Item 1. DESCRIPTION OF BUSINESS.
Narrative Description of the Business
We are a fee-based marketing, media and investor relations consultant to public and private companies. We may also invest in companies from time to time, including our clients as a secondary activity.
We operate out of one office in Colorado. Currently, our principal business address is 181 W. Boardwalk, Suite 202, Fort Collins, Colorado 80525. As of April 1, 2016 our new address will be 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525. We have no specific plans at this point for additional offices.
On January 1, 2008, we entered into a Service Agreement with Bohemian Companies, LLC to provide us with certain defined services. These services included financial, bookkeeping, accounting, legal and tax matters, as well as cash management, custody of assets, preparation of financial documents, including tax returns and checks, and coordination of professional service providers as may be necessary to carry out the matters covered by the Service Agreement. We compensated Bohemian Companies, LLC by reimbursing this entity for the allocable portion of the direct and indirect costs of each employee of Bohemian Companies, LLC that performed services on our behalf. This Service Agreement was terminated by mutual agreement of the parties on March 31, 2014.
On February 26, 2014, we amended our Articles of Incorporation to change our name to WestMountain Company. We were formerly known as WestMountain Asset Management, Inc. No other changes were made to our Articles of Incorporation.
Operations
We act as a fee-based marketing, media and investor relations consultant to public and private companies. We may also invest in companies from time to time, including our clients as a secondary activity.
Formerly, we also acted as an investment asset manager. Historically, we earned management fees based on the size of the funds managed, and incentive income based on the performance of the funds. We had an asset management services contract between WestMountain Prime, LLC and us, which was terminated as of September 30, 2013. With the termination of the asset management services contract between us and WestMountain Prime, LLC, we no longer provide asset management services to any clients. We have elected not to seek any new asset management services clients in the future but to concentrate solely on providing fee-based consulting services for marketing and media clients.
As a consultant to both public and private companies, we promote public visibility and market acceptance for our clients. We use a number of techniques to achieve these objectives for our clients, including developing public recognition of their business plans and strategic goals, managing investor relations, and engaging in website development and media production. We also utilize various social media outlets and services to deliver our client's message. We are paid fees for our services by our clients under written consulting agreements.
Approximately 73.9% of the revenues of our clients in fiscal year 2015 came from entities which were under common principal ownership with our majority shareholder. For the years ended December 31, 2015 and 2014, we recorded advisory/consulting revenue of $205,667 and $189,200 respectively. Of the $205,667 and $189,200 recorded advisory/consulting revenue in 2015 and 2014, $152,000 and $152,000 is related party revenue. This advisory/consulting fee revenue relates to services performed on behalf of Nexcore Group, LP and Bohemian Asset Management, Inc. We and the related parties have common affiliates.
As of December 31, 2015 and 2014, the Company recorded $6,000 and $41,125, respectively, as accounts receivable related party on its balance sheet. In 2015, one of the Company's investments declared a distribution of $274,715. In 2014, one of the Company's investments declared a distribution of $41,125. The receivable was collected in January, 2015.
Our principal executive office is located on 181 W. Boardwalk, Suite 202, Fort Collins, Colorado 80525. We signed a two year lease for a total of 565 square feet of office space at a price of $188 per month plus costs associated with monthly common area fees. Effective April 1, 2016, our new address will be 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525.
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Currently, we believe that we have sufficient capital to sustain our business operations through December 31, 2016. We were not profitable for the fiscal year ended December 31, 2015 but were profitable for the fiscal year ended December 31, 2014. If we can sustain ongoing profitability, we could operate at our present level indefinitely. To date, we have never had any discussions with any possible acquisition candidate nor have we any intention of doing so.
Markets
We believe that the primary reason that clients would work with us rather than competitors would be the existing relationships that we can develop. We believe that client loyalty and satisfaction can be the basis for success in this business. Therefore, we believe that we have developed and expanded on already existing relationships to develop a competitive edge. We utilize the expertise of our principal officer to develop our business.
Raw Materials
The use of raw materials is not a material factor in our operations at the present time. The use of raw materials may become a material factor in the future as we develop operations.
Customers and Competition
Our business involves acting as a fee-based marketing and media consultant and, secondarily, as an investor. Both businesses are highly competitive. There are numerous similar companies providing such services in the United States of America. Our competitors will have greater financial resources and more expertise in this business. Our ability to develop our business will depend on our ability to successfully develop our business plan in this highly competitive environment. We cannot guarantee that we will be able to continue to do so successfully.
Backlog
At December 31, 2015, we had no backlogs.
Employees
We have one full-time employee: Mr. Steve Anderson, our President. We also have a part-time employee, Ms. Joni Troska, our corporate Secretary; however, we reimburse our employees for all necessary and customary business related expenses. We have no plans or agreements which provide health care, insurance or compensation on the event of termination of employment or change in our control. We do not pay our Director for any Board meeting he attends.
Proprietary Information
We have a proprietary investment screening process to make our investments. Otherwise, we own no proprietary information.
Government Regulation
We are not currently subject to any material government regulation. We do not expect government regulations to have any material impact on us.
Research and Development
We have never spent any amount in research and development activities.
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Environmental Compliance
We believe that we are not subject to any material costs for compliance with any environmental laws.
How to Obtain our SEC Filings
We file annual, quarterly, and special reports, proxy statements, and other information with the Securities Exchange Commission (SEC). Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SEC's website at www.sec.gov.
We also have a corporate website, www.westmountainam.com, on which we post our regulatory filings.
Effective April 1, 2016, our investor relations department can be contacted at our principal executive office located at 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525. Our telephone number is (970) 223-4499.
Item 1A.
Item 1A. RISK FACTORS
You should carefully consider the risks and uncertainties described below and the other information in this document before deciding to invest in shares of our common stock.
The occurrence of any of the following risks could materially and adversely affect our business, financial condition and operating result. In this case, the trading price of our common stock could decline and you might lose all or part of your investment.
Risks Related to Our Business and Industry
We have a limited operating history. While we have been profitable for the fiscal year ended December 31, 2014, we were not profitable for the fiscal year ended December 31, 2015 and prior to 2013. If we never achieve sustained profitability, we could go out of business.
We were formed as a Colorado business entity in October, 2007. In the past, we have been profitable. While we have been profitable for the fiscal year ended December 31, 2014, we were not profitable for the fiscal year ended December 31, 2015 and prior to 2013. We recognize that we must achieve ongoing profitability to be viable over the long term. If we never achieve sustained profitability, we could go out of business.
We currently rely upon clients under common principal control of our majority shareholder for approximately 74% of our revenues, which means that we could be severally impacted if the current arrangement does not continue and we cannot replace our current clients with other clients.
Approximately 73.9% of the revenues of our clients in fiscal year 2015 came from entities which were under common principal ownership with our majority shareholder. This was down from 80.34% in 2014. Our revenue projections are subject to greater uncertainty than if we had revenue commitments from a number of clients not under common principal ownership. We could be materially impacted if the current arrangement does not continue, and we cannot replace our current clients with other clients. While we have no basis to believe that we will not continue to generate revenue from this arrangement, we cannot assure you that these clients or any of our clients, will continue to purchase our products or services in significant volume, or at all.
Our lack of operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. An investor could lose his entire investment.
We have a limited operating history. An investor has no frame of reference to evaluate our future business prospects. This makes it difficult, if not impossible, to evaluate us as an investment. An investor could lose his entire investment if our future business prospects do not result in our ever sustaining profitability.
