UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-Q
------------------
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 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 ______
Commission file number 000-52439
Bill The Butcher, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 20-5449905
------------------------ ------------------------
(State of incorporation) (I.R.S. Employer ID No.)
424 Queen Anne Ave. N., Suite #400, Seattle, WA 98109
-------------------------------------------------------------
(Address of principal executive officers, including Zip Code)
Issuer's telephone number, including area code: (206) 612-6370
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. Yes |X| No |_|
Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definition of "accelerated filer and large accelerated filer" in Rule
12b-2 of the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
As of July 19, 2010, the registrant's outstanding common stock consisted
of 22,537,169 shares, $0.001 par value. Authorized - 70,000,000 common
voting shares. No preferred issued, 5,000,000 preferred shares, par value
$0.001 authorized.
Table of Contents
Bill The Butcher, Inc.
Index to Form 10-Q
For the Quarterly Period Ended May 31, 2010
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets as of May 31, 2010 and August 31, 2009 3
Statements of Income for the three and nine months
ended May 31, 2010 and 2009 4
Statements of Cash Flows for the nine months
ended May 31, 2010 and 2009 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 18
Item 3. Quantitative and Qualitative Disclosures About Market Risk 25
Item 4T. Controls and Procedures 25
Part II Other Information
Item 1. Legal Proceedings 27
Item 1A. Risk Factors 27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27
Item 3.-- Defaults Upon Senior Securities 27
Item 4.-- Submission of Matters to a Vote of Security Holders 27
Item 5.-- Other Information 27
Item 6. Exhibits 28
Signatures 29
2
Part I. Financial Information
Item 1. Financial Statements
Bill The Butcher, Inc.
(Formerly Reshoot & Edit, Inc.)
Balance Sheets
May 31, August 31,
2010 2009
----------- -----------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 148,045 $ -
Advances 200 -
Prepaid expense 17,488 3,500
Inventory 132,067 -
Inventory deposit 6,000 -
----------- -----------
Total current assets 303,800 3,500
Fixed Assets:
Equipment, net 155,389 -
Leasehold improvements, net 158,366 -
----------- -----------
Total fixed assets 313,755 -
Other Assets:
Security deposits 53,208 -
Intangible assets, net 3,750 -
----------- -----------
Total other assets 56,958 -
----------- -----------
TOTAL ASSETS $ 674,513 $ 3,500
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 306,459 $ 1,225
Notes payable 100,000 -
Capital lease obligation - current 9,043 -
---------- -----------
Total current liabilities 415,502 1,225
Long Term Liabilities:
Capitalized lease obligation 17,623 -
Deferred rent 6,287 -
----------- -----------
Total long term liabilities 23,910 -
----------- -----------
Total liabilities 439,412 1,225
----------- -----------
Stockholder's Equity:
Series A preferred stock, $0.001
par value, 2,000,000 shares authorized,
no shares issued or outstanding - -
Series B preferred stock, $0.001
par value, 2,000,000 shares authorized,
no shares issued or outstanding - -
Series C preferred stock, $0.001
par value, 1,000,000 shares authorized,
no shares issued or outstanding - -
Common stock, $0.001 par value, 70,000,000
shares authorized, 22,537,169 issued and
outstanding as of 5/31/2010, and
34,960,000 shares issued and outstanding as of
8/31/2009 22,537 34,960
Stock subscriptions payable 206,000 -
Additional paid-in capital 695,742 -
Accumulative deficit (689,178) (32,685)
----------- -----------
Total stockholders' equity 235,101 2,275
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 674,513 $ 3,500
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
Bill The Butcher, Inc.
(Formerly Reshoot & Edit, Inc.)
