SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September
30, 2012
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-53259
POWERDYNE INTERNATIONAL, INC.
(Exact name of registrant as specified
in its charter)
Delaware
|
20-5572576
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
300 Centerville Road
Suite 100E
Warwick, Rhode Island 02886
(Address of principal executive offices)
(zip code)
401/739-3300
(Registrant's telephone number, including
area code)
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
x
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", "non-accelerated filer", and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
Large Accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
x
|
(do not check if smaller reporting company)
|
|
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨
Yes
x
No
Indicate the number of shares outstanding
of each of the registrant's classes of common stock as of the latest practicable date.
Class
|
|
Outstanding at July 20, 2012
|
|
|
|
Common Stock, par value $0.0001
|
|
193,216,667 shares
|
Documents incorporated by reference:
None
POWERDYNE INTERNATIONAL INC.
INDEX
TO FORM 10-Q FILING
september
30, 2012 and 2011
TABLE
OF CONTENTS
|
|
|
|
Page
Numbers
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PART I - FINANCIAL INFORMATION
|
|
|
|
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Item 1.
|
|
Financial Statements (unaudited)
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Balance Sheets (unaudited)
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2
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Statements of Operations (unaudited)
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3
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Statements of Cash Flows (unaudited)
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5
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Notes to Financial Statements (unaudited)
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6
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Item 2.
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Management Discussion and Analysis of Financial Condition and Results
of Operations
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17
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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19
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Item 4.
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Controls and Procedures
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19
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PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings
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21
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Item 1A
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Risk Factors
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21
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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21
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Item 3.
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Defaults Upon Senior Securities
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21
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Item 4.
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Submission of Matters to a Vote of Security Holders
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21
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Item 5.
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Other information
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21
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Item 6.
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Exhibits
|
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22
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CERTIFICATIONS
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Exhibit 31 – Management certification
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Exhibit 32 – Sarbanes-Oxley Act
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PART I
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEETS
|
|
September 30, 2012
|
|
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December 31, 2011
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(unaudited)
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|
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ASSETS
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|
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Current Assets:
|
|
|
|
|
|
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|
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Cash
|
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$
|
117
|
|
|
$
|
17,664
|
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Prepaid expenses
|
|
|
-
|
|
|
|
1,817
|
|
Advances to stockholder
|
|
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11,321
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|
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11,321
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Total current assets
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11,438
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|
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30,802
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|
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|
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Equipment, net
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|
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119,493
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|
|
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129,821
|
|
|
|
|
|
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|
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Total Assets
|
|
$
|
130,931
|
|
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$
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160,623
|
|
|
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|
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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Current Liabilities:
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|
|
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|
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Accounts payable and accrued expenses
|
|
$
|
140,669
|
|
|
$
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135,626
|
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Due to related party
|
|
|
4,700
|
|
|
|
-
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Notes payable-related party
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11,000
|
|
|
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—
|
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Tax payable
|
|
|
—
|
|
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|
956
|
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Total current liabilities
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|
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156,369
|
|
|
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136,582
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Total Liabilities
|