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If we do not continue to generate adequate revenues to finance our operations, our business may fail.
As of December 31, 2015, we had a cash position of $579,971. We anticipate that operating costs will range between $300,000 and $400,000, for the fiscal year ending December 31, 2016. These operating costs include payroll, contract services, marketing costs, and all other costs of operations. We will use contract employees who will be paid on an hourly or monthly fee basis. However, the operating costs and expected revenue generation are difficult to predict. We expect to continue to generate revenues in the next twelve months from our fee-based marketing, media and investor relations consulting services. Since there can be no assurances that revenues will be sufficient to cover operating costs for the foreseeable future, it may be necessary to raise additional funds. Due to our lack of operating history, raising additional funds may be difficult.
Competition in our industry is intense.
Our business plan involves acting as a fee-based marketing and media consultant to public and private companies. This business is highly competitive. There are numerous similar companies providing such services in the United States of America. Our competitors will have greater financial resources and more expertise in this business. Our ability to develop our business will depend on our ability to successfully market our services in this highly competitive environment. We cannot guarantee that we will be able to do so successfully.
The share control position of WestMountain Blue, LLC will limit the ability of other shareholders to influence corporate actions.
Our largest shareholder, WestMountain Blue, LLC, of which Mr. Klemsz is a 16.8% member, owns 8,505,652 shares and thereby controls approximately 90% of our outstanding shares. Because WestMountain Blue, LLC individually beneficially controls more than a majority of the outstanding shares, other shareholders, individually or as a group, will be limited in their ability to effectively influence the election or removal of our directors, the supervision and management of our business or a change in control of or sale of our company, even if they believed such changes were in the best interest of our shareholders generally.
Our future success depends, in large part, on the continued service of our President and Treasurer
We depend almost entirely on the efforts and continued employment of Mr. Anderson, our President, and Mr. Klemsz, our Treasurer. Mr. Anderson is our primary executive officer, and we will depend on him for nearly all aspects of our operations. We do not have an employment contract with either Mr. Anderson or Mr. Klemsz, and we do not carry key person insurance on the life of either gentleman. The loss of the services of either Mr. Anderson or Mr. Klemsz through incapacity or otherwise, would have a material adverse effect on our business. It would be very difficult to find and retain qualified personnel such as either Mr. Anderson or Mr. Klemsz.
Our success also depends upon our ability to develop relationships with our clients. If we cannot develop sufficient relationships, we may never become profitable. An investor could lose his entire investment.
We now have one line of business. We operate as a fee-based marketing and media consultant to client companies, which include both public and private entities. Our success now depends, in large part, on our ability to develop relationships with potential consulting services clients. We have no long-term contracts or other contractual assurances of consulting services. We may never develop sufficient consulting services clients, which would negatively impact our proposed operations. As a result, we may never become profitable or be able to sustain profitability. An investor could lose his or her entire investment.
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Risks Related to an Investment in Our Common Stock
The lack of a broker or dealer to create or maintain a market in our stock could adversely impact the price and liquidity of our securities.
We have no agreement with any broker or dealer to act as a market maker for our securities and there is no assurance that we will be successful in obtaining any market makers. Thus, no broker or dealer will have an incentive to make a market for our stock. The lack of a market maker for our securities could adversely influence the market for and price of our securities, as well as your ability to dispose of, or to obtain accurate information about, and/or quotations as to the price of, our securities.
We have limited experience as a public company.
We have only operated as a public company since January, 2009. We trade on the OTC Bulletin Board under the trading symbol WASM. Thus, we have limited experience in complying with the various rules and regulations which are required of a public company. As a result, we may not be able to operate successfully as a public company, even if our operations are successful. We plan to comply with all of the various rules and regulations which are required of a public company. However, if we cannot operate successfully as a public company, your investment may be materially adversely affected. Our inability to operate as a public company could be the basis of your losing your entire investment in us.
We may be required to register under the Investment Company Act of 1940, or the Investment Advisors Act, which could increase the regulatory burden on us and could negatively affect the price and trading of our securities.
Because our proposed business may involve the identification, acquisition and development of investments, we may be required to register as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law. While we believe that we are currently either not an investment company or an investment advisor or are exempt from registration as an investment company under the Investment Company Act of 1940 or the Investment Advisors Act and analogous state law, either the SEC or state regulators, or both, may disagree and could require registration either immediately or at some point in the future. As a result, there could be an increased regulatory burden on us, which could negatively affect the price and trading of our securities.
Our stock has a limited public trading market and there is no guarantee an active trading market will ever develop for our securities.
There has been, and continues to be, a limited public market for our common stock. An active trading market for our shares has not, and may never develop or be sustained. If you purchase shares of common stock, you may not be able to resell those shares at or above the initial price you paid. The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, including the following:
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actual or anticipated fluctuations in our operating results;
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changes in financial estimates by securities analysts or our failure to perform in line with such estimates;
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changes in market valuations of other companies, particularly those that market services such as ours;
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announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
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introduction of product enhancements that reduce the need for the products our projects may develop;
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departures of key personnel.
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Of our total outstanding shares as of December 31, 2015, a total of 8,755,652, or approximately 91.99%, will be restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
As restrictions on resale end, the market price of our stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.
Applicable SEC rules governing the trading of "Penny Stocks" limit the liquidity of our common stock, which may affect the trading price of our common stock.
Our common stock is currently quoted on the Over-the-Counter Bulletin Board and trades well below $5.00 per share. As a result, our common stock is considered a "penny stock" and is subject to SEC rules and regulations that impose limitations upon the manner in which our shares can be publicly traded. These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the written purchaser's agreement to a transaction prior to purchase. These regulations have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.
The over-the-counter market for stock such as ours is subject to extreme price and volume fluctuations.
The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in the our industry and in the investment markets generally, as well as economic conditions and quarterly variations in our operational results, may have a negative effect on the market price of our common stock.
Buying low-priced penny stocks is very risky and speculative.
Our common shares are defined as a penny stock under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in the public markets.
Issuances of our stock could dilute current shareholders and adversely affect the market price of our common stock, if an active public trading market develops.
We have the authority to issue up to 50,000,000 shares of common stock, 1,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our common stock without stockholder approval. Although no financing is planned currently, we may need to raise additional capital to fund operating losses. If we raise funds by issuing equity securities, our existing stockholders may experience substantial dilution. In addition, we could issue large blocks of our common stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval.
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The issuance of preferred stock by our board of directors could adversely affect the rights of the holders of our common stock. An issuance of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over the common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our board of directors' authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve.
Colorado law and our Articles of Incorporation protect our directors from certain types of lawsuits, which could make it difficult for us to recover damages from them in the event of a lawsuit.
Colorado law provides that our directors will not be liable to our company or to our stockholders for monetary damages for all but certain types of conduct as directors. Our Articles of Incorporation require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require our company to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
We do not expect to pay dividends on common stock.
We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Earnings, if any, that we may realize will be retained in the business for further development and expansion.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY.
Our principal executive offices are located at 181 W. Boardwalk, Suite 202, Fort Collins, Colorado 80525, and our telephone number is (970) 223-4499. Our office is leased from an unaffiliated third party under a monthly lease at the rate of $323 per month. Effective April 1, 2016, our office will be located at 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525. We own no real estate nor have plans to acquire any real estate.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings, nor is our property the subject of any material legal proceeding.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable to smaller reporting companies.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Holders
As of December 31, 2015, there were fifty-two record holders of our common stock and there were 9,517,402 shares of our common stock outstanding.