Statements of Operations
(Unaudited)
For the three months For the nine months
ended ended
---------------------- ----------------------
May 31, May 31, May 31, May 31,
2010 2009 2010 2009
---------- ---------- ---------- ----------
REVENUE $ 469,371 $ - $ 476,258 $ -
COST OF GOODS
SOLD 319,914 - 323,816 -
---------- ---------- ---------- ----------
GROSS PROFIT 149,457 - 152,442 -
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Store expenses 281,831 - 323,722 -
Marketing and
advertising
expense 10,560 - 12,917 -
General and
administrative
expenses 240,746 1,000 478,096 7,100
---------- ---------- ---------- ----------
Total expenses 533,137 1,000 814,735 7,100
---------- ---------- ---------- ----------
Net loss from
operations (383,680) (1,000) (662,293) (7,100)
OTHER EXPENSES
Interest
expense 2,325 - 2,988 -
---------- ---------- ---------- ----------
Total other
expenses 2,325 - 2,988 -
---------- ---------- ---------- ----------
NET LOSS $(386,005) $ (1,000) $(665,281) $ (7,100)
========== ========== ========== ==========
NET LOSS PER
SHARE - BASIC $ (0.02) $ (0.00) $ (0.03) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
-BASIC 22,537,169 9,200,000 22,846,413 9,200,000
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
Bill The Butcher, Inc.
(Formerly Reshoot & Edit, Inc.)
Statements of Cash Flows
(Unaudited)
For the nine months
ended
----------------------
May 31, May 31,
2010 2009
---------- ----------
OPERATING ACTIVITIES
Net loss $(665,281) $ (7,100)
Adjustments to reconcile
net loss to net cash
used by operating
activities:
Depreciation and amortization 16,734 -
Changes in operating assets
and liabilities:
Increase (decrease) in:
Accounts payable and
accrued expenses 217,150 (2,250)
(Increase) decrease in:
Advances 1,043 -
Inventory (59,326) -
Deferred rent 6,286 -
Prepaid expenses (13,795) (4,500)
Deposits (6,000) -
Security deposits (53,208) -
---------- ----------
Net cash used by operating
activities (556,397) (13,850)
INVESTING ACTIVITIES
Purchase of equipment (103,602) -
Leasehold improvements (158,156) -
Intangible assets (4,500) -
---------- ----------
Net cash used by investing
activities (266,258) -
FINANCING ACTIVITIES
Bank overdraft acquired (7,886) -
Issuances of common stock 699,600 -
Cancellation of common stock (25,000) -
Contributed capital - 9,750
Note payable 100,000 -
Vehicle lease (2,014) -
Subscription payable 206,000 -
---------- ----------
Net cash provided by financing
activities 970,700 9,750
---------- ----------
NET INCREASE (DECREASE) IN CASH 148,045 (4,100)
CASH AND EQUIVALENTS - BEGINNING - 4,100
---------- ----------
CASH AND EQUIVALENTS - ENDING $ 148,045 $ -
========== ==========
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ -
Income taxes paid $ - $ -
Assets acquired under capital lease $ 28,680 $ -
Net assets acquired $ 22,223 $ -
The accompanying notes are an integral part of these financial statements.
5
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at May 31, 2010 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
August 31, 2009 audited financial statements. The results of operations for
the periods ended May 31, 2010 and 2009 are not necessarily indicative
of the operating results for the full year.
Bill The Butcher, Inc. was previously a development stage company that was in
the early stages of commercialization. Since our inception in August 2006,
we have: 1) completed a private placement which has provided us with the
necessary seed capital to begin operations, 2) filed and have had declared
effective a registration statement with the SEC on form SB-2, 3) established
commercial operations. Since we have achieved our initial development and
established a recurring base revenue stream, management considers that the
company is no longer a development stage enterprise.
NOTE 2 - GOING CONCERN
These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As of May 31, 2010,
the Company has recognized revenues of $476,258 and has accumulated operating
losses of approximately $689,178. The Company's ability to
continue as a going concern is contingent upon the successful completion of
additional financing arrangements and its ability to achieve and maintain
profitable operations. Management plans to raise equity capital to finance
the operating and capital requirements of the Company. Amounts raised will
be used for further development of the Company's products, to provide
financing for marketing and promotion, to secure additional property and
equipment, and for other working capital purposes. While the Company is
putting forth its best efforts to achieve the above plans, there is no
assurance that any such activity will generate funds that will be available
for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset amounts, or amounts and classification of liabilities that might result
from this uncertainty.
6
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
The relevant accounting policies are listed below.
Basis of Presentation
- ---------------------
The Consolidated Financial Statements include the consolidated accounts of
Bill the Butcher and Reshoot & Edit. All intercompany accounts and
transactions have been eliminated in consolidation. The Company has
evaluated subsequent events for potential recognition and/or disclosure
through the date of issuance of these financial statements.
