SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-55388
SOUTH WEST COAST SENIOR LIVING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
YELLOW GROTTO ACQUISITION CORPORATION
(Former Name of Registrant as Specified in its Charter)
Delaware 47-3165398
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14197 Farralon Court
Fontana, California 92336
(Address of principal executive offices) (zip code)
909-545-0229
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer Smaller reporting company X
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
November 5, 2015
Common Stock, par value $0.0001 3,500,000
Documents incorporated by reference: None
______________________________________________________________
UNAUDITED CONDENSED FINANCIAL STATEMENTS
Unaudited Condensed Financial Statements 2-4
Notes to Unaudited Condensed Financial Statements 5-7
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SOUTH WEST COAST SENIOR LIVING CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
September 30, 2015
------------
ASSETS
Total assets $ -
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Total liabilities -
------------
Stockholders' deficit
Preferred stock, $0.0001 par value,
20,000,000 shares authorized; none
issued and outstanding as of Sept 30, 2015 -
Common stock, $0.0001 par value, 100,000,000
shares authorized; 3,500,000 shares issued
and outstanding as of Sept 30, 2015 350
Discount on Common Stock (350)
Additional paid-in capital 712
Accumulated deficit (712)
------------
Total stockholders' deficit -
------------
Total liabilities and stockholders'
deficit $ -
============
The accompanying notes are an integral part of these unaudited condensed
financial statements.
2
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SOUTH WEST COAST SENIOR LIVING CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the period from
For the three January 12, 2015
months ended (Inception) to
Sept. 30, 2015 Sept. 30, 2015
----------------- -----------------
Revenue $ - $ -
Cost of revenue - -
----------------- -----------------
Gross profit - -
Operating expenses - 712
----------------- -----------------
Operating loss - (712)
Loss before income taxes - (712)
================== ==================
Income tax expense - -
Net loss $ - $ (712)
================== ==================
Loss per share - basic and diluted $ (0.00) $ (0.00)
================== ==================
Weighted average shares-basic and diluted 11,870,516 15,860,153
------------------ ------------------
The accompanying notes are an integral part of these unaudited condensed
financial statements.
3
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SOUTH WEST COAST SENIOR LIVING CORPORATION
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
For the period from
January 12, 2015
(Inception) to
Sept. 30, 2015
--------------
OPERATING ACTIVITIES
Net loss $ (712)
-------------
Non-cash adjustments to reconcile net loss to
net cash:
Expenses paid for by stockholder and
contributed as capital 712
-------------
Net cash (used in) operating activities -
-------------
Net increase in cash -
Cash, beginning of period -
-------------
Cash, end of period $ -
=============
Interest paid -
-------------
Income tax paid -
-------------
The accompanying notes are an integral part of these unaudited condensed
financial statements.
4
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SOUTH WEST COAST SENIOR LIVING CORPORATION
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
South West Coast Senior Living Corporation formerly Yellow Grotto Acquisition
Corporation ("Senior Living" or "the Company") was incorporated on January 12,
2015 under the laws of the state of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
On August 8, 2015, the Company effected a change in control by the redemption
of 19,500,000 shares of the then outstanding 20,000,000 shares of common
stock. The then outstanding officers and directors resigned and Deshawn
Palmer was named the sole officer and director of the Company.
On August 10, 2015, 3,000,000 shares of common stock were issued
to Deshawn Palmer. Pursuant to the change in control, the Company
changed its name to South West Coast Senior Living Corporation.
BASIS OF PRESENTATION
The summary of significant accounting policies presented below is designed
to assist in understanding the Company's unaudited condensed financial
statements. Such unaudited condensed financial statements and accompanying
notes are the representations of the Company's management, who are responsible
for their integrity and objectivity. These accounting policies conform to
accounting principles generally accepted in the United States of America
("GAAP") in all material respects, and have been consistently applied in
preparing the accompanying unaudited condensed financial statements.
Certain information and footnote disclosures normally present in annual
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") were omitted
pursuant to such rules and regulations. These financial statements should be
read in conjunction with the audited financial statements and footnotes
included in the Company's Annual Report on Form 10-K filed with the SEC on
April 17, 2015. The results for the three months ended September 30, 2015,
are not necessarily indicative of the results to be expected for the year
ending December 31, 2015.
