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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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{x} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2010
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
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HUDSON'S GRILL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Texas 333-94797 75-2738727
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
27 Chicora Ave
Toronto, ON, M5R 1T7
(Address of Principal Executive Office) (Zip Code)
416-928-3095
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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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 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. [X] Yes [_] 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. (Check one):
Large accelerated filer [_]Accelerated filer [_]Non-accelerated filer
[_] Small reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the [X] Yes [_] No Act).
State the number of shares of outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 10,388,986 shares of Class A
Common Stock outstanding as of April 30, 2009.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Page
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Consolidated Balance Sheets at March 31, 2010
and December 31, 2009.......................................... F-2
Consolidtated Statements of Operations for the
three-months ended March 31, 2010 and from August 11,
2008 (development stage) through March 31, 2010................ F-3
Consolidated Statements of Cash Flows for the
three-months ended March 31, 2010 and from August 11,
2008 (development stage) through March 31, 2010................ F-4
Notes to Financial Statements.................................... F-5
F-1
HUDSON'S GRILL INTERNATIONAL, INC.
Consolidated
Balance Sheets
March 31 December 31
2010 2009
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(Unaudited) (Audited)
Assets:
Total assets $ -- $ --
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Liabilities and Stockholders' Deficit:
Current liabilities:
Accounts payable and accrued liabilities $ 3,042 11,021
Note payable related party 36,638 25,437
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Total current liabilities 39,680 36,458
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Commitments and contingencies
Stockholders' deficit:
Common stock, no par value; 100,000,000
shares authorized, 10,388,986 shares
issued and outstanding at December 31,
2009 and December 31, 2008 $ 402,678 $ 402,678
Common stock, Class B, no par value,
15,000,000 shares authorized, no shares
issued and outstanding -- --
Accumulated deficit (444,858) (439,136)
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Total stockholders' deficit (42,180) (36,458)
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Total liabilities and stockholders'
deficit $ -- $ --
============= =============
The accompanying notes are an integral part of these financial statements
F-2
HUDSON'S GRILL INTERNATIONAL, INC.
Consolidated
Statements of Operations
August 11,
2008
(Development
Stage)
Three Months Ended Through
March 31, March 31,
2010 2009 2010
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Operating costs:
General and administrative $ (5,722) $ (15,006) $ (41,157)
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Total (5,722) (15,006) (41,157)
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Net loss $ (5,722) $ (15,006) $ (41,157)
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Net loss per share - basic and
diluted
Net loss per share $ 0.00 $ 0.00
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Weighted average outstanding
shares
Basic and diluted 10,388,986 10,388,986
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The accompanying notes are an integral part of these financial statements
F-3
HUDSON'S GRILL INTERNATIONAL, INC.
Consolidated
Statements of Cash Flows
August 11,
2008
(Development
Stage)
Three Months Ended Through
March 31, March 31,
2010 2009 2010
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Cash flows from operating
activities:
Net loss $ (5,722) $ (15,006) $ (41,157)
Items not involving cash:
Amortization of loan costs -- -- --
Depreciation -- -- --
Loss on disposal of
operations -- -- --
Professional fees paid with
stock -- -- --
Changes in operating assets and
liabilities
Other current assets -- -- --
Accounts receivable -- -- --
Accounts payable and accrued
expenses (5,479) (1,023) 4,519
Accounts payable to related
parties -- -- --
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Net cash provided by
(used in) operating
activities (11,201) (16,029) (36,638)
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Cash flows from investing
activities:
Cash divested in sale
transaction -- -- --
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Net cash used in
investing activities -- -- --
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Cash flows from financing
activities:
Note payable related party 11,201 16,029 36,638
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Net cash provided by
financing activities 11,201 16,029 36,638
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Net change in cash -- -- --
Cash, beginning of period -- -- --
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Cash, end of period $ -- $ -- $ --
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Supplemental disclosure of cash
flow information:
Non-cash transaction
Cancellation of debt through
building foreclosure and
new $35,000 note payable $ -- $ 0 $ --
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Income taxes paid $ -- $ -- $ --
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Interest paid $ $ -- $
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The accompanying notes are an integral part of these financial statements
F-4
HUDSON'S GRILL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. UNAUDITED INFORMATION
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The consolidated balance sheet of Hudson's Grill International, Inc. (the
"Company") as of March 31, 2010 and the consolidated statements of operations
for the three month period ended March 31, 2010 , have not been audited.
However, in the opinion of management, such information includes all adjustments
(consisting only of normal recurring adjustments) which are necessary to
properly reflect the financial position of the Company as of March 31, 2010, and
the results of operations for the three months ended March 31, 2010.
Certain information and notes normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America have been condensed or omitted, although management believes that the
disclosures are adequate to make the information presented not misleading.
Interim period results are not necessarily indicative of the results to be
achieved for an entire year. These financial statements should be read in
conjunction with the financial statements and notes to financial statements
included in the Company's consolidated financial statements as filed on Form
10-K for the year ended December 31, 2009.
2. PRINCIPLES OF CONSOLIDATION
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The consolidated financial statements include the accounts of Hudson's Grill
International, Inc., and its subsidiary. Significant intercompany accounts and
transactions have been eliminated in consolidation.
3. DEVELOPMENT STAGE COMPANY
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The Company has not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of a
"Development Stage Company". The Company's financial statements be identified as
those of a development stage company, and that the statements of operations,
stockholders' equity and cash flows disclose activity since the date of the
Company's inception. The Company has elected a fiscal year ending on December
31.
4. EARNINGS PER SHARE
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Basic earnings per share are calculated on the weighted average number of common
shares outstanding during each period. Diluted earnings per share is computed by
dividing net income by the weighted average number of common shares and common
stock equivalents outstanding for the period. Common stock equivalents are
excluded from the computation if such inclusion would have an anti-dilutive
effect.
