Multi-Corp International (MULI) 10-Q 2009 Q2 Quarterly report

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 quarter ended:  June 30, 2009

o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 333-145471

BWI Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	N/A
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

3915 61Avenue South East

Calgary, Alberta, Canada  T2C 1V5

(Address of principal executive offices)

(403) 255-2900

(Registrant’s telephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o

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 (§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 o  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer   o Accelerated Filer   o      Non-Accelerated Filer   o 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 o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of December 14, 2010: 9,498,063 shares of common stock.

BWI HOLDINGS, INC. AND SUBSIDIARY

FORM 10-Q

FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008

__________________

TABLE OF CONTENTS

___________________

		Page
PART I - FINANCIAL INFORMATION		2
Item 1.	Consolidated Financial Statements	2
	Consolidated Balance Sheets	3
	Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6 to 11
Item 2.	Management’s Discussion & Analysis or Plan of Operation	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
PART II -- OTHER INFORMATION		17
Item 1.	Legal Proceedings	17
Item 1A.	Rick Factors	17
Item 2.	Unregistered Sales of Equity securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Removed and Reserved	17
Item 5	Other Information	17
Item 6.	Exhibits	18
		18
Signatures

1

PART I.                FINANCIAL INFORMATION

ITEM I.                 CONSOLIDATED FINANCIAL STATEMENTS

2

BWI HOLDINGS, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(US Dollars)

As Of June 30, 2009 and March 31, 2009

	June 30, 2009 (Unaudited)				March 31, 2009 (Audited)
ASSETS
Current Assets
Cash		$	107,732			$	124,011
Accounts receivable, net of allowance for doubtful accounts of $67,928 as of June 30, 2009 and $62,634 as of March 31, 2009			1,225,534				1,451,547
Prepaid expenses			205,578				155,744
Equipment held for sale			617,885				569,728
Total Current Assets			2,156,729				2,301,030
Long-Term Assets
Performance bonds			25,795				23,785
Property and equipment, net			4,898,622				4,665,478
Goodwill			2,746,304				2,532,262
Customer lists			59,438				73,073
Total Long-Term Assets			7,730,159				7,294,598
Total Assets		$	9,886,888			$	9,595,628
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Revolving bank loan		$	15,937			$	14,695
Accounts payable			435,061				267,303
Accrued liabilities			225,083				151,123
Liabilities under compromise			3,077,057				2,706,247
Notes payable			13,866				12,786
Advances from related parties			154,017				195,920
Advances from shareholders			165,876				442,274
Current portion of long-term debt			34,630				25,545
Current portion of obligations under capital lease			1,285,566				1,512,180
Total Current Liabilities			5,407,093				5,328,073
Long-Term Liabilities
Long-term debt			-				6,386
Obligations under capital lease			1,333,802				1,089,406
Total Long-Term Liabilities			1,333,802				1,095,792
Total liabilities			6,740,895				6,423,865
Stockholders’ Equity
Preferred stock, $0.001 par value, non-voting, 20,000,000 authorized, none issued and outstanding (March 31, 2009 – Nil)			-				-
Common stock, $0.001 par value, voting, 100,000,000 authorized, 55,320,270 issued and outstanding (March 31, 2009 – 55,320,270)			55,320				55,320
Additional paid-in capital			11,687,255				11,687,255
Accumulated other comprehensive income (loss)			237,172				(36,299	)
Accumulated deficit			(8,833,754	)			(8,534,513	)
Total Stockholders’ Equity			3,145,993				3,171,763
Going concern (Note 2)
Commitments, contingencies and subsequent events (Note 8)
Total Liabilities and Stockholders’ Equity		$	9,886,888			$	9,595,628

The accompanying notes are an integral part of these financial statements.