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156,369
|
|
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|
136,582
|
|
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|
|
|
|
|
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|
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Stockholders' Equity (Deficit):
|
|
|
|
|
|
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|
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Common stock; $0.0001 par value; 300,000,000 shares authorized, 193,216,667
shares issued and outstanding as of September 30, 2012 and 191,750,000 shares issued and outstanding as of December 31, 2011
|
|
|
19,322
|
|
|
|
19,175
|
|
Additional paid-in capital
|
|
|
1,090,778
|
|
|
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1,056,925
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Accumulated deficit
|
|
|
(1,135,538
|
)
|
|
|
(1,052,059
|
)
|
Total Stockholders' Equity (Deficit)
|
|
|
(25,438
|
)
|
|
|
24,041
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity (Deficit)
|
|
$
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130,931
|
|
|
$
|
160,623
|
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Page
2
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The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
|
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For the three
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For the three
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For the Nine
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|
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For the Nine
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For the period from
|
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|
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months ended
|
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months ended
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Months Ended
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Months Ended
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February 2, 2010 (inception)
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September
30, 2012
|
|
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September
30, 2011
|
|
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September
30, 2012
|
|
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September
30, 2011
|
|
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to
September 30, 2012
|
|
|
|
|
|
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|
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|
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Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Cost of revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
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-
|
|
|
|
-
|
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Gross profit
|
|
|
-
|
|
|
|
-
|
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|
|
-
|
|
|
|
-
|
|
|
|
-
|
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Operating expenses
|
|
|
22,610
|
|
|
|
49,892
|
|
|
|
83,479
|
|
|
|
694,272
|
|
|
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1,132,670
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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Loss from operations
|
|
|
(22,610
|
)
|
|
|
(49,892
|
)
|
|
|
(83,479
|
)
|
|
|
(694,272
|
)
|
|
|
(1,132,670
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Income tax expense
|
|
|
—
|
|
|
|
956
|
|
|
|
—
|
|
|
|
1,912
|
|
|
|
2,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net loss
|
|
$
|
(22,610
|
)
|
|
$
|
(50,848
|
)
|
|
$
|
(83,479
|
)
|
|
$
|
(696,184
|
)
|
|
$
|
(1,135,538
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
Basic
and diluted weighted average common shares outstanding
|
|
|
193,216,667
|
|
|
|
190,608,696
|
|
|
|
193,093,431
|
|
|
|
191,890,110
|
|
|
|
|
|
Page
3
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS’
EQUITY (DEFICIT)
For the period from February 2, 2010
(Inception) to September 30, 2012
|
|
|
|
|
|
|
|
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|
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Additional
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
Common
Stock
|
|
|
Common
Stock
|
|
|
Paid-In
|
|
|
Common
Stock
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Subscribed
|
|
|
Capital
|
|
|
Subscriptions
Receivable
|
|
|
Deficit
|
|
|
Equity
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 2, 2010 (Inception)
|
|
|
1,000,000
|
|
|
$
|
100
|
|
|
$
|
-
|
|
|
$
|
900
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,000
|
|
Common stock subscribed
|
|
|
-
|
|
|
|
-
|
|
|
|
191,900
|
|
|
|
-
|
|
|
|
(61,915
|
)
|
|
|
-
|
|
|
|
129,985
|
|
Stock issued for change
in control
|
|
|
188,000,000
|
|
|
|
18,800
|
|
|
|
-
|
|
|
|
(18,800
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stock issued for services
|
|
|
16,000,000
|
|
|
|
1,600
|
|
|
|
-
|
|
|
|
158,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
160,000
|
|
Net
loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(306,270
|
)
|
|
|
(306,270
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2010 (1)
|
|
|
205,000,000
|
|
|
|
20,500
|
|
|
|
191,900
|
|
|
|
140,500
|
|
|
|
(61,915
|
)
|
|
|
(306,270
|
)
|
|
|
(15,285
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization shares
contributed from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reverse merger agreement
|
|
|
(84,526,666
|
)
|
|
|
(8,453
|
)
|
|
|
-
|
|
|
|
8,453
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Issuance pursuant to merger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
agreement for services
- fair valued
|
|
|
32,500,000
|
|
|
|
3,250
|
|
|
|
-
|
|
|
|
321,750
|
|
|
|
-
|
|
|
|
-
|
|
|
|
325,000
|
|
Issuance per cash considerations
in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
relation to the stockholder
subscription
|
|
|
36,026,666
|
|
|
|
3,603
|
|
|
|
(191,900
|
)
|
|
|
523,997
|
|
|
|
(102,200
|
)
|
|
|
-
|
|
|
|
233,500
|
|
Common stock issued
|
|
|
2,750,000
|
|
|
|
275
|
|
|
|
-
|
|
|
|
62,225
|
|
|
|
164,115
|
|
|
|
|
|
|
|
226,615
|
|
Net
loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(745,789
|
)
|
|
|
(745,789
|
)
|
Balance, December 31, 2011
|
|
|
191,750,000
|
|
|
|
19,175
|
|
|
|
-
|
|
|
|
1,056,925
|
|
|
|
-
|
|
|
|
(1,052,059
|
)
|
|
|
24,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance per cash considerations
in
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
relation to the stockholder
subscription
|
|
|
966,667
|
|
|
|
97
|
|
|
|
-
|
|
|
|
28,903
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29,000
|
|
Stock issued for services
|
|
|
500,000
|
|
|
|
50
|
|
|
|
-
|
|
|
|
4,950
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
Net loss for the nine
months ended 9/30/2012
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(83,479
|
)
|
|
|
(83,479
|
)
|
Balance, September 30, 2012, (Unaudited)
|
|
|
193,216,667
|
|
|
$
|
19,322
|
|
|
$
|
-
|
|
|
$
|
1,090,778
|
|
|
$
|
-
|
|
|
$
|
(1,135,538
|
)
|
|
$
|
(25,438
|
)
|
(1) The capital accounts
of the Company have been retroactivrly restated to reflect the equivalent number of common shares based on the exchange ratio
of the merger transaction. See Note 2.
