UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


 [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended March 31, 2014


-OR-


[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________


Commission File Number:   000-54717


Drywave Technologies, Inc.

(Exact name of Registrant in its charter)


Delaware

 

27-1340346

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification Number)


167 Penn Street

Washington Boro, Pennsylvania

 

17582

(Address of Principal Executive Offices

 

(Zip Code)


Registrant's Telephone Number,

Including Area Code:

 

(717) 215-9872


Strategic Dental Management Corp.

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


Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [x] No [ ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [ ]   No [ ]



1




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):


Large accelerated filer          [  ]

 

Non-accelerated filer             [  ]

Accelerated filer                   [  ]

 

Smaller reporting company   [x]


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


The number of outstanding shares of the registrant's common stock, May 15, 2014:  Common Stock – 116,218,383




2




TABLE OF CONTENTS


PART 1 – FINANCIAL INFORMATION

 

 

 

 

 

Page

Item 1.  Financial Statements (Unaudited)

 

5

Item 2.  Management's Discussion and Analysis of

  Financial Condition and Results of Operations

 

14

Item 3.  Quantitative and Qualitative Disclosure

  About Market Risk

 

17

Item 4.  Controls and Procedures

 

17


PART II – OTHER INFORMATION


 

 

 

Item 1.  Legal Proceedings

 

18

Item 1A.  Risk Factors

 

18

Item 2.  Unregistered Sales of Equity Securities and

  Use of Proceeds

 

18

Item 3.  Defaults upon Senior Securities

 

18

Item 4.  Mine Safety Disclosures

 

18

Item 5.  Other Information

 

18

Item 6.  Exhibits

 

18

 

 

 

SIGNATURES

 

19





3



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements included or incorporated by reference in this Quarterly Report on Form 10-Q, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including, but not limited to “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment of the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “should,” “plan,” “project” and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:

 

 

 

projected operating or financial results, including anticipated cash flows used in operations;

 

 

 

expectations regarding capital expenditures; and

 

 

 

our beliefs and assumptions relating to our liquidity position, including our ability to obtain additional financing.

 

Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:

 

 

 

the loss of key management personnel on whom we depend;

  

 

 

our ability to operate our business efficiently, manage capital expenditures and costs (including general and administrative expenses) and obtain financing when required; and

 

 

 

our expectations with respect to our acquisition activity.

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this Quarterly Report on Form 10-Q are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q, except as otherwise required by applicable law.

 




4



Drywave Technologies, Inc.

 (A Development Stage Company)

Part 1 – Financial Information

Condensed Consolidated Balance Sheets

 

March 31, 2014

December 31, 2013

 

(Unaudited)

(Audited)

Assets

 

 

 

Current assets:

 

 

Cash

$                 5,877

$                4,422

Total current assets

5,877

4,422

 

 

 

Total Assets

$                5,877

$                4,422

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

Current liabilities:

 

 

Accrued payables

$                   150

$                  150

Due to related party

16,454

14,082

Total current liabilities

16,604

14,232

 

 

 

Total liabilities

16,604

14,232

 

 

 

Commitments and Contingencies  (Note 7)

 

 

 

 

 

Stockholders' deficit:

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized;

 

 

  none issued and outstanding

-

-

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

  authorized; 116,218,383 shares issued and

  outstanding, March 31, 2014 and December 31,

  2013

116,218

116,218

Additional paid-in capital

(91,005)

(91,005)

Deficit accumulated during the development stage

(35,940)

(35,023)

Total stockholders' deficit

(10,727)

(9,810)

 

 

 

Total Liabilities and Stockholders' Deficit

$                5,877

$                4,422


See accompanying notes to consolidated unaudited financial statements




5



Drywave Technologies, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

 

Three Months

From January 8, 2010

 

Ended March 31,

(Inception) to

 

2014

2013

March 31, 2014

 

 

 

 

Revenue - related party

$           1,500

$          1,200

$         27,904

 

 

 

 

Operating expenses

 

 

 

 General and administrative

2,417

4,082

63,481

Total operating expenses

2,417

4,082

63,481

 

 

 