3

BWI HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Loss and Comprehensive Loss

(US Dollars)

For The Three Months Ended June 30

(Unaudited)

		2009			2008
Sales	$	2,096,889		$	3,376,988
Cost of Sales		1,508,947			2,659,323
Gross Profit		587,942			717,665
Operating Expenses
Advertising and promotion		9,670			101,082
Automotive		-			4,101
Bad debts		-			369
Depreciation		206,658			350,435
Insurance		5,856			26,619
Interest and bank charges		24,061			17,431
Interest on long-term debt		34,569			118,377
Office		31,024			45,232
Professional fees		14,530			45,702
Rent		109,724			103,904
Repairs and maintenance		964			57,624
Salaries and benefits		256,779			157,372
Telephone		42,380			42,842
Travel		10,965			7,720
Total Operating Expenses		747,180			1,078,810
Loss From Operations		(159,238	)		(361,145	)
Gain on sale of equipment		-			416,135
Reorganization costs		(140,003	)		-
Net (Loss) Income	$	(299,241	)	$	54,990
Foreign currency translation adjustment		273,471			(24,538	)
Comprehensive (Loss) Income	$	(25,770	)	$	30,452
(Loss) Income Per Weighted Number Of Shares Outstanding – Basic And Diluted	$	(0.01	)	$	0.00
Weighted Average Number Of Shares Outstanding – Basic And Diluted		55,320,270			26,250,000

The accompanying notes are an integral part of these financial statements.

4

BWI HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(US Dollars)

For The Three Months Ended June 30

(Unaudited)

	2009			2008
Cash Flows From Operating Activities
Net (loss) income	$	(299,241	)	$	54,988
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities
Depreciation and amortization		206,658			350,435
Issuance of common stock for services		-			25,000
Gain on sale of equipment		-			(416,135	)
Changes in operating assets and liabilities
Accounts receivable		352,886			(75,391	)
Prepaid expenses		(37,110	)		(815	)
Corporate taxes payable		-			1,119
Accounts payable, accrued liabilities and accounts payable under compromise		(28,436	)		130,022
Net Cash Provided By Operating Activities		194,757			73,098
Cash Flows From Investing Activities
Proceeds from performance bonds		-			18,807
Acquisition of property and equipment		(23,467	)		(84,780	)
Proceeds on disposal of property and equipment		-			67,229
Net Cash (Used In) Provided By Investing Activities		(23,467	)		536
Cash Flows From Financing Activities
Proceeds from bank indebtedness and revolving bank loans		-			138,012
Repayment of notes payable		-			(20,236	)
Repayment of long-term debt		-			(7,390	)
Proceeds from obligations under capital lease		176,478			(156,739	)
Repayment of related parties		(59,165	)		155,003
Repayment of shareholders		(315,489	)		127,122
Net Cash Provided By Financing Activities		198,176			256,008
Effect of Exchange Rate Changes in Cash		(10,607	)		(329,642	)
Net Decrease in Cash		(16,279	)		-
Cash, Beginning of Period		124,011			-
Cash, End of Period	$	107,732		$	-
Supplemental Cash Flow Information:
Cash Paid During the Year for
Interest	$	34,569		$	118,377
Income Taxes	$	-		$	-
Supplemental Schedule of Noncash Investing and Financing Activities:
Issuance of common stock for services	$	-		$	25,000

The accompanying notes are an integral part of these financial statements.

5

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

1.       NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Company Description

Gray Creek Mining, Inc. was incorporated on August 10, 2006 under the laws of the State of Nevada. On November 7, 2008, a Certificate of Amendment was filed with the Nevada Secretary of State changing the name to BWI Holdings, Inc.

These financial statements include the accounts of BWI Holdings, Inc. (A Nevada Corporation) and subsidiary (the "Company" or “BWI”) and its wholly owned subsidiary Budget Waste Inc. (an Alberta Corporation) ("Budget Alberta").

The Company provides non-hazardous waste collection, transfer, recycling and disposal services. Additionally, the Company provides support to the construction industry such as fence rentals, sanitary facility rentals, bin rentals, hydrovac and water hauling. The Company operates primarily, but not exclusively, in Alberta, Canada. The Company evaluates principal operations through three functional departments: Solid Waste, Liquid Waste and Water Hauling.

Basis of Presentation

The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Securities and Exchange Commission, or SEC, Form 10Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature.  The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2009.  Operating results for the three months ended June 30, 2009 are not necessarily indicative of the results that may be expected for future quarters or the year ending March 31, 2010.

