | 3,370 | | | | 204 | |
| TOTAL CURRENT LIABILITIES | | | 11,665 | | | | 8,499 | |
| | | | | | | | | |
| TOTAL LIABILITIES | | | 11,665 | | | | 8,499 | |
| | | | | | | | | |
| STOCKHOLDERS' DEFICIT | | | | | | | | |
| Preferred stock ($0.0001 par value; 10,000,000 shares authorized: | | | | | | | | |
| none issued and outstanding) | | | - | | | | - | |
| Common stock ($0.0001 par value; 100,000,000 shares authorized; | | | | | | | | |
| 1,000,000 shares issued and outstanding) | | | 100 | | | | 100 | |
| Accumulated Deficit | | | (11,665 | ) | | | (8,499 | ) |
| TOTAL STOCKHOLDERS' DEFICIT | | | (11,565 | ) | | | (8,399 | ) |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 100 | | | $ | 100 | |
The accompanying notes are an integral part of these financial statements.
|
| (A Development Stage Company) |
| Statement of Operations (unaudited) |
| | | | | | | | | Cumulative | |
| | | For the three months ended | | | Totals | |
| | | September 30, | | | September 30, | | | Since Inception | |
| | | 2009 | | | 2008 | | | March 5, 2008 | |
| REVENUES | | | | | | | | | |
| Income | | $ | - | | | $ | - | | | $ | - | |
| Total Revenues | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | |
| Selling, general and administrative | | | - | | | | 664 | | | | 2,195 | |
| Professional Fees | | | 3,000 | | | | - | | | | 9,100 | |
| TOTAL EXPENSES | | | 3,000 | | | | 664 | | | | 11,295 | |
| | | | | | | | | | | | | |
| Net Income/(Loss) from Operations | | | (3,000 | ) | | | (664 | ) | | | (11,295 | ) |
| | | | | | | | | | | | | |
| OTHER (EXPENSE)/INCOME | | | | | | | | | | | | |
| Interest Expense | | | (166 | ) | | | - | | | | (370 | ) |
| | | | | | | | | | | | | |
| Net Income/(Loss) | | $ | (3,166 | ) | | $ | (664 | ) | | $ | (11,665 | ) |
| | | | | | | | | | | | | |
| Net income/(loss) per share—basic and fully diluted | | | | | | | | | | | | |
| Net income/(loss) per share | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) |
| Weighted average shares outstanding—basic and fully diluted | | | 1,000,000 | | | | 1,000,000 | | | | 1,000,000 | |
The accompanying notes are an integral part of these financial statements.
|
| (A Development Stage Company) |
| Statement of Stockholders' Deficit (unaudited) |
| | | | | | | | | | | | Additional | | | | |
| | | Common Stock | | | Preferred stock | | | Paid-in | | | Deficit | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Accumulated | |
| | | | | | | | | | | | | | | | | | | |
| Balances, June 30, 2008 | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income/(loss) for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | (8,499 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Issuance of common shares | | | 1,000,000 | | | | 100 | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, June 30, 2009 | | | 1,000,000 | | | $ | 100 | | | | - | | | $ | - | | | $ | - | | | $ | (8,499 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income/(loss) for the quarter | | | - | | | | - | | | | - | | | | - | | | | - | | | | (3,166 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, September 30, 2009 | | | 1,000,000 | | | $ | 100 | | | | - | | | $ | - | | | $ | - | | | $ | (11,665 | ) |
The accompanying notes are an integral part of these financial statements.
|
| (A Development Stage Company) |
| Statement of Cash Flows (unaudited) |
| | | | | | | | | Cumulative | |
| | | | | | | | | Totals | |
| | | For the three months ended | | | Since Inception | |
| | | September 30, 2009 | | | September 30, 2008 | | | March 5, 2008 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| Net loss | | $ | (3,166 | ) | | $ | (664 | ) | | $ | (11,665 | ) |
| Adjustments to reconcile net (loss) to net cash used in operations: | | | | | | | | | | | | |
| Changes in Assets and Liabilities: | | | | | | | | | | | | |
| Increase/(decrease) in Accrued Expenses | | | 3,166 | | | | - | | | | 3,370 | |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | - | | | | (664 | ) | | | (8,295 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Note Payable to Related Party | | | - | | | | 664 | | | | 8,295 | |
| Capital Stock purchase | | | - | | | | 100 | | | | 100 | |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | - | | | | 764 | | | | 8,395 | |
| | | | | | | | | | | | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | - | | | | 100 | | | | 100 | |
| | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS, | | | | | | | | | | | | |
| BEGINNING OF THE PERIOD | | | 100 | | | | - | | | | - | |
| | | | | | | | | | | | | |
| END OF THE PERIOD | | $ | 100 | | | $ | 100 | | | $ | 100 | |
| | | | | | | | | | | | | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | | | | |
| CASH PAID DURING THE PERIOD FOR: | | | | | | | | | | | | |
| Interest | | $ | - | | | $ | - | | | $ | - | |
| Taxes | | $ | - | | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity- Stonecrest One, Inc. (the "Company”) was organized under the laws of the State of Nevada on March 5, 2008 as a corporation with a year end of June 30. 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 revenue 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.