Cash and Cash Equivalents
- -------------------------
The Company considers all short-term investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
Consolidations
- --------------
The Company adopted ASC 805 in regards to its Consolidation Policy.
ASC 805 establishes principles and requirements for how an acquirer recognizes
and measures in its financial statements the identifiable assets acquired,
including goodwill, the liabilities assumed and any non-controlling interest
in the acquiree. The Statement also establishes disclosure requirements to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. ASC is effective for business
combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2008.
Property and Equipment
- ----------------------
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the various assets,
which range from three to seven years. Leasehold improvements are amortized
over the remaining lease term or three years, including renewal periods at
the Company's option. Depreciation expense was $20,430 and $20,778 for the
three and nine months ended May 31, 2010, respectively. Maintenance and
repairs are charged against income as incurred and additions, renewals,
and improvements are capitalized.
Valuation of Long-Lived Assets
- ------------------------------
The Company periodically evaluates the carrying value of long-lived assets,
including, but not limited to, property and equipment, and other assets. The
carrying value of a long-lived asset is considered impaired if its estimated
fair value is less than its carrying value. Management does not believe
there were any impaired long-lived assets as of May 31, 2010.
Inventory
- ---------
Inventories consist primarily of raw meat product, dairy and non-perishable
specialty grocery items held for resale. Inventories are stated at the lower
of average cost or market using the first-in first-out method and are
accounted for on a monthly basis based on a physical inventory count.
Fair Value of Financial Instruments
- -----------------------------------
The Company's cash and cash equivalents, short-term investments, accounts
receivable, accounts payable and accrued liabilities are considered financial
instruments whose carrying value approximates fair value based on their short
term nature.
7
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue recognition
- -------------------
The Company recognizes revenue on an accrual basis as it invoices for
services. Revenue is generally realized or realizable and earned when all of
the following criteria are met: 1) persuasive evidence of an arrangement
exists between the Company and the customer(s); 2) services have been
rendered; 3) the price to the customer is fixed or determinable; and 4)
collectability is reasonably assured.
Use of Estimates
- ----------------
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates made in preparing the consolidated financial statements
include depreciation and amortization periods, the allowance for doubtful
accounts, reserves for inventory and valuation of long-lived assets. Actual
results could materially differ from these estimates.
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per
share is calculated by dividing the Company's net income (loss) available to
common shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of shares
outstanding is the basic weighted number of shares adjusted as of the first
of the year for any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities
since inception.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year-end
- --------
The Company's fiscal year-end is August 31.
8
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Advertising
- -----------
Advertising costs are expensed when incurred. The Company has incurred
advertising expenses of $10,560 and $0 for the three months ended May 31,
2010 and 2009, respectively.
Recent Accounting Pronouncements
- --------------------------------
In May 2010, the FASB issued
Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic
830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates.
The amendments in this Update are effective as of the announcement date of
March 18, 2010. The Company does not expect the provisions of ASU 2010-19
to have a material effect on the financial position, results of operations
or cash flows of the Company.
In April 2010, the FASB issued
Accounting Standards Update 2010-17 (ASU 2010-17), Revenue
Recognition-Milestone Method (Topic 605): Milestone Method of Revenue
Recognition. The amendments in this Update are effective on a prospective
basis for milestones achieved in fiscal years, and interim periods within
those years, beginning on or after June 15, 2010. Early adoption is
permitted. If a vendor elects early adoption and the period of adoption
is not the beginning of the entity's fiscal year, the entity should apply
the amendments retrospectively from the beginning of the year of adoption.
The Company does not expect the provisions of ASU 2010-17 to have a material
effect on the financial position, results of operations or cash flows of
the Company.
In April 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the
Underlying Equity Security Trades - a consensus of the FASB Emerging
Issues Task Force. The amendments in this Update are effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2010. Earlier application is permitted. The Company does not
expect the provisions of ASU 2010-13 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in
Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does
not change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December
15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial
position, results of operations or cash flows of the Company.