On March 4, 2009, the Company’s subsidiary, Budget Alberta, filed for protection under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) with the Court of the Queen’s Bench, Alberta (Court). Under the provisions of this act, Budget Alberta has been granted temporary relief from its creditors while it under goes restructuring. In late 2009, Budget Alberta expects to hold a creditors meeting to vote on a Plan of Compromise and Arrangement (the “Plan”), and on approval of the Plan by the Court, expects to emerge from credit protection.

In February 2010, Budget Alberta’s creditors voted to accept the proposed plan of restructuring in order to emerge from creditor protection.  Under the terms of the Plan, preferred and secured creditors are to be paid in full in the amount of approximately $1,668,000.  Unsecured creditors are to receive fifty cents on the dollar and will receive approximately $475,000.  The preferred and secured creditors are to be paid in instalments over six months commencing in March of 2010, and the unsecured creditors are to paid over twelve months.

6

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

Basis of Presentation (continued)

The consolidated financial statements of BWI are presented in accordance with Accounting Standards Codification (“ASC”) 852-10-45, Reorganizations – Overall - Other Presentation Matters. Accordingly, liabilities subject to compromise as of March 31, 2009, which include the expected allowed claims for liabilities incurred prior to our CCAA filing, are presented separately from those liabilities not subject to compromise on our Consolidated Balance Sheet. Liabilities not subject to compromise include all liabilities incurred after the CCAA petition date. All liabilities incurred prior to the petition date are considered liabilities subject to compromise. These amounts represent the Company’s estimates of known or potential pre-petition date claims that are likely to be resolved in connection with the CCAA filings. In addition, those expenses directly attributable to our CCAA activities, including, but not limited to, professional fees, mailings to creditors, and fees payable to the trustee, are presented separately from other operating expenses on our Consolidated Statement of Loss as reorganization expenses.

On November 10, 2008, pursuant to a Share Exchange Agreement between BWI (formerly known as Gray Creek Mining, Inc.) and Budget Waste Inc., a Nevada corporation ("Budget Nevada"), the Company acquired 100% of the issued and outstanding common shares of Budget Alberta in exchange for 27,570,270 common shares of BWI (the "Acquisition").

The acquisition by the Company of Budget Alberta is deemed to be a reverse acquisition. In accordance with the Accounting and Financial Reporting Interpretations and Guidance prepared by the staff of the U.S. Securities and Exchange Commission, BWI (the legal acquirer) is considered the accounting acquiree and Budget Alberta (the legal acquiree) is considered the accounting acquirer. The combined financial statements of the combined entity will in substance be those of Budget Nevada, with the assets and liabilities, and revenues and expenses, of BWI being included effective from the date of consummation of Share Exchange Agreement. BWI is deemed to be a continuation of business of Budget Nevada. The outstanding common stock of BWI prior to the Share Exchange Agreement will be accounted for at their net book value and no goodwill will be recognized.

Comparative Figures

As discussed above, the continuing operations are of Budget Nevada and the operations of Gray Creek Mining, Inc. ceased following the capital transaction described above. Prior to the Acquisition, Gray Creek Mining, Inc. reported on an April 30 fiscal year end. Subsequent to changing its name to BWI Holdings, Inc, the Company also changed its fiscal year end to March 31, the original year end of Budget Nevada. Comparative figures have been reclassified, where applicable, in order to conform to the current periods presentation.

2.       GOING CONCERN

The Company's ability to continue as a going concern is dependent upon achieving profitable operations and upon the continued financial support of its lenders and investors. The outcome of these matters cannot be predicted at this time.

7

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

2.       GOING CONCERN (continued)

On March 4, 2009, the Company’s subsidiary Budget Waste Inc. entered into credit protection under the provisions of the Companies’ Credit Arrangement Act (Canada) whereby Budget Waste Inc. is granted temporary relief while undergoing restructuring. The Company’s continuation as a going concern is dependent upon the approval and execution of the Company's business plan including achieving more efficient operations, and marketing initiatives, obtaining new financing either by debt or by equity and making arrangements with existing creditors.

