SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
[ ] 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 000-54825
ESSENTIAL TELECOMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
BEACHGATE ACQUISITION CORPORATION
(former name of Registrant)
Delaware 46-1856006
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
705 Commerce Street, Southlake, Texas 76092
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.0001 par value per share
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act
[ ] Yes [ X ] No
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
[ ] Yes [ X ] No
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 Website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (Section 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the reistrant was required to submit
and post such files).
[ X ] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.
[ X ] 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", "non-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 smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
[ X ] Yes [ ] No
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter.
$ 0
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date.
Class Outstanding at
April 1, 2013
Common Stock, par value $0.0001 1,500,000
Documents incorporated by reference: None
PART I
Item 1. Business
Subsequent Event
On March 25, 2013, subsequent to the date of this Report, the
Registrant effected a change in control by the following transactions:
The Registrant redeemed an aggregate of 19,500,000 of the then
20,000,000 shares of outstanding stock at a redemption price
of $.0001 per share for an aggregate redemption price of $1,950.
James Cassidy and James McKillop each resigned as the Registrant's
president, secretary and director and vice president and director,
respecdtively.
The following individuals were named as the directors of the Registrant:
Louis A. White (chairman)
David F. Martin
Bassam Abdallah
David F. Martin and Bassam Abdallah were appointed Chief
Executive Officer Chief Operating Officer, respectively.
On March 26, 2013 the Company issued 1,000,000 shares of its
common stock to Louis A. White.
The information herewith has been updated to reflect this
change in control but the financial statements are prepared through
the date December 31, 2012.
Business
Essential Telecommunications, Inc. (formerly Beachgate Acquisition
Corporation) ("Essenetial" or the "Company") was incorporated on July
23, 2012 under the laws of the State of Delaware to engage in
any lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions. The Company has been in the developmental stage
since inception. In addition to a change in control of its management and
shareholders, the Company's operations to date have been limited to issuing
shares and filing a registration statement on Form 10 pursuant to the
Securities Exchange Act of 1934. The Company was formed to provide a method
for a foreign or domestic private company to become a reporting company
with a class of securities registered under the Securities Exchange Act
of 1934.
On October 10, 2012, the Company registered its common stock on a
Form 10 registration statement filed pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act") and Rule 12(g) thereof which became
automatically effective 60 days thereafter.
The Company files with the Securities and Exchange Commission periodic
and current reports under Rule 13(a) of the Exchange Act, including
quarterly reports on Form 10-Q and annual reports Form 10-K.
The Company has no employees.
The Company has entered into an agreement with Tiber Creek
Corporation of which the former president of the Company is the president
and controlling shareholder. Tiber Creek Corporation assists companies to
become public reporting companies and for the preparation and filing of a
registration statement pursuant to the Securities Act of 1933, and the
introduction to brokers and market makers.
CURRENT ACTIVITIES
The Company anticipates that it will develop operations as
an wireless ETC telecommunication company. An ETC (eligible
telecommunications carrier) is a government assisted wireless
telecommunications provider offering free wireless phones and
services for low-income subscribers through a federal mandated
low-income assistance program (Lifeline).
The Company May develop its operations by marketing and internal
growth and/or by effecting a business combination with an operating
or other company in the field. The Company anticipates that if it enters
such a business combination it would likely take the form of a merger.
It is anticipated that such private company will bring with it to
such merger key operating business activities and a business plan. As of
the date of this Report, no agreements have been executed to effect any
business combination.
If and when the Company chooses to enter into a business combination,
it will likely file a registration statement after such business combination
is effected.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. The Company may 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.
As of December 31, 2012, the Company had not generated revenues and had
no income or cash flows from operations since inception. At December 31,
2012, the Company had sustained a net loss of $1,357 and had an
accumulated deficit of $1,357.
The Company's independent auditors have issued a report raising
substantial doubt about the Company's ability to continue as a going
concern. At present, the Company has no operations and the continuation
of the 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 a business combination that would provide a basis
of possible operations.
Tiber Creek Corporation paid, without expectation of repayment, all
expenses incurred by the Company until the change in control at which time
new management of the Company undertook payment of such expenses. Because
of the absence of any on-going operations, these expenses are anticipated
to be relatively low.
