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EX-32.1 - EXHIBIT 32.1 - DYNAMIC VENTURES CORP.exhibit_32-1.htm
EX-31.1 - EXHIBIT 31.1 - DYNAMIC VENTURES CORP.exhibit_31-1.htm
EX-32.2 - EXHIBIT 32.1 - DYNAMIC VENTURES CORP.exhinit_32-2.htm
EX-31.2 - EXHIBIT 31.2 - DYNAMIC VENTURES CORP.exhibit_31-2.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
Amendment No. 1

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2010

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

For the transition period from _____ to _____
 
Commission file number: 333-163913

DYNAMIC VENTURES CORP.
 (Exact name of registrant as specified in its charter)

Delaware
46-0521574
(state or other jurisdiction of incorporation or organization)
(I.R.S. Employer I.D. No.)
   
8776 E Shea Blvd.  Suite B3A-615
Scottsdale, Arizona
85260
(Address of principal executive offices)
(Zip Code)

(480) 968-0207
(Issuer's telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):
Large accelerated filer o                                                                            Accelerated filer o     
Non-accelerated filer o                                                                                                                              Smaller reporting company  þ
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes þ   No þ
 
APPLICABLE ONLY TO CORPORATE ISSUERS:
 
As of January 7, 2011, the Company’s outstanding common stock consisted of 50,000,000 common shares.
 
 
 
 
 
Page - 1

 

 
 
DYNAMIC VENTURES CORP.
  

TABLE OF CONTENTS
 
 
   
  
Page
PART I
3
Item 1.  Financial Statements.
3
Item 2.  Management’s Discussion and Analysis or Plan of Operation.
4
Item 4.  Controls and Procedures.
10
   
PART II
11
Item 1.  Legal Proceedings.
11
Item IA.  Risk Factors.
11
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
11
Item 3.  Defaults Upon Senior Securities.
11
Item 4.  [Removed and Reserved]
11
Item 5.  Other Information.
11
Item 6.  Exhibits.
14
 
 
 
 
 
























 
Page - 2

 





PART I
FINANCIAL INFORMATION



Item 1.  Financial Statements.


 
DYNAMIC VENTURES CORP. AND SUBSIDIARIES
 
INDEX TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
 

   
Unaudited Consolidated Balance Sheet as of September 30, 2010 and Combined Balance Sheet as of December 31, 2009
F-1
Unaudited Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2010 and Unaudited Combined Statements of Operations for the Three Months and Nine Months Ended September 30, 2009
F-2
Unaudited Consolidated Statements of Cash Flows for the  Nine Months Ended September 30, 2010 and Unaudited Combined Statements of Cash Flows for the Nine Months Ended September 30, 2009
F-3
Unaudited Statement of Changes in Equity for the Nine Months Ended September 30, 2010
F-4
Notes to Financial Statements
F-5
 
 
 
























 
Page - 3

 





DYNAMIC VENTURES CORP. AND SUBSIDIARIES
Unaudited Balance Sheets
As Of September 30, 2010 and December 31, 2009
             
   
Consolidated
   
Combined
 
   
September 30, 2010
   
December 31, 2009
 
Assets:
           
             
Cash and cash equivalents
 
$
240,416
   
$
280,649
 
Accounts receivable, net
   
204,580
     
301,956
 
Inventories
   
25,839
     
7,886
 
Contracts in process
   
61,047
     
39,145
 
Other current assets
   
62,800
     
21,003
 
                 
   Total Current Assets
   
594,682
     
650,639
 
                 
Property and equipment, net
   
1,595
     
26,796
 
Other  long term assets
           
26,451
 
  Total Assets
 
$
596,277
   
$
703,886
 
                 
Liabilities and Stockholders' Equity
               
                 
Current Liabilities:
               
Accounts payable
 
$
63,463
   
$
18,170
 
Customer deposits
   
23,627
         
Deferred Income
   
45,913
     
27,250
 
Royalty payable - contracts
   
39,139
     
91,940
 
Loans from related parties - Directors and stockholders
   
283,547
     
10,326
 
                 
   Total Current Liabilities
   
455,689
     
147,686
 
                 
Note payable
   
50,000
         
                 
   Total Liabilities
   
505,689
     
147,686
 
                 
                 
Equity
               
                 
Common stock  - par value $.0001 per share, 200,000,000
               
authorized , 50,000,000 issued and outstanding
   
5,000
         
                 
                 
    Additional paid-in capital
   
120,027
     
1,744,201
 
    Accumulated earning/deficit
   
(34,439
)
   
(1,188,001
)
                 
      Stockholders' Equity
   
90,588
     
556,200
 
                 
   Total Liabilities and Stockholders' Equity
 
$
596,277
   
$
703,886
 


The accompanying notes to financial statements are an integral part of these statements.
 