 

Income (loss) from operations

(917)

(2,882)

(35,577)

 

 

 

 

Other income (expense)

 

 

 

 Miscellaneous income

-

-

200

 Interest expense

-

-

(563)

Total other income (expense)

-

-

(363)

 

 

 

 

Net income (loss)

$            (917)

$      (2,882)

$     (35,940)

 

 

 

 

Net income (loss) per common share - basic and diluted

$         (0.00)*

$      (0.00)*

 

 

 

 

 

Weighted average number

 

 

 

of common shares outstanding - basic and diluted

116,218,383

116,218,383

 


*Denotes a loss of less than $(0.01) per share


See accompanying notes to consolidated unaudited financial statements




6



Drywave Technologies, Inc.

 (A Development Stage Company)

Condensed Consolidated Statement of Stockholders’ Equity (Deficit)

From January 8, 2010 (Inception) to March 31, 2014 (Unaudited)

 

 

 

 

Deficit

 

 

 

 

 

Accumulated

 

 

 

 

Additional

During the

Total

 

Common Stock, $0.001 Par Value

Paid-in

Development

Stockholders'

 

Shares

Amount

Capital

Stage

Equity (Deficit)

 

 

 

 

 

 

Balance - January 8, 2010 (Inception)

-

$        -

$             -

$              -

$              -

 

 

 

 

 

 

Compensatory stock issuances

18,200,000

18,200

(17,400)

-

800

 

 

 

 

 

 

Sales of common stock

93,275,000

93,275

(84,275)

-

9,000

 

 

 

 

 

 

Net loss for the period

-

-

-

(7,866)

(7,866)

 

 

 

 

 

 

Balance - December 31, 2010 – (Audited)

111,475,000

111,475

(101,675)

(7,866)

1,934

 

 

 

 

 

 

Sales of common stock

2,013,383

2,013

6,837

-

8,850

 

 

 

 

 

 

Net loss for the year

-

-

-

(4,661)

(4,661)

 

 

 

 

 

 

Balance - December 31, 2011 – (Audited)

113,488,383

113,488

(94,838)

(12,527)

6,123

 

 

 

 

 

 

Note payable conversion

2,730,000

2,730

3,270

-

6,000

 

 

 

 

 

 

Debt relief

-

-

563

-

563

 

 

 

 

 

 

Net loss for the year

-

-

-

(9,387)

(9,387)

 

 

 

 

 

 

Balance - December 31, 2012 – (Audited)

116,218,383

116,218

(91,005)

(21,914)

3,299

 

 

 

 

 

 

Net loss for the year

-

-

-

(13,109)

(13,109)

 

 

 

 

 

 

Balance - December 31, 2013 – (Audited)

116,218,383

116,218

(91,005)

(35,023)

(9,810)

 

 

 

 

 

 

Net loss for the period (unaudited)

-

-

-

(917)

(917)

 

 

 

 

 

 

Balance - March 31, 2014 (Unaudited)

116,218,383

$116,218

$(91,005)

$   (35,940)

$   (10,727)

 

 

 

 

 

 


All numbers are reflective of 22.75:1 forward split completed effective July 15, 2013


See accompanying notes to consolidated unaudited financial statements




7



Drywave Technologies, Inc.

 (A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

Three Months

From January 8, 2010

 

Ended March 31,

(Inception) to

 

2014

2013

March 31, 2014

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income (loss)

$      (917)

$   (2,882)

$     (35,940)

Adjustments to reconcile net loss to net cash used (used in)

 

 

 

operating activities:

 

 

 

Write offs

-

-

642

Compensatory stock issuances

-

-

800

   Changes in operating assets and liabilities:

 

 

 

Accounts receivable

-

-

(79)

Accrued payables

-

(1,500)

150

Net Cash Used In Operating Activities

(917)

(4,382)

(34,427)

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

-

-

-

Net Cash Provided By (Used in) Investing Activities

-

-

-

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Note payable - borrowing

-

-

6,000

Due to related party

2,372

-

16,454

Sales of common stock

-

-

17,850

Net Cash Provided By Financing Activities

2,372

-

40,304

 