Net Income per Common Share- Statement of Financial Accounting Standards (SFAS) No. 128 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as option, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Accordingly, this presentation has been adopted for the period presented. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.
Deferred Taxes- Income taxes are provided in accordance with Statement of Financial Accounting Standards (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.
Accounts Receivable- Accounts deemed uncollectible are written off in the year they become uncollectible. As of September 30, 2009, the balance in Accounts Receivable was $0.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. 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. If so, 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 September 30, 2009.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method of Statement of Financial Accounting Standards (SFAS) 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.
Fair Value for Financial Assets and Financial Liabilities- The Company has adopted Statement of Financial Accounting Standards (SFAS) 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 reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This 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. No such assets or liabilities were recognized during the period ending September 30, 2009.
Recent Accounting Pronouncements- In December 2007, the Financial Accounting Standards Board (the “FASB”) Accounting Codification Statement (“ASC”) 805-10 (formerly SFAS 141R), “Business Combinations” (“ASC 805-10”) was issued. ASC 805-10 replaces prior guidance on the subject and requires the acquirer of a business to recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at fair value. Additionally, it also requires transaction costs related to the business combination to be expensed as incurred. ASC 805-10 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The effective date, as well as our adoption date, for the pronouncement was January 1, 2009. The adoption did not have a material impact on our financial statements.
In April 2008 the FASB issued ASC 350-30 (formerly FSP No. 142-3), Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350-10 (formerly SFAS 142). This pronouncement requires enhanced disclosures concerning a company’s treatment of costs incurred to renew or extend the term of a recognized intangible asset. It is effective for financial statements issued for fiscal years beginning after December 15, 2008. We determined that the standard will not have a material impact on our financial statements.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (continued)
In May 2009, the FASB issued ASC 855-10 (formerly SFAS No. 165), “Subsequent Events,” which establishes general standards for accounting for accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The pronouncement requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, whether that date represents the date the financial statements were issued or were available to be issued. It is effective with interim and annual financial periods ending after June 15, 2009. We adopted ASC 855-10 at the beginning of our 2009 third quarter. The adoption did not have a significant impact on the subsequent events that we report, either through recognition or disclosure, in our financial statement
In June 2009, the FASB issued ASC 105-10 (formerly SFAS 168), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”. ASC 105-10 will become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernment entities. It also modifies the GAAP hierarchy to include only two levels of GAAP; authoritative and nonauthoritative. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Therefore, the Company adopted ASC 105-10 for the reporting in our 2009 third quarter. The adoption did not have a significant impact on the reporting of our financial position, results of operations or cash flows.
In April 2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments ". The objective of an other-than-temporary impairment analysis under existing U.S. generally accepted accounting principles (GAAP) is to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. An investment is impaired if the fair value of the investment is less than its amortized cost basis. FSP FAS No. 115-2 and FAS No. 124-2 is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted. The implementation of FSP FAS No. 115-2 and FAS No. 124-2 did not have a material impact on the Company’s financial position and results of operations.
In April 2009, the FASB issued FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments". This FSP amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. FSP FAS No. 107-1 is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The implementation of FSP FAS No. 107-1 did not have a material impact on the Company’s financial position and results of operations
In April 2009, the FASB issued FASB Staff Position “FSP” No. SFAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments”. This FSP amends SFAS No. 107 to require disclosures about fair values of financial instruments for interim reporting periods as well as in annual financial statements. The FSP also amends Accounting Principles Board Opinions “APB Opinion” No. 28 to require those disclosures in summarized financial information at interim reporting periods. This FSP becomes effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this FSP is not expected to have a material impact on our financial statements.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (continued)
In April 2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly". This FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS No. 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. The implementation of FSP FAS No. 157-4 did not have a material on the Company’s financial position and results of operations.
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”.(“SFAS No. 165”) This Statement establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date and is effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS No. 165 is not expected to have a material impact on the Company’s financial statements.
In June 2009, the Financial Accounting Standards Board issued Statement “FASB” issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 168”). SFAS No. 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. This statement will have an impact on the Company’s financial statements since all future references to authoritative accounting literature will be references in accordance with SFAS No. 168.
In June 2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No. 09-1, “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing”. This Issue is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. Share lending arrangements that have been terminated as a result of counterparty default prior to the effective date of this Issue but for which the entity has not reached a final settlement as of the effective date are within the scope of this Issue. This Issue requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. This Issue is effective for arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. Early adoption is not permitted. The Company is currently assessing the impact of FSP EITF 09-1 on its financial position and results of operations.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE B-SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the period ended September 30, 2009 and 2008 is summarized as follows:
Cash paid during the period ended September 30, 2009 and 2008 for interest and income taxes:
| | | 2009 | | | 2008 | |
| Interest | | $ | - | | | $ | - | |
| Taxes | | $ | - | | | $ | - | |
NOTE C-SEGMENT REPORTING
In June, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 131,”Disclosures About Segments of an Enterprises 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 September 30, 2009.