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Market Information
A limited public market currently exists for shares of our common stock. We began trading on the Over-the-Counter Bulletin Board under the trading symbol WASM in January, 2009. The following table sets forth the high and low closing bid prices of our common stock on for the period indicated in 2015 and 2014.
The last date that our common stock was traded was on December 18, 2015. On that date, the most recent date that the stock traded, the closing bid price of our common stock in the OTC Bulletin Board was $0.35 per share, volume was 138 shares, and the number of shares issued and outstanding was 9,517,402.
The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
A purchaser is purchasing penny stock, which limits the ability to sell the stock. Our shares constitute penny stock under the Securities and Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
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The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:
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contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
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contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended;
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contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
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contains a toll-free telephone number for inquiries on disciplinary actions;
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defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
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contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:
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the bid and offer quotations for the penny stock;
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the compensation of the broker-dealer and its salesperson in the transaction;
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the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
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monthly account statements showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
Equity Compensation Plan Information
On August 15, 2011, the Company approved the employee compensation plan and granted a total of 200,000 common stock options to our employees. As stated in the compensation plan, these options have a four year term. Fifty percent of the options were vested and exercisable immediately, 25% on the first anniversary date of August 15, 2012 and 25% on the second anniversary date of August 15, 2013. The options have an exercise price of $0.27 per share, which was the fair value of the stock on the day of the grant. Given a risk free rate of 0.99% a volatility input of 99.96% and using the simplified method, the maturity time used in the calculation is 2.375 years. All of the options have expired as of December 31, 2015.
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Stock Transfer Agent
The stock transfer agent for our securities is Corporate Stock Transfer of Denver, Colorado. Their address is 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209. Their phone number is (303) 282-4800.
Dividend Policy
We have not previously declared or paid any dividends on our common stock and do not anticipate declaring any dividends in the foreseeable future. The payment of dividends on our common stock is within the discretion of our board of directors. We intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our board of directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
A smaller reporting company is not required to provide the information in this Item.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis or Plan of Operation contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as "may", "will", "should", "anticipate", "believe", "expect", "plan", "future", "intend", "could", "estimate", "predict", "hope", "potential", "continue", or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption "Risk Factors". We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.
Results of Operations
For the fiscal year ended December 31, 2015 we had revenue of $205,667. In comparison for the fiscal year ended December 31, 2014 we had revenue of $189,200. In 2015, we recorded consulting fees of $205,667, of which $152,000 were from a related party. We also recorded $-0- in management fees from a related party. We recorded consulting fees of $189,200 in the fiscal year ended December 31, 2014, of which $152,000 were from a related party, and $-0- in management fees from a related party.
Operating expenses were $395,416 and $379,604, respectively for the years ended December 31, 2015 and 2014. Of the $395,416, $446,346 was mostly related to payroll and contract services. The remaining was a $60,937 write-off of notes receivable.
For the year ended December 31, 2015 we had a net loss of $91,486. In comparison for the year ended December 31, 2014 we had net income of $122,954. The decrease in net income was a result of a write-off of an investment in Omni Bio Pharmaceutical, Inc. of $193,634 in Other Income (Expense) and a write-off of note receivables of $60,937. For the fiscal year ended December 31, 2015, we received dividend and distribution income of $280,225, compared to dividend and distribution income of $305,059 for the fiscal year ended December 31, 2014, a decrease of $24,834.
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As of December 31, 2015, we hold nine investment positions. All the companies classified as marketable securities are publicly traded and listed on the OTC Bulletin Board. Those classified as nonmarketable are private companies or do not have an active market for their shares. The table below lists the investments and total shares owned by us as of December 31, 2015.
Our ninth position involves Marine Exploration, Inc. In 2008 the Company invested $50,000 for 175,000,000 shares of common stock in Marine Exploration, which represented 39% of the outstanding common stock of Marine Exploration. The Company recorded this long-term investment using the equity method of accounting for investments. Any net income or net loss must be recorded against the Company's investment, not to exceed the original investment of $50,000. Marine Exploration incurred significant losses during 2008, and the investment was reduced to zero. On August 24, 2010, Marine Exploration authorized a reverse split of 1 new share for 500 old shares of their common stock. As of this date, the Company has less than 1% ownership in Marine Exploration.
Liquidity and Capital Resources.
As of December 31, 2015, we had cash or cash equivalents of $579,971.
For the fiscal year ended December 31, 2015 net cash provided by operating activities was $171,272 compared to net cash provided by operating activities for the fiscal year ended December 31, 2014 of $417,708. The difference of $246,436 over the two years, was mainly associated with Accounts receivable, related parties change in 2014 of $352,738. This amount was mainly associated with dividends and distributions recorded in 2013 and respective cash was deposited in 2014. In addition, all but a $41,125 dividend for 2014 was received and deposited in 2014. This $41,125 was collected during January 2015.
For the fiscal year ended December 31, 2015 net cash used by investing activities was $36,712 compared to net cash used in investing activities for the fiscal year ended December 31, 2014 of $30,289. In 2015 and 2014, we loaned $35,000 and $25,000 to a related party, respectively. In 2015, we wrote off all the related party notes receivable in the amount of $60,937,
For the fiscal years ended December 31, 2015 and 2014 net cash flows provided by financing activities were $-0-.
Over the next twelve months we do not expect any material or capital costs to develop operations.
Our daily operational expenses in 2015, excluding the write off of related party notes, decreased over 2015 as in 2014 we were paying marketing and social media expenses to raise awareness of our Company through our website, Facebook, and YouTube. Part of the marketing services increase was associated with outside marketing contractors that we used to assist us in meeting client deadlines.
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On November 4, 2015, the Board of Directors of NexCore Companies LLC, authorized a $0.167 per unit cash distribution payable to unit holders of record as of December 15, 2015. On December 18, 2015, we deposited a check in the amount of $274,715 as a result of that distribution. In addition, we posted the related tax impact of $5,510.
On January 3, 2014, NexCore Healthcare Capital Corp. declared a $0.10 per share cash dividend to holders of NexCore common stock of record on January 16, 2014. As of that date, the Company owned 1,645,000 shares of common stock and received a cash dividend of $164,500.
In March 2014, the Company received an additional distribution from Nexcore Real Estate in the amount of $1,425.
On December 15, 2014, the Board of Directors of NexCore Healthcare Capital Corp, as manager of NexCore Real Estate, authorized a $0.0675 per unit cash distribution payable to holders of NexCore Real Estate Class B Units of record on December 1, 2014. On December 30, 2014, we deposited a check in the amount of $111,038 as a result of that distribution.
In addition, on December 15, 2014 the Board of Directors for NexCore Healthcare Capital Corp, authorized a $0.025 per share cash dividend payable to holders of NexCore common stock of record on December 1, 2014. We recorded a $41,125 receivable and respective dividend income in December 2014. On January 7, 2015 we deposited a check in the amount of $41,125 as a result of that cash dividend.
In November 2014 we were notified by Nexcore Real Estate that we had received an over distribution in the amount of $29,478 that we paid back to Nexcore Real Estate in December 2014. The over distribution was associated with Illinois tax that was disbursed to the State of Illinois on the Company's behalf. This payment has been recorded against dividend income on non- marketable securities in the other income and expense section of the income statement.