These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

3. EQUIPMENT HELD FOR SALE

In order to meet cash flow requirements and planned commitments under the Plan, The Company reviewed its equipment inventory in March 2009 and assessed that there was a large surplus of unused waste bins, specifically small-roll-off bins. Management established that approximately $618,000 ($570,000 at March 31, 2009) carrying value of waste bins will be held for sale, and have therefore presented these items separately as Equipment held for sale on the June 30, 2009 and March 31, 2009 Consolidated Balance Sheets.

4.       PROPERTY AND EQUIPMENT

The components of property and equipment are as follows:

	Cost		Accumulated Depreciation			Net June 30, 2009		Net March 31, 2009
Equipment	$	433,800	$	(158,681	)	$	275,119	$	267,028
Waste bins		1,302,442		(573,039	)		729,403		687,355
Automotive		5,877,124		(2,759,874	)		3,117,250		2,974,592
Port-A-Potties		373,487		(153,113	)		220,374		195,823
Office equipment		59,817		(23,341	)		36,476		35,385
Fencing		533,925		(186,252	)		347,673		337,447
Computer equipment		64,382		(41,806	)		22,576		22,540
Leasehold improvements		277,387		(127,636	)		149,751		145,308
	$	8,922,364	$	(4,023,742	)	$	4,898,622	$	4,665,478

8

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

5.       GOODWILL AND INTANGIBLE ASSETS

	Net June 30, 2009			Net March 31, 2009
Goodwill
Balance, beginning	$	2,532,262		$	3,107,397
Foreign currency translation		214,042			(575,135	)
Balance, ending	$	2,746,304		$	2,532,262
Customer lists
Balance, beginning	$	239,725		$	239,725
Accumulated amortization		(178,309	)		(146,144	)
Foreign currency translation		(1,978	)		(20,508	)
Balance, ending	$	59,438		$	73,073

6.       LONG-TERM DEBT

	June 30, 2009		March 31, 2009
Loan payable to BDC is secured by a general charge over the assets of the Company. It bears interest at 8.25% per annum, and is repayable in monthly principal payments of $2,685 CAD plus interest, maturing on July 23rd, 2010		34,630		31,931
Less current portion		34,630		25,545
Long-term portion	$	-	$	6,386

7. OBLIGATIONS UNDER CAPITAL LEASES

	June 30, 2009		March 31, 2009
Obligations under capital lease	$	2,619,368	$	2,601,586
Less current portion		1,285,566		1,512,180
Long-term portion	$	1,333,802	$	1,089,406
Minimum lease payments over the next five years are as follows:
2010 (Nine months)			$	1,285,566
2011				553,931
2012				129,166
2013				650,705
2014
Thereafter
Total			$	2,619,368

9

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

8.        COMMITMENTS, CONTINGINCIES AND SUBSEQUENT EVENTS

Commitments

The Company has entered into various operating leases for equipment and premises. Minimum payments over the next five years are as follows:

2010 (Nine months)	$	66,414
2011		59,217
2012		11,567
2013		-
2014		-
Thereafter		-
Total	$	137,198

Litigation

By statement of claim issued January 10, 2008, Budget Alberta sought a declaration confirming an interest in certain leased lands, as well as various corollary relief including judgment in the amount of $220,000 plus costs. By statement of defence and counterclaim issued January 30, 2008, the defendant denied the existence of the claim, and counterclaimed for damages for trespass and wrongful occupation of the subject lands in an unspecified amount. The lawsuit is ongoing and the outcome is not determinable at this time.

Subsequent events

In February 2010, Budget Alberta’s creditors voted to accept the proposed plan of restructuring in order to emerge from creditor protection.  Under the terms of the Plan, preferred and secured creditors are to be paid in full in the amount of approximately $1,668,000.  Unsecured creditors are to receive fifty cents on the dollar and will receive approximately $475,000.  The preferred and secured creditors are to be paid in instalments over six months commencing in March of 2010, and the unsecured creditors are to be paid over twelve months.