9
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU
2010-01 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances that
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
10
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
NOTE 4 - RELATED PARTY PURCHASE AGREEMENT
On March 26, 2010, the Company executed a Related Party Purchase Agreement
to acquire all of the equity ownership interest of W K Inc., a Washington
Company, owned and operated by William Von Schneidau whom also is a
shareholder of the Company. The total consideration given for the
acquisition of all the equity ownership of W K Inc. was $10. A copy of this
agreement was filed in Form 8-K as filed with the U.S. Securities and
Exchange Commission on March 29, 2010. The Agreement is structured as a
purchase of W K Inc. by the Company, which will become the public holding
company for its wholly owned operating subsidiary. This purchase is treated
as a related party transaction for the following reasons: (1) J'Amy Owens,
the current President, Director and majority shareholder of the Company,was
also a founder of W K Inc., and has contributed to its development and
business operations since its inception; (2) William Von Schneidau will
remain as an employee of W K Inc., after the acquisition and will continue
to serve as one of the consolidated company's principals in charge of the
"Bill the Butcher" business; and (3) William Von Schneidau will acquire a
controlling interest in the public company through the purchase of stock in
a private transaction from J'Amy Owens.
The business combination has been accounted similar to a Pooling of Interests
due to the related parties involved in the transaction and nominal
consideration given whereby the assets and liabilities acquired from the
W K Inc. transaction have been recorded at the carrying book value and no
goodwill has been recorded.
11
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 4 - RELATED PARTY PURCHASE AGREEMENT (Continued)
The following table sets forth supplemental pro forma information regarding
results of operations for Bill The Butcher and WK, Inc. for the three months
ended May 31, 2010 and May 31, 2009 as if the purchase occurred on
September 1, the beginning of each respective fiscal year:
May 31, 2010
------------
Unaudited)
Pro forma
5/31/10
----------------
Revenue $ 505,482
----------------
Net income (loss) $ (388,389)
================
Net (loss) per share - basic $ (0.00)
================
May 31, 2009
------------
(Unaudited)
Pro forma
5/31/09
----------------
Revenue $ -
----------------
Net income (loss) $ (1,000)
================
Net (loss) per share - basic $ (0.00)
================
There are no material, non-recurring items included in the reported pro forma
results of operations.
12
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 4 - RELATED PARTY PURCHASE AGREEMENT (Continued)
The following table sets forth supplemental pro forma information regarding
results of operations for Bill The Butcher and WK, Inc. for the nine months
ended May 31, 2010 and May 31, 2009 as if the purchase occurred on
September 1, the beginning of each respective fiscal year:
May 31, 2010
------------
(Unaudited)
Pro forma
5/31/10
----------------
Revenue $ 727,327
----------------
Net income (loss) $ (661,377)
================
Net (loss) per share - basic $ (0.00)
================
May 31, 2009
------------
(Unaudited)
Pro forma
5/31/09
----------------
Revenue $ -
----------------
Net income (loss) $ (7,100)
================
Net (loss) per share - basic $ (0.00)
================
There are no material, non-recurring items included in the reported pro forma
results of operations.
NOTE 5 - STOCKHOLDERS' EQUITY
The Company is authorized to issue up to 70,000,000 shares of common stock,
par value $0.001 and up to 5,000,000 preferred shares, par value $0.001.
Preferred Stock
- ---------------
There have been no issuances of preferred stock.
Common Stock
- ------------
On August 23, 2006 (inception), the Company issued 1,520,000 shares of its
$0.001 par value common stock to its sole officer and director for $400.
On August 31, 2006, the Company issued 30,400,000 shares of its $0.001 par
value common stock pursuant to a regulation 506 offering.
The Company filed a registration statement on Form SB-2 with the U. S.
Securities and Exchange Commission. The registration was deemed effective on
January 31, 2007. The Company coordinated the registration with the
Securities Division of State of Nevada. The Company offered up to a maximum
of 3,040,000 shares of its $0.001 par value common stock at a price of $0.01
per share pursuant to a self-underwritten offering. When the offering was
closed on July 17, 2007, the maximum number (3,040,000 shares) were sold by
the Company to thirty-six (36) investors in conjunction with the registered
offering for an aggregate of $8,000.00.
During the year ended August 31, 2009 and the year ended August 31, 2008, the
Company's former officer and director contributed $9,750 and $22,
respectively, to the Company as Additional Paid in Capital.