USE OF ESTIMATES
The preparation of unaudited condensed 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 condensed financial statements, and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
CASH
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with original
maturities of 90 days or less. The Company did not have cash equivalents as
of September 30, 2015.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balances
in excess of the Federal Deposit Insurance Corporation limit as of
September 30, 2015.
5
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SOUTH WEST COAST SENIOR LIVING CORPORATION
Notes to Unaudited Condensed 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 June 30, 2015 there were no deferred taxes due to the
uncertainty of the realization of net operating loss or carry forward prior
to expiration.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities or other contracts to issue common
stock 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
September 30, 2015, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in the
unaudited condensed financial statements on a recurring basis. Additionally,
the Company adopted guidance for fair value measurement related to nonfinancial
items that are recognized and disclosed at fair value in the unaudited
condensed financial statements on a nonrecurring basis. The guidance
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to measurements
involving significant unobservable inputs (Level 3 measurements). The three
levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access at the
measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their fair
values because of the short maturity of these instruments.
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception to date and
has sustained operating loss of $712 from inception (January 12, 2015) to
September 30, 2015. The Company had no working capital and an accumulated
deficit of $712 as of September 30, 2015. The Company's continuation as a
going concern is dependent on its ability to generate sufficient cash flows
from operations to meet its obligations and/or obtaining additional financing
from its members or other sources, as may be required.
6
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SOUTH WEST COAST SENIOR LIVING CORPORATION
Notes to Unaudited Condensed Financial Statements
The accompanying unaudited condensed financial statements have been prepared
assuming that the Company will continue as a going concern; however, the above
condition raises substantial doubt about the Company's ability to do so. The
unaudited condensed financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification
of assets or the amounts and classifications of liabilities that may result
should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will require
additional working capital from either cash flow from operations or from the
sale of its equity. However, the Company currently has no commitments
from any third parties for the purchase of its equity. If the Company is unable
to acquire additional working capital, it will be required to significantly
reduce its current level of operations.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
On June 12, 2015, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2015-10-Technical Corrections and
Improvements. The amendments in this Update cover a wide range of Topics
in the Codification. The amendments in this Update represent changes to make
minor corrections or minor improvements to the Codification that are not
expected to have a significant effect on current accounting practice or
create a significant administrative cost to most entities. This Accounting
Standards Update is the final version of Proposed Accounting Standards Update
2014-240-Technical Corrections and Improvements, which has been deleted.
Transition guidance varies based on the amendments in this Update. The
amendments in this Update that require transition guidance are effective
for all entities for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2015. Early adoption is permitted,
including adoption in an interim period. All other amendments will be
effective upon the issuance of this Update. Management is in the process
of assessing the impact of this ASU on the Company's financial statements.
On April 30, 2015, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update (ASU) No. 2015-06 Earnings Per Share
(Topic 260): Effects on Historical Earnings per Units of Master Limited
Partnership Dropdown Transactions. Under Topic 260, Earnings Per Share,
master limited partnerships (MLPs) apply the two-class method to calculate
earnings per unit (EPU) because the general partner, limited partners,
and incentive distribution rights holders each participate differently
in the distribution of available cash. When a general partner transfers
(or "drops down") net assets to a master limited partnership and that
transaction is accounted for as a transaction between entities under
common control, the statements of operations of the master limited
partnership are adjusted retrospectively to reflect the dropdown
transaction as if it occurred on the earliest date during which the
entities were under common control. The amendments in this Update specify
that for purposes of calculating historical EPU under the two-class
method, the earnings (losses) of a transferred business before the
date of a dropdown transaction should be allocated entirely to the
general partner interest, and previously reported EPU of the limited
partners would not change as a result of a dropdown transaction.
Qualitative disclosures about how the rights to the earnings (losses)
differ before and after the dropdown transaction occurs also are
required. This Accounting Standards Update is the final version of
Proposed Accounting Standards Update EITF-14A Earnings Per Share Effects
on Historical Earnings per Unit of Master Limited Partnership Dropdown
Transactions (Topic 260), which has been deleted. Effective for fiscal
years beginning after December 15, 2015, and interim periods within
those fiscal years. Earlier application is permitted. The amendments in
this Update should be applied retrospectively for all financial
statements presented. Management is in the process of assessing the
impact of this ASU on the Company's financial statements.
