10-Q 1 form10qq32015.txt 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 000-55391 POWERCOMM HOLDINGS INC. (Exact name of registrant as specified in its charter) Delaware 47-3152668 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3429 Ramsgate Terrace Alexandria, VA 22309 (Address of principal executive offices (zip code) 571-259-8773 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated Filer Non-accelerated filer Smaller reporting company X (do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes X No Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date. Class Outstanding at Common Stock, par value $0.0001 20,500,000 Documents incorporated by reference: None ______________________________________________________________ UNAUDITED FINANCIAL STATEMENTS Unaudited Financial Statements 2-4 Notes to Unaudited Financial Statements 5-7 ______________________________________________________________________ POWERCOMM HOLDINGS INC. BALANCE SHEET (UNAUDITED) September 30, 2015 ------------ ASSETS Total assets $ - ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accrued expenses $ 1,500 ------------ Total liabilities 1,500 ------------ Stockholders' deficit Preferred stock, $0.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of September 30,2015 - Common stock, $0.0001 par value, 100,000,000 shares authorized; 20,500,000 shares issued and outstanding as of September 30,2015 2,050 Discount on Common Stock (2,050) Additional paid-in capital 939 Accumulated deficit (2,439) ------------ Total stockholders' deficit (1,500) ------------ Total liabilities and stockholders' deficit $ - ============ The accompanying notes are an integral part of these unaudited financial statements. 2 ______________________________________________________________________ POWERCOMM HOLDINGS INC. STATEMENTS OF OPERATIONS (UNAUDITED) For the period from For the three January 12, 2015 Months ended (Inception) to September 30, 2015 September 30, 2015 ----------------- ----------------- Revenue $ - $ - Cost of revenue - - ----------------- ----------------- Gross profit - - Operating expenses 1,727 2,439 ----------------- ----------------- Operating loss (1,727) (2,439) ----------------- ----------------- Loss before income taxes (1,727) (2,439) ----------------- ----------------- Income tax expense - - ----------------- ----------------- Net loss $ (1,727) $ (2,439) ================== ================== Loss per share - basic and diluted $ - $ - ================== ================== Weighted average shares-basic and diluted 19,869,565 19,952,191 ================== ================== The accompanying notes are an integral part of these unaudited financial statements. 3 ______________________________________________________________________ POWERCOMM HOLDINGS INC. STATEMENT OF CASH FLOWS (UNAUDITED) For the period from January 12, 2015 (Inception) to September 30,2015 -------------- OPERATING ACTIVITIES Net loss $ (2,439) Non-cash adjustments to reconcile net loss to net cash: Expenses paid for by stockholder and contributed as capital 939 Changes in Operating Assets and Liabilities: Accrued expenses 1,500 ------------- Net cash used in operating activities - ------------- Net increase in cash - Cash, beginning of period - ------------- Cash, end of period $ - ============= Interest paid $ - ============= Income tax paid $ - ============= The accompanying notes are an integral part of these unaudited financial statements. 4 -------------------------------------------------------------------- POWERCOMM HOLDINGS INC. Notes to Unaudited Financial Statements NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS PowerComm Holdings Inc. (formerly White Grotto Acquisition Corporation) (PowerComm or the Company) was incorporated on January 12, 2015 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On September 14,2015, the Company effected a change in control by the redemption of 19,500,000 shares of then outstanding 20,000,000 shares of common stock. The then current officers and directors resigned and David Kwasnik was named the sole officer and director of the Company. Pursuant to the change in control, the Company changed its name to PowerComm Holdings Inc. On September 15, 2015, the Company issued 20,000,000 shares of common stock to David Kwasnik. The Company intends to develop through a business combination with an ongoing company otherwise a company designed to serve as a holding company for certain privately owned power transmission, distribution, telecommunications, fiber optic, cellular communications, excavation, dredging, gas and oil pipeline, road and bridge, wind and solar, alternative energy, bio-fuels, and bio-coal construction companies. The Company has been in the developmental stage since inception. The Company will attempt to locate and negotiate with a business entity for the combination of the target company with the Company. The combination will normally take the form of a merger, stock-for-stock exchange. In most instances the target company will wish to structure the business combination to be within the definition of tax-free reorganization under Section 351 or section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The company has been formed to provide a method for a foreign domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934. BASIS OF PRESENTATION The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited financial statements. Such unaudited financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying unaudited financial statements. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") were omitted pursuant to such rules and regulations. 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 financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. CASH Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of September 30, 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. ______________________________________________________________________ POWERCOMM HOLDINGS Notes to Unaudited Financial Statements INCOME TAXES Under ASC 740, "Income Taxes," deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of September 30, 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 was exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of September 30, 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 financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the unaudited financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. NOTE 2 - GOING CONCERN The Company has not yet generated any revenue since inception to date and has sustained an operating loss of $2,439 from inception (January 12, 2015) to September 30, 2015. The Company had a working capital deficit of $1,500 and an accumulated deficit of $2,439 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. ______________________________________________________________________ POWERCOMM HOLDINGS INC. Notes to Unaudited Financial Statements The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability to do so. The unaudited financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations. NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS On June 12, 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) No. 2015-10-Technical Corrections and Improvements. The amendments in this Update cover a wide range of Topics in the Codification. The amendments in this Update represent changes to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2014-240-Technical Corrections and Improvements, which has been deleted. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this Update. Management is in the process of assessing the impact of this ASU on the Company's financial statements. On April 30, 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) No. 2015-06 Earnings per Share (Topic 260): Effects on Historical Earnings per units of Master Limited Partnership Dropdown Transaction. Under Topic 260, Earnings per Share, Master Limited partnerships (MPLS) apply the two class method to calculate earnings per unit (EPU) because the general partner, limited partners, and incentive distribution rights holders each participate differently on the distribution of available cash. When a general partner transfers or (drops down) net assets to a master limited partnership and that the transaction is accounted for as a transaction between entities under common control, the statement of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as it occurred on the earliest date during which the entities were under common control. The amendments in this update specify that for the purpose of calculating historical EPU under the two-class method, the earning (losses) of a transferred business before the late dropdown transaction should be allocated entirely to the general partner interest, and previously reported EPU of the limited partners would not change as a result of a dropdown transaction. Qualitative disclosure about how the rights to earnings (losses) differ before and after the dropdown transaction occurs also are required. This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-14A Earnings Per Share Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (Topic 260), which has been deleted. Effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments in this Update should be applied retrospectively for all financial statements presented. Management is in the process of assessing the impact of this ASU on the Company's financial statements. NOTE 4 ACCRUED EXPENSES As of September 30, 2015, the Company had an accrued professional fee of $1,500. NOTE 5 STOCKHOLDERS' DEFICIT On January 22, 2015, the Company issued 20,000,000 founders common stock to two directors and officers. On September 14, 2015, the Company redeemed 19,500,000 of then outstanding 20,000,000 shares at a redemption price of $.0001 per share for an aggregate redemption price of $1,950. On September 15, 2015, the Company issued 20,000,000 shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933 at par, to David Kwasnik as a party of the change in control of the Company. The Company is authorized to issue 100,000,000 Shares of common stock and 20,000,000 shares of preferred stock. As of September 30, 2015, 20,500,000 shares of common stock and no preferred stock were issued and outstanding. NOTE 6 - SUBSEQUENT EVENT Management has evaluated subsequent events through September 30, 2016, the date which the financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2015 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, Subsequent Events. ______________________________________________________________________ ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PowerComm Holdings Inc. was incorporated on January 12, 2015 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. PowerComm Holdings Inc. (PowerComm or the Company) is a blank check company and qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act which became law in April, 2012. Since the inception of Company operations to date of the period covered by this report have been limited to issuing shares of common stock to its original shareholders and filing a registration statement on Form 10 on March 2, 2015 with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 as amended to register its class of common Stock and effecting a change of control. On September 14, 2105, the following events occurred in the change of control: The Company redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $ 1,950. James Cassidy and James McKillop, the then current officers and directors resigned. David Kwasnik was named the sole director and officer of the Company. On September 15, 2015, the Company issued 20,000,000 shares of its common stock to David Kwasnik. The Company filed a Form 8-K noticing the change of control. The Company has no operations nor does it currently engage in any business activities generating revenues. The Company intends to develop through a business combination with an ongoing company otherwise a company designed to serve as a holding company for certain privately owned power transmission, distribution, telecommunications, fiber optic, cellular communications, excavation, dredging, gas and oil pipeline, road and bridge, wind and solar, alternative energy, bio-fuels, and bio-coal construction companies. A combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, licensing agreement or other arrangement with another corporation or entity. On the consummation of a transaction, it is likely that the present management and shareholders of the Company will no longer be in control of the Company. In addition, it is likely that the officer and director of the Company will, as part of the terms of the business combination, resign and be replaced by one or more new officers and directors. As of September 30, 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 a net loss of $2,439, and had an accumulated deficit of $2,439. 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 PowerComm Holdings Inc. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. Information not required to be filed by Smaller reporting companies. ITEM 4. Controls and Procedures. Disclosures and Procedures Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company's principal executive officer (who is also the principal financial officer). Based upon that evaluation, he believes that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Quarterly Report. Changes in Internal Controls There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS During the past three years, the Company has issued the following shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933: On January 22, 2015, an aggregate of 20,000,000 shares to its then two officers and directors. On the September 14, 2105, 19,500,000 of the outstanding 20,000,000 were redeemed. On September 15, 2015, 20,000,000 shares were issued to David Kwasnik, the then new officer and director of the Company. The total outstanding shares of common stock as of the date of this report is 20,500,000. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION (a) Not applicable. (b) Item 407(c)(3) of Regulation S-K: During the quarter covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors. ITEM 6. EXHIBITS (a) Exhibits 31 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. POWERCOMM HOLDINGS INC. By: /s/ David Kwasnik President, Chief Financial Officer Dated: October 3, 2016