Company Quick10K Filing
Summer Energy
Price2.00 EPS-0
Shares32 P/E-11
MCap63 P/FCF-26
Net Debt6 EBIT-4
TEV69 TEV/EBIT-16
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-19
10-Q 2020-06-30 Filed 2020-08-14
10-Q 2020-03-31 Filed 2020-05-20
10-K 2019-12-31 Filed 2020-03-27
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-11
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
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10-K 2017-12-31 Filed 2018-03-29
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-05-15
10-K 2016-12-31 Filed 2017-03-30
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10-K 2013-12-31 Filed 2014-04-15
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10-K 2011-12-31 Filed 2012-03-26
10-Q 2011-09-30 Filed 2011-11-14
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10-K 2010-12-31 Filed 2011-03-31
10-Q 2010-09-30 Filed 2010-11-12
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8-K 2020-10-30
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8-K 2018-06-27
8-K 2018-06-08
8-K 2018-05-01
8-K 2018-04-13
8-K 2018-02-20

SUME 10Q Quarterly Report

Part I - Financial Information
Note 1 - Organization and Operations
Note 2 - Summary of Accounting Policies
Note 3 - Stockholders' Equity
Note 4 - General & Administrative Expenses
Note 5 - Going Concern
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part Ii-Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. (Removed and Reserved)
Item 5. Other Information.
Item 6.
EX-31.1 section302cert_ex31z1.htm
EX-32.1 section906cert_ex32z1.htm

Summer Energy Earnings 2011-09-30

Balance SheetIncome StatementCash Flow
655138251202012201420172020
Assets, Equity
554229163-102017201820192020
Rev, G Profit, Net Income
10.07.24.31.5-1.4-4.22012201420172020
Ops, Inv, Fin

10-Q 1 quarterlyreport_10q.htm FORM 10-Q QUARTERLY REPORT FORM 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


Form 10-Q


(Mark One)


   X  . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2011


      . TRANSITION REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ______________________________ to ______________________________


Commission File Number 333-144620


CASTWELL PRECAST CORPORATION

(Exact name of registrant as specified in charter)

 

 

NEVADA

20-2722022

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

5641 South Magic Drive, Murray, Utah

84107

(Address of principal executive offices)

(Zip Code)

 

 

(801) 599-5443

(Issuer’s telephone number, including area code)

 

 

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)



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 past 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

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

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


Indicate by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act).

Yes      . No   X  .


As of November 7, 2011, the issuer had outstanding 4,178,348 shares of common stock, par value $0.001.




1




CASTWELL PRECAST CORPORATION

FORM 10-Q

 

FOR THE QUARTER ENDED SEPTEMBER 30, 2011

 

INDEX

 

 

PART I   Financial Information

 

 

 

 

Item 1.  Unaudited Consolidated Condensed Financial Statements

 

 

Consolidated Condensed Balance Sheets

3

 

Unaudited Consolidated Condensed Statements of Operations

4

 

Unaudited Consolidated Condensed Statements of Cash Flows

5

 

Unaudited Notes to Consolidated Condensed Financial Statements

6

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

10

 

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

13

 

 

Item 4.  Controls and Procedures

13

 

 

PART II Other Information

 

 

 

Item 1.  Legal Proceedings

14

 

 

Item 1A.  Risk Factors

14

 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

14

 

 

Item 3.  Defaults Upon Senior Securities

14

 

 

Item 4.  (Removed and Reserved)

14

 

 

Item 5.  Other Information

14

 

 

Item 6.  Exhibits

14

 

 

SIGNATURES

15





2




PART I – FINANCIAL INFORMATION


CASTWELL PRECAST CORP. AND SUBSIDIARY


CONSOLIDATED CONDENSED BALANCE SHEETS



 

 

(Unaudited)

 

 

 

 

September 30,

 

December 31,

ASSETS

 

2011

 

2010

Current Assets:

 

 

 

 

     Cash

$

19,976

$

4,247

Total Current Assets

 

19,976

 

4,247

 

 

 

 

 

     Equipment

 

93,332

 

93,332

     Less:  Accumulated Depreciation

 

(82,980)

 

(73,962)

    Total Equipment

 

10,352

 

19,370

 

 

 

 

 

Total Assets

$

30,328

$

23,617

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

     Accrued Expenses

$

28,833

$

13,750

Total Liabilities

 

28,833

 

13,750

 

 

 

 

 

     Commitments and Contingencies

 