 
 
Page - 4

 
 
 
 
DYNAMIC VENTURES CORP. AND SUBSIDIARIES
Unaudited Statements of Operations
For The Three Months and Nine Months Ended September 30, 2010 And September 30, 2009
                         
   
Three Months Ended
   
Three Months Ended
   
Nine Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
   
September 30,
   
September 30,
 
   
2010
Consolidated
   
2009
Combined
   
2010
Consolidated
   
2009
Combined
 
Contract revenue
 
$
961,625
   
$
888,533
   
$
2,653,487
   
$
2,224,707
 
Software revenue
   
3,000
     
19,875
     
9,000
     
52,664
 
Total revenue
   
964,625
     
908,408
     
2,662,487
     
2,277,371
 
                                 
Costs of contract revenue
   
865,346
     
679,655
     
2,164,837
     
1,709,117
 
Cost of software revenue
                               
Total cost of revenue
   
865,346
     
679,655
     
2,164,837
     
1,709,117
 
                                 
Gross Margin
   
99,279
     
228,753
     
497,650
     
568,254
 
                                 
Operating expense:
                               
 Selling, general and administrative
   
181,229
     
258,373
     
506,726
     
935,494
 
 Depreciation and amortization expense
           
18,809
     
13,218
     
56,427
 
Total operating expenses
   
181,229
     
277,182
     
519,944
     
991,921
 
                                 
Other income (expense):
                               
                                 
  Other income
   
3,117
     
(1,529
)
   
3,855
     
31,432
 
                                 
                                 
Total other income(expense)
   
3,117
     
(1,529
)
   
3,855
     
31,432
 
                                 
Income(loss) before income taxes
   
(78,833
)
   
(49,958
)
   
(18,439
)
   
(392,235
)
                                 
  Provision for income taxes
                               
                                 
Net income (loss)
 
$
(78,833
)
 
$
(49,958
)
 
$
(18,439
)
 
$
(392,235
)
                                 
Net income (loss)  per common share from Continuing Operations:
                 
Basic & Diluted
 
$
(0.002
)
 
$
(0.002
)
 
$
(0.000
)
 
$
(0.017
)
Diluted
 
$
(0.002
)
 
$
(0.002
)
 
$
(0.000
)
 
$
(0.017
)
                                 
                                 
Weighted average common shares outstanding:
                         
Basic & Diluted
   
38,564,356
     
22,500,000
     
28,443,223
     
22,500,000
 

The accompanying notes to financial statements are an integral part of these statements.
 
 
 
 
Page - 5

 
 
 
 
DYNAMIC VENTURES CORP. AND SUBSIDIARIES
Unaudited Statement of Cash Flows
For The Nine Months Ended September 30, 2010 and
September 30, 2009
             
   
Nine Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2010
Consolidated
   
2009
Combined
 
OPERATING ACTIVITIES
           
Net Income (loss)
 
$
(18,439
)
 
$
(392,235
)
Adjustments to reconcile Net Income
               
to net cash provided by operations:
               
Depreciation and Amortization
   
13,686
     
56,427
 
 Accounts Receivable
   
97,376
     
91,298
 
Other receivables
           
29,704
 
Prepaids
   
13,298
     
(1,633
)
Inventory
   
(17,953
)
   
(20,189
)
Contracts in process
   
(21,902
)
   
(116,349
)
Other current assets
   
(59,172
)
       
Accounts Payable
   
38,766
     
116,644
 
Unearned Income
   
18,663
     
123,165
 
Royalty Payable
   
(52,801
)
   
(34,296
)
Customer Deposits
   
23,627
     
18,240
 
Accrued expenses
   
(5,037
)
   