October 2, 2009 management decided to close down all the operations at their Edson, Alberta location. The Edson location was primarily involved in the Water Hauling segment. The decision to close this location was made as a result of a substantial decrease in sales because of the lack of oil rigs operating in Alberta during the year.  The Edson location owned several of our trucks and trailers which were all sold at auctions during the three months ended December 31, 2009, except for one truck which was brought back to our Calgary location.

9.       RELATED PARTY TRANSACTIONS

The Company has transactions with various related parties, including the Company’s officers, directors and significant shareholders and companies controlled by shareholders, directors or family members, and a company controlled by the spouse of a shareholder. These transactions are in the normal course of operations and are transacted at the exchange amount agreed to by the related parties.

10

BWI HOLDINGS, INC. AND SUBSIDIARY

Notes To Consolidated Financial Statements

(US Dollars)

For The Three Months Ended June 30 2009 and 2008

(Unaudited)

9.       RELATED PARTY TRANSACTIONS (continued)

Included in accounts receivable at June 30, 2009 and March 31, 2009	$	-	$	212,165
Included in accounts payable at June 30, 2009 and March 31, 2009		36,668		16,613
Included in obligations under capital lease at June 30, 2009 and March 31, 2009		1,244,029		1,087,748
Transactions during the three months ended June 30, 2009 and 2008:
Rent		34,869		8,000
Repairs and supplies		70,285		35,339
Loan interest		16,233		47,066

During the three months ended June 30, 2008, the Company sold property to a related party. The property was independently appraised at $541,741. The Company recognized a gain of $317,220 on this sale.

10.        SEGMENTED INFORMATION

The Company provides non-hazardous waste collection, transfer, recycling and disposal services. Additionally, the Company provides support to the construction industry such as fence rentals, sanitary facility rentals, bin rentals, hydrovac and water hauling. The Company operates primarily, but not exclusively, in Alberta, Canada. The Company evaluates principal operations through four functional departments: Solid Waste, Liquid Waste and Water Hauling.

The results of operations for the three months ended June 30, 2009 by functional department is as follows:

	Revenue		Cost of Sales		Gross Profit			Depreciation		Administration			Net Loss
Solid Waste	$	1,510,355	$	184,789	$	1,325,566		$	168,579	$	1,438,164			$	(281,177	)
Liquid Services		428,947		724,094		(295,147	)		27,848		(279,943	)			(43,051	)
Water Hauling		119,985		433,744		(313,759	)		7,790		(341,360	)			19,812
Septic		37,601		166,320		(128,719	)		2,441		(136,335	)			5,175
	$	2,096,889	$	1,508,947	$	587,942		$	206,658	$	680,525			$	(299,241	)

The results of operations for the three months ended June 30, 2008 by functional department is as follows:

	Revenue		Cost of Sales		Gross Profit		Depreciation		Administration		Net Income (Loss)
Solid Waste	$	2,693,291	$	2,141,087	$	552,205	$	279,466	$	167,765		$	104,975
Liquid Services		447,529		311,531		135,997		46,454		94,570			(5,027	)
Water Hauling		236,168		206,705		29,463		24,515		49,906			(44,958	)
	$	3,376,988	$	2,659,323	$	717,665	$	350,435	$	312,241		$	54,989

11

ITEM 2.     MANAGEMENT’S DISCUSSION OR PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and Notes thereto in Item I, and the Company’s 10-K Annual Report, the Company’s 8-K Entry Into a Material Definitive Agreement  and other publicly available financial information. This discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those contained in any forward-looking statements.

Operating Results for the Three Months Ended June 30, 2009 Compared to Three Month Period Ended June 30, 2008

For the three months ended June 30, 2009, the Company reported revenues of $2,097M (“M” representing thousands), compared to $3,377M for the three months ended June 30, 2008 . The decrease was caused by the economic recession as it resulted in less construction of residential and commercial properties, which is a core segment of our business.

The gross margin for the three months ended June 30, 2009 of $588M represented 28% of revenue as compared to $718M for the three months ended June 30, 2008 or 21%.  This improvement resulted from a concerted effort to stabilize costs and to implement stronger systems of internal control.