Currently, we believe that we have sufficient capital to implement our business operations or to sustain them at our present level indefinitely. To date, we have never had any discussions with any possible acquisition candidate nor have we any intention of doing so.
We operate out of one office in Colorado. We have no specific plans at this point for additional offices.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements with any party.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of our financial statements. From time to time, we evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. Below is a discussion of accounting policies that we consider critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.
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Fair Value Measurements
ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
Level 1:
Quoted prices in active markets for identical assets or liabilities;
Level 2:
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
Level 3:
Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Revenue Recognition
We provide investor relations, website development, video production, and associated marketing and media services to clients. We are paid fees for our services by our clients under written consulting agreements. As a secondary source of revenue, we raise, invest and manage private equity and direct investment funds for third parties including high net worth individuals and institutions. We earn management fees based on the size of the funds that we manage and incentive income based on the performance of these funds. We do not focus on any particular industry but look at any and all opportunities. We will screen investments with emphasis towards finding opportunities with long term potential.
Revenue is recognized under the full accrual method. Under the full accrual method, profit may be realized in full when funds are invested and managed, provided (1) the profit is determinable and (2) the earnings process is virtually complete (the Company is not obligated to perform significant activities).
Recently Issued Accounting Pronouncements
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new standard requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact this guidance may have on our financial statements.
In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740)" providing guidance on the balance sheet classification of deferred taxes. The guidance requires that deferred tax assets and liabilities to be classified as noncurrent in the Balance Sheet. The guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact this guidance may have on our financial statements.
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In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02), Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02") - The evaluation of limited partnerships or similar entities as variable interest entities ("VIEs"), was modified. The revised requirements may affect the method of consolidation for reporting entities involved with such entities. All legal entities are subject to reevaluation under the revised consolidation mode. ASU 2015-02 affects the following areas: (1) limited partnerships and similar legal entities; (2) evaluating fees paid to a decision maker or a service provider as a variable interest; (3) the effect of fee arrangements on the primary beneficiary determination; (4) the effect of related parties on the primary beneficiary determination; and (5) certain investment funds. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. A reporting entity may apply the amendments in this guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A reporting entity also may apply the amendments retrospectively. The adoption of ASU 2015-02 is not expected to have any impact on the Company's financial statement presentation or disclosures.
Management believes there were various other accounting standards and interpretations issued during 2015 and 2014, none of which are expected to have a material impact on the Company's consolidated financial position, operations, or cash flows.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information in this Item.
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ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
WestMountain Company
Fort Collins, Colorado
We have audited the accompanying consolidated balance sheets of WestMountain Company and its subsidiaries (collectively, the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity, and cash flows for each of the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of WestMountain Company and its subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
April 13, 2016
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
WestMountain Company
Notes to Consolidated Financial Statements
(1) Nature of Organization and Summary of Significant Accounting Policies
Nature of Organization and Basis of Presentation
WestMountain Company ("we", "our" or the "Company"), formerly known as WestMountain Asset Management, Inc. was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations.
As a consultant to both public and private companies, we promote public visibility and market acceptance for our clients. We use a number of techniques to achieve these objectives for our clients, including developing public recognition of their business plans and strategic goals, managing investor relations, and engaging in website development and media production. We also utilize various social media outlets and services to deliver our client's message. We are paid fees for our services by our clients under written consulting agreements.
Principles of Consolidation
Property holding entities and other subsidiaries of which we own 100% of the equity or have a controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and transactions are eliminated.
The accompanying consolidated financial statements include the accounts of WestMountain Company and the following 100% owned subsidiaries, which were active at December 31, 2015:
WestMountain Business Consulting, Inc.
WestMountain Allocation Analytics, Inc.
WestMountain Valuation Services, Inc.
Reclassifications
Certain prior period amounts have been reclassified to conform to current period presentation.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents as of December 31, 2015 and December 31, 2014.
Accounts Receivable
Accounts receivable consists of amounts due from consulting fees associated with marketing and media consulting and dividends due from a related party. The Company considers accounts more than 30 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. Management records reasonable allowances to fairly represent accounts receivable amounts that are collectible. For the years ended December 31, 2015 and 2014, the Company did not record any allowance against our accounts receivable balance.
Notes Receivable, Related Party
Notes receivable consists of unsecured loans to a related party and are reported at the outstanding principal balance including accrued interest. As of December 31, 2015 and 2014, the outstanding principal and accrued interest balance was $60,937, net of an allowance of $60,937 and $25,937, net of an allowance of $0, respectively.
Allowance for Loss on Note Receivable, Related Party
The allowance for loss on note receivable is the amount that, in the opinion of management, is necessary to absorb probable losses inherent in the note receivable. The allowance is determined based upon numerous considerations including local economic conditions, a review of the value of collateral supporting the note receivable and the collectability of the note receivable. As a result of the test of adequacy, required adjustments to the allowance for loan losses are made periodically by changes to the provision for loss on note receivable. As of December 31, 2015 and 2014, the allowance for loss on note receivable was $60,937 and $0, respectively. A write-off of note receivable, related party was recognized in 2015 resulting in a loss of $60,937.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
The Company had three unsecured promissory notes from WestMountain Distressed Debt. On December 31, 2015 management evaluated the collectability of the notes and determined it was necessary to write the balances off. A total of $60,937 was expensed to the income statement.
Revenue
We act primarily as a fee-based marketing and media consultant to public companies. As a consultant, we provide investor relations, website development, video production, and associated marketing and media services to clients. We are paid fees for our services by our clients under written consulting agreements.
The Company recognizes revenue for its services generally when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured.
In the general course of business, we receive stock-based compensation for our services. In many cases, the underlying stock is thinly traded and determining the value of revenue requires substantial judgment. If the underlying stock is traded in an active market, the value used to record revenue is based on the quoted market value of the stock. If there is not an active market, then the value is determined using other inputs.
Concentrations
During the year ended December 31, 2015, two related party customers, Bohemian Asset Management, Inc. and Nexcore Healthcare Capital Corp., accounted for 74% of total revenue (39% and 35%, respectively). In addition, during 2015, one third party customer accounted for 23% of total revenue. During the year ended December 31, 2014, two related party customers, Bohemian Asset Management, Inc. and Nexcore Healthcare Capital Corp., accounted for 80% of total revenue (42% and 38%, respectively).
Fair Value of Financial Instruments
On January 1, 2008, the Company adopted ASC 820 Fair Value Measures. ASC820 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. The Company's estimates of fair value for financial assets and financial liabilities are based on the framework established in SFAS 157. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the ASC 820 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company's significant market assumptions. The three levels of the hierarchy are as follows:
Level 1: Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, default rates, etc.) or can be corroborated by observable market data.
Level 3: Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the assumptions that market participants would use.
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of financial assets require to be measured at fair value on a recurring basis including our major assets that approximates fair value as determined by using the future expected net cash flows on the sale of the investments.
The following methods and assumptions were used to estimate the fair value of the Company's investments in available-for-sale marketable securities:
Available-for-sale securities are recorded at fair value. We primarily own securities in smaller public companies that are thinly traded. Determining fair value requires substantial judgment. For common stock securities, we first determine whether or not the stock is traded in an active market. Securities traded in an active market are marked-to-market using the quoted market price of the stock and are classified as Level 1 inputs. Securities that do not have an active market are measured using unobservable inputs, and are classified as Level 3 inputs.
Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.
A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.
Available-for-sale securities are accounted for on a specific identification basis. As of December 31, 2015 and 2014, the Company held available-for-sale securities with an aggregate fair value of $117,022 and $1,006,230, respectively. As of December 31, 2015 and 2014, all of our available-for-sale securities were invested in publically traded equity holdings. The Company recognized unrealized losses, net of tax, in accumulated other comprehensive income as of December 31, 2015 and 2014 in the amounts of $437,824 and $231,515, respectively. (See Note 2 for details of available for sale investments).
The Company's assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 at December 31, 2015, were as follows:
The Company's assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 at December 31, 2014, were as follows:
Property and Equipment and Intangibles
Computers and intangibles are stated at cost. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing computers and intangibles, are capitalized and depreciated or amortized. Upon retirement or disposition of computers and intangibles, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the statements of operations.
Long-Lived Assets
All long-lived assets are reviewed when events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. An impairment loss is recognized when estimated undiscounted cash flows that can be generated by those assets are less than the carrying value of the assets. When an impairment loss is recognized, the carrying amount is reduced to its estimated fair value based on appraisals or other reasonable methods to estimate fair value. There was no impairment of long-lived assets as of December 31, 2015 and 2014.
Investments in Marketable and Nonmarketable Securities
The Company reports its investments in marketable securities on the balance sheet as available for sale. Investments are deemed to be marketable when they are investments in public companies. Some of the investments reflect the original cost of the investment due to low volume of trading of the investment, and other investments reflect the original cost of the investments and unrealized gain/loss amounts based on the market price as of the date of the financial statements. Any tax adjustment related to the unrealized gain/loss is reflected as a deferred tax asset or liability on the balance sheet.
Other comprehensive income (OCI) is made up of the unrealized gain/loss amounts related to the available for sale investments of the Company. The OCI balance is recorded net of tax.
The Company reports its investments in nonmarketable securities on balance sheet using the cost method. Investments are deemed to be nonmarketable when they are investments in private companies. Investments in nonmarketable securities reflect the original cost of the investment
Equity Method Investments
For investments that represent significant influence in the investee, the Company follows ASC 323 Investments-Equity Method and Joint Ventures when recognizing these investments in the financial statements. Under this method, any net income or net loss must be recorded against the Company's investment, not to exceed the original investment and recognized as additional income or loss on the Company's income statement. In 2008 the Company acquired 39% of the outstanding shares of Marine Exploration, Inc. for $50,000 and accounted for this investment under the equity method. As of December 31, 2015 and 2014, the Company's investment in Marine Exploration is zero due to significant losses of the investee.
Income Taxes
Deferred income tax assets and liabilities are recognized for the expected future income tax consequences of events that have been included in the consolidated financial statements or income tax returns. Deferred income tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the years in which the differences are expected to reverse.
In evaluating the ultimate realization of deferred income tax assets, management considers whether it is more likely than not that the deferred income tax assets will be realized. Management establishes a valuation allowance if it is more likely than not that all or a portion of the deferred income tax assets will not be utilized. The ultimate realization of deferred income tax assets is dependent on the generation of future taxable income, which must occur prior to the expiration of the net operating loss carry forwards.
The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax return in Colorado as "major" tax jurisdictions, as defined. The Company is not currently under examination by the Internal Revenue Service or any other jurisdiction. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company's financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded.
Earnings per Share
Basic income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted income per share is determined by dividing the net income by the sum of (1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of stock awards determined utilizing the treasury stock method. The dilutive effect of the outstanding awards for the years ended December 31, 2015 and 2014 was $-0- and 119,403 shares, respectively.
Recently Issued Accounting Pronouncements
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new standard requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact this guidance may have on our financial statements.
In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740)" providing guidance on the balance sheet classification of deferred taxes. The guidance requires that deferred tax assets and liabilities to be classified as noncurrent in the Balance Sheet. The guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact this guidance may have on our financial statements.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02), Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02") - The evaluation of limited partnerships or similar entities as variable interest entities ("VIEs"), was modified. The revised requirements may affect the method of consolidation for reporting entities involved with such entities. All legal entities are subject to reevaluation under the revised consolidation mode. ASU 2015-02 affects the following areas: (1) limited partnerships and similar legal entities; (2) evaluating fees paid to a decision maker or a service provider as a variable interest; (3) the effect of fee arrangements on the primary beneficiary determination; (4) the effect of related parties on the primary beneficiary determination; and (5) certain investment funds. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. A reporting entity may apply the amendments in this guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A reporting entity also may apply the amendments retrospectively. The adoption of ASU 2015-02 is not expected to have any impact on the Company's financial statement presentation or disclosures.
There were various other accounting standards and interpretations issued during 2015 and 2014. However, management does not expect any of these to have a material impact on the Company's consolidated financial position, operations, or cash flows.
(2) Investments
Equity Method Investments
In 2008 the Company invested $50,000 for 175,000,000 shares of common stock in Marine Exploration, which represented 39% of the outstanding common stock of Marine Exploration. The Company recorded this long-term investment using the equity method of accounting for investments. Any net income or net loss must be recorded against the Company's investment, not to exceed the original investment of $50,000. Marine Exploration incurred significant losses during 2008, and the investment was reduced to zero. On August 24, 2010, Marine Exploration authorized a reverse split of 1 new share for 500 old shares of their common stock. As of this date, the Company has less than 1% ownership in Marine Exploration.
Investments in Available for Sale Marketable Securities
The Company's investments in available for sale marketable securities as of December 31, 2015 and 2014 are summarized below.
On May 7, 2015 Omni Bio Pharmaceutical, Inc. filed a Form 8K announcing it has been unsuccessful in its fundraising and partnering/licensing efforts and does not anticipate being able to raise sufficient capital to continue operations. Consequently, the Board of Directors of Omni Bio approved an orderly wind down, including negotiations with its senior secured creditor, Bohemian Investments, LLC. During the year ended December 31, 2015, the Company's investment in Omni Bio Pharmaceutical, Inc. was determined to have other than temporary decline in value. The investment was fully impaired resulting in a loss on impairment of available for sale marketable securities of $193,634.
Investments in Nonmarketable Securities
In June 2014, the Company received 80,000 common shares of WestMountain Distressed Debt, Inc., a related party, for services provided. This investment is recorded at our cost of $-0- and is accounted for under the cost method because, although WestMountain Distressed Debt, Inc. is a public company, an active market does not exist for the shares.
On November 1, 2015, our 1,645,000 common shares in NexCore Healthcare Capital Corp and our Class B units of NexCore Real Estate LLC was exchanged for 1,645,000 of common units of NexCore Companies LLC.
The Company's investments in nonmarketable securities accounted for under the cost method as of December 31, 2015 are summarized below.
The Company's investments in nonmarketable securities accounted for under the cost method as of December 31, 2014 are summarized below.
(3) Related Parties
Bohemian Companies, LLC and BOCO Investments, LLC are two companies under common control. Mr. Klemsz, our President, has been the Chief Investment Officer of BOCO Investments, LLC since March 2007. Since there is common control between the two companies and a relationship with our Company President, we are considering all transactions with Bohemian Companies, LLC and BOCO Investments, LLC, related party transactions.