(36,176
)
Net Cash ( used ) by Operating Activities
   
30,112
     
(165,400
)
                 
INVESTING ACTIVITIES
 
               
Purchase property and equipment
 
   
(1,595
)
   
(2,538
)
Cash distribution
   
(150,000
)          
       
Net cash provided ( used ) by Investing Activities
   
(151,595
)  
   
(2,538
)
                 
FINANCING ACTIVITIES
               
Borrowing from ( repayments to ) related parties
   
30,250
)
   
17,436
 
Note payable
   
50,000
     
89,646
 
Net cash provided by Financing Activities
   
80,250
     
107,082
 
                 
Net cash ( decrease ) for period
   
(40,233
)
   
(60,856
)
Cash at beginning of period
   
280,649
     
219,768
 
Cash at end of period
 
$
240,416
   
$
158,912
 
                 
SUPPLEMENTAL CASH FLOW DISCLOSURE
               
Contribution of expenses by member
 
$
37,065
         
Purchase of FF&E with note
 
$
20,545
         
Distribution of equity for expenses
               
paid by Company
 
$
12,495 
         
                                                                                                         
The accompanying notes to financial statements are an integral part of these statements.
 
 
 
 
Page - 6

 
 
 
 
DYNAMIC VENTURES CORP. AND SUBSIDIARIES
Unaudited Statement Of Changes in Equity
For The Nine Months Ended September 30, 2010
 
   
   
Common Stock
                   
   
Shares
   
Value
   
Contributed Capital
   
Retained Earnings
   
Total
 
                               
Balance as of 12/31/09
                1,744,201       (1,188,001 )     556,200  
   Stock dividend
    22,500,000       2,250               (2,250 )     -  
   Recapitalization
                    (1,176,001 )     1,176,001       -  
   Net deemed distribution
                    (448,173 )     -       (448,173 )
   Net Income before recapitalization
                            12,000       -  
   Net Income after recapitalization
                            48,394       -  
      total net income
                    -       60,394       60,394  
Balance as of 6/30/10
    22,500,000       2,250       120,027       46,144       168,421  
Share issued for Stock Exchange
    27,500,000       2,750               (1,750 )     1,000  
                                      -  
   Net Income (loss)
                            (78,833 )     (78,833 )
Balance as of 9/30/10
    50,000,000       5,000       120,027       (34,439 )     90,588  
                                         
The equity roll reflects the recapitalization that occurred as of 3/31/10 with BBSI buying out Floor Art and BDC. It also reflects the subsequent stock dividend of 5:1 which for accounting purposes was treated like a stock split due to > 25% of shares issued and significant change in market price (ASC 505).
 


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


















 
Page - 7

 


 

DYNAMIC VENTURES CORP.
DYNAMIC VENTURES CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
 
Summary of Significant Accounting Policies

Basis of Presentation and Organization

Organization – Dynamic Ventures Corp. (the “Company”) was incorporated in the State of Delaware on December 22, 2008. The Company initially intended to engage in the manufacturing and distribution of a non-powered toothbrush with longitudinal to lateral motion conversion.  This never materialized and the Company became a shell public company.

Bundled Builder Solutions Inc. (“Bundled Builder” also “BBSI”) was incorporated on August 29, 2008 under the laws of the state of Delaware.  Bundled Builder was formed to provide construction services through the combination of trade contractors and management integrated into one organization.  It acquired Floor Art, LLC (“Floor Art") and Builder Design Center, LLC (“BDC") in an asset purchase transaction effective March 31, 2010. These companies have common ownership and all significant intercompany accounts and transactions have been eliminated in presenting the combined/consolidated results.  Floor Art’s primary business is installation of flooring. BDC develops software for use by builders and designers.  Both subsidiaries have been in business for over five years.  

Additionally, Bundled Builder provides construction management services to Native American communities in the Southwestern United States through a contract with a native owned company, Tribal Building Solutions, LLC.  There is no common ownership between the Company and Tribal Building Solutions, LLC.  This contract relationship began in September of 2009.

Bundled Builder also provides construction management for structured insulated panels’ construction (SIPS) for commercial projects throughout the United States through its subsidiary, EZ Build Systems, LLC which was formed in August of 2010.

