UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
| T | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2008
| £ | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from _______________ to _______________
Commission File Number 0-52266
Brownshire Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Nevada | 20-4617652 |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
660 LaSalle Place, Suite 200, Highland Park, Illinois 60035
(Address of Principal Executive Offices) (Zip Code)
(847) 780-1006
(Registrant’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 requirements for the past 90 days. Yes T No £
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | £ | Accelerated filer | £ |
| Non-accelerated filer | £ | Smaller reporting company | T |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes T No £
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 20, 2008, there were outstanding 10,002,400 shares of the issuer’s Common Stock, $0.001 par value.
FORM 10-Q
For the quarter ended March 31, 2008
TABLE OF CONTENTS
| | | | Page |
| PART I - Financial Information | |
| | | | |
| | Item 1. | | |
| | | | 3 |
| | | | 4 |
| | | | 5 |
| | | | 6 |
| | Item 2. | | 9 |
| | Item 3. | | 11 |
| | Item 4(T). | | 11 |
| | | | |
| PART II - Other Information | |
| | | | |
| | Item 1. | | 13 |
| | Item 1A. | | 13 |
| | Item 2. | | 13 |
| | Item 3. | | 13 |
| | Item 4. | | 13 |
| | Item 5. | | 13 |
| | Item 6. | | 13 |
| | | | |
| 14 |
_________________________________________
Forward-Looking Statements
This report on Form 10-Q includes statements that constitute “forward-looking statements” under the federal securities laws. These forward-looking statements often are characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Specific forward-looking statements contained in this report include, but are not limited to, (a) our ability to acquire or to be acquired by an operating company, and (b) our ability to sell or otherwise derive any revenue from certain software assets that we own.
Forward-looking statements involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to differ materially from those contained in the forward-looking statements include those factors identified throughout this report and in the section entitled Part II, Item 6, “Management’s Discussion and Analysis or Plan of Operation – Certain Risk Factors Affecting Our Business,” in our Form 10-KSB for the year ended December 31, 2007, as well as other factors that we currently are unable to identify or quantify, but that may exist in the future. Such factors may affect generally the Company’s business, results of operations, and financial position. Forward-looking statements speak only as of the date the statements are made. We do not undertake and specifically decline any obligation to update any forward-looking statements included in this report.
PART I – FINANCIAL INFORMATION
BROWNSHIRE HOLDINGS, INC. BALANCE SHEETS
| | | March 31, 2008 | | | December 31, 2007(1) | |
| | | (unaudited) | | | | |
| Assets | | | | | | |
| | | | | | | |
| Cash and equivalents | | $ | 3,540 | | | $ | 3,545 | |
| Prepaid expenses | | | -- | | | | 2,317 | |
| Total current assets | | | 3,540 | | | | 5,862 | |
| Total assets | | $ | 3,540 | | | $ | 5,862 | |
| | | | | | | | | |
| Liabilities and Stockholders' Deficit | | | | | | | | |
| | | | | | | | | |
| Accounts payable | | $ | 5,713 | | | $ | 2,564 | |
| Due to shareholders | | | 83,646 | | | | 76,012 | |
| Total current liabilities | | | 89,359 | | | | 78,576 | |
| Total liabilities | | | 89,359 | | | | 78,576 | |
| | | | | | | | | |
| Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or outstanding | | | -- | | | | -- | |
| Common stock, $0.001 par value, 80,000,000 shares authorized, 10,002,400 shares issued and outstanding | | | 10,002 | | | | 10,002 | |
| Paid-in capital | | | (300,173 | ) | | | (300,173 | ) |
| Retained earnings | | | 204,352 | | | | 217,457 | |
| Total stockholders' deficit | | | (85,819 | ) | | | (72,714 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' deficit | | $ | 3,540 | | | $ | 5,862 | |
See accompanying notes to unaudited financial statements.
______________________
(1) Derived from audited financial statements.