Page
4
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For The Nine
|
|
|
For The Nine
|
|
|
From February 2, 2010
|
|
|
|
Months Ended
|
|
|
Months Ended
|
|
|
(Inception) to
|
|
|
|
September 30, 2012
|
|
|
September 30, 2011
|
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(83,479
|
)
|
|
$
|
(696,184
|
)
|
|
$
|
(1,135,538
|
)
|
Adjustments to reconcile net loss to net cash used by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
10,328
|
|
|
|
66
|
|
|
|
13,570
|
|
Stock compensation
|
|
|
5,000
|
|
|
|
325,000
|
|
|
|
490,000
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
1,817
|
|
|
|
(3,409
|
)
|
|
|
—
|
|
Accrued expenses
|
|
|
5,043
|
|
|
|
89,529
|
|
|
|
140,669
|
|
Due to related party
|
|
|
4,700
|
|
|
|
-
|
|
|
|
4,700
|
|
Tax payable
|
|
|
(956
|
)
|
|
|
-
|
|
|
|
—
|
|
Net cash used in operating activities
|
|
|
(57,547
|
)
|
|
|
(284,998
|
)
|
|
|
(486,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of equipment
|
|
|
-
|
|
|
|
(113,162
|
)
|
|
|
(133,063
|
)
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
(113,162
|
)
|
|
|
(133,063
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances to stockholder
|
|
|
-
|
|
|
|
(9,927
|
)
|
|
|
(11,321
|
)
|
Notes payable
|
|
|
11,000
|
|
|
|
-
|
|
|
|
11,000
|
|
Proceeds from issuance of common
stock
|
|
|
29,000
|
|
|
|
452,615
|
|
|
|
620,100
|
|
Net cash provided by financing activities
|
|
|
40,000
|
|
|
|
442,688
|
|
|
|
619,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
|
|
|
(17,547
|
)
|
|
|
44,528
|
|
|
|
117
|
|
Cash, beginning of period
|
|
|
17,664
|
|
|
|
2,059
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
117
|
|
|
$
|
46,587
|
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suppplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for taxes
|
|
$
|
956
|
|
|
$
|
-
|
|
|
$
|
2,868
|
|
Page
5
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
1. ORGANIZATION
Powerdyne, Inc., was incorporated on February
2, 2010 in Nevada, and is registered to do business in Rhode Island and Massachusetts. On February 7, 2011, Powerdyne, Inc. merged
with Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, a publicly held Delaware shell corporation with
minimal assets and no operations.
On December 13, 2010, Powerdyne International,
Inc., formerly Greenmark Acquisition Corporation, filed an Amended and Restated Articles of Incorporation in order to, among other
things, increase the authorized capital stock to 300,000,000 common shares, par value $0.0001 per share. Unless the context specifies
otherwise, as discussed in Note 2, references to the “Company” refers to Powerdyne International, Inc. and Powerdyne,
Inc. after the merger.
At the closing of the merger, each share
of Powerdyne, Inc.’s common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for
the right to receive 7,520 shares of common stock of Powerdyne International, Inc. Accordingly, an aggregate of 188,000,000 shares
of common stock of Powerdyne International, Inc. were issued to the holders of Powerdyne, Inc.’s common stock.
The Company is a start-up organization
which intends to produce and distribute completely packaged independent electrical generator units that run on environmentally-friendly
fuel sources, such as natural gas and propane. At this time, the majority stockholder has patents pending with the United States
Patent Office regarding the unique design of these units.
2. REVERSE MERGER ACCOUNTING
On February 7, 2011, Greenmark Acquisition
Corporation, which was a publicly held Delaware shell corporation with no operations merged with Powerdyne, Inc. Upon closing
of the transaction, Greenmark Acquisition Corporation, the surviving corporation in the merger, changed its name to Powerdyne
International, Inc.
The merger
is being accounted for as a reverse-merger, and recapitalization
in accordance with generally accepted accounting principles
in the United States (“GAAP”).
Powerdyne, Inc. is the acquirer for financial reporting
purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations that are reflected
in the historical financial statements prior to the Merger are those of Powerdyne, Inc. and have been recorded at the historical
cost basis of Powerdyne, Inc., and the financial statements after completion of the merger include the
assets
and liabilities of the Company and Powerdyne, Inc., historical operations of Powerdyne, Inc. and operations of the Company from
the closing date of the Merger.
Common stock and the corresponding capital amounts of the Company pre-merger have been
retroactively restated as capital stock shares reflecting the exchange ratio in the merger.
Page
6
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
2. REVERSE MERGER ACCOUNTING (CONTINUED)
In conjunction with the merger, the Company
received no cash and assumed no liabilities from Greenmark Acquisition Corporation. All members of the Company’s executive
management are from Powerdyne, Inc.
3. BASIS OF PRESENTATION
The accompanying unaudited financial statements
primarily reflect the financial position, results of operations and cash flows of the Company (as discussed above). The accompanying
unaudited financial statements have been prepared in accordance with GAAP for interim financial information and pursuant to the
instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, these interim
financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2012 or for any other period. These financial statements and accompanying
notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2011 on file with the SEC (our “Annual Report”). There have been no material changes
to our significant accounting policies as compared to the significant accounting policies described in our Annual Report.
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The summary of significant accounting
policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements
and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and
objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”)
in all material respects, and have been consistently applied in preparing the accompanying financial statements.
