UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2009
Commission File Number: 333-132948
Famous Uncle Al’s Hot Dogs & Grille, Inc.
(Exact name of small business issuer in its charter)
| | |
Delaware | | 20-2791397 |
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(State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) |
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100 Mill Plain Rd. Danbury, CT | | 06811 |
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(Address of principal executive offices) | | (Zip Code) |
Issuer’s telephone number: (203) 616-2930
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer | | | Accelerated filer | |
Non-accelerated filer | | | Smaller reporting company | X |
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Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X ]
Applicable only to corporate issuers:
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of June 30, 2009, the registrant had 14,858,875 shares of common stock, $.001 par value, issued and outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE:
None
FORWARD-LOOKING STATEMENTS
Certain statements made in this Quarterly Report on Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Famous Uncle Al’s Hot Dogs & Grille, Inc. (the "Company") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and marke t conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
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FAMOUS UNCLE AL’S HOT DOGS AND GRILLE, INC. FORM 10-Q
TABLE OF CONTENTS
|
PART I | | FINANCIAL INFORMATION |
| | |
Item 1 | | Financial Statements |
| | Balance Sheets |
| | Statements of Operations |
| | Statements of Cash Flows
|
| | Notes to Financial Statements |
| | |
Item 2 | | Management's Discussion and Analysis and Plan of Operation |
Item 3 | | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4 | | Controls and Procedures |
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PART II | | OTHER INFORMATION |
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Item 2 | | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6 | | Exhibits and Reports |
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PART I-FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
| | |
Famous Uncle Al's Hot Dogs & Grille, Inc. |
Balance Sheet |
| June 30, 2009 (unaudited) | December 31, 2008 |
| | |
Assets | | |
| | |
Current Assets | | |
Cash | $98 | $1,210 |
Prepaid expenses | 0 | 0 |
Total current assets | 98 | 1,210 |
| | |
Equipment, net | 2,348 | 4,347 |
| | |
Other: | | |
Security deposits | 5,200 | 5,200 |
Total Assets | $7,646 | $10,757 |
| | |
Liabilities and Stockholders' Deficiency | | |
| | |
Current Liabilities: | | |
Trade accounts payable | $67,985 | $67,985 |
Accrued expenses | 247,578 | 226,578 |
Deferred income | 17,500 | 0 |
Convertible notes due in less than one year | 32,638 | 26,806 |
Current portion of long term debt | 111,090 | 111,090 |
Total current liabilities | 476,791 | 432,459 |
| | |
Long-term debt: | | |
Related party | 50,192 | 27,700 |
| | |
Stockholders' Deficiency: | | |
Common stock-70,000,000 authorized $0.001 par value | | |
14,858,875 issued & issuable | 14,859 | 14,689 |
Additional paid in capital | 2,800,354 | 2,792,024 |
Accumulated Deficit | (3,334,551) | (3,256,115) |
Total Stockholders' Deficiency | (519,338) | (449,402) |
| | |
Total Liabilities & Stockholders' Deficiency | $7,646 | $10,757 |
See notes to unaudited interim financial statements. | | |
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| | | | | |
Famous Uncle Al's Hot Dogs & Grille, Inc. |
Statement of Operations |
(Unaudited) |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2009 | 2008 | | 2009 | 2008 |
Initial franchise fees-unit agreements | $0 | $35,000 | | $0 | $52,500 |
Initial franchise fees-developer agreements | 0 | 0 | | 0 | 0 |
Ongoing weekly continuation fees | 8,251 | 22,882 | | 17,889 | 30,647 |
Other | 9,817 | 13,794 | | 10,209 | 16,030 |
Franchising revenue | 18,069 | 71,676 | | 28,099 | 99,177 |
| | | | | |
| | | | | |
Costs & Expenses: | | | | | |
Franchise sales | 3,963 | 81,907 | | 17,685 | 127,155 |
General & administrative | 55,168 | 109,605 | | 80,018 | 382,058 |
Interest | 4,416 | 0 | | 8,832 | 0 |
Total Costs & Expenses | 63,546 | 191,512 | | 106,534 | 509,213 |
| | | | | |
Income before income taxes | (45,478) | (119,836) | | (78,436) | (410,036) |
| | | | | |
Income taxes | 0 | 0 | | 0 | 0 |
Net Loss | ($45,478) | ($119,836) | | ($78,436) | ($410,036) |
Net Loss Per Share, basic | Nil | Nil | | Nil | ($0.03) |
Weighted average shares, basic | 14,858,875 | 13,873,370 | | 14,806,886 | 13,372,463 |
See notes to unaudited interim financial statements. | | |
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Famous Uncle Al's Hot Dogs & Grille, Inc. |
Statement of Cash Flows |
(Unaudited) |
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| Six Months Ended June 30, |
| 2009 | 2008 |
| | |
Cash flows from operating activities: | | |
Net Loss | ($78,436) | ($410,036) |
Adjustments required to reconcile net income | | |
