Berkshire Homes (BKSH) 10-Q 2 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Aug. 31, 2015	Oct. 20, 2015
Document And Entity Information
Entity Registrant Name	Berkshire Homes, Inc.
Entity Central Index Key	1,505,124
Document Type	10-Q
Document Period End Date	Aug. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--11-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,575,002
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Aug. 31, 2015	Nov. 30, 2014
Properties
Properties under development	$ 3,233,999	$ 4,963,545
Properties held for sale	2,409,708	932,171
Properties, net	5,643,707	5,895,716
Cash and equivalents	477,776	353,685
Prepaid expenses	25,206	5,000
Assets related to discontinued operations, net of accumulated depreciation of $ 59,907 (2014-$24,923)	$ 2,776,361	2,634,247
Vehicle, net of accumulated depreciation of $ nil (2014-$ 1,229)		$ 28,271
Advances due from Praetorian Property, Inc.	$ 3,877
Deferred financing costs	38,977	$ 5,322
Total Assets	8,965,904	8,922,241
LIABILITIES AND STOCKHOLDERS DEFICIT
Accounts payable and accrued liabilities	6,903	26,529
Accrued interest	722,556	373,544
Accounts payable to related parties	$ 482,243	494,020
Advances due to Praetorian Property, Inc.		$ 149,472
Loan payable	$ 212,110
Promissory notes	9,150,000	$ 9,150,000
Total liabilities	10,573,812	10,193,565
Stockholders Deficit
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; 2,000,000 and nil shares issued and outstanding	200	200
Common Stock, $0.0001 par value, 500,000,000 shares authorized, 1,572,002 and 1,572,002 shares issued and outstanding	157	157
Additional paid-in capital	168,243	168,243
Preferred share subscription receivable	(20,000)	(20,000)
Accumulated Deficit	(1,756,508)	(1,419,924)
Total Stockholders Deficit	(1,607,908)	(1,271,324)
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT	$ 8,965,904	$ 8,922,241

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - USD ($)	Aug. 31, 2015	Nov. 30, 2014
Statement of Financial Position [Abstract]
Discontinued Operations, accumulated depreciation	$ 59,907	$ 24,923
Vehicle accumulated depreciation		$ 1,229
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized shares	20,000,000	20,000,000
Preferred stock, issued shares	2,000,000	2,000,000
Preferred stock, outstanding shares	2,000,000	2,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	500,000,000	500,000,000
Common stock, issued shares	1,572,002	1,572,002

STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
REVENUES
Property sales	$ 230,002	$ 3,411,705	$ 1,655,418	$ 4,621,705
COST OF SALES
Property costs	180,978	2,997,901	1,492,474	4,106,511
GROSS PROFIT	$ 49,024	$ 413,804	162,944	$ 515,194
EXPENSES
Depreciation			4,917
Consulting fees			5,000	$ 12,000
Insurance	$ 3,221	$ 832	10,693	6,897
General and administrative	8,843	22,988	31,956	49,319
Professional fees	11,539	731	60,368	45,696
Management fees and expenses	26,692	31,624	100,534	85,995
TOTAL EXPENSES	50,295	56,175	213,468	199,907
INCOME (LOSS) FROM OPERATIONS	(1,271)	$ 357,629	(50,524)	$ 315,287
OTHER INCOME (EXPENSE)
Gain on sale of vehicle	3,346		3,346
Interest expense	(126,086)	$ (102,595)	(359,122)	$ (198,416)
TOTAL OTHER INCOME (EXPENSE)	(122,740)	(102,595)	(355,776)	(198,416)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(124,011)	255,034	(406,300)	116,871
INCOME (LOSS) FROM DISCONTINUED OPERATIONS	(15,880)		69,716
NET INCOME (LOSS)	$ (139,891)	$ 255,034	$ (336,584)	$ 116,871
NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED CONTINUING OPERATIONS	$ (0.08)	$ 0.16	$ (0.26)	$ 0.07
NET INCOME PER SHARE: BASIC AND DILUTED DISCONTINUED OPERATIONS	$ (0.01)	$ 0	$ (0.04)	$ 0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED	1,572,002	1,572,002	1,572,002	1,700,889