On January 1, 2008, we entered into a Service Agreement with Bohemian Companies, LLC to provide us with certain defined services. These services included financial, bookkeeping, accounting, legal and tax matters, as well as cash management, custody of assets, preparation of financial documents, including tax returns and checks, and coordination of professional service providers as may be necessary to carry out the matters covered by the Service Agreement. We compensated Bohemian Companies, LLC by reimbursing this entity for the allocable portion of the direct and indirect costs of each employee of Bohemian Companies, LLC that performed services on our behalf. We received invoices monthly from Bohemian Companies, LLC. This Service Agreement was terminated by mutual agreement of the parties on March 31, 2014. Total expenses incurred with Bohemian Companies were $0 and $2,000 for the years ending December 31, 2015 and 2014. As of December 31, 2015 and 2014, the Company had a balance due to Bohemian Companies, LLC of $-0- and $-0-, respectively.
Revenue
For the years ended December 31, 2015 and 2014, the Company recorded aggregate advisory/consulting revenue of $205,667 and $189,200 respectively. Of the $205,667 and $189,200 recorded advisory/consulting revenue in 2015 and 2014, $152,000 and $152,000 is related party revenue. This advisory/ onsulting fee revenue relates to services performed on behalf of Nexcore Group LP and WestMountain Gold, Inc. The related parties and the Company have common affiliates. As of December 31, 2015 and 2014, the Company had outstanding accounts receivables from related parties of $6,000 and $41,125, respectively.
Investments in Marketable and Nonmarketable Securities
On January 3, 2014, NexCore Healthcare Capital Corp. declared a $0.10 per share cash dividend to holders of NexCore common stock of record on January 16, 2014. As of that date, the Company owned 1,645,000 shares of common stock and received a cash dividend of $164,500.
In March 2014, the Company received an additional distribution from Nexcore Real Estate in the amount of $1,425.
On December 15, 2014, the Board of Directors of NexCore Healthcare Capital Corp, as manager of NexCore Real Estate, authorized a $0.0675 per unit cash distribution payable to holders of NexCore Real Estate Class B Units of record on December 1, 2014. On December 30, 2014, we deposited a check in the amount of $111,038 as a result of that distribution.
In addition, on December 15, 2014 the Board of Directors for NexCore Healthcare Capital Corp, authorized a $0.025 per share cash dividend payable to holders of NexCore common stock of record on December 1, 2014. We recorded a $41,125 receivable and respective dividend income in December 2014. On January 7, 2015 we deposited a check in the amount of $41,125 as a result of that cash dividend.
In November 2014 we were notified by Nexcore Real Estate that we had received an over distribution in the amount of $29,478 that we paid back to Nexcore Real Estate in December 2014. The over distribution was associated with Illinois tax that was disbursed to the State of Illinois on the Company's behalf. This payment has been recorded against dividend income on non- marketable securities in the other income and expense section of the income statement.
On November 1, 2015, our 1,645,000 common shares in NexCore Healthcare Capital Corp and our Class B units of NexCore Real Estate LLC was exchanged for 1,645,000 of common units of NexCore Companies LLC. On November 4, 2015, the Board of Directors of NexCore Companies LLC, authorized a $0.167 per unit cash distribution payable to unit holders of record as of December 15, 2015. On December 18, 2015, we deposited a check in the amount of $274,715 as a result of that distribution. In addition, we posted the related tax impact of $5,510.
As of December 31, 2015 and 2014, the following investments in marketable and nonmarketable securities were held in related parties due to common principal ownership:
Notes Receivable
On October 17, 2014, we entered into a Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $25,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before April 16, 2015. On April 18, 2015, we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of April 18, 2015. The new principal amount was $27,256. The new note carried an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before October 18, 2015. On October 18, 2015 we entered into a new Promissory Note Agreement for the total principal and interest due on the extension as of October 18, 2015. The new principal amount is $29,729. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before April 18, 2016. As of December 31, 2015, the total principal and interest due on this note is $30,814. A full allowance has been recognized against this note and the accrued interest.
On January 27, 2015, we entered into a Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $25,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before July 27, 2015. On July 27, 2015, we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of July 27, 2015. The new principal amount is $27,244. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before January 27, 2016. As of December 31, 2015, principal and interest due on this note is $29,353. On January 27, 2016, we entered into a new Promissory Note Agreement for the total principal and interest due on the extension as of January 27, 2016. The new principal amount was $29,729. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before July 29, 2016. As of December 31, 2015, principal and interest due on this note is $29,353. A full allowance has been recognized against this note and the accrued interest.
On May 4, 2015, we entered into an additional Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $10,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before November 4, 2015. On November 4, 2015 we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of November 4, 2015. The new principal amount is $10,740. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before May 4, 2016. As of December 31, 2015, principal and interest due on this note is $11,219. A full allowance has been recognized against this note and the accrued interest.
On December 31, 2015 management evaluated the collectability of the notes and determined it was necessary to write the balances off. A total of $60,937 was expensed to the income statement.
The Company has determined that WestMountain Distressed Debt, Inc., (WMDS) is considered a "variable interest entity", however, WestMountain Company is not the primary beneficiary.
WestMountain Company provided funding to WMDS to assist in paying their current operational expenses. The Company is not the only financial supporter to WMDS. The first note was dated October 17, 2014. Below is a summary of the current notes with WMDS that have been written off as of December 31, 2015.
The total funding at risk is not sufficient to permit this entity to finance its activities without additional subordinated financial support.
WestMountain Company is not a majority equity stakeholder in WMDS, nor does it have voting control, control of the board of directors, or substantive management rights. Given that the Company does not have the power to direct their activities that most significantly impact its economic performance, the Company determined that it is not the primary beneficiary of WMDS and therefore is not required to consolidate this entity.
The Company will access any additional transactions with WMDS to determine if the entity will need to be consolidated with the Company based on the VIE disclosure requirements.
(4) Stockholders Equity
Common stock
No common shares were issued or retired during the years ended December 31, 2015 and 2014.
Stock options
On August 15, 2011, the Company approved the employee compensation plan and granted a total of 200,000 common stock options, to our employees. As stated in the compensation plan, these options have a four year term. 50% of the options will become vested and exercisable immediately, 25% on the first anniversary date of August 15, 2011, and 25% on the second anniversary date of August 15, 2012. The options have an exercise price of $0.27 per share, which was the fair value of the stock on the day of the grant. The fair value of the options was determined to be $41,038 using the Black-Scholes option pricing model and the following key assumptions: market price of common stock of $0.27, a risk free rate of 0.99%, a volatility of 99.96% and an expected term of 2.375 years using the simplified method. During the years ended December 31, 2015 and 2014, $-0- and $-0-, respectively was expensed.
The following table presents the activity stock options during the years ended December 31, 2015 and 2014:
All outstanding options expired during the year ended December 31, 2015.
The following table presents the composition of options outstanding and exercisable as of December 31, 2015 and December 31, 2014. The exercisable options have an intrinsic value of $-0- and $96,000 as of December 31, 2015 and December 31, 2014.
(5) Commitments and Contingencies
Based on currently available information, the Company believes that it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our financial statements. As the Company learns new facts concerning contingencies, the Company reassesses its position both with respect to accrued liabilities and other potential exposures. In the case of all known contingencies, the Company accrues a liability when the loss is probable and the amount is reasonably estimable. The Company does not reduce these liabilities for potential insurance or third-party recoveries.
