TMCnet News

POWERSTORM CAPITAL CORP - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations
[April 15, 2014]

POWERSTORM CAPITAL CORP - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations


(Edgar Glimpses Via Acquire Media NewsEdge) The following discussion and analysis of the results of operations and financial condition of Health Revenue Assurance Holdings, Inc. for the fiscal years ended December 31, 2013 and 2012, should be read in conjunction with the Selected Consolidated Financial Data, the Company's financial statements, and the notes to those financial statements that are included elsewhere in this Annual Report.



Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Annual Report. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements.

Overview Powerstorm provides equipment and services for the emerging telecommunication infrastructure industry, particularly in energy storage and management, base stations, telecommunication towers and related equipment.


The founders of Powerstorm Capital have worked in mobile telecommunications for the past decade. Our founders formed Powerstorm Capital to pursue opportunities they had identified related to growth and technology shifts in the industry, particularly as they relate to renew, upgrade and deploy new hybrid energy storage solutions in emerging markets.

6 We are a development stage company, and to date, our development efforts have been focused primarily on planning and development of our business model. To date we have limited operating history for investors to evaluate the potential of our business. As such, we have not yet built our customer base or fully defined our market position. We do not currently have any written or oral commitments to provide products services to customers. In addition, our sources of cash are not adequate for the next 12 months of operations. If we are unable to raise additional cash, we will either have to suspend or cease our expansion plans entirely.

Our Strategy Powerstorm Capital intends to serve the strong, growing demand for telecommunications infrastructure worldwide, and in particular in emerging markets.

Due to the continued increase in subscribers for wireless personal communication and phone services, we expect wireless carriers will need to add a significant number of cell sites to maintain the performance of their networks in the areas they currently cover and to extend service to new markets. In addition, we believe that as wireless data services, such as e-mail, Internet access, and video, are deployed on a widespread basis, wireless carriers will need to augment the cell density of their existing networks throughout the emerging world. They will also need to upgrade the technology used in their networks to accommodate the need for greater coverage and bandwidth, as well as increase efficiency and reduce operating costs.

Out of five million cellular towers worldwide, three million are in emerging regions such as Africa and the Middle East. Of these, over one million are tied to unstable grids and 640,000 are off-grid. To maintain and grow this network, telecommunication operators must ensure access to energy sources, and must store, manage and deploy power efficiently and reliably. Navigant Research forecasts that revenue for off-grid base station power will grow from $1.6 billion in 2012 to more than $10.5 billion in 2020.

Presently operators in emerging areas rely principally on diesel generators as a primary energy source for cellular towers. These generators are costly to operate and maintain, rely on fossil fuels, and cause harm to the environment.

As a result, the industry is looking to alternative energy sources, including solar, wind, and hydroelectric, to power mobile telecommunications over the coming decades. The ultimate goal is a "green base station," which will likely be powered by a combination of renewable energy and fuel cell technology. We believe that this technology shift presents a compelling business opportunity.

Our founders and management team has significant experience and relationships in the mobile telecommunications industry, with geographical focus in Africa, the Middle East, Eastern Europe and Southeast Asia. Our founders' legacy in providing replacement equipment to telecom operators has conferred an understanding of the needs and technology acquisition behavior of these operators, and has given Powerstorm a recognizable brand in this market.

Accordingly, the Company believes it is well positioned to capitalize on the hybrid energy opportunity.

As part of its planning activities, Powerstorm has evaluated solutions to reduce network operating expenditures. Powerstorm has met and discussed integration of hybrid power with leading telecommunication operators, suppliers and integrators. Powerstorm identified general infrastructure deficiencies and power management gaps as opportunities to propose more compelling hybrid power solutions to meet global operators demand to reduce network costs and increase efficiencies by deploying hybrid technologies.

Powerstorm Capital plans to start by offering branded solutions that integrate equipment manufactured by existing suppliers. In the coming years, we intend to develop proprietary technology solutions that offer advantages such as increased duty cycle, reduced installation cost, superior energy efficiency, and value-added features. We intend to develop these solutions through internal research and development, as well as strategic initiatives such as mergers and acquisitions, licenses, joint ventures, and joint development arrangements, among other activities.

7 Powerstorm Capital has in his pipeline since the end of the GSMA show Feb 2014 a possible deal flow of more than 300 sites for 2014 but has not closed any such offering and is fiercely negotiating with the operators. The Company cant guarantee and positive outcome or give a timeline of deal closure.