Operating expenses decreased to $747M for the three months end June 30, 2009 from $1,079M for the three months ended June 30, 2008. This decrease is due in part from depreciation which decreased to $206M for the three months ended June 30, 2009 from $350M for the three months ended June 30, 2008. Advertising and promotion decreased to $10M for the three months ended June 30, 2009 from $101M for the three months ended June 30, 2008. This expense decreased as a result of the economic recession and overall construction industry. Repairs and maintenance also decreased to $964M for the three months ended June 30, 2009 from $58M for the three months ended June 30, 2008. Additionally, general administrative and operating expenses decreased due to the Company’s commitment to stronger systems of internal controls and effort to stabilize c osts.

The Company experienced net loss from operations of $159M for the three months ended June 30, 2009 compared to a loss of $361M for the three months ended June 30, 2008. This is a significant improvement arising from improved gross margins and reduced general and administrative expenses.

The Company experienced net loss of $299M for the three months ended June 30, 2009 mainly due to reorganization costs of $140,003 compared to income of $55M for the three months ended June 30, 2008, which was due mainly to a gain on sale of equipment of $416M realized in the three months ended June 30, 2008.

Based upon foreign currency translation adjustment, our comprehensive net loss during the three months ended June 30, 2009 was $25M or $0.01 per share compared to a comprehensive net income of $30M or $0.00 per share during the three months ended June 30, 2008. The weighted average number of shares outstanding was 55,320,270 for the three months ended June 30, 2009 compared to 26,250,000 for the three months ended June 30, 2008.

12

Liquidity and Capital Resources for the Three Months Ended June 30, 2009

As of June 30,  2009, our current assets were $2,157M and our current liabilities were $5,407M, which resulted in a working capital deficit of $3,250M. As of June 30, 2009, our total assets were $9,887M and out total liabilities were $6,741M.

Stockholders’ equity decreased from $3,172M as of March 31, 2009 to $3,146M as ofJune 30, 2009.

Cash Flows from Operating Activities

We have generated positive cash flows from operating activities. For the three months ended June 30, 2009, net cash flows provided by operating activities was $194,757 compared to $73,098 provided during the three month period ended June 30, 2008. Net cash flows provided in operating activities consisted primarily of a net loss of $299,241 (2008: net gain of $54,988), which was partially offset by $206,658 (2008: $350,435) in depreciation and amortization, $-0- (2008: $25,000) in issuance of common stock for services and $-0- (2008: ($416,135) in gain on sale of equipment. Net cash flows provided by operating activities was further changed by $352,886 (2008: ($75,391) in accounts receivable, ($37,110 (2008: ($815) in prepaid expenses and ($28,436 (2008: $130,022) in payable, accrued liabilities and accounts payable under compromise.

Cash Flows from Investing Activities

For the three month period ended June 30, 2009, net cash flows used in investing activities was ($23,467) compared to net cash flows provided by investing activities of $536 in three month period ended June 30, 2008. Net cash flows used in investing activities for the three month period ended June 30, 2009 was comprised of acquisition of property and equipment.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the three month period ended June 30, 2009, net cash flows provided from financing activities was $198,176 compared to $256,008 for the three month period ended June 30, 2008. Cash flows from financing activities for the three month period ended June 30, 2009 consisted of $176,478 from proceeds from obligation sunder capital lease, ($59,165) in repayment of related parties and ($315,489) in repayment to shareholders.

For the three months ended June 30, 2009 there was a cash surplus from operations of $52M as the Company improved its collection of receivables.

On March 4, 2009, the Company’s subsidiary, Budget Alberta, filed for protection under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) with the Court of the Queen’s Bench, Alberta (Court). Under the provisions of this act, Budget Alberta has been granted temporary relief from its creditors while it under goes restructuring. In late 2009, Budget Alberta expects to hold a creditors meeting to vote on a Plan of Compromise and Arrangement (the “Plan”), and on approval of the Plan by the Court, expects to emerge from credit protection.

In February 2010, Budget Alberta’s creditors voted to accept the proposed plan of restructuring in order to emerge from creditor protection.  Under the terms of the Plan, preferred and secured creditors are to be paid in full in the amount of approximately $1,668,000.  Unsecured creditors are to receive fifty cents on the dollar and will receive approximately $475,000.  The preferred and secured creditors are to be paid in installments over six months commencing in March of 2010, and the unsecured creditors are to be paid over twelve months.