There is no assurance that the Company will ever be profitable.
Item 2. Properties
The Company has no properties and at this time has no agreements
to acquire any properties. The Company currently uses the offices of
its president at no cost to the Company.
Item 3. Legal Proceedings
There is no litigation pending or threatened by or against the
Company.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
There is currently no public market for the Company's securities.
The Company may wish to cause the Company's common stock to trade
in one or more United States securities markets. At such time as it
qualifies, the Company may choose to apply for quotation of its
securities on the OTC Bulletin Board.
The OTC Bulletin Board is a dealer-driven quotation service.
Unlike the Nasdaq Stock Market, companies cannot directly apply to be
quoted on the OTC Bulletin Board, only market makers can initiate
quotes, and quoted companies do not have to meet any quantitative
financial requirements. Any equity security of a reporting company not
listed on the Nasdaq Stock Market or on a national securities exchange
is eligible.
Since inception, the Company has sold securities which
were not registered as follows:
NUMBER OF
DATE NAME SHARES CONSIDERATION
July 30, 2012 Tiber Creek 10,000,000 $1,000
Corporation (1) (9,750,000 redeemed 3/25/2013)
July 30, 2012 MB Americus LLC (2) 10,000,000 $1,000
(9,750,000 redeemed 3/25/2013)
March 26, 2013 Louis A. White 1,000,000 $100
(1) James Cassidy, was the president and a director of the Company,
is the sole shareholder and director of Tiber Creek Corporation,
a Delaware corporation, and Mr. Cassidy may be deemed to be the
beneficial owner of the shares of stock owned by Tiber Creek Corporation.
(2) James McKillop is the sole principal of MB Americus LLC, a
California limited liability corporation. Mr. McKillop is deemed to
be the beneficial owner of the shares of stock owned by MB Americus LLC.
Item 6. Selected Financial Data.
There is no selected financial data required to be filed for
a smaller reporting company.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
the Company has no operations nor does it currently engage in any
business activities generating revenues. The Company's principal
business objective is to develop operations as a wirele-ss ETC
telecommunications provider offering free wireless phones and services
for low-income subscribers through a federal mandated low-income
assistance program (Lifeline) through development of its operations
and/or by effecting a business combination with a target company.
As of December 31, 2012, the Company had not generated revenues and had
no income or cash flows from operations since inception. At December 31,
2012, the Company had sustained a net loss of $1,357 and had an accumulated
deficit of $1,357.
The Company's independent auditors have issued a report raising
substantial doubt about the Company's ability to continue as a going concern.
At present, the Company has no operations and the continuation of the 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 the Company.
Tiber Creek Corporation paid, without expectation of repayment, all
expenses incurred by the Company until the change in control at which time
new management of the Company undertook payment of such expenses. Because
of the absence of any on-going operations, these expenses are anticipated
to be relatively low.
The Company has entered into an agreement with Tiber Creek
Corporation of which the former president of the Company is the president
and controlling shareholder. Tiber Creek Corporation assists companies to
become public reporting companies and for the preparation and filing of a
registration statement pursuant to the Securities Act of 1933, and the
introduction to brokers and market makers.
2012 Year-End Analysis
The Company has received no income, has had no operations
nor expenses, other than Delaware state fees and incorporation and
accounting fees as required for incorporation and for the preparation
of the Company's financial statements.
As of December 31, 2012, the Company had not generated revenues
and had no income or cash flows from operations since inception. At
December 31, 2012, the Company had sustained a net loss of $1,357 and
had an accumulated deficit of $1,357.
Item 8. Financial Statements and Supplementary Data
The financial statements for the year ended December 31, 2012
are attached hereto.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
There were no disagreements with the Company's accountants on
accounting or financial disclosure for the period covered by this
report.
Item 9A. Controls 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 fiscal
year under the supervision and with the participation of the then Company's
principal executive officer (who was also the principal financial officer).