to cash used in operating activities: | | |
Depreciation expense | 2,000 | 4,500 |
Amortization of debt discount | 5,832 | 0 |
Expenses paid by related parties | 22,492 | 0 |
Stock issued for services | 0 | 261,080 |
(Increase) decrease in prepaid expenses | (0) | (2,923) |
Increase (decrease) in accounts payable & accrued expenses | 38,500 | (24,501) |
Cash flows used by operating activities: | (9,611) | (171,880) |
| | |
Cash flows from financing activities: | | |
Proceeds from issuance of common stock | 8,500 | 153,500 |
Loans from related parties | 0 | 20,200 |
Cash generated by financing activities | 8,500 | 173,700 |
| | |
Change in cash | (1,111) | 1,820 |
Cash-beginning of period | 1,210 | 2,825 |
Cash-end of period | $99 | $4,645 |
See notes to unaudited interim financial statements. | | |
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| | | | | |
Famous Uncle Al's Hot Dogs & Grille, Inc. |
Statement of Stockholders' Equity |
(Unaudited) |
| Common | | |
| Shares | Common Stock Amount | Additional Paid-In Capital | | Accumulated Deficit |
Balance at December 31, 2007 | 12,688,875 | $12,689 | $2,357,779 | | ($2,636,268) |
Shares issued and issuable as debt incentives | 70,000 | 70 | 11,596 | | |
Shares issued and issuable for cash | 1,114,000 | 1,114 | 162,386 | | |
Shares issued services | 816,000 | 816 | 260,264 | | |
Net Loss | | | | | (619,847) |
Balance at December 31, 2008 | 14,688,875 | $14,689 | $2,792,025 | | ($3,256,115) |
Shares issued and issuable for cash | 170,000 | 170 | 8,330 | | |
Net Loss | | | | | (78,436) |
Balance at June 30, 2009 | 14,858,875 | $14,859 | $2,800,355 | | ($3,334,551) |
See notes to unaudited interim financial statements. | | | | | |
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FAMOUS UNCLE AL’S HOT DOGS & GRILLE, INC.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
Background:We were incorporated as National Franchise Directors, Inc., under the laws of the State of Delaware on March 4, 2005 and on October 25, 2005 changed our name to Famous Uncle Al’s Hot Dogs & Grille, Inc. (Uncle Al). We were formed for the purpose of obtaining all existing and future restaurant franchising rights from Famous Uncle Al’s Hot Dogs, Inc. We acquired those rights on October 6, 2005. Famous Uncle Al’s Hot Dogs, Inc., owned the exclusive worldwide right to franchise fast casual service restaurants operating under the “Famous Uncle Al’s Hot Dogs” name. Our restaurants serve hot dogs, bratwurst, sausage and other heated sandwiches that use secret recipes and preparation techniques created by Al Stein, the original “Uncle Al”.
The Financial Statements presented herein have been prepared by us in accordance with the accounting policies described in our December 31, 2008 Annual Report on Form 10-KSB and should be read in conjunction with the Notes to Financial Statements which appear in that report.
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on going basis, we evaluate our estimates, including those related intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.
In the opinion of management, the information furnished in this Form 10-Q reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the three and six-month periods ended June 30, 2009 and 2008. All such adjustments are of a normal recurring nature. Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include some information and notes necessary to conform with annual reporting requirements
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2. | Earnings/Loss Per Share |
Basic earnings per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted earnings per share assume that any dilutive convertible securities outstanding were converted, with related preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options for which market price exceeds the exercise price, less shares which could have been purchased by us with the related proceeds. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive.
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3. | New Accounting Standards |
In December 2007, the Financial Accounting Standards Board issued FASB Statement No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R provides additional guidance on improving the relevance, representational faithfulness, and comparability of the financial information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
In December 2007, the Financial Accounting Standards Board issued FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for
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the deconsolidation of a subsidiary. This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 160 on our financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411,The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. Our Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.
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4. | Recent Issuance of Common Stock |
. We issued 170,000 shares of common stock in exchange for $8,500 in cash. All common shares issued are restricted as to transferability.