The
Company is classified as a development stage enterprise under GAAP and has not generated significant revenues from its principal
operations.
Development Stage and Capital Resources
Since its inception,
the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management
and technical staff, acquiring operating assets and raising capital. Accordingly, the Company is considered to be in the development
stage as defined in GAAP
.
The Company has not generated significant revenues from its principal operations, and there is
no assurance of future revenues.
As of September 30, 2012, the Company had an accumulated deficit from inception of $1,135,538.
Page
7
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONTINUED)
The Company’s activities will necessitate
significant uses of working capital beyond 2012. Additionally, the Company’s capital requirements will depend on many factors,
including the success of the Company’s continued research and development efforts and the status of competitive products.
The Company plans to continue financing its operations with cash received from financing activities, more specifically from one
of its major shareholders.
While the Company strongly believes that its
capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate
sufficient revenues to sustain its operations without additional capital or, if additional capital is needed, that such funds,
if available, will be obtainable on terms satisfactory to the Company.
Use of Estimates
In preparing these financial statements,
management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Fair Value of Financial Instruments
Fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous market for the specific
asset or liability.
GAAP provides for a three-level hierarchy
of inputs to valuation techniques used to measure fair value, defined as follows:
Level 1 —
Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 —
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability, including:
- Quoted prices for similar assets
or liabilities in active markets
- Quoted prices for identical
or similar assets or liabilities in markets that are not active.
- Inputs other than quoted prices
that are observable for the asset or liability
- Inputs that are derived principally
from or corroborated by observable market data by correlation or other means.
Page
8
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONTINUED)
Level 3 — Inputs that are unobservable
and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability
based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and
amount of expected cash flows). The Company did not measure any financial instruments presented on the balance sheets at fair
value on a recurring basis using significantly unobservable inputs (Level 3) during the nine months ended September 30, 2012 or
during the year ended December 31, 2011.
The Company monitors the market conditions
and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value
hierarchy, the Company elects to disclose the fair value measurement at the beginning of the reporting period during which the
transfer occurred.
The Company’s financial instruments
include cash and accrued liabilities. The estimated fair value of these instruments approximates its carrying amount due to the
short maturity of these instruments.
Management believes it is not practical
to estimate the fair value of advances to stockholder because the transactions cannot be assumed to have been consummated at arm’s
length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent
valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.
Cash and Cash Equivalents
The Company considers all highly-liquid investments
with maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents
as
of September
30, 2012 and December 31, 2011.
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its
cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions
in excess of the Federal Deposit Insurance Corporation limit. The Company has not incurred any loss from this risk.
Revenue Recognition
The Company is in the development stage
and has yet to realize revenues from planned operations. The Company will recognize revenue on arrangements in accordance
with Financial
Page
9
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONTINUED)
Accounting Standards Board Accounting
Standards Codification (“ASC”) No. 605, “Revenue Recognition”. In all cases, revenue is recognized
only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability
of the resulting receivable is reasonably assured. The Company has not recorded any sales transactions since inception.
Equipment, net
Equipment is stated at cost. Capital expenditures
for improvements and upgrades to existing equipment are also capitalized. Maintenance and repairs are expensed as incurred. The
machinery and equipment, previously classified as ‘construction in process’ was placed into service on October 1,
2011 and the Company began to depreciate the assets at that time. The equipment is depreciated over 10 years on a straight-line
basis. Vehicles are depreciated over 5 years using the straight-line basis. Depreciation expense for the nine months ended September
30, 2012 and 2011 was $10,328 and $0, respectively, and $13,570 for the period from inception to September 30, 2012.
Long-Lived Assets
In accordance with ASC 350-30 (formerly
SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets
), the Company evaluates long-lived assets
for impairment whenever events or changes in circumstances indicate that their then carrying values may not be recoverable. When
such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related
asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based
on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows,
of those assets and is recorded in the period in which the determination is made. The Company’s management currently believes
there is no impairment of its long-lived assets. There can be no assurance however, that market conditions will not change or
demand for the Company’s products under development will continue. Either of these could result in future impairment of
long-lived assets.
Income Taxes
As a result of the implementation of certain
provisions of ASC 740,
Income Taxes
, (formerly FIN 48,
Accounting for Uncertainty in Income Taxes – An Interpretation
of FASB Statement No. 109),
(“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax
positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and
measurement related to accounting for income taxes.
Page
10
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONT INUED)
In 2010, the Company adopted Accounting
for Uncertain Income Taxes under the provisions of ASC 740.
ASC 740 clarifies the accounting for income
taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial
statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition. The Company did not recognize any additional liability for unrecognized tax benefits
as a result of the adoption of ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will
not be realized.
We believe that our income tax filing
positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change
to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to
ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Our
policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of
income taxes.