BROWNSHIRE HOLDINGS, INC. STATEMENTS OF OPERATIONS
| | | Three months ended March 31, | |
| | | 2008 | | | 2007 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | |
| Net revenues | | $ | - | | | $ | - | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| General and administrative | | | 1,215 | | | | 1,128 | |
| Professional fees | | | 11,091 | | | | 13,113 | |
| Total operating expenses | | | 12,306 | | | | 14,241 | |
| | | | | | | | | |
| Operating loss | | | (12,306 | ) | | | (14,241 | ) |
| Other income (expense) | | | | | | | | |
| Interest income | | | 5 | | | | 144 | |
| Interest expense | | | (804 | ) | | | (601 | ) |
| Total other income (expense) | | | (799 | ) | | | (457 | ) |
| | | | | | | | | |
| Loss before income taxes | | | (13,105 | ) | | | (14,698 | ) |
| Income tax provision | | | - | | | | - | |
| Net loss | | $ | (13,105 | ) | | $ | (14,698 | ) |
| | | | | | | | | |
| Net loss per share: | | | | | | | | |
| Basic | | $ | (0.00 | ) | | $ | (0.00 | ) |
| Diluted | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | |
| Basic | | | 10,002,400 | | | | 10,002,400 | |
| Diluted | | | 10,002,400 | | | | 10,002,400 | |
See accompanying notes to unaudited financial statements.
BROWNSHIRE HOLDINGS, INC. STATEMENTS OF CASH FLOWS
| | | Three months ended March 31, | |
| | | 2008 | | | 2007 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
| Net income (loss) | | $ | (13,105 | ) | | $ | (14,698 | ) |
| Changes in assets and liabilities: | | | | | | | | |
| Prepaid expenses | | | 2,317 | | | | 958 | |
| Accounts payable | | | 3,149 | | | | (8,494 | ) |
| Net cash used in operating activities | | | (7,639 | ) | | | (22,433 | ) |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | - | | | | - | |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Due to stockholders | | | 7,634 | | | | 1,333 | |
| Net cash provided by financing activities | | | 7,634 | | | | 1,333 | |
| | | | | | | | | |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | | | (5 | ) | | | (20,901 | ) |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, beginning of period | | | 3,545 | | | | 33,934 | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, end of period | | $ | 3,540 | | | $ | 13,033 | |
| | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | | |
| Cash paid for interest | | $ | - | | | $ | - | |
| Cash paid for taxes | | $ | - | | | $ | - | |
See accompanying notes to unaudited financial statements.
BROWNSHIRE HOLDINGS, INC. NOTES TO THE FINANCIAL STATEMENTS
March 31, 2008
(Unaudited)
NOTE 1: BACKGROUND AND BASIS OF PRESENTATION
Background
Brownshire Holdings, Inc., a Nevada corporation (the “Company”), is a holding company with limited operating activities. The Company was formerly known as Gateway Data Sciences Corporation (“GDSC” or the “Predecessor Company”). In 1998, the Predecessor Company filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code. On June 26, 2002, the Bankruptcy Court confirmed the Trustee’s Plan of Reorganization (the “Plan”). The Plan was subsequently modified and became effective on December 5, 2002.
The substantive provisions of the Plan were as follows:
| | · | Certain outstanding litigation claims involving the Predecessor Company’s former directors and officers, the insurance company that issued the Predecessor Company’s director and officer insurance policy, and third parties were settled pursuant to a “Global Settlement Agreement.” |
| | · | A pool of assets was created as the sole source of all cash payments and distributions to be made to holders of certain allowed claims. The “creditors’ pool” was funded with |
| | o | cash paid by a new stockholder group; |
| | o | a cash payment by the Predecessor Company’s former Chief Executive Officer and President; |
| | o | a cash payment by the insurance company pursuant to the Global Settlement Agreement described above; |
| | o | the stock of the Predecessor Company’s wholly owned subsidiaries and a minority interest in another company; |
| | o | cash in possession or control of the bankruptcy trustee; and |
The creditors’ pool of assets was and will be used to satisfy any claims against the Predecessor Company that were not transferred to the Company, as described below.
| | · | As of the effective date, (i) the Predecessor Company was reconstituted as the Company; (ii) all of the assets of the Predecessor Company, other than the creditor’s pool, vested in the Company; (iii) all equity interests in the Predecessor Company were cancelled and the Company issued 500,120 shares of its common stock to the former stockholders of the Predecessor Company; and (iv) the Company issued 9,502,280 shares of common stock to the new stockholder group. As a result, immediately following the reorganization: |
| | o | The Company’s assets consisting primarily of a litigation claim receivable and intangible assets consisting of proprietary technology developed by the Predecessor Company; and |
| | o | the Company’s liabilities consisted primarily of accounts payable related to the litigation claim receivable |
On December 5, 2002, the Company adopted fresh start reporting in accordance with Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”) of the American Institute of Certified Public Accountants.