(6) Income Taxes
The Company records deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The provision of income taxes consists of the following for the years ended December 31, 2015 and 2014:
Deferred tax assets and liabilities consisted of the following as of December 31, 2015 and 2014:
The benefit for income taxes differs from the amount computed by applying the U.S. federal income tax rate of 35% to loss before income taxes as follows for the years ended December 31, 2015 and 2014:
(7) Subsequent Events
On February 17, 2016, we paid $30,000 for 6.98 of RavenBrick Class C unit shares. RavenBrick is an existing customer we provide advisory services to. These services consist of, but not limited to, developing public recognition of their business plans and strategic goals, and engaging in website development and media production.
Our principal executive offices are located at 181 W. Boardwalk, Suite 202, Fort Collins, Colorado 80525, and our telephone number is (970) 223-4499. Effective April 1, 2016, our office will be located at 1001-A E. Harmony Road, #366, Fort Collins, Colorado 80525.
On January 27, 2015, we entered into a Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $25,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before July 27, 2015. On July 27, 2015, we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of July 27, 2015. The new principal amount was $27,244. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before January 27, 2016. On January 28, 2016, we entered into a new Promissory Note Agreement for the total principal and interest due on the extension as of January 27, 2016. The new principal amount was $29,729. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before July 29, 2016. As of December 31, 2015, principal and interest due on this note is $29,353. A full allowance has been recognized against this note and the accrued interest.
ITEM 9.
ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
We did not have any disagreements on accounting and financial disclosures with our present accounting firm during the reporting period.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act. As a result of this evaluation, we identified no material weaknesses in our internal control over financial reporting as of December 31, 2015. Accordingly, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2015 due to the material weaknesses described below.
Management's Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U. S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
ii. provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our consolidated financial statements in accordance with U. S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.
Management has concluded that our internal control over financial reporting was not effective as December 31, 2015 due to the following material weaknesses:
i.
Inadequate procedures to evaluate notes receivables for collectability.
The Company has put new procedures in place to evaluate their accounts receivable and notes receivable. The Company will provide an allowance for any receivable over 90 days if there are special circumstances that will eliminate the need for an allowance or write-off, it will be documented and reviewed on a quarterly basis
ii.
Inadequate procedures to evaluate certain interests held for variable interest entity considerations.
Management will create a VIE checklist for all disclosure elements. This checklist will be used for future investment and receivable transactions. Depending on the analysis of the results from the checklist, we will record the transactions accordingly.
Inherent Limitations Over Internal Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting.
We have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report on Form 10-K.
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ITEM 9B.
ITEM 9B. OTHER INFORMATION.
Nothing to report.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Set forth below is the name of the sole director and officer of the Company, all positions and offices with the Company held, the period during which he has served as such, and the business experience during at least the last five years:
Mr. Anderson has been our President since May, 2011. He was director of Marketing and Development for EnviroPest, a large privately owned pest control company from June 2009 to May 2011. From June 2008 to June 2009 he served as Marketing Director for Pillar Capital, LLC and from December 1996 to May 2007 was Pastor of Media Ministries at Resurrection Fellowship church in Loveland, Colorado. He also served as radio play-by-play announcer for Colorado State University football and basketball from 1989 to 1997. Mr. Anderson received his Bachelor of Science in Communications from Oral Roberts University in 1983.
Mr. Klemsz has been our Treasurer and sole Director since our inception and President from inception until May, 2011. Since March, 2007, he has been the Chief Investment Officer of BOCO Investments, LLC. He was President and Chief Investment Officer for GDBA Investments, LLLP, a private investment partnership from May 2000 until February 2007. He is currently also the President, Treasurer, and sole Director of WestMountain Distressed Debt, Inc., and WestMountain Alternative Energy, Inc., which are public companies. Mr. Klemsz received a Masters of Science in Accounting and Taxation in 1993 and a Masters of Science in Finance in 1990 from Colorado State University. He received his Bachelor of Science degree from the University of Colorado in 1981.
Ms. Troska has been the Company's Secretary since March 2010. She currently serves as corporate Secretary of WestMountain Alternative Energy, Inc. and WestMountain Distressed Debt, Inc., both public companies. She started SP Business Solutions, a business consulting service, in April, 2002. Prior to that period, she was employed for fourteen years as the General Accounting Manager and financial liaison for software implementations and acquisition integration by Advanced Energy Industries, Inc., a public international electronics manufacturing company, in Fort Collins, Colorado. While employed by Advanced Energy, she obtained her business degree in July 2001.
Family Relationships
There are no family relationships among our directors and executive officers. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it. No director or executive officer has been convicted of a criminal offense within the past five years or is the subject of a pending criminal proceeding. No director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities. No director or officer has been found by a court to have violated a federal or state securities or commodities law.
Committees of the Board of Directors
There are no committees of the Board of Directors.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in its Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. We have nothing to report in this regard.
Code of Ethics
Our board of directors has not adopted a code of ethics but plans to do so in the future.
Options/SAR Grants and Fiscal Year End Option Exercises and Values
Effective August 15, 2011, our board of directors adopted and approved a new Equity Compensation Plan.(the 2011 Plan) . Our shareholders approved this Plan in December, 2011. A total of 500,000 common shares have been reserved under the 2011 Plan.
The purpose of the 2011 Plan is to provide a means for us and our subsidiaries and other designated affiliates, which we refer to as Related Entities, to attract key personnel to provide services to our company and the Related Entities, as well as, to provide a means whereby those key persons can acquire and maintain stock ownership, thereby strengthening their commitment to the welfare of our company and its Related Entities and promoting the mutuality of interests between participants and our shareholders. A further purpose of the 2011 Plan is to provide participants with additional incentive and reward opportunities designed to enhance the profitable growth of our company and its Related Entities, and provide participants with annual and long term performance incentives to expend their maximum efforts in the creation of shareholder value.
The terms of the 2011 Plan provide for grants of stock options and restricted stock awards and performance awards that may be settled in cash, stock or other property. As of September 1, 2011, two awards have been granted under the 2011 Plan. Mr. Steve Anderson received an option to acquire a total of 160,000 common shares of the Company, all at a price of $ 0.27 per share. Ms Joni Troska received an option to acquire a total of 40,000 common shares of the Company, all at a price of $ 0.27 per share. All of the options have been expensed as of December 31, 2015.
Otherwise, we have not had a stock option plan or other similar incentive compensation plan for officers, directors and employees, and no stock options, restricted stock or SAR grants were granted or were outstanding at any time.
Item 11.
Item 11. EXECUTIVE COMPENSATION
Beginning in May, 2011, our President, Mr. Anderson receives a salary of $120,000 per annum, plus a stock option to acquire a total of 160,000 common shares of the Company, all at a price of $ 0.27 per share. These options expired in 2015. We reimburse Mr. Anderson for all necessary and customary business related expenses. We have no plans or agreements which provide health care, insurance or compensation on the event of termination of employment or change in our control.
Ms. Joni Troska, was appointed our corporate Secretary on March 19, 2009. In May 2011, she was hired as a part-time accountant and receives a salary of $48,000. Ms Troska also received an option to acquire a total of 40,000 common shares of the Company, all at a price of $ 0.27 per share. These options expired in 2015.
Otherwise, our officers and director are not accruing any compensation pursuant to any agreement with us.