On October 7, 2009, the Company issued 14,098,000 shares of its unregistered
common stock to its new officer and director for cash of $37,100. These
shares were issued pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act.
On October 7, 2009, the Company cancelled 27,360,000 shares of its common
stock previously held by its founder and its largest shareholder for cash
paid of $25,000.
13
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 5 - STOCKHOLDERS' EQUITY (Continued)
Common Stock (Continued)
- ------------------------
On November 17, 2009, the Company initiated a private placement of its common
stock pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended, and Rule 506 of Regulation D, promulgated
thereunder. To date, the Company has received subscription agreements from
five (5) accredited investors in the aggregate amount of $662,500, for the
purchase of 839,170 unregistered shares of the Company's common stock at
$3.00 per share.
On April 9, 2010, the Company put into effect a stock split of the
outstanding shares of its common stock, with a par value of $0.001 per
share ("Common Stock"), on the basis of 3.8 new shares of Common Stock for
every 1 share of Common Stock outstanding. Common stock and additional
paid in capital were adjusted to reflect the additional shares at the par
value of $0.001.
On May 31, 2010 the company cancelled receivables totaling $4,716 paid to
the owner of WK Inc resulting in an adjustment to additional paid in capital.
In May 2010, the Company received subscriptions for the purchase of 260,935
shares of its common stock for total cash paid of $206,000. This transaction
is reflected on the accompanying financial statements as "Subscriptions
Payable."
All references in these financial statements and notes to financial
statements to number of shares, price per share and weighted average number
of shares outstanding of Common Stock prior to this stock split have been
adjusted to reflect the stock split on a retroactive basis unless otherwise
noted.
There have been no other issuances of common or preferred stock.
NOTE 6 - RELATED PARTY TRANSACTIONS
The current officer and sole director of the Company is involved in other
business activities. This person may face a conflict in selecting between
the Company and their other business interests. The Company has not
formulated a policy for the resolution of such conflicts. The Company's sole
officer has started receiving $8,000 per month in the form of remuneration
for her services.
14
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 7 - CONCENTRATION OF CREDIT RISK
Cash Balances
- -------------
The Company maintains its cash in various financial institutions in the
United States. Balances maintained in the United States are insured by the
Federal Deposit Insurance Corporation (FDIC). This government corporation
insured balances up to $100,000 through October 13, 2008. As of October 14,
2008 all non-interest bearing transaction deposit accounts at an FDIC-insured
institution, including all business checking deposit accounts that do not
earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009. All other
deposit accounts at FDIC-insured institutions are insured up to at least
$250,000 per depositor until December 31, 2013.
NOTE 8 - Property and Equipment
Property and equipment consists of the following at May 31:
2010
-------------------
Leasehold improvements $ 169,908
Store equipment 117,177
Delivery truck 32,246
Smallwares 8,330
Computer equipment 6,872
-------------------
334,533
Accumulated depreciation (20,778)
-------------------
$ 313,755
===================
Depreciation expense for the quarter ended May 31, 2010 and 2009 was
$16,132 and $0, respectively.
NOTE 9 - Intangible Assets
Intangible assets consist of the following at May 31:
2010
-------------------
Website domain name $ 4,500
-------------------
4,500
Accumulated amortization (750)
-------------------
$ 3,750
===================
Amortization expense for the quarter ended May 31, 2010 and 2009 was
$375 and $0, respectively.
15
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 10 - LEASE AGREEMENTS
During the nine month period ended May 31, 2010 the Company entered into
a several non-cancelable operating leases and month-to-month leases for
four retail stores, a commissary, and a storage warehouse. The lease
periods for the non-cancelable operating leases range from one to three
years. Lease expense during the quarter ended May 31, 2010 and 2009
was $28,683 and $0, respectively. Future minimum lease payments required
under the non-cancelable operating leases as of May 31 are as follows:
2010 $ 45,075
2011 107,822
2012 105,822
2013 26,667
----------
Total $ 285,444
==========
NOTE 11 - CAPITAL LEASE
On February 16, 2010 the Company entered into a three-year capital lease
agreement for its delivery truck. The terms of the lease required that the
Company provide a $10,000 deposit to be returned in increments of 1/3 at the
end of each lease year. The lease includes a residual payment equal to the
expected fair value of the property at the expiration of the lease term. The
asset and liability under the capital lease are recorded at the lower of the
present value of the minimum lease payments or the fair value of the asset.