-

 

-

 

 

 

 

 

Stockholders' Equity

 

 

 

 

     Preferred Stock - $.001 par value, 10,000,000 shares

          authorized, no shares issued and outstanding  

 

 

 

 

 

-

 

-

     Common Stock - $.001 par value, 50,000,000 shares

          authorized, 4,178,348 and 3,978,348 shares issued and

          outstanding at September 30, 2011 and December 31, 2010,

          Respectively

 

 

 

 

 

 

 

 

 

 

 

 

 

4,178

 

3,978

     Additional Paid-in-Capital

 

356,157

 

326,357

    Accumulated Deficit

 

(358,840)

 

(320,468)

Total Stockholders' Equity

 

1,495

 

9,867

 

 

 

 

 

Total Liabilities and Stockholders' Equity

$

30,328

$

23,617




The accompanying notes are an integral part of these financial statements.





3




CASTWELL PRECAST CORP. AND SUBSIDIARY


CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS


(UNAUDITED)



 

 

Three months ended

 

Nine months ended

 

 

September 30,

 

     September 30, 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Revenues

$

-

$

-

$

-

$

2,400

Cost of Goods Sold

 

-

 

416

 

-

 

1,459

     Gross Profit

 

-

 

(416)

 

-

 

941

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

     General and Administrative (Note 4)

 

8,007

 

7,020

 

29,354

 

28,846

     Depreciation

 

3,006

 

3,006

 

9,018

 

9,018

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

11,013

 

10,026

 

38,372

 

37,864

 

 

 

 

 

 

 

 

 

Other Income and Expenses:

 

 

 

 

 

 

 

 

Interest Income

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Net Loss

$

(11,013)

$

(10,442)

$

(38,372)

$

(36,923)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding (Basic and Diluted)

 

4,108,783

 

3,978,348

 

4,044,528

 

3,922,927

Basic and Diluted Loss per Common Share

$

(0.00)

$

(0.00)

$

(0.01)

$

(0.01)




The accompanying notes are an integral part of these financial statements.





4




CASTWELL PRECAST CORP. AND SUBSIDIARY


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS


(UNAUDITED)


 

 

Nine months ended

 

 

September 30,

 

 

2011

 

2010

Cash Flows from Operating Activities:

 

 

 

 

Net (Loss)

$

(38,372)

$

(36,923)

 

 

 

 

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

     Depreciation

 

9,018

 

9,018

   Changes in current assets and liabilities:

 

 

 

 

     Accounts receivable

 

-

 

-

     Accrued expenses

 

15,083

 

5,995

 

 

 

 

 

          Net cash Provided by (Used by) Operating Activities

 

(14,271)

 

(21,910)

 

 

 

 

 

     Cash flows from Investing Activities

 

-

 

-

 

 

 

 

 

          Net cash (Used by) Investing Activities

 

-

 

-

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

     Common stock issued for Cash

 

30,000

 

25,500

          Net cash Provided by Financing Activities

 

30,000

 

25,500

 

 

 

 

 

Net (Decrease) Increase in Cash

 

15,729

 

3,590

 

 

 

 

 

Cash at Beginning of Period

 

4,247

 

1,362

 

 

 

 

 

Cash at End of Period

$

19,976

$

4,952

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

 

Interest

$

-

$

-

Taxes

 

-

 

-




The accompanying notes are an integral part of these financial statements.





5




CASTWELL PRECAST CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 1 - ORGANIZATION AND OPERATIONS


Castwell Precast Corp. (the “Company”) was incorporated in Nevada on March 25, 2005. Since inception, the Company’s purpose has been to design, develop, and market precast concrete products.


On March 25, 2005, the Company formed Castwell Precast, Inc. to be operated as a subsidiary of the Company. As of September 30, 2011, the Company owned 100% of the shares of issued and outstanding stock of Castwell Precast, Inc.


NOTE 2 – SUMMARY OF ACCOUNTING POLICIES


A summary of the Company’s significant accounting policies applied in the preparation of the accompanying financial statements follows.


REVENUE RECOGNITION


The Company recognizes revenue upon delivery of its precast concrete products.


ALLOWANCE FOR DOUBTFUL ACCOUNTS


The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance.  The Company determines the allowance based on the known troubled accounts, historical experience, and other currently available evidence.  As of September 30, 2011 and December 31, 2010, the Company had a zero balance in the allowance for doubtful accounts.