On February 23, 2005, the Company settled all of its outstanding litigation claims and counterclaims with the former customer of the Predecessor Company.
Basis Of Presentation
The accompanying financial statements of the Company as of March 31, 2008 and for the three months ended March 31, 2008 and 2007, respectively, have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for audited financial statements. The information furnished in these interim statements reflects all adjustments and accruals, consisting only of normal recurring adjustments, that are, in the opinion of the Company’s management, necessary for a fair statement of the results for such periods. The footnote disclosures related to the interim financial information included herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of December 31, 2007, and for the year then ended included in the Company’s annual report on Form 10-KSB for the year ended December 31, 2007. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.
NOTE 2: GOING CONCERN AND OPERATIONS
The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern, which contemplate the realization of assets and extinguishment of liabilities in the normal course of business. Since its emergence from bankruptcy, the Company has not generated any revenues from operations to date. While it has limited ongoing cash requirements, this lack of revenue generation raises substantial doubt about the entity’s ability to continue to operate as a going concern. Management intends to seek acquisition or merger opportunities that would substantially increase future operating cash flows. To the extent that such opportunities are not realized, the Company’s future financial position could be adversely affected.
NOTE 3: INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, if appropriate.
Realization of the future tax benefits related to the deferred tax assets will depend on many factors, including the Company’s ability to generate taxable income within the net operating loss period. The Company has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.
A full valuation allowance has been established for all deferred tax assets related to these net operating losses as there is substantial doubt as to the ability of the Company to utilize these deferred tax assets given certain rules limiting the use of these net operating losses and the Company’s historical lack of taxable income. The Company has no other deferred tax assets.
NOTE 4: STOCKHOLDERS’ DEFICIT
Capitalization
The Company was incorporated on October 16, 2002. The Company is authorized to issue (a) 80,000,000 shares of common stock, par value $.001 per share, and (b) 20,000,000 shares of preferred stock, par value $.001 per share, under terms and conditions to be established by the Board of Directors in the future. Pursuant to the Plan and in connection with its emergence from bankruptcy, effective December 5, 2002 the Company issued (i) 500,120 shares of common stock to the former stockholders of the Predecessor Company, whose ownership interests in the Predecessor Company were cancelled pursuant to the Plan, and (ii) 9,502,280 shares of common stock to a new stockholder group in exchange for $250,000 payable by the new stockholder group to the creditors’ pool that was created through the bankruptcy process.
NOTE 5: RELATED PARTY TRANSACTIONS
Pursuant to a 4.0% Multiple Advance Credit Note dated February 28, 2005, the Company’s majority stockholder has agreed to advance the Company up to $100,000 to finance its working capital needs. The promissory note bears interest at the rate of 4.0% per annum, payable at maturity. The note, as amended, matures on the earlier to occur of (a) a “liquidity event” with respect to the Company, as that term is defined in the note, or (b) February 28, 2009. In addition, a director and officer of the Company advanced funds to pay certain of the Company’s operating expenses during fiscal 2007 and the first three months of fiscal 2008. The aggregate outstanding balance of principal and accrued interest under the promissory note and advances by the director and officer was $83,646 at March 31, 2008 and $76,012 at December 31, 2007. These amounts are reflected as a current liability in the accompanying balance sheets.
NOTE 6: COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company currently has no significant non-cancelable operating leases.
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
For a description of our company’s significant accounting policies and an understanding of the factors that influenced our company’s performance during the three months ended March 31, 2008, this “Management’s Discussion and Analysis or Plan of Operation” should be read in conjunction with the unaudited financial statements, including the related notes thereto, appearing in Item 1 of this report, as well as the audited financial statements and notes thereto appearing in our Annual Report on Form 10-KSB for the year ended December 31, 2007.