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$ (336,584)	$ 116,871
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on sale of vehicle	(3,346)
Depreciation	39,901
Amortization of deferred financing costs	8,595	$ 7,369
Changes in operating assets and liabilities:
Prepaid expenses	(20,206)
Inventory of properties under development	252,009	$ (6,689,398)
Accounts payable	(19,626)	$ (11,655)
Accounts payable related party	(11,777)
Accrued interest	349,012	$ 198,416
Net Cash Provided/(Used) by Operating Activities	257,978	$ (6,378,397)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of vehicle	26,700
Rental properties, rehabilitation expense	(177,098)
Net Cash Used by Investing Activities	(150,398)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable	$ 169,860
Issuance of promissory notes		$ 6,500,000
Repayment of advances from Praetorian Property, Inc.	$ (153,349)	117,951
Net Cash Provided by Financing Activities	16,511	6,617,951
Net Change in Cash	124,091	239,554
Cash and Cash equivalents, beginning of period	353,685	146,048
Cash and Cash equivalents, end of period	$ 477,776	$ 385,602
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
Income taxes paid
NON CASH TRANSACTIONS
Preferred stock subscription		$ 20,000
Cancellation of common stock		$ 5,800

DESCRIPTION OF BUSINESS AND BAS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
	Aug. 31, 2015
Accounting Policies [Abstract]
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Berkshire Homes, Inc. (the “Company”) was incorporated in Nevada on June 2, 2010. The Company operated an agricultural consulting business until November 16, 2012 when upon change of management the Company changed its business focus to acquisition, rehabilitation and sale or lease of distressed residential real estate in the United States.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Aug. 31, 2015
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation

RELATED PARTY TRANSATIONS

RELATED PARTY TRANSATIONS	9 Months Ended
	Aug. 31, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSATIONS	During the three months ended August 31, 2015 and 2014, the Company incurred management fees and expenses of $26,692 and $31,624 to its officers, respectively. During the nine months ended August 31, 2015 and 2014, the Company incurred management fees and expenses of $100,534 and $85,995 to its officers, respectively. As of August 31, 2015 and December 31, 2014, the Company had a payable of $482,243 owed to Bay Capital A.G., who became a related party during 2013 by obtaining majority ownership. As of August 31, 2015 and December 31, 2014, there were $0 and $11,0777 owed to the Chief Executive Officer of the Company, respectively. During 2013, Praetorian Property, Inc., an entity with common ownership and management, advanced an aggregate of $50,496 to us which was outstanding as of November 30, 2013. In addition, in 2014, Cannabis advanced an additional $99,093 to us, $117 of which was written off as of the year ended November 30, 2014. During the period ended August 31, 2015, the Company repaid $ 153,349 of the advances. As at August 31, 2015, the total advances to Cannabis was $3,877. The amounts due to these related parties are due on demand, non-interest bearing and unsecured.

PROMISSORY NOTES

PROMISSORY NOTES	9 Months Ended
	Aug. 31, 2015
Debt Disclosure [Abstract]
PROMISSORY NOTES	On June 13, 2013, the Company borrowed $2,150,000 at an interest rate of 5% per annum. The promissory note is unsecured and is due on June 13, 2015. In connection with the note, the Company paid a fee of $19,650 to a third party which was recorded as deferred financing costs and is being amortized to interest expense over the life of the loan using the effective interest rate method. During the period ended August 31, 2015, amortization expense of $5,322 was recognized and no unamortized financing costs as of August 31, 2015. The note has matured. While the note has matured, the note has not been declared in default. Accordingly, the Company will continue accruing interest at 5% per annum and not the default interest rate of 12% per annum. On June 27, 2013, the Company borrowed $500,000 at an interest rate of 5% per annum. The promissory note is unsecured and is due on June 27, 2015. The note has matured. While the note has matured, the note has not been declared in default. Accordingly, the Company will continue accruing interest at 5% per annum and not the default interest rate of 12% per annum On April 21, 2014, the Company borrowed $4,500,000 at an interest rate of 5% per annum. The promissory note is unsecured and is due on April 21, 2016. On June 23, 2014, the Company borrowed $2,000,000 at an interest rate of 5% per annum. The promissory note is unsecured and is due on June 23, 2016.