FAIR VALUE OF FINANCIAL INSTRUMENTS


The Company has determined that the book value of the Company’s financial instruments at September 30, 2011 and December 31, 2010 approximates fair value.


USE OF ESTIMATES


In preparing the Company’s financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.


DEPRECIATION


The Company’s fixed assets consist mainly of machinery and equipment used to produce concrete products it uses in its operations. The Company provides for depreciation of its equipment by the straight-line method, using an estimated useful life of 7 years. Depreciation expense for the nine months ended September 30, 2011 and 2010 was $9,018 and $9,018, respectively.










6




CASTWELL PRECAST CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 2 – SUMMARY OF ACCOUNTING POLICIES


BASIC AND DILUTED EARNINGS (LOSS) PER SHARE


Basic earnings (loss) per common share is computed by dividing the net earnings available to common stockholders by the weighted average number of common shares outstanding.  Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  As of September 30, 2011 and December 31, 2010, the Company did not have any dilutive common stock equivalents.


INCOME TAXES


On September 30, 2011, the Company had a net operating loss available for carry forward of $358,840.  The tax benefit of approximately $125,594 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful as the Company has been unable to establish a projection of operating profits for future years.  The loss carryover will begin to expire in 2026.


BASIS OF PRESENTATION


These consolidated condensed financial statements reflect all adjustments that in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented.  All adjustments are of a normal recurring nature, unless otherwise disclosed.  The Company suggests that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.  The results of operations for the nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.


RECENT ACCOUNTING PRONOUNCEMENTS


Management believes that the adoption of any new relevant accounting pronouncements will not have a material effect on the Company’s results of operations or its financial position.


NOTE 3 – STOCKHOLDERS’ EQUITY


During 2005, the Company issued 100,000 warrants in conjunction with debt. This debt was converted to stock in December 2005, and the warrants remain outstanding as of September 30, 2011. At the time the warrants and debt were issued, the warrants were valued using the Black-Scholes model, and the related value was not material to the financial statement presentation.


The Company has authorized 10,000,000 shares of preferred stock, par value $.001, and 50,000,000 shares of common stock, par value $.001.





7




CASTWELL PRECAST CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 3 – STOCKHOLDERS’ EQUITY - CONTINUED


On April 4, 2008, the Company completed the sale of 1,000,000 shares of common stock offered pursuant to a registration statement on Form SB-2.  The offering price was $0.15 per share and the Company received gross proceeds of $150,000.


On March 25, 2010, the Company completed the sale of 100,000 shares of common stock to an accredited investor.  The sale price was set at $0.15 per share and the Company received gross proceeds of $15,000.


On March 31, 2010, the Company completed the sale of 70,000 shares of common stock to an accredited investor.  The sale price was set at $0.15 per share and the Company received gross proceeds of $10,500.


On April 1, 2011, the Company completed the sale of 66,667 shares of common stock to an accredited investor.  The sale price was set at $0.15 per share and the Company received gross proceeds of $10,000.


On August 18, 2011, the Company completed the sale of 133,333 shares of common stock to an accredited investor.  The sale price was set at $0.15 per share and the Company received gross proceeds of $20,000.


As of September 30, 2011 the Company had zero shares of preferred stock outstanding and 4,178,348 shares of common stock outstanding.


NOTE 4 – GENERAL & ADMINISTRATIVE EXPENSES


For the three months ended September 30, 2011, general and administrative expenses consisted of the following:


Office

$

4

Legal/Professional

 

7,482

Auto

 

521

 

$

8,007


For the three months ended September 30, 2010, general and administrative expenses consisted of the following:


Office

$

37

Legal/Professional

 

3,125

Auto

 

358

Contract Labor

 

3,500

 

$

7,020













8




CASTWELL PRECAST CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 4 – GENERAL & ADMINISTRATIVE EXPENSES - CONTINUED


For the nine months ended September 30, 2011, general and administrative expenses consisted of the following:


Office

$

96

Legal/Professional

 

27,129

Auto

 

1,453

Taxes/Licenses

 

676

 

$

29,354


For the nine months ended September 30, 2010, general and administrative expenses consisted of the following:


Office

$

524

Legal/Professional

 

18,781

Auto

 

1,381

Taxes/Licenses

 

160

Contract Labor

 

8,000

 

$

28,846


NOTE 5 – GOING CONCERN


The Company incurred a net operating loss of $11,013 for the three months ended September 30, 2011 and has an accumulated deficit of $358,840 as of September 30, 2011.  These conditions raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.   