Our tax provision
determined using an estimate of our annual effective tax rate using enacted tax rates expected to apply to taxable income in the
years in which they are earned, adjusted for discrete items, if any, that are taken into account in the relevant period. Each
quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment
.
Taxes payable as of September 30, 2012 and December 31, 2011 was $0 and $956, respectively.
Share Based Compensation
The Company applies ASC 718, Share-Based
Compensation to account for its service providers’ share-based payments. Common stock of the Company was given to service
providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors’
communications and public relations with broker-dealers, market makers and other professional services.
In accordance with ASC 718, the Company
determines whether a share payment should be classified and accounted for as a liability award or equity award. All grants of
share-based payments to service providers classified as equity awards are recognized in the financial statements based on their
grant date fair values which are calculated using historical pricing.
The Company has elected to recognize compensation
expense based on the criteria that the stock awards vest immediately on the issuance date. ASC 718 requires forfeitures to be
estimated at the time of grant and revised, if necessary, in subsequent period if actual forfeitures differ from initial estimates.
There were no forfeitures of share based compensation.
Page
11
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONTINUED)
Loss per Common Share
Basic loss per common share excludes dilutive
securities and is computed by dividing net loss by the weighted average number of common shares outstanding during the period.
Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings
of the entity. Since the Company has only incurred losses, basic and diluted loss per share is the same. As of September
30, 2012 and 2011, there were no outstanding dilutive securities.
The following table represents the computation of basic and
diluted losses per share:
|
|
Nine months
|
|
|
Nine months
|
|
|
|
ended September
|
|
|
ended September
|
|
|
|
30, 2012
|
|
|
30, 2011
|
|
Loss available for common shareholder
|
|
$
|
(83,479
|
)
|
|
$
|
(696,184
|
)
|
Basic and fully diluted loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
|
193,093,431
|
|
|
|
191,890,110
|
|
Net loss per share is based upon the weighted
average shares of common stock outstanding.
Recent Accounting Pronouncements
Adopted -
In May 2011, the Financial Accounting
Standards Board ("FASB") issued a new accounting standard on fair value measurements that clarifies the application
of existing guidance and disclosure requirements, changes certain fair value measurement principles and requires additional disclosures
about fair value measurements. The standard is effective for interim and annual periods beginning after December 15, 2011. Adoption
of this accounting standard did not have a material impact on our financial statements and related disclosures.
Page
12
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(CONTINUED)
Not Adopted -
In December 2011, the FASB issued
ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in this update
require an entity to disclose information about offsetting and related arrangements to enable users of its financial
statements to understand the effect of those arrangements on its financial position. This update will enhance disclosures
required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments. The
requirements of this update are effective for annual reporting periods beginning on or after January 1, 2013, and interim
periods within those annual periods. Entities should provide the disclosures required retrospectively for all comparative
periods presented. We are currently evaluating the impact of adopting ASU 2011-11 on the consolidated financial
statements.
Other recent accounting pronouncements
issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the
United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future financial statements.
5. EQUIPMENT - NET
Equipment consists of the following as
of September 30, 2012 and December 31, 2011:
|
|
September 30, 2012
|
|
|
December 31, 2011
|
|
Motor vehicles
|
|
$
|
1,976
|
|
|
$
|
1,976
|
|
Machinery and equipment
|
|
|
131,087
|
|
|
|
131,087
|
|
Less accumulated depreciation
|
|
|
(13,570
|
)
|
|
|
(3,242
|
)
|
|
|
|
|
|
|
|
|
|
Total equipment - net
|
|
$
|
119,493
|
|
|
$
|
129,821
|
|
Equipment is stated at cost and depreciated
on a straight-line basis over the assets’ estimated useful lives: vehicles 5 years and machinery and equipment 10 years.
The machinery and equipment that was previously classified as ‘construction in process,’ was placed into service on
October 1, 2011. Total depreciation expense for the nine months ended September 30, 2012 and 2011 was $10,328 and $0, respectively
and from February 2, 2010 (Inception) to September 30, 2012 was $13,570.
6. COMMON STOCK
Starting in June 2010, the Company entered
into various stockholder subscription agreements with private investors in order to provide working capital for the Company. The
agreements were sold to private investors at $0.01 to $0.03 per share in various share amounts. The agreement stipulated that
the shares of common stock would not be issued to the investors until the execution of the reverse merger agreement and subsequent
Initial Public Offering. During fiscal year 2010, the Company raised $191,900 from the stockholder subscription agreements for
the purchase of 19,190,000 shares of common stock. The Company had $61,915 in common stock subscription receivable as of December
31, 2010. The 19,190,000 shares of common stock were issued on February 8, 2011.