Plan of Operation
As a shell company, we currently have no operations and nominal assets. Nevertheless, we believe we possess a stockholder base that will make us an attractive merger or acquisition candidate to an operating privately held company seeking to become publicly held. We intend to locate and combine with an existing privately held company that has profitable operations or, in our management’s view, potential for earnings and appreciation of value of its equity securities, irrespective of the industry in which it is engaged. A combination may be structured as a merger, consolidation, exchange of our common stock for stock or assets of the operating company, or any other form that will result in the combined companies becoming an operating publicly held corporation. We have not identified a particular acquisition target as of the filing date of this report, and we currently are not engaged in any substantive negotiations regarding such an acquisition. We intend to provide our stockholders with complete disclosure documentation concerning the structure of a proposed business combination prior to consummation of such a transaction.
We intend to remain a shell company until a merger or acquisition is consummated, and we anticipate that our cash requirements will be minimal during that time frame. We do not anticipate that we will have to raise equity capital during the next 12 months. Our officers and our controlling stockholder have provided financing for our limited operating expenses, which consist primarily of legal, accounting, and related expenses to enable us to prepare and file our reports with the Securities and Exchange Commission, or “SEC.” We currently anticipate that our directors, officers, controlling stockholder, and/or their affiliates in the future will provide the financing that may be required for our limited operations prior to the time that we complete a merger or acquisition transaction. We also anticipate that such financing will be in the form of loans to our company that will have to be repaid or refinanced in connection with a merger or acquisition transaction. Our directors, officers, controlling stockholder, and their affiliates, however, are under no obligation to provide us with any amount of financing or to continue to provide financing to our company if they provide financing to us at a given time or from time to time. Accordingly, we cannot provide any assurance that we will have access to a sufficient amount of capital to enable us to seek and locate a merger or acquisition candidate or to successfully negotiate and consummate a merger or acquisition transaction.
Pending negotiation and consummation of a business combination, we anticipate that we will have, aside from carrying on our search for a combination partner, no business activities and, accordingly, we will have no source of revenue. Should we incur any significant liabilities prior to a combination with a private company, we may not be able to satisfy such liabilities as they are incurred. If our management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is possible that such efforts will exhaust our ability to continue to seek such combination opportunities before any successful combination can be consummated.
In our pursuit for a business combination partner, our management intends to consider only combination candidates that are profitable or, in management’s view, have growth potential. Our management does not intend to pursue any combination proposal beyond the preliminary negotiation stage with any combination candidate that does not furnish us with audited financial statements for its historical operations or that cannot demonstrate to our management’s satisfaction that it can furnish audited financial statements in a timely manner. We may engage attorneys and accountants to investigate a combination candidate and to consummate a business combination. We may require payment of fees by such merger candidate to fund all or a portion of such expenses. We may incur enhanced risks that any combined business combination will be unsuccessful to the extent we are unable to obtain the advice or reports from experts.
We intend to seek to carry out our business plan as discussed herein. In order to do so, we will need to pay ongoing expenses, including particularly legal and accounting fees incurred in conjunction with future compliance with our ongoing reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Except as described above, we currently do not intend to raise funds, either debt or equity, from investors while our company is a shell company, and we currently do not intend to borrow any funds to make any payments to our management or affiliates.
We have no employees and do not expect to hire any prior to effecting a business combination. Our officers have agreed to allocate a portion of their time to our company’s activities, without cash compensation. Our directors and officers anticipate that our business plan can be implemented by their devoting a portion of their available time to our business affairs.
We are not registered and we do not propose to register as an investment company under the Investment Company Act of 1940. We intend to conduct our business activities so as to avoid application of the registration and other provisions of the Investment Company Act of 1940 and the related regulations thereunder.
We have no operating history (apart from that of our predecessor, Gateway Data Sciences Corporation), nominal cash, no other assets, and our business plan has significant business risks, as described in our Annual Report on Form 10-KSB. Because of these factors, our independent registered public accounting firm has issued an audit opinion on our financial statements that includes a statement that, in our auditor’s opinion, there is substantial doubt about our ability to continue as a going concern.
Results of Operations – Three Months Ended March 31, 2008 and 2007
Operating Expenses
For the three months ended March 31, 2008, total operating expenses were $12,306, consisting of $1,215 in general and administrative expenses and $11,091 in professional fees for legal and accounting services performed during the period. This compares with total operating expenses of $14,241 during the three months ended March 31, 2007, consisting of $1,128 in general and administrative expenses and $13,113 in professional fees for legal and accounting services performed during the period.