At June 30 2009, we had working capital deficiency of approximately $477,000. We have recognized inconsistent revenue to date. Our operations have been financed to date through sales of our common stock through private placements, loans, sales of franchise territory agreements and royalties from franchisee sales. We require significant additional capital for the expansion of our franchising operations. We believe additional funding will be required to fund our operations until at least December 31, 2009. However, no assurance can be given that additional funds will not be required prior to the expiration of such period or that any funds which may be required will be available, if at all, on acceptable terms. If additional funds are required, our inability to raise such funds will have an adverse effect upon our operations. If adequate capital is not available, we will have to reduce or eliminate our planned expansion activities, which co uld otherwise ultimately provide significant revenue.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). For example, statements included in this report regarding our financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions about future product demand, supply, manufacturing, costs, marketing and pricingfactors are all forward-looking statements. When we use words like "intend," "anticipate," “will,” “may,” “should,” “could,” “predict,” “potential,” "believe," "estimate," "plan" or "expect," we are making forward-looking statements. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, based on information a vailable to us on the date hereof, but we cannot assure you that these assumptions and expectations will prove to have been correct or that we will take any action that we may presently be planning. We have disclosed certain important factors that could cause our actual results to differ materially from our current expectations elsewhere in this report. You should understand that forward-looking statements made in this report are necessarily qualified by these factors. We are not undertaking to publicly update or revise any forward-looking statement if we obtain new information or upon the occurrence of future events or otherwise.
Description of Business.
A.
History of the Company
Famous Uncle Al’s Hot Dogs & Grille, Inc. was originally incorporated in the State of Delaware on March 4, 2005. We were formed for the purpose of receiving future and existing restaurant franchising rights from Famous Uncle Al’s Hot Dogs, Inc., also a Delaware corporation. Famous Uncle Al’s Hot Dogs, Inc., owned the exclusive worldwide right to franchise quick service restaurants operating under the “Famous Uncle Al’s Hot Dogs” name. The Famous Uncle Al’s Hot Dogs restaurants serve hot dogs and other style sandwiches that use “secret recipes” and preparation techniques created by Al Stein, the original “Uncle Al”. We maintain offices at One Plaza West, 100 Mill Plain Road, Danbury, CT 06811, and our phone number is (203) 616-2930. Our Internet website address is www.fdoginc.com or www.famousunclealshotdogs.com. Our common stock is currently traded on the OTC Bulletin board.
The Famous Uncle Al’s restaurant concept has been in operation since 1985 when the original “Uncle Al”, Al Stein, opened the first restaurant in Virginia Beach, VA. That restaurant continues to operate successfully under Al Stein’s management. Seven additional Famous Uncle Al’s Hot Dogs restaurants were opened by independent operators in the Virginia Beach area under various licensing agreements with Al Stein and continue to operate. One store is owned and operated by Mr. Stein’s son and one by a former employee.
The franchise assignor sold several regional franchise territories prior to assigning the franchise to us. Company came into those agreements under the global type of arrangement provided for under the Settlement Agreement of October 6, 2006, under which company agreed to assume the debts, liabilities and obligations of the company from which we were acquiring the franchise license in exchange for licensing rights.
B.
Current status of business
The primary business of the company is selling Famous Uncle Al’s Hot Dogs & Grille Franchised restaurants. The company also sells regional franchises, also known as Territorials or Area Developer agreements. Regional franchises are responsible for the development of franchised restaurants in designated geographic territories. The company derives revenue from three primary sources. 1) One time fees for individual franchised stores. 2) One time fees for regional franchise territories. 3) Continuing royalties from operating franchised stores (ongoing weekly continuation fees).
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Results of Operations
The following discussion and analysis provides information, which our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and related notes that appear elsewhere in this report.
Six months ended June 30, 2009 and June 30, 2008
Profit/Loss
The company realized a net loss of $ 78,436 in the first half of 2009 compared to a net loss of $ 410,036 for the first half of 2008 resulting in a decrease in loss of $ 331,600. The decrease in loss was due primarily to decreased expenses which include the issue of shares in the first half of 2008 as payment for services valued at $ 261,080.
Revenue
Total revenue for the first half of 2009 was $ 28,099 compared to $ 99,177 for the first half in 2008 resulting in a decrease in revenue of $ 71,078 or a 70.5% decrease.. The decrease in revenue was due primarily to decreased franchise sales, royalties and other revenue.
Royalty and other revenue, which includes marketing contributions from vendors, for the first half of 2009 was $ 28,099 compared to $ 46,677 in the first half of 2008 resulting in a decrease of $ 18,578 or a 40% decrease.