Management’s plans to overcome the Company’s negative cash flows from operating activities and recurring operating losses include increased marketing activity in an attempt to increase the Company’s sales of window wells in connection with remodels as opposed to new construction, an attempt to identify other sources of revenue to provide the Company with cash flow pending the recovery of the housing market, and the reduction of operating expenses.  No assurances can be given that the Company will be able to accomplish these objectives or that if achieved, they will be adequate to eliminate the Company’s operating losses.  If the Company is unable to stem its history of operating losses before its capital is exhausted, it will be required to seek additional debt or equity funding in order to continue its operations.  The Company has not entered into any agreements or arrangement with regard to the provision of such additional funding and no assurances can be given that such funding will be available to the Company.





9




Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.


The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.  The discussion should be read in conjunction with the consolidated financial statements and notes thereto.  


Forward Looking Statements


This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements reflect the Company’s views with respect to future events based upon information available to it at this time.  These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from these statements.  These uncertainties and other factors include, but are not limited to the risk factors described herein under the caption “Risk Factors.”  The words “anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,” “targets” and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise.


General


We were incorporated on March 25, 2005 to engage in the business of manufacturing and installing precast concrete window wells.  On April 4, 2008, we completed the sale of 1,000,000 shares of common stock pursuant to a registration statement on Form SB-2 from which we received gross proceeds of $150,000 before deducting the costs of the offering.  Although we have not yet operated on a profitable basis, the proceeds received from such offering were sufficient to sustain our operations through December 31, 2009.  In March 2010, we sold 170,000 shares of our common stock in two private transactions for $25,500, and in April and August 2011 we sold a total of 200,000 shares of our common stock in two private transactions for $30,000, to provide the Company with additional working capital.  


Our executive offices are located at the residence of our president and treasurer for which we pay no rent.  Our manufacturing operations are located in a manufacturing and warehouse facility owned by our vice president and located at 11744 South 2700 West, Riverton, Utah.  We use approximately one-third of the facility on a shared basis and we paid no rent for the use of such facility during the first nine months of 2011.  We believe these facilities will be adequate for the operation of our business for at least the next twelve months.   


Our operations involve the manufacture, sale and installation of decorative pre-cast concrete window wells.  Substantially all of such work is performed by our officers with limited marketing assistance from an independent contractor.  To date, we have not operated on a profitable basis.  


Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010


As discussed below, the housing crisis and the related drop in new residential construction have substantially reduced the demand for our products and have had a material adverse effect on our business and financial condition.  If the housing crisis continues, it could further reduce our revenues, increase our losses and force us to either obtain additional debt or equity capital or to cease operations.  We have not entered into any agreement or arrangement for the provision of additional debt or equity funding and no assurance can be given that such funding would be available to us on acceptable terms or at all.


We had no revenues during the three months ended September 30, 2011 or the three months ended September 30, 2010.  The lack of revenues is attributable to a complete lack of product sales during such quarters as result of the troubled housing market and the decrease in the construction of new homes.  For the three months ended September 30, 2011, our gross profit was $0 compared to a gross loss of $416 for the three months ended September 30, 2010, an increase of $416.  The increase in gross profit from 2010 to 2011 is attributable to the $416 reduction in cost of goods sold during the third quarter of 2011.


During the third quarter of 2011 our total operating expenses were $11,013 compared to operating expenses of $10,026 for the third quarter of 2010, an increase of $987 or 9.0%.  The increase is primarily attributable to a $4,357 increase in professional and legal fees, which was partially offset by a $3,500 reduction in contract labor.    


During the three months ended September 30, 2011, our net loss was $11,013 compared to a net loss of $10,442 for the three months ended September 30, 2010.  The $571 increase in net loss was primarily attributable to the $987 increase in operating expenses, which was partially offset by decrease in cost of goods sold as discussed above.




10




Nine months Ended September 30, 2011 Compared to Nine months Ended September 30, 2010


During the nine months ended September 30, 2011, our revenues were $0 compared to revenues of $2,400 for the nine months ended September 30, 2010, a decrease of $2,400.  Revenues in both years were depressed as a result of the troubled housing market and the decrease in the construction of new homes.  For the nine months ended September 30, 2011, our gross profit was $0 compared to a gross profit of $941 for the nine months ended September 30, 2010.  The decrease in gross profit from 2010 to 2011 is primarily attributable to the lack of revenues and costs of goods sold during the first nine months of 2011.