Finally, no retirement, pension, profit sharing, or insurance programs or other similar programs have been adopted by us for the benefit of our employees.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following sets forth the number of shares of our $0.001 par value common stock beneficially owned by (i) each person who, as of December 31, 2014, was known by us to own beneficially more than five percent (5%) of its common stock; (ii) our individual Directors and (iii) our Officers and Directors as a group. A total of 9,517,402 common shares were issued and outstanding as of December 31, 2015.
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______________
(1) All ownership is beneficial and of record, unless indicated otherwise.
(2) The Beneficial owner has sole voting and investment power with respect to the shares shown.
(3) Mr. Klemsz owns 16.8% of WestMountain Blue, LLC.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Bohemian Companies, LLC and BOCO Investments, LLC are two companies under common control. Mr. Klemsz, our President, has been the Chief Investment Officer of BOCO Investments, LLC since March 2007. Since there is common control between the two companies and a relationship with our Company President, we are considering all transactions with Bohemian Companies, LLC and BOCO Investments, LLC, related party transactions.
On January 1, 2008, we entered into a Service Agreement with Bohemian Companies, LLC to provide us with certain defined services. These services included financial, bookkeeping, accounting, legal and tax matters, as well as cash management, custody of assets, preparation of financial documents, including tax returns and checks, and coordination of professional service providers as may be necessary to carry out the matters covered by the Service Agreement. We compensated Bohemian Companies, LLC by reimbursing this entity for the allocable portion of the direct and indirect costs of each employee of Bohemian Companies, LLC that performed services on our behalf. We received invoices monthly from Bohemian Companies, LLC. This Service Agreement was terminated by mutual agreement of the parties on March 31, 2014. Total expenses incurred with Bohemian Companies were $-0- and $2,000 for the years ending December 31, 2015 and 2014. As of December 31, 2015 and 2014, the Company had a balance due to Bohemian Companies, LLC of $-0- and $-0-, respectively.
Revenue
For the years ended December 31, 2014 and 2013, the Company recorded aggregate advisory/consulting revenue of $205,667 and $189,200 respectively. Of the $205,667 and $189,200 recorded advisory/consulting revenue in 2015 and 2014, $152,000 and $152,000 is related party revenue. This advisory/consulting fee revenue relates to services performed on behalf of Nexcore Group LP and WestMountain Gold, Inc. The related parties and the Company have common affiliates. As of December 31, 2015 and 2014, the Company had outstanding accounts receivables from related parties of $6,000 and $41,125, respectively.
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Investments in Marketable and Nonmarketable Securities
On January 3, 2014, NexCore Healthcare Capital Corp. declared a $0.10 per share cash dividend to holders of NexCore common stock of record on January 16, 2014. As of that date, the Company owned 1,645,000 shares of common stock and received a cash dividend of $164,500.
In March 2014, the Company received an additional distribution from Nexcore Real Estate in the amount of $1,425.
On December 15, 2014, the Board of Directors of NexCore Healthcare Capital Corp, as manager of NexCore Real Estate, authorized a $0.0675 per unit cash distribution payable to holders of NexCore Real Estate Class B Units of record on December 1, 2014. On December 30, 2014, we deposited a check in the amount of $111,038 as a result of that distribution.
In addition, on December 15, 2014 the Board of Directors for NexCore Healthcare Capital Corp, authorized a $0.025 per share cash dividend payable to holders of NexCore common stock of record on December 1, 2014. We recorded a $41,125 receivable and respective dividend income in December 2014. On January 7, 2015 we deposited a check in the amount of $41,125 as a result of that cash dividend.
In November 2014 we were notified by Nexcore Real Estate that we had received an over distribution in the amount of $29,478 that we paid back to Nexcore Real Estate in December 2014. The over distribution was associated with Illinois tax that was disbursed to the State of Illinois on the Company's behalf. This payment has been recorded against dividend income on non- marketable securities in the other income and expense section of the income statement.
On November 1, 2015, our 1,645,000 common shares in NexCore Healthcare Capital Corp and our Class B units of NexCore Real Estate LLC was exchanged for 1,645,000 of common units of NexCore Companies LLC. On November 4, 2015, the Board of Directors of NexCore Companies LLC, authorized a $0.167 per unit cash distribution payable to unit holders of record as of December 15, 2015. On December 18, 2015, we deposited a check in the amount of $274,715 as a result of that distribution. In addition, we posted the related tax impact of $5,510.
As of December 31, 2015 and 2014, the following investments in marketable and nonmarketable securities were held in related parties due to common principal ownership:
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Notes Receivable
On October 17, 2014, we entered into a Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $25,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before April 16, 2015. On April 18, 2015, we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of April 18, 2015. The new principal amount was $27,256. The new note carried an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before October 18, 2015. On October 18, 2015 we entered into a new Promissory Note Agreement for the total principal and interest due on the extension as of October 18, 2015. The new principal amount is $29,729. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before April 18, 2016. As of December 31, 2015, the total principal and interest due on this note is $30,814. A full allowance has been recognized against this note and the accrued interest.
On January 27, 2015, we entered into a Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $25,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before July 27, 2015. On July 27, 2015, we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of July 27, 2015. The new principal amount is $27,244. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before January 27, 2016. As of December 31, 2015, principal and interest due on this note is $29,353. On January 27, 2016, we entered into a new Promissory Note Agreement for the total principal and interest due on the extension as of January 27, 2016. The new principal amount was $29,729. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before July 29, 2016. As of December 31, 2015, principal and interest due on this note is $29,353. A full allowance has been recognized against this note and the accrued interest.
On May 4, 2015, we entered into an additional Promissory Note Agreement with WestMountain Distressed Debt, Inc., a related party, in the amount of $10,000. The note bears an interest rate of 18% per annum until paid in full. Repayment of the loan was due on or before November 4, 2015. On November 4, 2015 we entered into a new Promissory Note Agreement for the total principal and interest due on the original note as of November 4, 2015. The new principal amount is $10,740. The new note carries an interest rate of 18% per annum until paid in full. Repayment of the loan is due on or before May 4, 2016. As of December 31, 2015, principal and interest due on this note is $11,219. A full allowance has been recognized against this note and the accrued interest.
On December 31, 2015 management evaluated the collectability of the notes and determined it was necessary to write the balances off. A total of $60,937 was expensed to the income statement.
ITEM 14:
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent auditor, MaloneBailey, LLP, Certified Public Accountants billed an aggregate of $27,000 for the year ended December 31, 2015 and for professional services rendered for the audit of the Company's annual financial statements and review of the financial statements included in our quarterly reports. MaloneBailey, LLP, Certified Public Accountants, billed an aggregate of $35,000 for the year ended December 31, 2014 and for professional services rendered for the audit of the Company's annual financial statements and review of the financial statements included in our quarterly reports.
We do not have an audit committee and as a result our board of directors performs the duties of an audit committee. Our board of directors evaluates the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.
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ITEM 15.
ITEM 15. EXHIBITS FINANCIAL STATEMENT SCHEDULES.
The following financial information is filed as part of this report:
(a) (1) FINANCIAL STATEMENTS
(2) SCHEDULES
(3) EXHIBITS. The following exhibits required by Item 601 to be filed herewith are incorporated by reference to previously filed documents:
* Previously filed with Form SB-2 Registration Statement, January 2, 2008
** Previously filed with Form 10-KSB Registration Statement, February 29, 2008
*** Previously filed under cover of Form 8K, February 27, 2014.
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SIGNATURES
In accordance with Section 12 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 on April 13, 2016.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacity and on the date indicated.
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