 

 

 

Net increase (decrease) in cash

1,455

(4,382)

5,877

 

 

 

 

Cash - Beginning of Period

4,422

4,949

-

 

 

 

 

Cash - End of Period

$     5,877

$        567

$         5,877

 

 

 

 

SUPPLEMENTARY CASH FLOW INFORMATION:

 

 

 

Cash Paid During the Period for:

 

 

 

Taxes

$            -

$            -

$                 -

Interest

$            -

$            -

$                 -

 

 

 

 

Non-Cash Transactions:

 

 

 

Conversion of related party note to shares of stock

$           -

$  6,000

$        6,000

Forgiveness of accrued interest

$           -

$      563

$           563


See accompanying notes to consolidated unaudited financial statements




8



Drywave Technologies, Inc.

 (A Development Stage Company)


Notes to Unaudited Consolidated Financial Statements

For the Three Month Periods Ended March 31, 2014 and 2013 and the Period from January 8, 2010 (Inception) to March 31, 2014


Note 1 Nature of Operations


Drywave Technologies, Inc., formerly known as Strategic Dental Management Corp. (the “Company”) was incorporated on January 8, 2010 (Inception) in the State of Colorado.  On July 16, 2013, the Company changed its name from Strategic Dental Management Corp. to Drywave Technologies, Inc. and changed its state of incorporation from Colorado to Delaware.  The Company has had limited activity and revenue and is in the development stage. The Company provides consulting and management services to the dental industry.


On March 6, 2013, the Company came under new ownership and currently has minimal activity. The Company intends to seek new business opportunities including the acquisition of, or merger with, an existing business.  See Form 8-K filed on March 12, 2013 for additional information pertaining to the change in control.


The Company has chosen December 31 as a year end.


Note 2 Summary of Significant Accounting Policies


Basis of Presentation


The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.


The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed on April 15, 2014, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the year ended December 31, 2013.  


Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the period ended March 31, 2014 are not necessarily indicative of results for the full fiscal year.




9



Principles of Consolidation


The accompanying consolidated financial statements include the accounts of Drywave Technologies, Inc. and its sole wholly owned subsidiary.  All intercompany accounts and transactions have been eliminated in consolidation.  


Development Stage


The Company's financial statements are presented as those of a development stage enterprise.  Activities during the development stage primarily include equity based financing and the development of the business plan.


Use of Estimates


The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the financial statements and the accompanying notes. Such estimates and assumptions impact, among others, the following: assessment of the recoverability of long-lived assets and the valuation allowance for deferred tax assets due to continuing and expected future losses.


Cash and cash equivalents


All cash and short-term investments with original maturities of three months or less are considered cash and cash equivalents, since they are readily convertible to cash. These short-term investments are stated at cost, which approximates fair value.


Property and equipment


The Company has no property or equipment at this time.


Due to Related Party


Due to related party represents an obligation to pay for goods or services that were used in the ordinary course of business and paid for by a related party on the Company’s behalf.  Due to related party is classified as a current liability as payment is due within one year or less.


Revenue Recognition


The Company recognizes revenue when it is realized or realizable and earned.  We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collection is reasonably assured.


Advertising expenses


Advertising costs are expensed when incurred.  No advertising expenses were incurred during the three month periods ended March 31, 2014 or 2013.




10



Income taxes


Income taxes are accounted for in accordance with ASC 740, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  The Company is currently filing its income tax returns on the cash basis.


Earnings (loss) per share


The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.  No potentially dilutive debt or equity instruments were issued or outstanding during the three month period ended March 31, 2014 or 2013.


On July 16, 2013, the Company executed a 22.75 for 1 stock split.  As a result of the split, each outstanding share of the Company before the split represents 22.75 shares of common stock after the split.   All share and per share amounts have been retroactively restated to reflect the split.


Financial Instruments


The carrying value of the Company’s financial instruments, including accrued payables and due to related party, as reported in the accompanying balance sheet, approximates fair value due to the short term maturities of these financial instruments.


Stock based compensation


The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.


