Company Quick10K Filing
Quick10K
Wadena
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
8-K 2019-08-08
8-K 2019-02-22
8-K 2018-10-15
ALFA Alfacourse 383
CLDB Cortland Bancorp 100
BLGO Biolargo 33
EFSH 1847 Holdings 4
CYS CYS Investments 0
PCC Powercomm Holdings 0
FMCF 4M Carbon Fiber 0
RSAP Reign Sapphire 0
LBSR Liberty Star Uranium & Metals 0
WESTG Westgate Acquisitions 0
WDN 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Note 1.
Note 2.
Note 3.
Note 4.
Note 5.
Note 6.
Item 2.
Item 4.
Part II
Item 2.
Item 5.
Item 6.
EX-31.1 exhibit311.htm
EX-31.2 exhibit312.htm
EX-32.1 exhibit321.htm

Wadena Earnings 2019-06-30

WDN 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 f190630pierreform10q.htm QUARTERLY REPORT FOR PERIOD ENDED JUNE 30, 2019 Pierre Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q


x   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


For the quarterly period ended June 30, 2019


 o  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934


For the transition period _____________to______________


Commission File Number 333-207047


 

 

 

 

PIERRE CORP.

 

 

(Exact name of registrant as specified in its charter)

 


 

 

 

Nevada

  

467-4046237

(State or other jurisdiction of incorporation or organization)

  

(IRS Employer Identification No.)


 

 

 

750 N. San Vicente, Suite 800 West

  

  

West Hollywood, CA

  

90069

(Address of principal executive offices)

  

(Postal or Zip Code)


 

 

 

Registrant’s telephone number, including area code:

 

(818) 855-8199


 

 

 

 

 

 

 

(Former name, former address and former fiscal year,

 if changed since last report

 


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

  Common Stock

None

None


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) had been subject to such filing requirements for the past 90 days.

Yes                   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     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 and emerging growth company in Rule 12b-2 of the Exchange Act. (Check One):

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 



1



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).      Yes       No


State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 29,076,800 shares of $0.001 par value common stock outstanding as of August 19, 2019.




2



PART I. FINANCIAL INFORMATION


Item 1.   Financial Statements




3




Pierre Corp.

Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

June 30, 2019

 

December 31, 2018

Current assets:

 

 

 

 

 

 

Cash

 

 

 

 

 $  34,736

 

 $ 1,285

Prepaid assets

 

 

 

5,700

 

5,700

Total current assets

 

 

 

40,436

 

6,985

Total assets

 

 

 

 $40,436

 

 $6,985

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

 

 $11,349

 

 $15,028

Accounts payable - related party

 

175,221

 

164,841

Notes payable

 

 

 

323,900

 

244,000

Notes payable - related party

 

 

6,000

 

6,000

Convertible notes, net of unamortized discount of $59,979 and $0, respectively

 

 

25,021

 

-

Derivative liability

 

 

60,859

 

--

 

 

 

 

 

 

 

 

Total current liabilities

 

 

602,350

 

429,869

Total liabilities

 

 

 

602,350

 

429,869

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

Preferred stock, $0.001 par value, 500,000,000 shares authorized,

 

 

none issued and outstanding

 

 

                            -   

 

                                   -   

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized,

 

 

29,076,800 and 29,051,800 shares issued and outstanding at

 

 

 

June 30, 2019 and December 31, 2018, respectively

29,077

 

 29,052

 

 

 

 

 

 

 

 

Additional paid in capital

 

 

195,273

 

189,048

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

(786,264)

 

(640,984)

Total stockholders' deficit

 

 

(561,914)

 

(422,884)

Total liabilities and stockholders' deficit

 

 $40,436

 

 $ 6,985




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




4






Pierre Corp.

Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

 

 

 

For the Three months

For the Three months

For the Six months

For the Six months

 

 

 

ended

ended

ended

ended

 

 

 

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

Operating expenses:

 

 

 

 

 

Depreciation

 

$                -

$            386

$                -

$            772

General and administration

        79,656

        51,473

      127,311

       70,432

 

 

 

 

 

 

 

Total operating expenses

        (79,656)

        (51,859)

      (127,311)

       (71,204)

 

 

 

 

 

Amortization of debt discount

(8,637)

-

(8,637)

-

Interest expense

(839)

-

(839)

-

Change in fair value of derivative liability

(8,493)

-

(8,493)

-

Total other expense

        (17,969)

        -

      (17,969)

       -

 

 

 

 

 

 

 

Net loss

 

 

$       (97,625)

$      (51,859)

$    (145,280)

$      (71,204)

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 $             (0.00)

$            (0.00)

$             (0.00)

$            (0.00)

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

29,069,856

29,051,800

29,060,828

29,051,800


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



5




Pierre Corp.

Statements of Changes in Stockholders’ Deficit

For the three and six months ended June 30, 2019 and 2018

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Additional paid-in

 

Accumulated

 

 

 

 

Shares

 

Amount

 

capital

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

29,051,800

 

$29,052

 

$189,048

 

$(640,984)

 

$(422,884)

Net loss

 

-

 

-

 

-

 

(47,655)

 

(47,655)

Balance, March 31, 2019

 

29,051,800

 

29,052

 

189,048

 

(688,639)

 

(470,539)

Common shares issued with convertible note

 

25,000

 

25

 

6,225

 

-

 

6,250

Net loss

 

-

 

-

 

-

 

(97,625)

 

(97,625)

Balance, June 30, 2019

 

29,076,800

 

$29,077

 

$195,273

 

$(786,264)

 

$(561,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

28,305,000

 

$28,305

 

$3,095

 

$(442,083)

 

$(410,683)

Net loss

 

-

 

-

 

-

 

(19,345)

 

(19,345)

Balance, March 31, 2018

 

28,305,000

 

28,305

 

3,095

 

(461,428)

 

(430,028)

Sale of common stock

 

600,000

 

600

 

149,400

 

-

 

150,000

Net loss

 

-

 

-

 

-

 

(51,859)

 

(51,859)

Balance, June 30, 2018

 

28,905,000

 

$28,905

 

$152,495

 

$(513,287)

 

$(331,887)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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



6






Pierre Corp.

Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

 

 

 

For the Six months ended

For the Six months ended

 

 

 

 

June 30, 2019

June 30, 2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

Net loss

 

 

 

$        (145,280)

$      (71,204)

Adjustment to reconcile net loss to

 

 

cash used in operating activities:

 

 

Depreciation expense

 

-   

772

Amortization of debt discount

 

8,637

-

Loss on change in fair value of derivative liability

 

8,493

-

Net change in:

 

 

 

 

Accounts payable

 

 

(3,679)

(62)

Accounts payable - related party

10,380

5,841

 

 

 

 

 

 

CASH FLOWS USED IN OPERATING ACTIVITIES

(121,449)

(64,653)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Sale of common stock

 

-   

150,000

Proceeds from convertible notes

75,000

-

Proceeds from advances, related party

-   

1,012

Proceeds from advances, unrelated party

79,900

20,000

 

 

 

 

 

 

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

154,900

171,012

 

 

 

 

 

 

NET CHANGE IN CASH

 

33,451

106,359

Cash, beginning of period

 

   1,285

-   

Cash, end of period

 

 

 $             34,736

 $       106,359

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

Cash paid on interest expenses

 $                         -

 $                   -

Cash paid for income taxes

 

 $                          -

 $                   -

 

 

 

 

NON-CASH TRANSACTIONS

 

 

 

Common stock issued with convertible notes

 

$                 6,250

$                    -

Debt discount created by derivative liability

 

$               52,366

$                    -




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




7



Pierre Corp.

Notes to the Financial Statements

June 30, 2019

 (Unaudited)


Note 1.