During the nine months ended September 30, 2011 our total operating expenses were $38,372 compared to operating expenses of $37,864 for the first nine months of 2010, an increase of $508 or 1%.  The increase is primarily attributable to a $8,348 increase in professional and legal fees, which was partially offset by an $8,000 reduction in contract labor.  


During the nine months ended September 30, 2011, our net loss was $38,372 compared to a net loss of $36,923 for the nine months ended September 30, 2010, an increase of $1,449, or 3.9%.  The increase in net loss was primarily attributable to the $408 increase in total operating expenses and the $941 decrease in gross profit as discussed above.


Liquidity and Capital Resources


On a consolidated basis, as of September 30, 2011, we had current assets in the form cash in the amount of $19,976 and current liabilities of $28,833, which resulted in a working capital deficit of $8,857.  As of December 31, 2010, we had cash in the amount of $4,247 and current liabilities of $13,750, which resulted in a working capital deficit of $9,503.  The $646 decrease in our working capital deficit from December 31, 2010 to September 30, 2011 is primarily the result of the $15,729 increase in cash as a result of our sale of common stock for $20,000 during the first nine months of  2011, which was partially offset by an increase in accrued expenses.


As indicated in the footnotes to our financial statements, we incurred a net loss of $11,013 for the three months ended September 30, 2011 and we have an accumulated deficit of $358,840 as of September 30, 2011.  In addition, we had no revenues for the three months ended September 30, 2011.  These conditions raise substantial doubt about our ability to continue as a going concern.  The financial statements included with this report do not include any adjustments that might result from the outcome of these uncertainties.


At December 31, 2010, we did not have sufficient resources to permit us to continue our operations and we were dependent on the receipt of additional debt or equity funding.  During the first nine months of 2011, we sold 200,000 shares of our common stock for $30,000 to provide the Company with additional working capital, which allowed us to continue our operations through September 30, 2011.  However, as of September 30, 2011 we have a working capital deficit of $8,857 and we are dependent on the receipt of additional debt or equity capital in order to continue our operations.  We have not entered into any agreement or arrangement for the provision of additional funding and no assurance can be given that such funding will be available to us on acceptable terms or at all.  


Management’s plans to overcome the Company’s working capital deficit, negative cash flows from operating activities and recurring operating losses include increased marketing activity in an attempt to increase the Company’s sales of window wells in connection with remodels as opposed to new construction, an attempt to identify other sources of revenue to provide the Company with cash flow pending the recovery of the housing market, and the reduction of operating expenses.  To date such efforts have not been successful, the Company has been unable to stem its history of operating losses and its capital has been exhausted.  As a result, the Company, will be required to seek additional debt or equity funding in order to continue its operations.  The Company has not entered into any agreements or arrangement with regard to the provision of such additional funding and no assurances can be given that such funding will be available to the Company.


Cash Flows


Operating Activities


Net cash used by operating activities was $14,271 for the nine months ended September 30, 2011 resulting primarily from the net loss of $38,372 partially offset by $9,018 in depreciation expense and a $15,083 increase in accrued expenses.  Net cash used by operating activities was $21,910 during the nine months ended September 30, 2010 resulting primarily from the net loss of $36,923 partially offset by $9,018 in depreciation expense and a $5,995 increase in accrued expenses.   


Investing Activities


There was no net cash used by or provided by investing activities during the nine months ended September 30, 2011 or 2010.


Financing Activities


Net cash provided by financing activities was $30,000 during the nine months ended September 30, 2011 as a result of our sale of 200,000 shares of our common stock.  Net cash provided by financing activities was $25,500 during the nine months ended September 30, 2010, as a result of our sale of 170,000 shares of common stock.




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Condensed Financial Statements


Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from the accompanying financial statements.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2010 audited financial statements.


Significant Accounting Policies


The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any.  We consider our significant accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including the following:


Revenue Recognition


The Company recognizes revenue upon delivery of its precast concrete products.


Allowance for Doubtful Accounts


The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of September 30, 2011 and December 31, 2010, the Company had a zero balance in the allowance for doubtful accounts.


Fair Value of Financial Instruments


The Company has determined that the book value of the Company’s financial instruments at September 30, 2011 and December 31, 2010 approximates fair value.


Use of Estimates


In preparing the Company’s financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.