Results of Operations From October 10, 2011 Year Year (Inception) Ended Ended Through December 31, December 31, December 31, 2013 2012 2013 Revenues $ 32,061 $ - $ 32,061 Total operating expenses 161,798 76,521 263,780 Other Income 270 - 270 Net loss $ (129,467 ) $ (76,521 ) $ (231,449 ) For the Year Ended December 31, 2013 and 2012 Revenues We are still in our development stage and have generated some non-recurring revenues from consulting services of $32,061 during the year ended December 31, 2013 and $0 revenues during the year ended December 31, 2012.

Operating Expenses We incurred total operating expenses of $161,798 and $76,521 for the year ended December 31, 2013 and 2012, respectively. The increase of $85,277 over the prior year was primarily due to an increase in professional fees and filings fees in connection with the preparation and filing of the registration statement with the SEC.

Net Loss During the year ended December 31, 2013 and 2012, we incurred a net loss of $129,467 and $76,521, respectively. The increase of $52,946 in net loss over the prior year was primarily due to an increase in professional fees and filings fees in connection with the preparation and filing of the registration statement with the SEC.

From October 20, 2011 (Inception) through December 31, 2013 Revenues For the period from October 10, 2011 (Inception) to December 31, 2013, we generated some non-recurring revenues from consulting services of $32,061.

Operating Expenses We incurred total operating expenses of $263,780 for the period since inception on October 10, 2011 to December 31, 2013, which consisted primarily of general and administrative expenses. For the year ended December 31, 2013 our general and administrative expenses were comprised of audit and accounting fees of $36,337, legal fees of $41,554, rent expense of $23,702, filing fees of $29,049, marketing expenses of $11,272, and other expenses totaling $18,767. The legal fees were primarily incurred in connection with the preparation and filing of the registration statement with the SEC.

Net Loss We had a net loss of $231,449 for the period from October 10, 2011 (Inception) to December 31, 2013 due to incurred operating expenses and some non-recurring revenues.

8 Liquidity and Capital Resources Our financial condition as of December 31, 2013 and December 31, 2012 is summarized as follows: Working Capital: December 31, December 31, 2013 2012 Current assets $ 8,945 $ 3,814 Current liabilities (76,657 ) (28,424 ) Working capital (deficit) $ (67,712 ) $ (24,610 ) Cash Flows: From October 10, 2011 Year (Inception) Ended through December 31, December 31, 2013 2012 2013Cash used in operating activities $ (89,355 ) $ (54,434 ) $ (143,789 ) Cash used in investing activities (2,690 ) (7,787 ) (10,477 ) Cash provided by financing activities 96,029 65,780 161,809 Net increase in cash $ 3,984 $ 3,559 $ 7,543 We are a development stage company and have incurred an accumulated loss of $231,449 since inception. We had a working capital deficit of $67,712 for the year ended December 31, 2013, which is not sufficient to finance over business plan for the next twelve months. Our independent auditors have issued an audit opinion for us for the financial statements ended December 31, 2013 and the period than ended, which includes a statement expressing substantial doubt as to our ability to continue as a going concern due to our limited liquidity and our lack of revenues.

We have minimal operating expenses at the present time due to our limited business activities. To date, our founders have provided funding for our operations. We will, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses.

We plan to secure financing either through the issuance of equity or debt. To the extent that funds generated from any private placements, public offerings, and/or bank financings are insufficient, we will need to raise additional working capital through other sources.

Our resources were insufficient to effectuate our inaugural business plan dated October 10, 2011, that extended through the period ending December 31, 2013. We had expected to incur a minimum of $150,000 in operating expenses during the subsequent 12 months of operations.

We had previously indicated that we would have to raise the funds to pay for these expenses. We may have to borrow money from founders or shareholders, issue debt or equity, or enter into a strategic arrangement with a third party. There is no assurance that we will secure additional capital. There currently are no agreements, arrangements, or understandings that would enable Powerstorm to obtain funds through bank loans, lines of credit, or any other source. If we are unable to raise funds for acquisitions it will have a severe negative impact on our ability to execute our business.

Off-Balance Sheet Arrangements We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

9 Estimates In preparing our financial statements, we make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methods. In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment. We periodically evaluate our estimates and judgments that are most critical in nature. We believe that the following discussion of critical accounting policies address all important accounting areas where the nature of accounting estimates or assumptions is material due to the levels of subjectivity and judgment. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Intangible Assets The Company's intangible assets consist of trademarks with indefinite life. The Company capitalizes the filing and legal fees related to the trademark registrations, which totaled $5,828 and $4,570 as of December 31, 2013 and December 31, 2012, respectively. The Company reviews its indefinite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets. If these estimates change in the future, the Company may be required to record impairment charges for these assets. As of December 31, 2013, no impairment was recorded.

Stock-Based Compensation The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period.

Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.

Recent Accounting Pronouncements The Company does not expect adoption of the new accounting pronouncements will have a material effect on the Company's financial statements.

[ Back To TMCnet.com's Homepage ]