The asset is depreciated over its estimated productive life.
Following is a summary of property held under capital lease:
Delivery truck $ 32,246
Accumulated depreciation (1,791)
-----------
$ 30,455
===========
16
BILL THE BUTCHER, INC.
(Formerly Reshoot & Edit, Inc.)
Notes to the Financial Statements
May 31, 2010
(Unaudited)
NOTE 11 - CAPITAL LEASE (Continued)
Minimum future lease payments under capital leases as of May 31, 2010,
were as follows:
2010 $ 2,924
2011 11,695
2012 11,695
2013 4,873
---------
Total minimum payments required $ 31,187
Less amount representing interest 4,520
---------
Net present value of minimum
Lease payments $ 26,667
=========
The interest rate on the capitalized lease is 11.725% and is imputed based on
the lessor's implicit rate of return.
NOTE 12 - SUBSEQUENT EVENTS
On April 9, 2010 the Company borrowed $100,000 to be repaid with interest
at 7% per annum. The note is to be repaid from the next $100,000 equity
raised by the Company, or June 9, 2010 whichever occurs first. The note
holder granted a 90 day extension on the note now due September 7, 2010.
17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to change
based on various important factors (some of which are beyond the Company's
control). The following factors, in addition to others not listed, could cause
the Company's actual results to differ materially from those expressed in
forward looking statements: the strength of the domestic and local economies in
which the Company conducts operations, the impact of current uncertainties in
global economic conditions and the ongoing financial crisis affecting the
domestic and foreign banking system and financial markets, including the impact
on the Company's suppliers and customers, changes in client needs and consumer
spending habits, the impact of competition and technological change on the
Company, the Company's ability to manage its growth effectively, including its
ability to successfully integrate any business which it might acquire, and
currency fluctuations. All forward-looking statements in this report are based
upon information available to the Company on the date of this report. The
Company undertakes no obligation to publicly update or revise any forward-
looking statement, whether as a result of new information, future
events, or otherwise, except as required by law.
Critical Accounting Policies
- ----------------------------
The Company adopted SFAS Rule 141R in regards to its Consolidation Policy.
In December 2007, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 141 (revised 2007), "Business Combinations", ("SFAS 141R"). SFAS
141R establishes principles and requirements for how an acquirer recognizes
and measures in its financial statements the identifiable assets acquired,
including goodwill, the liabilities assumed and any non-controlling interest
in the acquiree. The Statement also establishes disclosure requirements to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. SFAS 141R is effective for business
combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2008.
There have been no other material changes to our critical accounting policies
and estimates from the information provided in Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
included in our Annual Report for the fiscal year ended August 31, 2009.
18
Results of Operations
- ---------------------
Overview of Current Operations
- ------------------------------
Bill The Butcher, Inc. ("the Company") was incorporated under the laws of the
State of Nevada on August 23, 2006, under the name Reshoot & Edit, Inc. Bill
The Butcher, Inc. is focused on becoming a purveyor of open pastured USDA
Organic and USDA/WSDA Natural grass fed beef, pork, chicken, and lamb that
has not been raised with steroids, antibiotics or hormones, and has not been
fed genetically modified corn.
Bill The Butcher, Inc.'s Business Plan
- --------------------------------------
On October 7, 2009, J'Amy Owens, of Seattle Washington, acquired majority
control of the Company through the purchase of 3,710,000 shares of
unregistered common stock acquired for the purchase price of $37,100. With
the purchase of these shares, Ms. Owens became our largest shareholder. J'Amy
Owens purchased control of the Company and has moved the Company in a new
direction. The new management acquired a private company, recently founded by
the new management called WK,Inc. Located in the State of Washington and
doing business under the name "Bill the Butcher", the company sells locally
and U.S. sourced, ethically raised, USDA Organic and USDA/WSDA Natural meat,
free range poultry, pork and lamb. The product line also includes specialties
such as custom marinades, dry rubs and carved-to-order dry aged meats. Bill
the Butcher features open pastured USDA Organic and USDA/WSDA natural grass
fed meats that have not been raised with steroids, antibiotics or hormones
and have not been fed genetically modified grain. Ms. Owens and her co-
founder currently have five stores in the greater Seattle, Washington area,
operating under the "Bill The Butcher" trade name. The company also purchased
a state-of-the-art inventory tracking and sales system called Counterpoint by
Radiant Systems (A public company trading on the NASDAQ with the symbol:
RADS) in order to create the most transparent and traceable "farm to
customer" control over all proteins. Future plans are to sell organic meats
and related products in company owned retail butcher shops and via the
Internet under the "Bill The Butcher" name and business plan.