Basis of Presentation


The accompanying unaudited interim financial statements of Pierre Corp. (“Pierre” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2018, as reported in the Form 10-K of the Company, have been omitted.


Significant Accounting Policies


Fair Value of Financial Instruments


The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The long-term debt approximate fair value since the related rates of interest approximate current market rates.


Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:


Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets


Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.


Level 3: inputs to the valuation methodology are unobservable and significant to the fair value.


Fair Value Measurements


The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy.


The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2019 and December 31, 2018:



8



 

Fair value measured at June 30, 2019

 

 

Total carrying

value

at June 30,

2019

 

Quoted prices in active

markets

(Level 1)

 

Significant other

observable

inputs

(Level 2)

 

Significant

Unobservable

inputs

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

60,859

 

$

-

 

$

-

 

$

60,859

 

Fair value measured at December 31, 2018

 

 

Total carrying

value

at December 31,

2018

 

Quoted prices in active

markets

(Level 1)

 

Significant other

observable

inputs

(Level 2)

 

Significant

Unobservable

inputs

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

-

 

$

-

 

$

-

 

$

-


There were no transfers between Level 1, 2 or 3 during the period.


The table below presents the change in the fair value of the derivative liability during the six months ended June 30, 2019:


Fair value as of December 31, 2018

$            -

Fair value on the date of issuance recorded as a debt discount

52,366

Fair value on the date of issuance recorded as a loss on derivatives

9,362

Gain on change in fair value of derivatives

(869)

Fair value as of June 30, 2019

$  60,859


Convertible debt


The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional noncash interest expense over the expected life of the convertible notes.

  

Beneficial Conversion Features


If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 47020 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.




9



Derivative Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.


Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, The Company adopted this standard on January 1, 2019 using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs; and all of the new standard’s available transition practical expedients.

 

The new standard also provides practical expedients for a company’s ongoing accounting. The Company elected the short-term lease recognition exemption for its leases. For those leases with a lease term of 12 months or less, the Company will not recognize ROU assets or lease liabilities. The Company also made an accounting policy election to combine lease and non-lease components of operating leases for all asset classes.  The adoption of this new standard did not impact the Company.


In June 2018, the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The Company adopted the provisions of the guidance on January 1, 2019 with no material impact on the Company’s consolidated financial statements and disclosures.

 

The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.




10



Note 2.

Going Concern

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2019 the Company had not yet achieved profitable operationsand expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.


Note 3.

Related Party Transactions


The related party advances are due to the former director and President of the Company for funds advanced.  The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of June 30, 2019, the advances totaled $6,000.


Effective March 1, 2012, the Company agreed to pay the President of the Company $4,000 per month for management services if funds are available or to accrue such amount if funds are not available.  Effective July 1, 2016, the Company agreed to pay the President of the Company $2,000 per month for management services if funds are available or to accrue such amount if funds are not available.  Effective October 1, 2018, the Company agreed to pay the President of the Company $6,000 per month for management services if funds are available or to accrue such amount if funds are not available. Effective April 30, 2019, the Company agreed to pay the President of the Company $11,500 per month for management services if funds are available or to accrue such amount if funds are not available.  The agreement is verbal and can be cancelled at any time. Accounts payable – related party are the fees earned but not yet paid of $175,221 and $164,841 at June 30, 2019 and December 31, 2018, respectively.


 

 

Six months ended
June 30, 2019

Six months ended
June 30, 2018

 

 

 

 


Management fees

$       52,500

$        12,000


Robert Sawatsky, who was previously the President and CEO of the Company continues to provide consulting services to the Company related to public company reporting with no expected compensation.


Note 4.  

Notes Payable


During the six-month period ended June 30, 2019, the Company received advances of $79,900 from six unrelated third parties. The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of June 30, 2019 and December 31, 2018 the advances totaled $323,900 and $244,000, respectively.




11



Note 5.