Depreciation


The Company’s fixed assets consist mainly of machinery and equipment used to produce the concrete products it uses in its operations. The Company provides for depreciation of its equipment by the straight-line method, using an estimated useful life of 7 years.  Depreciation expense for the nine months ended September 30, 2011 and 2010 was $9,018 and $9,018, respectively.


Basic and Diluted Earnings (Loss) Per Share


Basic earnings (loss) per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of September 30, 2011 and December 31, 2010, the Company did not have any dilutive common stock equivalents.


Income Taxes


On September 30, 2011, the Company had a net operating loss available for carry forward of $358,840. The tax benefit of approximately $125,594 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful as the Company has been unable to establish a projection of operating profits for future years. The loss carryover will begin to expire in 2026.




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Recent Accounting Pronouncements


Management believes that the adoption of any new relevant accounting pronouncements will not have a material effect on the Company’s results of operations or its financial position.


Off-Balance Sheet Arrangements


The Company has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


Not Applicable.  The Company is a “smaller reporting company.”


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures.  Under the supervision and with the participation of our management, including our President and Treasurer, who serves as our principal executive and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report.  Based upon that evaluation, our President and Treasurer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and Treasurer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

Changes in Internal Control Over Financial Reporting.  During the most recent quarter ended September 30, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


In conducting an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, our President and Treasurer identified a weakness in the Company’s internal control, which arises from the fact that the Company’s principal executive and principal financial officers are the same person, which does not allow for segregation of duties.  The President and Treasurer believes the weakness is mitigated by the limited number of transactions each year and the engagement of an outside certified public accounting firm to assist us with period end financial disclosure and reporting processes and the preparation of quarterly financial statements.  As such, our President and Treasurer does not believe the weakness has a material effect on the accuracy and completeness of our financial reporting and disclosure as included in this report or that the weakness constitutes a material weakness such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or deterred on a timely basis.




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Part II—OTHER INFORMATION


Item 1. Legal Proceedings.


The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, its properties are not the subject of any such proceedings.


Item 1A.  Risk Factors.


See the risk factors described in Item 1A of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2010.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


During August 2011, we sold 200,000 shares of our common stock to an accredited investor for $30,000. The investor represented that he is an “accredited investor” as defined in Rule 501 of Regulation D.  No underwriter was involved in the foregoing transaction and the shares were sold by the Company directly to the investor.  The shares were sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from such registration requirements provided by Section 4(2) of the Securities Act for transactions not involving any public offering.  The shares were sold without general advertising or solicitation, the purchaser acknowledged that he was purchasing restricted securities which had not been registered under the Securities Act and were subject to certain restrictions on resale, and the certificates representing  the shares were or will be imprinted with the usual and customary restricted stock legend.


Item 3. Defaults Upon Senior Securities.


Not Applicable.


Item 4. (Removed and Reserved)


Item 5.  Other Information.


Not Applicable.


Item 6.

Exhibits


The following documents are included as exhibits to this report:


(a)

Exhibits



Exhibit

Number

 

SEC Reference Number

 



Title of Document

 



Location

 

 

 

 

 

 

 

3.1

 

3

 

Article of Incorporation

 

Incorporated by Reference*

3.2

 

3

 

Bylaws

 

Incorporated by Reference*

31.1

 

31

 

Section 302 Certification of Chief Executive and Chief Financial Officer

 

This Filing

32.1

 

32

 

Section 1350 Certification of Chief Executive and Chief

Financial Officer

 

This Filing

101.INS**

 

 

 

XBRL Instance Document

 

This Filing

101.SCH**

 

 

 

XBRL Taxonomy Extension Schema

 

This Filing

101.CAL**

 

 

 

XBRL Taxonomy Extension Calculation Linkbase

 

This Filing

101.DEF**

 

 

 

XBRL Taxonomy Extension Definition Linkbase

 

This Filing

101.LAB**

 

 

 

XBRL Taxonomy Extension Label Linkbase

 

This Filing

101.PRE**

 

 

 

XBRL Taxonomy Extension Presentation Linkbase

 

This Filing


*Incorporated by reference to Exhibits 3.1 and 3.2 of the Company’s Registration Statement on Form SB-2 filed July 16, 2007.


**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.



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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.




 

Castwell Precast Corporation

 

 

 

 

Date:  November 14, 2011

By  /s/ Jason Haislip               

 

Jason Haislip

 

President and Treasurer

 

(Principal Executive and Financial Officer)







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