13

In order to meet its obligations under the Plan, the Company intends to sell excess waste bins and vehicles it has on hand, as well as make periodic payments towards these obligations out of cash flows from operations. At this time, acquisitions of equipment are anticipated to be minimal, while the Company focuses on debt repayment. In order to lower its debt, the Company intends to disclaim certain capital leases if their cost is no longer worth the benefit. Further, the Company also intends to increase its collection efforts in order to avoid bad debts.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Consolidated Finan cial Statements.

Depreciation Expense on Property and Equipment

Estimates are used in determining our accumulated amortization for depreciation on property and equipment.  We currently use the declining balance based over management’s estimate of the useful lives of the assets to the Company.

We also test our assets for impairment at least annually by way of undiscounted cash flow analysis. We have not encountered any instances of where our fixed assets were impaired.  Generally, our fixed assets have represented their useful life to the Company.

Bad Debt Allowance

Estimates are used in determining our allowance for bad debts and are based on our historical collection experience, current trends, credit policy and a review of our accounts receivable by aging category. Our reserve is evaluated and revised on a quarterly basis.

Off-Balance Sheet Arrangements

The Company has approximately 30 operating leases for vehicles and waste bins used in the operations of the Company.

14

Approximate Minimum lease payments over the next five years are as follows:
2010 (Nine months)	$	66,414
2011		59,217
2012		11,567
2013		-
2014		-
Thereafter		-
Total	$	137,198

Inflation and Prevailing Economic Conditions

To date, inflation has not had a significant impact on our operations. Consistent with industry practice, most of our contracts provide for a pass-through of certain costs, including increases in landfill tipping fees and, in some cases, fuel costs. We have implemented a fuel surcharge program, which is designed to recover fuel price fluctuations. We therefore believe we should be able to implement price increases sufficient to offset most cost increases resulting from inflation. However, competitive factors may require us to absorb at least a portion of these cost increases, particularly during periods of high inflation.

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material changes in the Company’s market risk during the fiscal period ended June 30, 2009.  For additional information, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2009.

ITEM 4.     CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES & CHANGES TO INTERNAL CONTROLS

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. 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 material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our Company, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.

15

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that:

(1)   pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(2)   provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and

(3)   provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Company's internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

-   INSUFFICIENT RESOURCES: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

-   INADEQUATE SEGREGATION OF DUTIES: We have an inadequate number of personnel to properly implement control procedures.

-   LACK OF AUDIT COMMITTEE & OUTSIDE DIRECTORS: We do not have a functioning audit committee and we have only two outside directors serving on the Company's Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

16

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future.

Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

PART II - OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

The Company’s wholly owned subsidiary (Budget Waste Inc.) entered into credit protection on March 4, 2009 under the provisions of the Companies’ Credit Arrangement Act (Canada).

On August 19, 2010, The Company's wholly owned subsidiary (Budget Waste Inc.), located in Calgary, Alberta, Canada, was placed into receivership.

As of August 19, 2010, the Company is abandoning all claim of ownership to this subsidiary and will continue with other opportunities and possible acquisition candidates.

Our wholly owned subsidiary, Budget Waste Inc., was involved in various legal proceedings; however as mentioned above we have abandoned all claim of ownership of this subsidiary and all legal claims would be handled by the trustee appointed to Budget Waste Inc.

ITEM 1A.  RISK FACTORS.

Not applicable.

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

The Company did not have any unregistered sales of equity during the three months ended June 30, 2009.

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.      (Removed and Reserved).

None.

ITEM 5.      OTHER INFORMATION

None.

17

ITEM 6.      EXHIBITS

(a)    Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended
31.2	Certification of  Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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, there unto duly authorized.

BWI HOLDINGS, INC.
Date: December 20, 2010	By:	/s/ Jim Can
		Jim Can
		President, Chief Executive Officer and Director
Date: December 20, 2010	By:	/s/ Bruce Milroy
		Bruce Milroy
		Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

18