LOAN PAYABLE

LOAN PAYABLE	9 Months Ended
	Aug. 31, 2015
Loan Payable
LOAN PAYABLE	On July 6, 2015, the Company entered into a term note agreement in the total amount of $1,500,000. The loan payable is repayable in monthly interest payments of interest only, calculated at the greater of 8.25% or 475 basis points above the Wall Street Journal’s Prime Lending Rate. Balance of principal and any unpaid interest is due July 1, 2017. The Company received an initial advance of $212,110. Financing fees of $42,520 have been deferred on the balance sheet and are being amortized over a 24 month period. The loan is secured by the Company’s Tallahassee property. The proceeds of the loan is only for the payment of costs directly associated with the construction of the improvements and shall not divert such funds for any other purpose.

COMMON STOCK

COMMON STOCK	9 Months Ended
	Aug. 31, 2015
Equity [Abstract]
COMMON STOCK	On February 12, 2014, the Company authorized a class of Series A preferred stock consisting of 5,000,000 shares with a par value of $ 0.0001 per share. On February 12, 2014, the Company agreed to issue 2,000,000 such shares for cash of $20,000. As of August 31, 2015, the Company had not received the proceeds of the share subscription and the proceeds have been recorded as share subscriptions receivable.

ACQUISITION

ACQUISITION	9 Months Ended
	Aug. 31, 2015
Business Combinations [Abstract]
ACQUISITION	On June 27, 2014, the Company acquired a 100% ownership interest in a property located in Tallahassee, Florida at an auction for a purchase price of $2,500,000 and rehabilitation expenses of $159,170 for a total of $2,659,170. During the period ended August 31, 2015, the Company incurred rehabilitation expenses of $16,411 related to the property and during this period inventory of properties under development increased by $225,557. The property consisted of 56 residential units consisting of one and two bedrooms. There were preexisting leases. However, due to the short-term nature of the leases, no value was assigned to them. The property was purchased for the purpose of resale after renovations. Offers for the purchase of the property have been received. On February 2, 2015, a written offer for $3,500,000 has been executed. The following table summarizes the preliminary estimated fair values of the assets and liabilities acquired as part of the Tallahasee purchase: Land $ 556,000 Buildings, net and Improvements 2,078,247 Estimated fair value of assets and liabilities acquired $ 2,634,247 The rental income and expenses from the discontinued operations for the three and nine months ended August 31, 2015 is as follows: 3 months 9 months Rental Income $ 11,399 60,637 Purchase deposit forfeited — 75,000 Rental Expense (15,618 ) (30,938 ) Depreciation Expense (11,661 ) (34,983 ) Total rental income and expense (15,880) 69,716 The property has been classified as held for sale. As a result the assets and rental income have been presented as discontinued operations in the financial statements.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Aug. 31, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	The Company has come to an agreement to convert $20,000 in accounts payable as payment for the subscription receivable for the 2,000,000 shares of Series A Preferred Stock.

SIGNIFICANT ACCOUNTING POLICI14

SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Aug. 31, 2015
Accounting Policies [Abstract]
Basis of Presentation

ACQUISITION (Tables)

ACQUISITION (Tables)	9 Months Ended
	Aug. 31, 2015
Business Combinations [Abstract]
Schedule of Estimated Fair Values of the Assets and Liabilities Acquired	Land $ 556,000 Buildings, net and Improvements 2,078,247 Estimated fair value of assets and liabilities acquired $ 2,634,247
Schedule of Rental Income and Expenses	3 months 9 months Rental Income $ 11,399 60,637 Purchase deposit forfeited — 75,000 Rental Expense (15,618 ) (30,938 ) Depreciation Expense (11,661 ) (34,983 ) Total rental income and expense (15,880) 69,716

DESCRIPTION OF BUSINESS AND B16

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative)	9 Months Ended
	Aug. 31, 2015
Accounting Policies [Abstract]
Date of Incorporation	Jun. 2, 2010

RELATED PARTY TRANSATIONS (Deta

RELATED PARTY TRANSATIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014	Dec. 31, 2014	Nov. 30, 2014	Nov. 29, 2014	Nov. 30, 2013
Management fees and expenses	$ 26,692	$ 31,624	$ 100,534	$ 85,995
Accounts payable to related parties	482,243		482,243			$ 494,020
Advances due to Praetorian Property, Inc.	3,877		3,877				$ 99,093	$ 50,496
Advances written off							$ 117
Repayment of advances from Praetorian Property, Inc.			153,349	$ (117,951)
Bay Capital AG
Accounts payable to related parties	482,243		482,243		$ 482,243
Chief Executive Officer
Accounts payable to related parties	$ 0		$ 0		$ 11,777