Competition
- -----------
As the Company develops its business plan to retail open pastured USDA
organic and USDA/WSDA natural grass fed beef products, it will face
competition from many other businesses who sell similar products. The organic
meat industry is intensely competitive with respect to price, location and
food quality, and there are many well-established competitors with
substantially greater financial and other resources than us. The organic
consumer market for meats is often impacted by changes in the taste and
eating habits of the public, economic and political conditions affecting
spending habits, population and traffic patterns. The principal bases of
competition in the industry are the quality and price of the food products
offered.
19
Results of Operations for the quarter ended May 31, 2010
- --------------------------------------------------------
During the three month period ended May 31, 2010, the Company generated
revenues of $469,371 with a gross profit of $149,457. This compares with no
revenues for the same period last year.
During the three months ended May 31, 2010, the Company lost $(386,005)
or $(0.02) per share as compared to a net loss $(1,000) or $(0.00) per
share for the same period last year. During the nine months ended
May 31, 2010, the Company lost $(665,281) or $(0.03) per share as
compared to a net loss of $(7,100) or $(0.00) per share for the same period
last year. This loss represented general and administrative expenses which
paid rent, accounting and legal fees. The increase in general and
administrative expense represents the Company's efforts to further develop
its business plan. Since the Company's inception, on August 23, 2006, the
Company experienced a net loss of $(689,178).
Revenues
- --------
The Company generated revenues of $469,371 during the three months ending
May 31, 2010. As of May 31, 2010, the Company had an accumulated
deficit of $(689,178). There can be no assurances that the Company can
achieve or sustain profitability or that the Company's operating losses
will not increase in the future.
Plan of Operation
- -----------------
Management does not believe that the Company will be able to generate any
significant profit during the coming year, as the company focuses on its new
business plan. Management believes developmental and marketing
costs will most likely exceed any anticipated revenues for the coming year.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
20
Going Concern
- -------------
Going Concern - The Company experienced an accumulated loss of $(689,178)
since its inception on August 23, 2006 through the period ended May 31,
2010. The financial statements have been prepared assuming the Company will
continue to operate as a going concern which contemplates the realization of
assets and the settlement of liabilities in the normal course of business.
No adjustment has been made to the recorded amount of assets or the recorded
amount or classification of liabilities which would be required if the
Company were unable to continue its operations. (See Financial Footnote 2)
Summary of any product research and development that we will perform for the
term of our plan of operation.
- ----------------------------------------------------------------------------
We do not anticipate performing any additional significant product research
and development under our current plan of operation.
Expected purchase or sale of plant and significant equipment.
- -------------------------------------------------------------
At this time, the Company does not anticipate the purchase or sale of any
plant or significant equipment.
Significant changes in the number of employees.
- -----------------------------------------------
As of May 31, 2010, the Company had twenty-five employees, including its sole
officer and director. We are dependent upon our sole officer and director
for our future business development. As our operations expand we anticipate
the need to hire additional employees, consultants and professionals;
however, the exact number is not quantifiable at this time.
Liquidity and Capital Resources
- -------------------------------
Our balance sheet as of May 31, 2010 reflects $303,800 in current
assets, $415,502 in current liabilities and $23,910 in long term liabilities.
Cash and cash equivalents from inception to date have been sufficient to
provide the operating capital necessary to operate to date. The Company is
authorized to issue 70,000,000 shares of its $0.001 par value common stock
and 5,000,000 shares of its $0.001 par value preferred stock. As of
July 19, 2010, the Company has 22,537,169 shares of common stock issued
and outstanding.