Subsequent to the date of that evaluation, the Company has effected
a change in control, including a change of its officers, directors and
controlling shareholders. However, new management has not mamde any
significant changes in the internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of the evaluation. Based upon that evaluation, the principal
executive officer 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, summarized and processed
timely. The principal executive officer is directly involved in the
current day-to-day operations of the Company.
Management's Report of Internal Control over Financial Reporting
The Company is responsible for establishing and maintaining
adequate internal control over financial reporting in accordance with
the Rule 13a-15 of the Securities Exchange Act of 1934. The Company's
principal officer, its president, conducted an evaluation of the
effectiveness of the Company's internal control over financial reporting
as of December 31, 2012, based on the criteria establish in Internal
Control Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treaedway Commission. Based on this evaluation,
management concluded that the Company's internal control over financial
reporting was effective as of December 31, 2012, based on those criteria.
A control system can provide only reasonably, not absolute, assurance
that the objectives of the control system are met and no evaluation
of controls can provide absolute assurance that all control issues
have been detected.
Anton & Chia, the independent registered public accounting
firm for the Company, has not issued an attestation report on the
effectiveness of the Company's internal control over financial
reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company's internal controls over
financial reporting during its fourth fiscal quarter that have materially
affected, or are reasonably likely to materially affect, its internal
control over financial reporting.
Item 9B. Other Information
Not applicable.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance;
The Directors and Officers of the Company are as follows:
Name Positions and Offices Held
----------------- -----------
David F. Martin Chief Executive Officer, Director
Bassam Abdallah Chief Operating Officer, Director
Louis A. White Director
Management of the Company
The Company has no full time employees.
On March 25, 2013, James Cassidy and James McKillop,
both directors of the Company and the then president and vice president,
respectively, resigned as directors and all offices of the Company.
Messrs. Cassidy and McKillop each beneficially retain 250,000 shares of
the Company's common stock.
David F. Martin was named the Chief Executive Officer of the Company
and Bassam Abdallah named its Chief Operating Officer.
Conflicts of Interest
Louis A. White serves as a director of the COmpany and is also
its majority shareholder. Mr. White is the founder of two ETC (Eligible
Telecommunications Carrier) companies which operate in the Lifeline market:
Assist Wireless, LLC and US Connect, LLC. Assist Wireless was founded in
November 2010 and has an estimated current annual revenue of $40MM and US
Connecti, LLC was founded in August, 2011 and has an estimated current
annual revenue of $8.6MM. Mr. White is the founder and Chief Executive
Officer of ReWireless, LLC and ASAP Distributors, LLC which have distributed
over 300,000 free wireless phones. Mr. White has worked in the internet,
electricity, and telecommunications for his entire career and has a special
expertise in providing guidance to a start-up company from the conceptual
phase to the operational phase and exit phase. Mr. White has served as an
advisor to Georgia State's Business School and has been honored by that
school was a success model case study at the Georgia State University
Business School. Mr. White studied pre-law with a business administration
focus at The Ohio State University and earned a paralegal degree from
the Columbus Paraprofessional Institute. He served on the Operating
Committee of the MIT Enterprise Committee of Atlanta and was an honorary
member of the Business Advisory Council for the National Republican
Congressional Committee.
David F. Martin serves as the Chief Executive Officer and a
director of the Company. Mr. Martin has worked in the distribution,
warehousing, inventory control and logistics areas since 1988 with a
special knowledge of the international environment and foreign trade zones.
Throughout his career, Mr. Martin has consistently decreased departmental
and company loss and increased efficiency and productivity. He has worked
as a consultant analyzing business processes and advising new business
strategies and models to increase operational efficiency. Mr. Martin
is a graduate of the University of Texas at Arlington and holds a Bachelor
of Science degree in Business Administration.
Bassam Abdallah serves as Chief Operating Officer and a director
of the COmpany. Mr. Abdallah received his Bachelor of Science degree in
Computer Science in 1983 from DePaul University. From 1983 to 1988, Mr.
Abdallah worked as computer program at Isticharat and then with the
California Judicial Council. In 1998 Mr. Abdallah determined to change
career paths and entered the telecommunications field. From 1998 to 2008,
Mr. Abdallah worked with Global Connections where he supervised the in-house
development of the company's software applications. Mr. Abdallah is a
Board Member of the NALA Organization. With expertise in the 1996
deregulation code and its impact on the telecommunication industry, Mr.