Reclassification


Certain amounts reported in prior years in the financial statements have been reclassified to conform to the current year’s presentation.


Recent Accounting Pronouncements


There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.




11



Note 3 Going Concern


As reflected in the accompanying financial statements, the Company has a net loss of $917 and net cash used in operations of $917 for the three months ended March 31, 2014, and a deficit accumulated during the development stage of $35,940 at March 31, 2014.  In addition, the Company is in the development stage and has not yet generated significant revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern.


The Company expects that its current cash resources as well as expected lack of operating cash flows will not be sufficient to sustain operations for a period greater than one year.  


The ability of the Company to continue its operations is dependent on Management's plans, which include continuing to raise equity based financing.


The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.


Note 4 Related Party Transactions


All Company revenues for the three months ended March 31, 2014 and 2013 of $1,500 and $1,200, respectively, are from a LLC related by common control of a Company director.  The revenue was earned from providing payroll accounting and human resource consulting.


In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or complete a business acquisition or merger.  There is no formal written commitment for continued support by related party affiliates.  Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.  As of March 31, 2014 and December 31, 2013, the Company had a due from related party balance outstanding with an affiliate of the Company in the amount of $16,454 and $14,082, respectively. The due from related party balance is non-interest bearing, due upon demand and unsecured.


Note 5 Shareholders’ Equity


Common Stock - The Company as of March 31, 2014 and December 31, 2013 had 200,000,000 shares of authorized common stock, $0.001 par value, with 116,218,383 shares issued and outstanding.


Preferred Stock - The Company as of March 31, 2014 and December 31, 2013 had 10,000,000 shares of authorized preferred stock, $0.001 par value, with none issued and outstanding, with rights, preferences and designations to be determined by the Board of Directors.




12



Note 6 Income Taxes


As of March 31, 2014, the Company provided a full valuation allowance against deferred tax assets based on the weight of the available evidence, both positive and negative, including the Company’s operating losses, which indicate that it is more likely than not that such benefits will not be realized.


Note 7 Commitments and Contingencies


Legal Matters - From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of March 31, 2014, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders, is an adverse party or has a material interest adverse to our interest.


Note 8 Subsequent Events


In accordance with ASC855-10. “Subsequent Events” the Company has analyzed its operations subsequent to March 31, 2014 to the date of these financial statements were issued on May 15, 2014 and has determined that it does not have any material subsequent events to disclose in these financial statements.  



13



ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


General


This discussion and analysis should be read in conjunction with the accompanying financial statements and related notes. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.


Plan of Operation


We are a development stage company, formed to build dental practices from scratch or to acquire existing dental practices and manage all aspects of the dental practices including payroll, human resources, collections, personnel, training etc.  In addition, we planned to consult with other dental practices and train employees, manage day to day operations, provide all financial and accounting services etc.  However, due to the costs associated with these plans, we have decided to pursue other business opportunities.


Our current plan of operation is to raise additional capital to maintain the Company in good standing and to explore new business opportunities. We currently have no definitive agreements with any prospective business combination. There are no assurances that we will find a suitable business with which to combine.


As a result of our limited resources, we expect to target only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.


Any new business opportunities will likely require additional capital. We anticipate additional funding will be in the form of equity financing from the sale of our common stock. However, we have no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund all of our anticipated expenses. We do not have any arrangements in place for any future equity financing.




14



Recent Corporate Developments


We were incorporated in the State of Colorado on January 8, 2010 under the name “Strategic Dental Management Corp.” In the first quarter of 2013, we entered into preliminary negotiations with Drywave Technologies USA, Inc., a Delaware corporation (“Drywave USA”) whereby we would acquire Drywave USA and Drywave USA would become our wholly-owned operating subsidiary (the “Reverse Merger”).  On March 6, 2013, we came under new ownership through the purchase of 93.5% of our issued and outstanding common stock.  We filed a Current Report on Form 8-K with the SEC noticing the change of control.  As a condition precedent to the Reverse Merger, we agreed to effectuate the following corporate actions: (1) Name change (the “Name Change”) from “Strategic Dental Management Corp” to “Drywave Technologies, Inc.”; (2) reincorporation (the “Reincorporation”) from the State of Colorado to the State of Delaware; and (3) twenty two and seventy five hundredths  (22.75) for one (1) forward-split (the “Forward-Split”) of our shares (the Name Change, Reincorporation and Forward-Split are referred to collectively herein as the “Corporate Actions”). On May16, 2013 our Board and our majority stockholder approved the Corporate Actions. On June 20, 2013, we filed a definitive information statement on Schedule 14C describing the Corporate Actions. The Financial Industry Regulatory Authority (“FINRA”) notified us that the Corporate Actions had been approved with an effective date of July 16, 2013.   As of the date of this Report, the Reverse Merger has not been completed.