Page
13
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
6. COMMON STOCK (CONTINUED)
On December 11, 2010, the Company issued
2,000,000 shares of common stock to each of Tiber Creek Corporation and IRAA Fin Serv. for services rendered on behalf of Powerdyne
Inc. The shares were valued at their estimated fair value of $0.01 per share for a total compensation of $40,000.
On December 13, 2010, the Company issued
188,000,000 to Dale Euga, the sole shareholder of Powerdyne Inc. The shares were issued to effect a change of control of the Company
in anticipation of the merger that was eventually consummated with Powerdyne, Inc.
On December 13, 2010, the Company issued
12,000,000 shares of common stock to Arthur Read, II, Esq for services rendered on behalf of Powerdyne Inc. The shares were valued
at their estimated fair value of $0.01 per share for a total compensation of $120,000.
On February 7, 2011, in connection with
the merger, Dale Euga contributed 84,526,666 shares of common stock to the Company which were then cancelled. Mr. Euga received
no compensation for these shares.
On February 8, 2011, the Company issued
32,500,000 shares of common stock to employees and consultants for services. The Company recorded an expense of $325,000 based
on an estimated fair value of $0.01 per share.
Pursuant to the terms and conditions of
the merger on February 7, 2011 (see Note 1 and 2) each share of Powerdyne, Inc.’s common stock issued and outstanding immediately
prior to the closing of the merger was exchanged for the right to receive 7,520 shares of Powerdyne International, Inc. common
stock.
For the nine months ended September 30,
2012, the Company raised an additional $29,000 from stockholder subscription agreements for the purchase of 966,667 shares of
common stock. In total, the Company has raised $619,100 in cash from common stock subscriptions since inception. In addition,
during the same period, 500,000 shares were issued to a consultant as compensation for services rendered. The Company valued the
award of stocks at $0.01 per share.
7. RELATED PARTY
The Company obtained short-term cash flow
from a related party in the form of a demand Note Payable in the amount of $5,000 on July 25, 2012. The Note bears an interest
rate of 7% per annum. This Note Payable is unsecured.
Page
14
|
The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
7. RELATED PARTY (CONTINUED)
The Company obtained short-term cash flow
from a related party in the form of a demand Note Payable in the amount of $6,000 on September 4, 2012. The Note bears an interest
rate of 7% per annum. This Note Payable is unsecured
From time to time, the Company advances
amounts to stockholders, as well as receives payments from stockholders in the form of cash and/or out-of-pocket expenditures
for the benefit of the Company, which are business in nature. The balance of advances to stockholder as of September 30, 2012
and December 31, 2011 was $11,321 and $11,321, respectively. Besides, as stated in Note 9, the Company has signed a real property
rental agreement with a related party for its’ manufacturing facilities that begins January 1, 2012. Rent accrued, but not
yet paid, as Due to Related Party at September 30, 2012 and December 31, 2011 was $2,700 and $0, respectively. The Company has
an agreement with an outside consultant, a related party. Amounts paid to this consultant for the nine months ended September
30, 2012 and 2011 was $16,000 and $18,000, respectively. Amounts accrued, but not yet paid, as Due to Related Party at September
30, 2012 and December 31, 2011 was $2,000 and $0, respectively.
8. MEMORANDUM OF UNDERSTANDING
The Company entered into a Memorandum of Understanding (MoU)
with Turning Mill, LLC, a Massachusetts company that has developed a business model that utilizes various federal and state renewable
energy programs. The MoU sets forth a framework for the companies to begin to collaborate in the clean, renewable energy market
place. This MoU expired December 31, 2011.
On February 6, 2012, the Company signed
a “Developers License Agreement” with AMCANCO, LLC (“AMCANCO”), a limited liability corporation organized
and existing in Massachusetts. AMANCO has agreed to use its resources and interest to develop renewable energy projects utilizing
the Company’s generator set technology. This agreement essentially replaces the MoU with Turning Mills, LLC.
9. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company entered into an operating
lease agreement for its manufacturing facilities with a related party on October 1, 2011. The initial term of the lease begins
January 1, 2012 and ends March 31, 2012. The Company has the option to renew the lease for an additional three month term beginning
April 1, 2012. Additional three month terms are renewable at the Company’s option through December 2017. The Company shall
pay this related party $300 per month, beginning January 1, 2012, for the term of the lease. In addition, The Company is responsible
for utilities used at this facility.
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15
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The accompanying notes are an integral part of these financial statements.
|
POWERDYNE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
(Unaudited)
9. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation
During the ordinary course of the Company’s
business, it is subject to various claims and litigation. Management believes that the outcome of such claims or litigation will
not have a material adverse effect on the Company’s financial position, results of operations or cash flow.
The Company is involved in a legal settlement
with a former employee of the Company. The Company is seeking reimbursement of expenses paid in the amount of $5,000. The former
employee is seeking further additional expenses incurred in the amount of $6,500. It is the opinion of the Company’s legal
counsel that the legal action is without merit and no accrual has been recorded for this claim.