Abdallah has assisted in effectively negotiating interconnection agreements
with other telecommunication companies. Mr. Abdallah diligently maintains
currency and develops his expertise on networking, voice components,
switches, common transport, loops and ports. This expertise is crucial
to participate in the ATT User Group meetings which allow Global Connections
to discuss the issues between Bellsouth and the CLEC community in order to
improve productivity. Mr. Abdallah was in charge of cost control for
Global Connection for eight years during which time the company showed
strong profits. Mr. Abdallah has a valuable knowledge of VOIP technology
and an expertise in how data flows between departments and how to make
such communication flow efficient and effortless.
There are no binding guidelines or procedures for resolving
potential conflicts of interest. Failure by management to resolve
conflicts of interest in favor of the Company could result in
liability of management to the Company. However, any attempt by
shareholders to enforce a liability of management to the Company
would most likely be prohibitively expensive and time consuming.
Code of Ethics. The Company has not at this time adopted a
Code of Ethics pursuant to rules described in Regulation S-K. The
Company has only three shareholders, one of whom also serves as
a director. The Company has no operations or business and does not
receive any revenues or investment capital. The adoption of an Ethical
Code at this time would not serve the primary purpose of such a code to
provide a manner of conduct as the development, execution and enforcement
of such a code would be by the same persons and only persons to whom
such code applied. Furthermore, because the Company does not have any
activities, there are activities or transactions which would be subject
to this code. At the time the Company enters into a business combination
or other corporate transaction or begins operations, the current officers
and directors may recommend that such a code be adopted.
Corporate Governance. For reasons similar to those described
above, the Company does not have a nominating nor audit committee of
the board of directors. The Company has no activities, and receives no
revenues. At such time that the Company begins operations or receives
revenue or enters into a business combination and/or has additional
shareholders and a larger board of directors, the Company will propose
creating committees of its board of directors, including both a nominating
and an audit committee. Because there are only three shareholders of the
Company, there is no established process by which shareholders to the
Company can nominate members to the Company's board of directors.
Similarly, however, at such time as the Company has more shareholders
and an expanded board of directors, the new management of the Company
may review and implement, as necessary, procedures for shareholder
nomination of members to the Company's board of directors.
Item 11. Executive Compensation
The Company's officers and directors do not receive any
compensation for services rendered to the Company, nor has any
former officer or director received any compensation in the past.
The sole officer and director is not accruing any compensation
pursuant to any agreement with the Company.
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
The Company does not have a compensation committee for
the same reasons as described above.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
The following table sets forth, as of December 31, 2012, each
person known by the Company to be the officer or director of the
Company or a beneficial owner of five percent or more of the Company's
common stock. The Company does not have any compensation
plans and has not authorized any securities for future issuance.
Except as noted, the holder thereof has sole voting and investment
power with respect to the shares shown.
Name and Address Amount of Beneficial Percent of
of Beneficial Owner Ownership Outstanding Stock
Louis A. White 1,000,000 67%
Director
David F. Martin 0
CEO and director
Bassam Abdallah 0
COO and director
James Cassidy (1) 250,000 16.5%
215 Apolena Avenue
Newport Beach, CA 92662
James McKillop (2) 250,000 16.5%
9454 Wilshire Boulevard
Beverly Hills, California 90212
All Executive Officers and 1,000,000
Directors as a Group (3 Persons)
(1) As the sole shareholder, officer and director of Tiber Creek
Corporation, a Delaware corporation, Mr. Cassidy is deemed to be the
beneficial owner of the shares of common stock of the Company owned by
it.
(2) As the sole principal of MB Americus LLC, a California business
entity, Mr. McKillop is deemed to be the beneficial owner of the shares
of the Company owned by it.
Item 13. Certain Relationships and Related Transactions and
Director Independence
Louis A. White is the majority shareholder of the Company and
also serves as a director.