5. RELATED PARTY TRANSACTION
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A shareholder of the Company paid expenses in the quarter of $11,201. The
Company currently has no agreement with the shareholder and the loan bears no
interest and is due on demand.
F-5
6. GOING CONCERN
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The Company will need working capital for its future planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon obtaining
sufficient working capital to be successful in that effort. The management of
the Company has developed a strategy, which it believes will accomplish this
objective, through short term loans, and equity funding, which will enable the
Company to operate for the coming year. In order to continue as a going concern,
we require additional financing. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to continue as a
going concern, we would likely be unable to realize the carrying value of our
assets reflected in the balances set out in the preparation of the consolidated
financial statements.
F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND OTHER PORTIONS OF THIS REPORT CONTAIN FORWARD-LOOKING INFORMATION
THAT INVOLVES RISKS AND UNCERTAINTIES, OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED BY THE FORWARD-LOOKING INFORMATION. FACTORS
THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, AVAILABLILITY
OF FINANCIAL RESOURCES FOR LONG TERM NEEDS, PRODUCT DEMAND, MARKET ACCEPTANCE
AND OTHER FACTORS DISCUSSED ELSEWHERE IN THIS REPORT. THIS MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHOULD
BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE RELATED NOTES
INCLUDED ELSEWHERE IN THIS REPORT.
Material changes in the consolidated financial condition of the Company and in
the results of their operations since the end of its last fiscal year and their
results from the comparable period in their last fiscal year including the
following:
The Company's current principal business activity is to seek a suitable reverse
acquisition candidate through acquisition, merger or other suitable business
combination method.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, there is no legal obligation for either
management or significant stockholders to provide additional future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative sources. Consequently, there is substantial doubt about the
Company's ability to continue as a going concern.
The Company's need for capital may change dramatically because of any business
acquisition or combination transaction. There can be no assurance that the
Company will identify any such business, product, technology or company suitable
for acquisition in the future. Further, there can be no assurance that the
Company would be successful in consummating any acquisition on favorable terms
or that it will be able to profitably manage the business, product, technology
or company it acquires.
Asset Purchase Agreement
The Company entered into an asset purchase agreement on August 11, 2008 with
Concept Franchising, LLC. Concept Franchising, LLC purchased all of the assets
($61,704) and assumed all of the liabilities ($258,427) of Hudson's Grill
International, Inc with the exception of the assets relating to the ability of
Hudson's Grill International, Inc to exist as a corporation. This resulted in an
increase in stockholders equity of $196,723. The Board of Directors of Hudson's
Grill International met on August 8, 2008 and appointed Mr. Joseph J. Meuse as
Director, President and Secretary of the Corporation. Following that appointment
all other board members resigned. On December 22, 2009 the Board of Directors of
the Company met and appointed Mr. David Roff as a Director. Following his
appointment Mr. Joseph J. Meuse resigned as an officer and director of the
Company. The Board of Directors appointed Mr. Roff as the President and CFO of
the Company.
2
Plan of Operation
The Company's current purpose is to seek, investigate and, if such investigation
warrants, merge or acquire an interest in business opportunities presented to it
by persons or companies who or which desire to seek the perceived advantages of
a Securities Exchange Act of 1934 registered corporation. As of the date of this
registration statement, the Company has no particular acquisitions in mind and
has not entered into any negotiations regarding such an acquisition, and neither
the Company's officer and director nor any promoter and affiliate has engaged in
any negotiations with any representatives of the owners of any business or
company regarding the possibility of a merger or acquisition between the Company
and such other company.
Item 4T. Controls and Procedures.
The Company maintains "disclosure controls and procedures," as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Act of 1934, as amended (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed by the Company in reports it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to our management including the Company's principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.
The management of the Company has designed and evaluated the Company's
disclosure controls and procedures. Management recognizes that disclosure
controls and procedures, no matter how well conceived and operated, can provide
only reasonable assurance of achieving the desired control objectives, and the
Company necessarily is required to apply its judgment in evaluating the
cost-benefit relationship of possible disclosure controls and procedures.
The Company's management, including its principal executive officer and
principal financial officer, evaluated the effectiveness of the design and
operation of its disclosure controls and procedures as of March 31, 2009, and
concluded that the disclosure controls and procedures were not effective,
because certain deficiencies involving internal controls constituted a material
weakness as disclosed in the Company's 2008 Form 10K. The material weaknesses
identified did not result in the restatement of any previously reported
consolidated financial statements or any other related financial disclosure, nor
does management believe that it had any effect on the accuracy of the Company's
financial statements for the current reporting period.
CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING
None.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are currently not a party to any pending legal proceedings and no such
actions by, or to the best of our knowledge, against us have been threatened.
Item 1A. Risk Factors
IN ADDITION TO THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING FACTORS
SHOULD BE CONSIDERED CAREFULLY IN EVALUATING OUR BUSINESS AND PROSPECTS,
CONDITIONS EXIST WHICH CAUSE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS
A GOING CONCERN.
Pending negotiation and consummation of a combination, the Company anticipates
that it will have, aside from carrying on its search for a combination partner,
no business activities, and, thus, will have no source of revenue. Should the
Company incur any significant liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.
3
If the Company's management pursues one or more combination opportunities beyond
the preliminary negotiations stage and those negotiations are subsequently
terminated, it is foreseeable that such efforts will exhaust the Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated. In that event, the Company is common stock will
become worthless and holders of the Company's common stock will receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits.
Exhibit Number Exhibit Title
31.1 Certification of CEO pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification of CFO 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 the requirements of Section Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Hudson's Grill International, Inc.
Date: May 05, 2010 By: /s/ David Roff
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David Roff
President and Chief Executive Officer
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