10.
RESTATEMENT
The Company has restated its financial
statements for the period ended December 31, 2010. Subsequent to the filing of the original financial statements, management identified
an omission in the financial statement. In December 2010, Greenmark issued 16,000,000 shares of its common stock for services
rendered on behalf of Powerdyne Inc. The shares were valued at their estimated fair value of $0.01 per share for a total compensation
of $160,000. The Company did not record the $160,000 expense for the services rendered. The effect of this correction was to increase
net loss for the period from inception to December 31, 2010 from $146,270, as previously reported, to $306,270.
Page
16
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The accompanying notes are an integral part of these financial statements.
|
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
Company is a development stage company and has experienced losses since its inception. The Company's independent auditors have
issued a report raising a substantial doubt about the Company's ability to continue as a going concern. The Company has not established
a revenue source since inception. The only source of cash has been capital invested by shareholders and the Company has had no
sales nor received revenues since inception through September 30, 2012.
The Company plans to manufacture, install,
maintain, own and operate patented portable electrical power generation equipment (“gensets
”
) intended
to be installed at a client location. The Company has applied for a patent for its electrical power generation equipment. The
Company will own, maintain and lease the equipment to the customer who will use it to produce its own supplemental electrical
power. The products are intended to be portable, easy-to-use units that can be conveniently redeployed in various locations around
the world. The units can also be assembled and combined to produce power centers providing up to 50 megawatts of power.
The following discussion contains forward-looking
statements, as discussed above. Please see the sections entitled "Forward-Looking Statements" and "Risk Factors"
for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
The following discussion and
analysis of Powerdyne International, Inc. financial condition and results of operations are based on the unaudited financial statements
as of September 30, 2012 and 2011, which were prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
Operations
The Company's initial product is the PDIGenset
(patent pending) which is a self-contained generator that is powered by a modified radial air cooled engine to drive a minimum
of a 1-megawatt generator. The entire unit, which runs on natural gas or propane, is compact, lightweight and clean burning. As
a result, the unit will produce extremely low emissions and is extremely energy-efficient.
The Company has recently completed
a fully operational factory Series 2 prototype, which has been tested and is ready as a demonstration unit. This unit is available
for any prospective customer to view in full operational capacity. In addition, the Series 2 prototype is ready to be manufactured
for customers upon placement of customer orders.
On February 28, 2011
,
the Company filed with the Securities and Exchange Commission a registration statement on Form S-1 for the offer and sale of up
16,000,000 shares of Common Stock by the Company
at $0.15
per share and for the offer of 71,535,166
shares of Common Stock by the holders of those shares
at $0.15
per share. The Company has amended
its registration to include only the registration of the 71
,535,166
shares of Common Stock by
the holders thereof. The registration statement has not been declared effective and no sales have been made.
Overview
The Company
plans to manufacture, install, maintain and lease its own portable electrical power equipment (for which the Company has applied
for a patent). The Company plans to manufacture portable electrical power equipment intended to be installed at client locations.
The Company will own, maintain and lease the equipment to the customer who will use it to produce its own supplemental electrical
power. The Company's products are intended to be portable, easy-to-use units that can be conveniently redeployed in various locations
around the world. The Company's units can also be assembled and combined to produce
power centers providing up to 50
megawatts
of power. The Company's headquarters are located in Warwick, Rhode Island and operates a manufacturing facility in Bridgewater,
Massachusetts.
The Company will market its products in locations where inexpensive
electrical power is needed and clean energy powered electrical equipment is needed and/or required.
Plan of Operations
The Company's strategy is to pursue selected
opportunities in markets where inexpensive and environmentally friendly power sources are needed and/or required.
Results of Operations -
The nine months ended September 30, 2012 compared to the nine months ended September 30, 2011:
Revenues
Powerdyne International, Inc. did not
generate revenues during the nine months ended September 30, 2012 and 2011.
Operating expenses
During the nine months ended September
2012 and 2011, total operating expenses were $83,479 and $694,272, respectively. The decrease related to the selling, general
and administrative expenses was approximately $611,000. This decrease resulted primarily from the decrease in officers
and director salaries of approximately $147,000, of which approximately $115,000 remains accrued and unpaid, a decrease in employee
stock compensation of approximately $320,000, a decrease in consulting, professional and outside services of approximately $37,000,
and decreases in wages and salaries paid of approximately $30,000, travel expenses of approximately $11,000. general factory expense
of $40,000, which includes expenses such as rents, parts & hardware, utilities, equipment rentals, factory supplies and insurance
and a decrease in legal and accounting of $13,000.
Net loss
During the nine months ended September
30, 2012 and 2011, the net loss was $83,479 and $696,184, respectively.