On August 2, 2010, the Company entered into a share exchange agreement with BBSI whereby the Company obtained all of the issued and outstanding shares of BBSI, in exchange for the issuance of 22,500,000 common shares of the Company (originally 4,500,000 shares adjusted for a 5:1 stock split).  See discussion under “Subsequent Events”.  The transaction results in BBSI becoming a wholly-owned subsidiary of the Company.  As a result of the share exchange, the Company intends to carry on the business of BBSI as the primary business.
 
Prior to the closing of the share exchange, there were no options or warrants to purchase shares of capital stock of the Company or BBSI outstanding and  the Company  has not adopted an equity incentive plan or otherwise reserved shares for issuance as incentive awards to officers, directors, employees and other qualified persons in the future.
 
Basis of Presentation – While legally the Company acquired BBSI, for financial presentation purposes this is considered a “reverse acquisition” where BBSI is considered the acquirer. Therefore the accompanying interim, unaudited consolidated financial statements include the activity for BBSI on a combined basis prior to March 31, 2010, and on a consolidated basis after that date.  Operations of the Company are included from August 2, 2010 to September 30, 2010, as a result of its acquisition for financial reporting purposes.
 
The accompanying consolidated financial statements are unaudited.  However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2010, and the results of their operations and their cash flows for the periods ended September 30, 2010, and September 30, 2009, respectively.  These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2010.  All significant intercompany accounts and transactions have been eliminated in consolidation.  
 
 
 
 
Page - 8

 
 
 
Use of Estimates – The preparation of 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 disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from these estimates.  Principles of Combination – The interim consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.
 
Cash and Cash Equivalents 

The Company considers all highly-liquid investments purchased with an original maturity of three months or less on the purchase date to be cash equivalents.

Valuation of Accounts Receivable – The Company accrues for revenue based on the completion of work.  Billings are due within 30 days.  Accounts receivable are reviewed to determine which are doubtful of collection.  In making the determination of the appropriate allowance for doubtful accounts, the Company considers specific accounts, analysis of accounts receivable agings, changes in customer payment terms, historical write-offs, changes in customer demand and relationships, concentrations of credit risk and customer credit worthiness.  The allowance for doubtful accounts totaled $35,000 at September 30, 2010.  
 
Property and Equipment – Property and equipment are stated at cost and depreciated using the straight-line method over estimated useful lives of three to seven years.  Upon retirement or sale, the costs of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized.  Repairs and maintenance charges are expensed as incurred.
 
Inventory – Inventory consists of carpet and carpet pad which are valued at the lower of cost or market.  As of September 30, 2010, there was no allowance for inventory obsolescence.
 
Long-Lived Assets – The Company evaluates potential impairment of long-lived assets, in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, which requires the Company to (a) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and (b) measure an impairment loss as the difference between the carrying amount and fair value of the asset. The Company believes that long-lived assets in the accompanying balance sheet are appropriately valued at September 30, 2010, and no impairment has been recorded.
 
Revenue Recognition – The Company derives revenue from BBSI and its subsidiaries for their specific line of business.
 
The Company recognizes revenue for Floor Art in accordance with ASU 605-35-50, Accounting for Performance of Construction-Type and Certain Product-Type Contracts.  Under this rule, the Company can perform work under a fixed-price contract or a time-and-materials contract.  As these jobs are short in nature, revenue is recognized at the completion of the project.  For contracts in progress but not completed, costs incurred are accumulated until completion of the contract.  These costs consist of labor and materials which at September 30, 2010 was $61,047.
 
BDC is providing a software resource for builders and designers to use in the design center selection process.  To access the software, there is a fee billed at the beginning of the contract period which extends, generally, a period of six months. As the billing and collection of fees are collected up front, the Company has deferred revenue for the portion of revenue received, but not earned, at year end.  For the nine months ended September 30, 2010 the Company had deferred revenue of $45,913.
 
The Company recognizes revenue for BBSI construction management projects in Native American communities and for EZ-Build Systems’ commercial projects in accordance with ASU 605-35-50, Accounting for Performance of Construction-Type and Certain Product-Type Contracts.  Under this rule, the Company can perform work under a fixed-price contract or a time-and-materials contract.  As these jobs are longer in nature, revenue is recognized as a percentage of completion based on the percentage of costs paid on the total cost of the project.  For contracts  in progress but not completed, costs incurred are charged to costs of contract revenues at the same time the revenues are recognized.  At September 30, 2010 there were no contracts in progress for these projects.
 