As the organizers and developers of Beachtree Acquisition
Corporation the predecessor name to the Company, James Cassidy and
James McKillop may be considered promoters. Mr. Cassidy provided
services to the Company without charge consisting of preparing and filing
the charter corporate documents and preparing its registration statement
of Form 10. Tiber Creek Corporation, a company of which Mr. Cassidy is the
sole director, officer and shareholder, paid all expenses incurred by
the Company until March 25, 2013 the date of the change in control,
without repayment. Tiber Creek is a shareholder of the Company
and may receive benefits in the future if the company is able to effect
a business combination beneficial to the company.
The Company is not currently required to maintain an independent
director as defined by Rule 4200 of the Nasdaq Capital Market nor does
it anticipate that it will be applying for listing of its securities on
an exchange in which an independent directorship is required. It is
likely Mr. Jones would not be considered an independent director if
it were to do so.
Item 14. Principal Accounting Fees and Services.
The Company has no activities, no income and no expenses
except for independent audit and incorporation and Delaware state
fees. The Company's current and former president donated their time
in preparation and filing of all state and federal required taxes and
reports.
Audit Fees
The aggregate fees incurred for each of the last two years for
professional services rendered by the independent registered public
accounting firm for the audits of the Company's annual financial
statements and review of financial statements included in the Company's
Form 10-K and Form 10-Q reports and services normally provided in
connection with statutory and regulatory filings or engagements were
as follows:
December 31, 2012
-----------------
Audit-Related Fees $ 750
The Company does not currently have an audit committee serving
and as a result its board of directors performs the duties of an audit
committee. The board of directors will evaluate and approve in advance,
the scope and cost of the engagement of an auditor before the auditor
renders audit and non-audit services. The Company does not rely on pre-
approval policies and procedures.
PART IV
Item 15. Exhibits, Financial Statement Schedules
There are no financial statement schedules nor exhibits filed
herewith. The exhibits filed in earlier reports and the Company's
Form 10 are incorporated herein by reference.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm 1
Balance Sheet as of December 31, 2012 2
Statement of Operations for the period from July 23, 2012
(Inception) to December 31, 2012 3
Statement of Changes in Stockholders' Equity for the
period from July 23, 2012 (Inception) to December, 2012 4
Statement of Cash Flows for the period from July 23, 2012
(Inception) to December 31, 2012 5
Notes to Financial Statements 6-9
ANTON & CHIA CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Beachgate Acquisition Corporation (a development stage company)
We have audited the accompanying balance sheet of Beachgate
Acquisition Corporation (the "Company") (a development stage company)
as of December 31, 2012, and the related statement of operations,
stockholders' equity and cash flows for the period from July 23, 2012
(Inception) through December 31, 2012. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
The Company was not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of Company's internal control over financial reporting.
Accordingly, we express no such opinion. Our audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of
December 31, 2012 and the results of its operations and its cash flows
from July 23, 2012 (Inception) through December 31, 2012, in conformity
with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has had no revenues and income
since inception. These conditions, among others, raise substantial doubt
about the Company's ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 2, which
includes the raising of additional equity financing or merger with
another entity. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Anton & Chia LLP
Newport Beach, CA
April 12, 2013
1
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
December 31,
2012
-----------------
Current Assets
Cash $ 2,000
-----------------
Total assets $ 2,000
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 350
-----------------
Total liabilities 350
-----------------
Stockholders' equity
Preferred stock, $0.0001 par value, -
20,000,000 shares authorized; none
outstanding
Common Stock; $0.0001 par value, 2,000
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding
Additional paid-in capital 1,007
Deficit accumulated during the
development stage (1,357)
-----------------
Total stockholders' equity 1,650
-----------------
Total Liabilities and
Stockholders' Equity $ 2,000
=================
The accompanying notes are an integral part of these financial statements
2
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
For the period from July 23, 2012
(Inception) to December 31, 2012
---------------------------------
Revenue $ -
Cost of revenue -
---------------------------------
Gross profit -
=================================
Operating expenses 1,357
---------------------------------
Loss before Income Taxes (1,357)
=================================
Income tax -
---------------------------------
Net loss $ (1,357)
=================================
Loss per share - basic and diluted $ (0.00)
=================================
Weighted average shares-
basic and diluted 20,000,000
=================================
The accompanying notes are an integral part of these financial statements
3
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Additional During the Total