Liquidity and Capital Resources
As of September 30, 2012 and December
31, 2011, Powerdyne International, Inc. had a working capital deficit of $144,931 and $105,780, respectively. For
the nine months ended September 30, 2012, Powerdyne International, Inc. had approximately $17,500 decrease in cash. The cash used
in operations of approximately $57,500 was primarily due to net loss from operations of $83,479 less non-cash adjustments to net
operating cash flows of approximately $10,000 of depreciation, $5,000 of employee stock compensation, the decrease of prepaid
expenses of $2,000, the increase of accrued but unpaid expenses of approximately $10,000 and the decrease of approximately $1,000
in tax payable. Of the total cash provided by financing activities of approximately $40,000, $0 was used to purchase equipment
and the remaining amount for working capital and operating activities.
For the period from February 2, 2010 (inception)
to September 30, 2012, Powerdyne International Inc. had approximately $100 of net cash increase. The cash used in operations of
approximately $487,000 was primarily due to net loss from operations of $1,135,538 less non-cash adjustments to net operating
cash flows of approximately $490,000 of employee stock compensation, $14,000 of depreciation, and approximately $145,000 of accrued
but unpaid expenses. Of the total cash provided by financing activities of approximately $620,000, approximately $133,000 was
used to purchase equipment and the remaining amount for working capital and operating activities.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that are reasonably
likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.
Critical Accounting Policies
Those material accounting policies that
we believe are the most critical to an investor’s understanding of our financial results and conditions are discussed in
Notes 2, 3 and 4 of the unaudited financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
Information not required to be filed by
Smaller Reporting Companies.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosures and Procedures
Pursuant to Rules
adopted by the Securities and Exchange Commission. the Company carried out an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of
the fiscal year and first quarter under the supervision and with the participation of the Company's principal executive officer
and principal financial and accounting officer. There have been no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, they believe
that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed
to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed
timely. Both officers are directly involved in the day-to-day operations of the Company.
Management's Report of Internal Control
over Financial Reporting
The Company is responsible
for establishing and maintaining adequate internal control over financial reporting in accordance with the Rule 13a-15 of the
Securities Exchange Act of 1934. The Company's president and principal financial and accounting officer conducted an evaluation
of the effectiveness of the Company's internal control over financial reporting as of December 31, 2011, and as of September 30,
2012, based on the criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Based on this evaluation, management concluded that the Company's internal control over financial
reporting was effective as of September 30, 2011 based on those criteria. A control system can provide only reasonably, not absolute,
assurance that the objectives of the control system are met and no evaluation of controls can provide absolute assurance that
all control issues have been detected.
Anton & Chia,
the independent registered public accounting firm, has not issued an attestation report on the effectiveness of the internal control
over financial reporting.
Changes in Internal Control Over Financial
Reporting
There has been no
change in the Company's internal control procedures over financial reporting that were identified in connection with such evaluation
that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS
There are no pending,
threatened or actual legal proceedings in which the Company or any subsidiary is a party in amounts over $10,000. The Company
is involved with a former employee for claims of expenses for approximately $6,500.
ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
On December 11, 2010,
the Company issued 4,000,000 shares of its common stock in addition to the then outstanding 1,000,000 shares of common stock.
As part of the change in control effected on December 13, 2010, the Company issued 200,000,000 shares of common stock to the following
shareholders in the following amounts:
Dale P. Euga
|
|
|
188,000,000
|
|
Arthur M. Read, II
|
|
|
12,000,000
|
|
On February 7, 2011,
Mr. Euga contributed back to the Company 84,526,666 shares of his 188,000,000 common stock without remuneration.
Subsequent to the
contribution of such shares and ending June 30, 2011, the Company issued 68,526,666 shares to officers, directors, and private
investors pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, as transactions
by an issuer not involving any public offering, as follows:
Edwin S. Barton, II
|
|
|
6,833,333
|
|
Stephen L. Caromile
|
|
|
6,000,000
|
|
Linda H. Madison
|
|
|
1,000,000
|
|
Eric Foster
|
|
|
18,000,000
|
|
57 Investors
|
|
|
37,193,333
|
|
Between August 8 and
August 22, 2011 the Company issued 2,000,000 shares to six investors pursuant to an exemption from registration under Section
4(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving any public offering,
For the period ended
June 30, 2012, the Company raised $29,000 from stockholder subscription agreements for the purchase of 966,667 shares of common
stock. In addition, during the period ended June 30, 2012, 500,000 shares were issued to a consultant as compensation for services
rendered.
ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
There were no matters
submitted to a vote of the security holders during the quarter covered by this report.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter
covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees
to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
|
31.1
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
POWERDYNE INTERNATIONAL, INC.
|
|
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|
By: /s/ Dale P. Euga
|
Dated: November 13, 2012
|
President and Principal executive officer
|
|
|
|
By: /s/ Linda H. Madison
|
Dated: November 13, 2012
|
Principal financial officer
|
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