NOTE 4 STOCKHOLDERS' DEFICIT
On January 22, 2015, the Company issued 20,000,000 founders common stock
to two directors and officers. The Company is authorized to issue
100,000,000 shares of common stock and 20,000,000 shares of preferred
stock.
On August 8, 2015, the Company redeemed an aggregate of 19,500,000 shares
of the outstanding common stock from the two shareholders thereof pro rata.
On August 10, 2015, the Company issued 3,000,000 shares of its common stock
to Deshawn Palmer.
As of September 30, 2015, 3,500,000 shares of common stock and no
preferred shares were issued and outstanding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
South West Coast Senior Living Corporation (formerly Yellow Grotto
Acquisition Corporation) was incorporated on January 12, 2015 under
the laws of the State of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and
acquisitions.
South West Coast Senior Living Corporation ("Senior Living" or
the "Company") is a blank check company and qualifies as an "emerging
growth company" as defined in the Jumpstart Our Business Startups Act
which became law in April, 2012.
On August 8, 2015 the Company effected a change in control
by the redemption of 19,500,000 shares of the then outstanding
20,000,000 shares of common stock. Messrs. James Cassidy and James
McKillop, the then officers and directors of the Company resigned
and Deshawn Palmer was named its sole officer and director.
Pursuant to the change in control, the Company changed its name to
South West Coast Senior Living Corporation.
On August 10, 2015, the Company issued 3,000,000 shares of
common stock to Deshawn Palmer.
The Company filed Forms 8-K noticing the change of control
and the change of name.
The Company anticipates that it will effect its business plan
through company development or through executing a business combination
with an existing company. The Company intends to consult with or effect
a business combination with a private company to develop superior
retirement community living by aligning wellness and aging with technology
and consumer living preferences.Through real estate investment, the Company
intends to identify and develop high-investment return properties that
also generate the maximum possible potential for wellness and aging care.
With compassionate leadership and professional planning, the Company has
a corporate vision of making the world a better place for the aging and
elderly. The Company's objective is to strive to provide substantial
returns, risk management and liquidity for its investors, while
providing seniors with living facilities. No agreements have been
executed and if and when any business combination is effected, the Company
will file a Form 8-K.
Since inception the Company's operations to the date of the period
covered by this report consisted of issuing shares of common stock to
its original shareholders and filing a registration statement on Form
10 on March 2, 2015 with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934 as amended to register its class
of common stock.
The Company has no operations nor does it currently engage in any
business activities generating revenues.
If the Company develops its business plan through a combination, it
may 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 the Company will be successful in
locating or negotiating with any target company.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may
include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, increasing the opportunity to use
securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many
different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities difficult and complex.
The search for a target company will not be restricted to any specific
kind of business entities, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or in
essentially any stage of its business life. It is impossible to predict
at this time the status of any business in which the Company may become
engaged, whether such business may need to seek additional capital,
may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer.
As of September 30, 2015 the Company had not generated revenues
and had no income or cash flows from operations since inception. At
September 30, 2015 the Company had sustained net loss of $712, and had
an accumulated deficit of $712.
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.
Former management paid all expenses incurred by the Company
until the change in control. There is no expectation of repayment
for such expenses. New management intends to continue to pay the
expenses of the Company until such time as it has revenues or
operations and can pay such expenses.
The president of the Company is the president, director and
shareholder of Company.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEM 4. Controls and Procedures.
Disclosures and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as of the end of the
period covered by this report under the supervision and with the
participation of the Company's principal executive officer (who is
also the principal financial officer).
Based upon that evaluation, he believes that the Company's
disclosure controls and procedures are effective in gathering, analyzing
and disclosing information needed to ensure that the information
required to be disclosed by the Company in its periodic reports is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company
is unaware of such proceedings contemplated against it.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued common shares
pursuant to Section 4(2) of the Securities Act of 1933 as follows:
On January 22, 2015, the Company issued 10,000,000 shares of
common stock to each of James Cassidy and James McKillop of which
an aggregate of 19,500,000 shares were redeemed pro rata on August
8, 2015.
On August 10, 2015, the Company issued 3,000,000 shares to
Deshawn Palmer.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SOUTH WEST COAST SENIOR LIVING CORPORATION
By: /s/ Deshawn Palmer
President, Chief Financial Officer
Dated: November 17, 2015