---------------------- Paid-In Development Stockholders'
Shares Amount Capital Stage Equity
---------- --------- --------- ---------- ------------
Balance, July 23,
2012 (inception) - $ - $ - $ - $ -
Issuance of common stock 20,000,000 2,000 - - 2,000
Additional paid-in
capital - - 1,007 - 1,007
Net loss - - - (1,357) (1,357)
---------- --------- --------- ---------- ------------
Balance,
December 31, 2012 20,000,000 $ 2,000 $ 1,007 $ (1,357) $ 1,650
========== ======== ======== ========= ===========
The accompanying notes are an integral part of these financial statements
4
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the period from
July 23, 2012
(Inception) to
December 31, 2012
------------------
OPERATING ACTIVITIES
Net loss $ (1,357)
------------------
Changes in Operating assets and liabilities:
Accrued liabilities 350
------------------
Net cash used in operating activities (1,007)
------------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 2,000
Proceeds from stockholders' contribution 1,007
------------------
Net cash provided by financing activities 3,007
------------------
Net increase in cash 2,000
Cash, beginning of period -
------------------
Cash, end of period $ 2,000
==================
The accompanying notes are an integral part of these financial statements
5
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Beachgate Acquisition Corporation ("Beachgate" or "the Company") was
incorporated on July 23, 2012 under the laws of the state of Delaware to
engage in any lawful corporate undertaking, including, but not limited
to, selected mergers and acquisitions. Beachgate has been in the
developmental stage since inception and its operations to date have been
limited to issuing shares to its original shareholders. Beachgate will
attempt to locate and negotiate with a business entity for the combination
of that target company with Beachgate. 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 a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.
No assurances can be given that Beachgate will be successful in locating or
negotiating with any target company. Beachgate has been formed to provide
a method for a foreign or domestic private company to become a reporting
company with a class of securities registered under the Securities Exchange
Act of 1934.
On February 4, 2013, the shareholders of the Company and the Board of
Directors unanimously approved the change of the Company's name to
Essential Telecommunications, Inc. and file such change with the State
of Delaware.
On March 25, 2013, David F. Martin and Bassam Abdalla were appointed
Chief Executive Officer and Chief Operating Officer, respectively.
BASIS OF PRESENTATION
The summary of significant accounting policies presented below is designed
to assist in understanding the Company's financial statements. Such 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 financial
statements.
USE OF ESTIMATES
The preparation of 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 AND CASH EQUIVALENTS
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 December 31, 2012.
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 December
31, 2012.
6
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to the 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 December 31, 2012, there were no deferred taxes.
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 were 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 December 31, 2012, 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 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
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 is in the development stage and has no revenues or profits
since its inception on July 23, 2012. The Company's continuation as a going
concern is dependent on its ability to generate sufficient cash flows from
operations to meet its obligations, which it has not been able to accomplish
to date, and /or obtain additional financing from its stockholders and/or
other third parties.
7
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
These financial statements have been prepared on a going concern basis,
which implies the Company will continue to meet its obligations and
continue its operations for the next fiscal year. The continuation of the
Company as a going concern is dependent upon financial support from its
stockholders, the ability of the Company to obtain necessary equity
financing to continue operations, successfully locating and negotiate with
a business entity for the combination of that target company with the
Company.
Tiber Creek Corporation, a company affiliated with management, will pay
all expenses incurred by the Company until a business combination is
effected, without repayment. There is no assurance that the Company
will ever be profitable. The 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.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
Effective January 2012, the Company adopted ASU No. 2011-04,
Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04
represents the converged guidance of the Financial Accounting Standards
Board (FASB) and the International Accounting Standards Board (IASB) on
fair value measurement. A variety of measures are included in the update
intended to either clarify existing fair value measurement requirements,
change particular principles requirements for measuring fair value or for
disclosing information about fair value measurements. For many of the
requirements, the FASB does not intend to change the application of
existing requirements under Accounting Standards Codification (ASC)
Topic 820, Fair Value Measurements. ASU 2011-04 was effective for interim
and annual periods beginning after December 15, 2011. The adoption of this
update did not have a material impact on the financial statements.