Significant Accounting Policies and Estimates


The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.


Results of Operations


For Three Months Ended March 31, 2014 and 2013


For the three months ended March 31, 2014, we received $1,500 in revenue and had general and administrative expenses of $2,417.  As a result, we had a loss from operations of $917 for the three months ended March 31, 2014.



15




Comparatively, for the three months ended March 31, 2013, we received $1,200 in revenue and had general and administrative expenses of $4,082.  As a result, we had a loss from operations of $2,882 for the three months ended March 31, 2013.  The decreased loss from operations between the three months ended March 31, 2014 and 2013 was due to a decrease in general and administrative expenses for 2014.


General and administrative expenses, which consist of fees paid for legal, accounting, and auditing services, were incurred primarily to enable the Company to satisfy the requirements of a United States reporting company.


Cashflow for the Three Months Ended March 31, 2014 and 2013


At March 31, 2014, the Company had a cash balance of $5,877, a $1,455 increase from the $4,422 balance at December 31, 2013.  


Operating Activities


For the three months ended March 31, 2014, we had a net loss and net cash used in operating activities of $917.  Comparatively, for the three months ended March 31, 2013, we had a net loss of $2,882, and paid $1,500 for accrued payables, resulting in net cash used in operating activities of $4,382.


Investing Activities


During the three month periods ended March 31, 2014 and 2013, we neither generated nor used funds in investing activities.


Financing Activities


For the three months ended March 31, 2014 and 2013, we had an increase in due from related party of $2,372 and $0, respectively.


Going Concern


The continuation of our business is dependent upon obtaining further financing and achieving a break even or profitable level of operations in our business. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current or future stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.  There are no assurances that we will be able to obtain additional financing through either private placements, and/or bank financing or other loans necessary to support our



16



working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us.  These conditions raise substantial doubt about our ability to continue as a going concern.


Recent Accounting Pronouncements


There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.  


Off-Balance Sheet Arrangements


We had no off-balance sheet transactions.


ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCUSSION ABOUT MARKET RISK.


Not required for smaller reporting companies.


ITEM 4.  CONTROLS AND PROCEDURES.


Evaluation of Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our principal executive officer and principal accounting officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), as of March 31, 2014.  Based on this evaluation, our principal executive officer and principal accounting officer has concluded such controls and procedures to be effective as of March 31, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Act are accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


Changes in internal controls over financial reporting


During the period covered by this Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or 15(d)-15(f)) that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



17



PART II – OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

None.


ITEM 1A.  RISK FACTORS.

Not required for smaller reporting companies.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.


ITEM 4.  MINE SAFETY DISCLOSURES.

Not applicable.


ITEM 5.  OTHER INFORMATION.

None.


ITEM 6.  EXHIBITS.

Exhibit

Number


Description of Exhibits

31

Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32

Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 

 

101

The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheet, (ii) Statement of Operations, (iii) Statements of Cash Flows, (iv) Statements of Stockholders Equity and (v) related notes to these financial statements, tagged as blocks of text.**


*Filed herewith

**Furnished herewith




18



SIGNATURES


In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


 

  

DRYWAVE TECHNOLOGIES, INC.

 

  

  

 

  

  

 

 By:

 /s/ Austin Kibler

 

  

Austin Kibler

 

  

Chief Executive Officer

 

  

(Principal Executive Officer

 

  

and Principal Accounting Officer)

 

  

  

 

Date:

 May 15, 2014





19