21
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
Off-Balance Sheet Arrangements
- ------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: The Company recognizes revenue on an accrual basis as
it invoices for services. Revenue is generally realized or realizable and
earned when all of the following criteria are met: 1) persuasive evidence
of an arrangement exists between the Company and the customer(s);
2) services have been rendered; 3) the price to the customer is fixed or
determinable; and 4) collectability is reasonably assured.
New Accounting Standards
- ------------------------
In May 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic
830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The
amendments in this Update are effective as of the announcement date of
March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to
have a material effect on the financial position, results of operations or
cash flows of the Company.
In April 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-
Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The
amendments in this Update are effective on a prospective basis for milestones
achieved in fiscal years, and interim periods within those years, beginning
on or after June 15, 2010. Early adoption is permitted. If a vendor elects
early adoption and the period of adoption is not the beginning of the
entity's fiscal year, the entity should apply the amendments retrospectively
from the beginning of the year of adoption. The Company does not expect the
provisions of ASU 2010-17 to have a material effect on the financial
position, results of operations or cash flows of the Company.
22
In April 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the
Underlying Equity Security Trades - a consensus of the FASB Emerging Issues
Task Force. The amendments in this Update are effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2010. Earlier application is permitted. The Company does not expect the
provisions of ASU 2010-13 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in
Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does
not change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December
15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU
2010-01 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
23
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances that
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
24
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Management is committed to maintaining disclosure controls and procedures
that are designed to ensure that information required to be disclosed in
its Exchange Act reports is recorded, processed, summarized, and reported
within the time periods specified in the U.S. Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to its management, including its Chief Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.
As required by Rule 13a-15(b) of the Exchange Act, we must carry out an
evaluation of the effectiveness of our disclosure controls and procedures
as of the end of each fiscal quarter, under the supervision and with the
participation of its management, including its Chief Executive Officer and
the Chief Financial Officer, who is also the sole member of our Board of
Directors, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the financial statements in
accordance with U. S. generally accepted accounting principles.
Management, including the chief executive officer and chief financial
officer, does not expect that the Company's disclosure controls and
internal controls will prevent all error and all fraud. Because of its
inherent limitations, a system of internal control over financial reporting
can provide only reasonable, not absolute, assurance that the objectives of
the control system are met and may not prevent or detect misstatements.
Further, over time, control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
With the participation of the chief executive officer and chief financial
officer, our management evaluated the effectiveness of the Company's
internal control over financial reporting as of May 31, 2010 based
upon the framework in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on the assessment performed using the criteria established by COSO,
management has concluded that the Company maintained ineffective internal
control over financial reporting in the following areas:
1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our
board of directors, resulting in ineffective oversight in the
establishment and monitoring of required internal controls and procedures;
2) inadequate segregation of duties consistent with control objectives;
25
3) insufficient written policies and procedures for accounting and
financial reporting with respect to the requirements and application of
US GAAP and SEC disclosure requirements; and
The aforementioned material weaknesses were identified by our Chief
Executive Officer in connection with the review of our financial statements
as of May 31, 2010.
Management believes that the material weaknesses set forth in items (2)
and (3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors results
in ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to
attestation by the Corporation's registered public accounting firm pursuant
to temporary rules of the SEC that permit the Corporation to provide only
the management's report in this quarterly report.
(b) Management's Remediation Initiatives
- -----------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
We plan to appoint one or more outside directors to our board of directors who
shall be appointed to an audit committee resulting in a fully functioning audit
committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures such as reviewing and approving
estimates and assumptions made by management when funds are available to us.
(c) Changes in internal controls over financial reporting
- ----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
26
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 2009 and the discussion in Item
1, above, under "Financial Condition - Liquidity and Capital resources.
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.
27
Item 6 -- Exhibits
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- ------------------------------------------------------------------------------
3.1 Articles of Incorporation, SB-2 3.1 10/3/06
as currently in effect
- ------------------------------------------------------------------------------
3.2 Bylaws SB-2 3.2 10/3/06
as currently in effect
- ------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- ------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- ------------------------------------------------------------------------------
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Bill The Butcher, Inc.
--------------------------
Registrant
Date: July 20, 2010 By: /s/ J'Amy Owens
------------- -------------------------------------
J'Amy Owens
President, Secretary,
Treasurer and Director
(Principal Executive,
Principal Financial and
Principal Accounting Officer)
29