Franchise (unit agreements) and Regional Franchise (developer agreements) revenue for the first half of 2009 was $ 0 compared to $ 52,500 in the first half in 2008 resulting in a decrease of $ 52,500 or a 100% decrease..
Expenses
Expenses for the first half of 2009 were $ 106,534 compared to $ 509,213 for the first half in 2008 resulting in a decrease in expenses of $ 402,679. The decrease in expenses was due primarily to decreased marketing and promotional activities.
Three Months ended June 30,2009 and June 30, 2008
Profit/Loss
The company realized a net loss of $ 45,478 in the second quarter of 2009 compared to a net loss of $ 119,836 for the second quarter of 2008 resulting in a decreased loss of $ 74,358. The decrease in loss was due primarily to decreased expenses.
Revenue
Total revenue for the second quarter of 2009 was $ 18,069 compared to $ 71,676 for the second quarter in 2008 resulting in a decrease in revenue of $ 53,607 or a 75% decrease. The decrease in revenue was due primarily to decreased franchise sales, royalties and other revenue
Royalty and other revenue, which includes marketing contributions from vendors, for the second quarter of 2009 was $ 18,069 compared to $ 36,676 in the second quarter of 2008 resulting in a decrease of $ 18,607 or a 51% decrease.
Franchise (unit agreements) and Regional Franchise (developer agreements) revenue for the second quarter of 2009 was $ 0 compared to $ 35,000 in the second quarter in 2008 resulting in a decrease of $ 35,000 or a 100% decrease.
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Expenses
Expenses for the second quarter of 2009 were $ 63,546 compared to $ 191,512 for the second quarter of 2008 resulting in a decrease in expenses of $ 127,966. The decrease in expenses was due primarily to decreased marketing and promotional activities.
Operating Restaurants
There are currently 11 franchised restaurants opened and operating at June 30, 2009. There are 2 restaurants scheduled to open during the second half of 2009.. This will result in 13 operating restaurants.
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Operating Restaurants | Scheduled to open |
Location | Quantity | Location | Quantity |
| | | |
Las Vegas, NV | 2 | Somers, NY (lease signed) | 1 |
Danbury, CT | 1 | Danbury, CT | 1 |
Norfolk, VA | 1 | | |
Franklin, VA | 1 | | |
Phoenix, AZ | 1 | | |
Melbourne, FL | 1 | | |
Winter Spring, FL | 1 | | |
West Haven, CT | 1 | | |
Coconut Creek, FL | 1 | | |
Lancaster, Ohio | 1 | | |
Total | 11 | Total | 2 |
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C.
Management Plans
Management believes that the company will require additional funding to maintain operations and to accelerate growth. The company has been limited in its ability to attract regional franchisees and franchisees. Management believes that current economic conditions, in particular the inability of prospective franchisees to secure bank loans to fund a Famous Uncle Al’s Hot Dogs & Grille restaurant, has had a significant negative impact on the Company’s ability to sell franchises. The general economic downturn has also affected existing store sales resulting in diminished royalty revenue.
Management is considering alternative means to expand the Company other than just through Regional and Individual franchise sales. Management is negotiation for debt funding to support the opening of corporately owned units. One beneficial result of the current economic downturn is an increased availability of commercial retail locations. There are an increasing number of locations that are particularly well suited for our restaurants. Many available locations include partial build outs and some included equipment that can be reused by a Famous Uncle Al’s restaurant. In general, lease costs have declined considerably over the last year. Management believes that the increased availability of commercial space, declining lease costs and more cooperative and flexible landlords presents an excellent opportunity for the Company to open corporately owned or corporately sponsored franchised restaurants.
Management believes that the existing business and operating franchised restaurants is a suitable platform for expansion and to attract funding. The fundamentals of the restaurant operating system, menu offerings, store décor and procedures are completed. There is no significant expenditure required for development. The company will seek additional funding under terms acceptable to the company to support the opening of company owned units.
Although the Company will pursue funding to open corporately owned restaurants, it will continue to offer its regional and individual franchise for sale and believes that these sales remain critical to the success of the Company.
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Liquidity and Capital Resources
D.
Capital Resources
The company is experiencing a burn rate of approximately $ 5,200 per month for the first six months of 2009. The company has not developed sufficient ongoing royalty revenue to support operations. Until the company develops sufficient ongoing revenue from royalties, the company will be dependent on franchise and regional franchise fees to support operations. In lieu of such sales materializing, the company is dependent on loans and alternative sources of revenue.
During the first quarter of 2009 we issued 170,000 shares at $ 0.05 per share for a total of
$ 8,500 cash as follows; 2/05/2009 issued 100,000 shares for $ 5,000 , 3/24/2009 issued 70,000 shares for $ 3,500.