Effective January 2012, the Company adopted ASU No. 2011-05,
Presentation of Comprehensive Income (ASU 2011-05). ASU 2011-05 is
intended to increase the prominence of items reported in other
comprehensive income and to facilitate convergence of accounting guidance
in this area with that of the IASB. The amendments require that all
nonowner changes in shareholders' equity be presented in a single
continuous statement of comprehensive income or in two separate but
consecutive statements. In December 2011, the FASB issued ASU No.
2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date
for Amendments to the Presentation of Reclassifications of Items Out of
Accumulated Other Comprehensive Income in Accounting Standards
Update No. 2011-05 (ASU 2011-12). ASU 2011-12 defers the provisions of
ASU 2011-05 that require the presentation of reclassification adjustments
on the face of both the statement of income and statement of other
comprehensive income. Amendments under ASU 2011-05 that were not
deferred under ASU 2011-12 will be applied retrospectively for fiscal years,
and interim periods within those years, beginning after December 15, 2011.
The adoption of this update did not have a material impact on the financial
statements.
In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet
(Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU
2011-11). The amendments in ASU 2011-11 require the disclosure of
information on offsetting and related arrangements for financial and
derivative instruments to enable users of its financial statements to
understand the effect of those arrangements on its financial position.
Amendments under ASU 2011-11 will be applied retrospectively for fiscal
years, and interim periods within those years, beginning after January 1,
2013. The Company is evaluating the effect, if any; adoption of ASU
2011-11 will have on its financial statements.
In February 2013, the FASB issued ASU No. 2013-02, Reporting of
Amounts Reclassified Out of Accumulated Other Comprehensive (ASU
2013-02). This guidance is the culmination of the FASB's deliberation
on reporting reclassification adjustments from accumulated other
comprehensive income (AOCI). The amendments in ASU 2013-02 do not
change the current requirements for reporting net income or other
comprehensive income. However, the amendments require disclosure of
amounts reclassified out of AOCI in its entirety, by component, on the
face of the statement of operations or in the notes thereto. Amounts that
are not required to be reclassified in their entirety to net income must
be cross referenced to other disclosures that provide additional detail.
This standard is effective prospectively for annual and interim
reporting periods beginning after December 15, 2012. The Company is
evaluating the effect, if any; the adoption of ASU 2013-02 will have
on its financial statements.
8
BEACHGATE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
NOTE 4 STOCKHOLDERS' EQUITY
The Company is authorized to issue 100,000,000 shares of common stock
and 20,000,000 shares of preferred stock. As of December 31, 2012,
20,000,000 shares of common stock and no preferred stock were issued
and outstanding.
On July 31, 2012, the Company issued 20,000,000 common shares to two
directors and officers for $2,000 in cash.
NOTE 5 SUBSEQUENT EVENTS
On March 25, 2013, the following events occurred which resulted in a
change of control of the Company:
On March 25, 2013, the Company redeemed an aggregate of 19,500,000 of
the then 20,000,000 shares of outstanding stock at a redemption price
of $.0001 per share for an aggregate redemption price of $1,950.
On March 25, 2013, James M. Cassidy resigned as the Company's
president, secretary and director.
On March 25, 2013, James McKillop resigned as the Company's vice
president and director.
On March 25, 2013, David F. Martin and Bassam Abdallah were appointed
Chief Executive Officer and Chief Operating Officer, respectively.
On March 26, 2013, Essential Telecommunications, Inc. (formerly
Beachgate Acquisition Corporation) (the "Company") issued 1,000,000
shares of its common stock at par representing 67% of the
total outstanding 1,500,000 shares of common stock.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ESSENTIAL TELECOMMUNICATIONS, INC.
Formerly Beachtree Acquisition Corporation
By: /s/ David F. Martin
Principal executive officer
Dated: April 15, 2013
By: /s/ David F. Martin
Principal financial officer
Dated: April 15, 2013
Pursuant to the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
NAME OFFICE DATE
/s/ Louis A. White Director April 15, 2013
/s/ David F. Martin Director April 15, 2013
/s/ Bassam Abdallah Director April 15, 2013