Convertible Notes Payable


On April 25, 2019, the Company borrowed $30,000 from an unrelated third party. The loan had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which will be amortized over the life of the note.  In addition the Company is required to pay transaction fees of the lender of $2,500 which is included in accounts payable.  The loan bears interest at a rate of 9% and is due and payable on October 25, 2020.  The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price.  The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion.  Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $28,112 which was recorded as a discount on the note payable and a day one loss on the derivative liability of $9,362.  In addition, the note holder was issued 25,000 shares of common stock valued at $6,250 which was recorded as a debt discount and will be amortized over the life of the note.


On June 4, 2019, the Company borrowed $55,000 from an unrelated third party.  The loan had an original issuance discount of $5,000 which will be amortized over the life of the note.  The loan bears interest at a rate of 10% and is due and payable on March 4, 2020.  At any time on or before December 1, 2019 the Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 20% to 40%. After December 1, 2019, the Company may not repay the loan without the consent of the lender. At any time after December 1, 2019, the unpaid principal is convertible into shares of the Company’s common stock at the conversion price.  The conversion price is 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion.  Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $33,615 which was recorded as a discount on the note payable.


As of June 30, 2019, the total derivative liability on the above notes was adjusted to a fair value of $60,859.  During the six months ended June 30, 2019, $8,637 of the discount was amortized leaving an unamortized balance of $59,979.  The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.25, volatility of 55% - 59% based on a comparable company peer group, expected term of 0.32 – 0.75 years, risk-free rate of 2.1% - 2.3% and a dividend yield of 0%.


Note 6.

Capital Stock


During the six months ended June 30, 2019 the Company issued 25,000 shares of its restricted common stock to the third party that provided the Company with the $27,500 loan described in Note 6.  The shares were valued at $6,250 and issued to the third party as additional consideration for providing the loan.



12





Item 2.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations


The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.


Cautionary Statement Regarding Forward-Looking Statements


This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.


Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.


Overview


Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” “our company,” “Pierre” or the “Company” refer to Pierre Corp.


We were incorporated in Nevada on January 21, 2011.  Since our incorporation, we have attempted to become involved in a number of business ventures, all of which were unsuccessful and which we have abandoned.


In February 2018, we decided to become involved in the marijuana industry.




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We now plan to own and operate medical and adult marijuana cultivation facilities, manufacturing facilities and dispensaries in California.  The first step in our business plan is to acquire licenses to cultivate, manufacture and dispense marijuana.  


We currently have agreements with LGM, Org and Lean Green Machine, Inc. (collectively “LGM”) to acquire licenses LGM may be awarded by the state of California in Long Beach and the City of Commerce.  LGM has applied for licenses to operate cultivation and manufacturing facilities in these two cities.  A cultivation and manufacturing license, awarded together, is known as a “micro license”.


If LGM is awarded a micro license for Long Beach, we will issue LGM 35,381,250 shares of our common stock in consideration for the assignment of the license to us.  As of June 30, 2019 LGM had not been awarded this license and no shares had been issued.


If LGM is awarded a micro license for the City of Commerce, we will issue LGM 35,381,250 shares of our common stock in consideration for the assignment of the license to us.  As of June 30, 2019  LGM had not been awarded this license and no shares had been issued.


We estimate that it will require six months and cost $750,000 to build and equip a cultivation and manufacturing facility in either Long Beach or the City of Commerce.


Our estimated costs to operate a cultivation/manufacturing facility are:


Description

Monthly Amount (1)


Nutrients/grow supplies

$  10,000

Utilities

18,700

Product testing

2,500

Transportation

1,000

Labor

25,000

Security

2,500

Insurance

1,000

Rent

15,000

Legal

5,000

$  80,700


(1)

Does not include licensing fees or state or local taxes, as the amounts will depend on the location of the cultivation/manufacturing facility.


If LGM is awarded only one license, or if LGM is not awarded any licenses we will attempt to acquire licenses from other persons who have either applied for or been granted marijuana licenses in California.  Although our preference is to acquire micro licenses, we may acquire separate cultivation, manufacturing or dispensary licenses.