During the second quarter of 2009 expenses totaling $ 22,492 were paid by a related party on behalf of the company.
The company believes that regional franchise sales and franchise sales are critical to the success of the company. Failure of these sales to materialize will have a detrimental effect on the company. Failure to either secure additional funding or generate revenue through regional franchise and franchise fees will have a detrimental effect on the company’s ability to support ongoing operations.
Each regional franchisee fee is $ 50,000. Regional franchises are designated geographic territories. Each regional franchisee is responsible for developing individual franchised restaurants in the territory. The company believes there are at least 50 suitable regions available for sale.
A regional franchisee purchases a defined geographic area and is obligated to develop Famous Uncle Al’s Hot Dogs & Grille restaurants in their defined territory. Regional franchisees endeavor to sell the individual franchise opportunity to prospects. The company benefits in the short term by receiving a one-time fee from the regional franchisee and a one-time fee from each individual franchisee that the regional franchisee sells. The company benefits long term from the weekly ongoing royalties collected from each individual franchise. This structure is designed to create a network of regional franchisees that serve as a sales force for the company. Regional franchisees are compensated on a commission basis only. The company believes that this structure will allow the company to develop a dedicated national sales and marketing infrastructure without incurring the financial liability of supporting employed sales persons
E.
Employees:
Three full time employees.
F.
Research and Development and Expenditures
No direct costs have been incurred for research and development in the last 2 years. The company believes that the basic restaurant concept has been developed but continues to work to enhance menu selection and products. The company does not maintain research and development facilities and utilizes existing franchised restaurants to test menu items and vendors to develop products.
G.
Subsidiaries
The Company has no subsidiaries.
H.
Patents and Trademarks
The company markets itself under its Famous Uncle Al’s Hot Dogs trademark. The company has received trademark and service mark protection of this name and related designs from the United States Patent and Trademark Office and considers these trademarks and service marks to be important to its business. The company received the right to this trademark by virtue of its application to the U.S. Patent and Trademark Office, and the
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approved assignment of it to us, dated August 16, 2005. The continuing right to license under this assignment is considered essential by the Company.
I.
Reports to Security Holders
At this time, the Company has not provided annual reports to security holders. However, shareholders and the general public may view copies of all of our filings with the SEC, by visiting the SEC website (http://www.sec.gov) and performing a search of Famous Uncle Al’s Hot Dogs & Grille, Inc.’s electronic filings.
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Substantially all of our financial assets consist of bank deposits and we own no portfolio investments that would expose our Company to the type of risks described in Item 304 of Regulation S-K.
ITEM 4.
CONTROLS AND PROCEDURES
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2009. This evaluation was accomplished under the supervision and with the participation of our chief executive officer, principal executive officer, chief financial officer/principal accounting officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the quarterly report on Form 10-Q has been made known to him.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon an evaluation conducted for the period ended June 30, 2009, Paul Esposito, who served as our Chief Executive Officer and Chief Financial Officer (which duties include that of principal accounting officer) as of June, 30, 2009, and the date of this Report, has concluded that as of the end of the period covered by this report, we have identified the following material weakness of our internal controls:
Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.
Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.
In order to remedy our existing internal control deficiencies, as soon as our finances allow, we will hire a Chief Financial Officer who will be sufficiently versed in public company accounting to implement appropriate procedures for timely and accurate disclosures
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Changes in internal control over financial reporting
We have not yet made any changes in our internal control over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 2
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the first quarter of 2009 we issued 170,000 shares at $ 0.05 per share for a total of $ 8,500 cash as follows; 2/05/2009 issued 100,000 shares for $ 5,000 , 3/24/2009 issued 70,000 shares for $ 3,500.
The common shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.
ITEM 6
EXHIBITS
(a)
Exhibits
Exhibit 31.1
Certification of the Company's Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the small business issuer's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
Exhibit 32.1
Certification of the Company's Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 with respect to the small business issuer's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
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(b) | | Reports on Form 8-K |
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| No reports on Form 8-K were filed during the three months ended June 30, 2009. |
* * * * *
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FAMOUS UNCLE AL’S HOT DOGS & GRILLE, INC.
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By: /s/ Paul Esposito | Chief Executive Officer, Chief Financial Officer | Dated: August 13, 2009 |
Paul Esposito | | |
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INDEX TO EXHIBITS
EXHIBIT
DESCRIPTION
STATUS
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31 | Certification pursuant to Section 301 of the Sarbanes-Oxley Act of 2002 | Filed herewith |
32 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith |
18