NOTE D-INCOME TAXES
Due to the operating loss and the inability to recognize an income tax benefit there is no provision for current or deferred federal or state income taxes for year ended June 30, 2009
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.
The Company’s total deferred tax asset, calculated using federal and state effective tax rates, as of June 30, 2009 is as follows:
| Total Deferred Tax Asset | | $ | 2,890 | |
| Valuation Allowance | | | (2,890 | ) |
| Net Deferred Tax Asset | | | - | |
The reconciliation of income taxes computed at the federal statutory income tax rate to total income taxes for the period from inception through June 30, 2009 and 2008 is as follows:
| | | 2009 | | | 2008 | |
| Income tax computed at the federal statutory rate | | | 34 | % | | | 34 | % |
| State income tax, net of federal tax benefit | | | 0 | % | | | 0 | % |
| Total | | | 34 | % | | | 34 | % |
| Valuation allowance | | | -34 | % | | | -34 | % |
| Total deferred tax asset | | | 0 | % | | | 0 | % |
Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased (decreased) by approximately $2,890 and $0 for the years ending June 30, 2009 and 2008, respectively.
As of June 30, 2008, the Company had a federal and state net operating loss carry forward in the amount of approximately $ 8,499 which expires in the year ending June 30, 2029.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE E-GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated during the development stage of $11,665, used cash from operations of $8,295 since its inception, and has a negative working capital of $11,565 at September 30, 2009.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s ability to continue as a going concern is also dependent on its ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however there is no assurance of additional funding being available. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.
NOTE F-COMMITMENTS
As of September 30, 2008, the Company had no commitments.
NOTE G-CAPITAL STOCK
The Company is authorized to issue 100,000,000 common shares at $0.0001 par value per share.
During the period ended September 30, 2009, the company issued no stock.
As of September 30, 2009, the company had the following outstanding in common shares of stock:
| 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 $0.0001 per share.
During the period ended September 30, 2009, the company had no preferred share outstanding.
| STONECREST ONE, INC. |
| NOTES TO THE UNAUDITED FINANCIAL STATEMENTS |
| AS OF SEPTEMBER 30, 2009 |
NOTE H-DEVELOPMENT STAGE COMPANY
The Company is in the development stage as of September 30, 2009 and to date has had no significant operations. Recovery of the Company 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.
NOTE I—NOTE PAYABLE TO A RELATED PARTY
The Company has signed a promissory note with a related party. The total amount of the loan is $8,295 and it is payable on demand with an annual interest rate of 8%. Accrued interest not paid as of September 30, 2009 is $370.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview.
Stonecrest One, Inc. (“we”, “us” or the “Company”) was incorporated in the State of Nevada on March 5, 2008. We are a developmental stage company and have not generated any revenues to date. We were organized 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 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 with respect to 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. Our officer and director currently serves as the secretary and owns shares of common stock in another shell company that has a class of stock registered under the Exchange Act which has the same business purpose as us. Our officer's/director's affiliation with two shell companies raises the possibility of conflicts of interest, in that both companies may have a right to take advantage of the same business opportunity. Neither our Company nor the other shell company with which our management is affiliated has adopted any policy with respect to resolving any potential conflict of interest and it is possible that any conflict or interest that arises between the two companies may not be decided in our favor.
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 the 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 |
| | · | cause a change and in likely result in the resignation or removal of our present officer and director. |
Our management anticipates that our Company likely will 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.
At September 30, 2009, we had a de minimus amount of cash on hand of. We do not expect that these funds will be sufficient to cover our operating costs and expenses. During the next twelve months we anticipate that we will incur costs and expenses in connection with the preparation and filing of reports under the Securities Exchange Act and the identification and evaluation of targets for 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.
Since our inception, we have neither engaged in any operations nor generated any revenue. We reported a net loss for the period ended September 30, 2009 of $3,166 and a net loss since inception of $11,665. The Company has a deficit accumulated during the development stage of $11,665, used cash from operations of $8,295 since its inception, and has a negative working capital of $11,565 at September 30, 2009. 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. As a result of our negative working capital, our losses since inception, and failure to generate revenues from operations, our financial statements include a note in which our auditor has expressed doubt about our ability to continue as a "going concern."
Results of Operations.
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.
Evaluation of Disclosure Controls and Procedures
As of September 30, 2009, the Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer, who is the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such evaluation, the Company’s Chief Executive Officer has concluded that the Company's disclosure controls and procedures were effective.
Changes in Internal Controls
There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three months ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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. Unregistered Sales of Equity Securities and Use of Proceeds.
(a) During the three months ended September 30, 2009, the Company did not issue any securities.
(b) Not applicable.
(c) During the three months ended September 30, 2009, neither the issuer nor any "affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares or other units of any class of the issuer's equity securities.
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 September 30, 2009. |
| | |
| 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. |
* Pursuant to Commission Release No. 33-8238, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act of 1934, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
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. |
| November 13, 2009 | By: | /s/ George C. Critz, III |
| | Name: | George C. Critz, III |
| | Title: | President, Principal Executive Officer and Principal Financial Officer |