PROMISSORY NOTES (Details Narra

PROMISSORY NOTES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014	Nov. 30, 2014
Issuance of promissory notes			$ 169,860
Interest expense	$ 126,086	$ 102,595	359,122	$ 198,416
Amortization expense			8,595	7,369
Long term liability	9,150,000		9,150,000		$ 9,150,000
Interest Expense	$ (122,740)	$ (102,595)	$ (355,776)	$ (198,416)
Promissory Note 1
Date of Debt Instrument			Jun. 13, 2013
Issuance of promissory notes			$ 2,150,000
Interest expense			$ 19,650
Interest rate			5.00%
Amortization expense			$ 5,322
Debt Instrument, Due Date			Jun. 13, 2015
Promissory Note 2
Date of Debt Instrument			Jun. 27, 2013
Issuance of promissory notes			$ 500,000
Interest rate			5.00%
Debt Instrument, Due Date			Jun. 27, 2015
Promissory Note 3
Date of Debt Instrument			Apr. 21, 2014
Issuance of promissory notes			$ 4,500,000
Interest rate			5.00%
Debt Instrument, Due Date			Apr. 21, 2016
Promissory Note 4
Date of Debt Instrument			Jun. 23, 2014
Issuance of promissory notes			$ 2,000,000
Interest rate			5.00%
Debt Instrument, Due Date			Jun. 23, 2016

LOAN PAYABLE (Details Narrative

LOAN PAYABLE (Details Narrative) - USD ($)	9 Months Ended
	Aug. 31, 2015	Nov. 30, 2014
Loan payable	$ 212,110
Note Agmt #1
Date of Debt Instrument	Jul. 6, 2015
Debt Instrument	$ 1,500,000
Debt Instrument, Variable Interest Description	The loan payable is repayable in monthly interest payments of interest only, calculated at the greater of 8.25% or 475 basis points above the Wall Street Journal’s Prime Lending Rate.
Debt Instrument, Due Date	Jul. 1, 2017
Loan payable	$ 212,110
Financing fees	$ 42,520

COMMON STOCK (Details Narrative

COMMON STOCK (Details Narrative) - USD ($)	Aug. 31, 2015	Nov. 30, 2014	Feb. 12, 2014
Equity [Abstract]
Common Stock, authorized	500,000,000	500,000,000
Common Stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, authorized	20,000,000	20,000,000
Preferred Stock, par value			$ 5,000,000
Series A Preferred stock, par value			$ 5,000,000
Series A Preferred stock, authorized shares			0.0001
Series A Preferred stock, issued shares			2,000,000
Series A Preferred stock, amount			$ 20,000

ACQUISITION - Schedule of Estim

ACQUISITION - Schedule of Estimated Fair Values of the Assets and Liabilities Acquired (Details)	Aug. 31, 2015USD ($)
Business Combinations [Abstract]
Land	$ 556,000
Buildings, net and Improvements	2,078,247
Estimated fair value of assets and liabilities acquired	$ 2,634,247

ACQUISITION - Schedule of Renta

ACQUISITION - Schedule of Rental Income and Expenses (Details) - USD ($)	3 Months Ended	9 Months Ended
	Aug. 31, 2015	Aug. 31, 2015
Acquisition - Schedule Of Rental Income And Expenses Details
Rental Income	$ 11,399	$ 60,637
Purchase deposit foreited		75,000
Rental Expense	$ (15,618)	(30,938)
Depreciation Expense	(11,661)	(34,983)
Total rental income and expense	$ (15,880)	$ 69,716

ACQUISITION (Details Narrative)

ACQUISITION (Details Narrative) - USD ($)	9 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Property Rehabilitation Expense	$ (177,098)
Inventory of properties under development	$ 252,009	$ (6,689,398)
Tallahasee Purchase
Date of Agreement	Jun. 27, 2014
Property Purchase Price	$ 2,500,000
Property Rehabilitation Expense	159,173
Rehabilitation expense	16,411
Total purchase price	$ 2,659,170