Other Income and Expenses
In the first quarter of 2008 we incurred $804 in interest expense relative to the 4.0% Multiple Advance Credit Note dated February 28, 2005, which is being used to finance the Company’s working capital needs (See Note 5) and we recognized $5 in bank interest income earned. In the first quarter of 2007 we incurred $601 in interest expense relative to the 4.0% Multiple Advance Credit Note dated February 28, 2005, and we recognized $144 in bank interest income earned.
Net Loss
Our net loss for the three months ended March 31, 2008 and 2007 was $13,105 and $14,698, respectively, which resulted in a net loss per share of $0.00 and $0.00, respectively.
Liquidity and Capital Resources
Pursuant to a 4.0% Multiple Advance Credit Note dated February 28, 2005, GDSC Acquisitions, LLC has agreed to advance our company up to $100,000 to finance our working capital needs. GDSC Acquisitions currently owns 95% of our outstanding common stock. The promissory note bears interest at the rate of 4.0% per annum, payable at maturity. The note matures on the earlier to occur of (a) a “liquidity event” with respect to our company, as that term is defined in the note, or (b) February 28, 2009. In addition, Norman Lynn, our Vice President and a director of our company, advanced funds to pay certain of our operating expenses during 2005, 2007, and 2008. Our aggregate outstanding balance of principal and accrued interest under the promissory note with GDSC Acquisitions and advances by Mr. Lynn was $83,646 at March 31, 2008, as compared with $76,012 at December 31, 2007.
We currently have no operations and we anticipate that we will not generate any revenue until we consummate a business combination. We will need funds to support our operation and implementation of our plan of operation and to comply with the periodic reporting requirements of the Exchange Act. We believe GDSC Acquisitions, LLC or our directors, officers, and/or their respective affiliates will provide us with sufficient working capital for at least the next 12 months to support and preserve the integrity of our corporate entity, to fund the implementation of our business plan, and to comply with the periodic reporting requirements of the Exchange Act. Those persons, however, are under no obligation to provide financing to our company and we cannot provide assurance that they will do so. If adequate funds are not available to us, we may be unable to complete our plan of operation.
We have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the identity of a merger or acquisition candidate and we do not anticipate that we will incur any significant debt, other than debt incurred to finance our ongoing expenditures for legal, accounting, and administrative expenses, prior to the consummation of a business combination.
Certain Risk Factors Affecting Our Business
Our business involves a high degree of risk. Potential investors should carefully consider the risks and uncertainties described in this report and under Part II, Item 6, “Management’s Discussion and Analysis or Plan of Operation – Certain Risk Factors Affecting Our Business,” in our Form 10-KSB for the year ended December 31, 2007, before deciding whether to invest in shares of our common stock. If any of such risks or other risks that we currently are not able to identify actually occur, our business, financial condition, and results of operations could be materially and adversely affected. This could cause the trading price of our common stock to decline, with the loss of part or all of an investment in our company’s common stock.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4(T). Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(3) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to our company required to be disclosed in our reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
Management’s 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) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Our management has concluded that, as of December 31, 2007, our internal control over financial reporting is effective based on these criteria.
Changes in Internal Control over Financial Reporting
Our management has also evaluated our internal controls over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Exhibits.
Exhibit
| | 31 | Section 302 Certifications of Steven A. Rothstein and Norman S. Lynn. |
| | 32 | Certifications pursuant to 18 U.S.C. Section 1350 of Steven A. Rothstein and Norman S. Lynn. |
Pursuant with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | BROWNSHIRE HOLDINGS, INC. |
| | |
| Date: May 21, 2008 | /s/ Norman S. Lynn |
| | Norman S. Lynn |
| | Vice President, Corporate Secretary, Treasurer, and Director (Principal Financial and Accounting Officer) |
EXHIBIT INDEX
Exhibit
| | | Section 302 Certifications of Steven A. Rothstein and Norman S. Lynn. |
| | | Certifications pursuant to 18 U.S.C. Section 1350 of Steven A. Rothstein and Norman S. Lynn. |
