SEC Filing Summary: Sierra Concepts, Inc. (10-Q)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2009, for Sierra Concepts, Inc., a Nevada corporation and smaller reporting company. The entity is classified as a development stage company and a shell company. It is developing a web-based service called "24 Year Fitness" designed to assist consumers with personal financial planning, budgeting, and debt management. The company has not yet generated any revenue from operations.
Key Financial Metrics
| Metric | Value |
|---|---|
| Revenue | $0 (No revenue generated to date) |
| Net Loss (3 months ended June 30, 2009) | $(750) |
| Net Loss (9 months ended June 30, 2009) | $(5,731) |
| Accumulated Deficit (Inception to June 30, 2009) | $(9,231) |
| Cash and Equivalents (June 30, 2009) | $15,769 |
| Total Assets | $15,769 |
| Current Liabilities | $7,000 (Accrued expenses) |
| Working Capital | $8,769 |
| Common Shares Outstanding | 8,400,000 |
Material Changes vs. Prior Period
- Cash Position: Cash increased from $6,000 as of September 30, 2008, to $15,769 as of June 30, 2009. This increase was driven by financing activities rather than operations.
- Equity Financing: During the nine months ended June 30, 2009, the company issued 2,400,000 shares of common stock for $12,000 in cash. Total shares outstanding increased from 6,000,000 to 8,400,000.
- Liabilities: Accrued expenses doubled from $3,500 to $7,000, reflecting ongoing professional fees and administrative costs.
- Operations: The company remains in the development stage with no revenue. Operating expenses for the nine-month period totaled $5,731, primarily consisting of professional fees ($5,325).
Outlook, Risks, and Management Commentary
- Going Concern Risk: Management explicitly states that the company's ability to continue as a going concern is dependent on obtaining additional financing and achieving profitable operations. There is substantial doubt regarding the company's ability to continue without further capital.
- Development Status: The "24 Year Fitness" website is in development. A beta version was expected to launch by the end of the fiscal year (September 30, 2009), with a full launch targeted for early 2010. A proof-of-concept for "The List" tool was launched in Spring 2009.
- Revenue Model: The company plans to generate revenue through monthly subscription fees (e.g., $20/month for the core "Sisyphus" system) and one-time fees for specific tools. No revenue is anticipated until the end of calendar year 2009.
- Capital Needs: The company estimates it needs approximately $12,000 to implement its business plan for the current fiscal year. While current cash reserves ($15,769) are deemed adequate for the current year, future operations depend on debt or equity financing.
- Management: The sole officer and director, David Davis, provides services without charge and dedicates 10-15 hours per week to the business.
Investor Verification Checklist
- Capital Adequacy: Verify if the company has secured the additional financing required to operate beyond the current fiscal year, given the "substantial doubt" regarding going concern status.
- Development Milestones: Confirm if the beta version of the website was launched by the end of the fiscal year as planned, and if the full launch is on track for early 2010.
- Revenue Generation: Monitor the transition from development to revenue generation; the company has no current revenue stream.
- Related Party Transactions: Note that office services are provided by an officer without charge; verify if this arrangement continues or if costs will be incurred in the future.
- Stock Dilution: Review the impact of the recent issuance of 2,400,000 shares and potential future issuances required to fund operations.