We do not intend to acquire a license associated with a facility or dispensary which is in operation.


We may also apply for a marijuana cultivation, manufacturing or dispensary license in our own name.


J. Jacob Isaacs, our only officer and director, and the owner of 15,750,000 shares of our common stock, intends to sell us, for $100, the same number of shares which we may issue to LGM.



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On October 15, 2018 an officer and shareholder owning a majority of the Company’s outstanding shares of common stock amended the Company’s Articles of Incorporation to:


·

change the name of the Company from Wadena, Corp. to Pierre Corp.

·

reverse split the Company’s outstanding shares of common stock on a 5-for-1 basis.  All share references in this document have been retroactively adjusted to reflect this reverse stock split.


Critical Accounting Policies


Use of Estimates and Assumptions


The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, and (ii) the reported amount of expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.


These estimates and assumptions also affect the reported amounts of costs and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.


Results of Operations for the three and six months ended June 30, 2019, compared to three and six months ended June 30, 2018.


During the three and six months ended June 30, 2019 General and Administrative Expenses increased from the comparable periods in 2018 due to the change in our business plan which resulted in increased legal and consulting fees as well as increased travel costs.  Increases in other expense are the result of cost associated with our new note payable arrangements included amortization of discounts, derivative liability expense and interest.



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Liquidity and Capital Resources


Our sources and (uses) of cash for the six months ended June 30, 2019 and 2018 were:

 

 

2018

 

2017

 

 

 

 

 

 

Cash (used in) operations

 

$

(121,449)

 

 

$

(64,653)

 

Sale of common stock

 

$

-

 

 

 

150,000

 

Proceeds from advances, related

   party

 

$

-

 

 

$

1,012

 

Proceeds on convertible notes

 

$

75,000

 

 

$

-

 

Proceeds from advances, unrelated party

 

$

79,900

 

 

$

20,000

 


Going Concern


The unaudited financial statements accompanying the report have been prepared on a going concern basis, which assumes that our company will be able to meet our obligations and continue our operations for our next fiscal year. Realization values may be substantially different from carrying values as shown and the financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should we be unable to continue as a going concern. At June 30, 2019, we have not yet achieved profitable operations and expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.


There are no assurances that we will be able to obtain further funds required for our continued operations. We are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be forced to scale down or perhaps even cease the operation of our business.


Item 4.  

Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the direction and with the participation of the Company’s management, including the Company’s Chief Executive and Chief Financial Officer, the Company has conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2019. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based on the evaluation, the Chief Executive and Chief Financial Officer concluded that the Company’s disclosure



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controls and procedures were not effective as of June 30, 2019.  

 

Changes in Internal Control over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting that occurred during the six months ended June 30, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


PART II

OTHER INFORMATION


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


The Company sold shares of common stock for that were not reported on a Current Report on Form 8-K or in Part II, Item 5 of the Annual report on Form 10-K and such transactions are being reported hereby, as follows.


Between May and August 2018, third party investors purchased 3,734,000 shares of the Company’s common stock for a purchase price of $0.05 per share totaling $186,700.


The Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933 in connection with issuance of the securities described above.  The persons who acquired these securities were sophisticated investors and were provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the offer or sale of these securities. The persons who acquired these securities acquired them for their own accounts. The certificates representing these securities will bear a restricted legend providing that they cannot be sold except pursuant to an effective registration statement or an exemption from registration. No commission was paid to any person in connection with the sale of these securities.


Item 5. 

Other Information


See Note 6 to the financial statements included as part of this report.





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Item 6. 

Exhibits

 

 

 

 

Exhibit

Number


Description

 

 

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.




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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.



DATED:   August 19, 2019

PIERRE CORP.



By: /s/ J. Jacob Isaacs

J. Jacob Isaacs, Principal Executive, Financial and Accounting Officer





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