 
 
 
Page - 9

 
 
 
Income (Loss) per Common Share

Basic income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period.  The 22,500,000 (adjusted for the 5:1 stock split) shares issued for the August 2, 2010 stock exchange described in paragraph 1 are considered outstanding for the entire 3 month and 9 month periods ending September 30, 2010 and 2009.  Dynamic Ventures Corp shares issued prior to the stock exchange agreement totaling 27,500,000 (adjusted for the 5:1 stock split) are considered outstanding from August 2, 2010, the effective date of the stock exchange agreement.  Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  There were no dilutive financial instruments issued or outstanding for the period ended September 30, 2010.
 
Income Taxes – Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes.  The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
 
The Company maintains a valuation allowance with respect to deferred tax assets.  The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.
 
The Financial Accounting Standards Board issued new guidance on accounting for uncertainty in income taxes.  The Company adopted this new guidance for the nine months ended September 30, 2010, and year ended December 31, 2009.  Management evaluated the Company’s tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance.  The Company recognized interest and penalties related to uncertain tax positions in income tax expense.  As of September 30, 2010, the Company made no provision for interest or penalties related to uncertain tax positions.  The company files income tax returns in the U.S. federal jurisdiction and Arizona.  There are currently no federal or state income tax examinations underway for these jurisdictions.  Given that the Company was newly formed in 2008, the Company is not subject to income tax examinations by the U.S. federal, state or local tax authorities for years before 2008.
 
Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods.  Considerable judgment is required in estimating fair value.  Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange.  As of March 31, 2010, the carrying value of accrued liabilities, and loans from directors and stockholders approximated fair value due to the short-term nature and maturity of these instruments.
 
Fiscal Year End

The Company has adopted a fiscal year end of December 31.
 
 
 
 
Page - 10

 
 

Patent

On September 20, 2009, the Company entered into a Patent Transfer and Sale Agreement whereby they acquired all of the right, title and interest in the patent known as the “Toothbrush with longitudinal to lateral motion conversion” for consideration of $27,000.  The United States Patent number is 6,918,154.  Under the terms of the Patent Transfer and Sale Agreement, the Company was assigned rights to the patent free of any liens, claims, royalties, licenses, security interests or other encumbrances.  The cost of obtaining the patent was expensed.  The patent was issued on July 19, 2005 and assigned to the Company on December 1, 2009.

Loans from Related Parties - Directors and Stockholders

As of September 30, 2010, loans from related parties amounted to $283,547 and represented working capital advances from principal officers and directors who are also stockholders of the Company.  The loans are unsecured, non-interest bearing, and due on demand. 

Common Stock

On March 29, 2010, the Company completed an offering of 2,500,000 shares of newly issued common stock at an offering price of $0.03 per share for proceeds of $75,000 by filing a Registration Statement on Form S-1 with the Securities and Exchange Commission ( S.E.C.)

For financial reporting presentation purposes, BBSI issued 22,500,000 (4,500,000 shares adjusted for the 5:1 stock dividend) shares of its common stock to acquire the Company.  Therefore the operations of the Company are not reflected within these financial statements until after August 2, 2010, and the financial statements before this date are of BBSI.
  
Related Party Transactions

As a result of the acquisition of Floor Art and BDC by  BBSI  on March 31, 2010,  BBSI owed a Director for assets acquired in excess of liabilities assumed and for cash advanced to the affiliated entities for operations. The balance due the Director as of September 30, 2010 is $283,547.  This amount is unsecured, non-interest bearing, and due upon demand.

In August of 2010, the Company hired JENAL Consulting, Inc. to provide the company with marketing of the SIPS panel construction system.  The owner of JENAL is the wife of Al Cain, director.  The Company has paid JENAL $21,332 as of September 30,2010.
 
Litigation – From time to time, the Company may be subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the ordinary course of business activities.  The Company is not currently aware of any legal proceedings or claims that will have, individually or in the aggregate, a material effect on the Company’s financial condition, results of operations or cash flows

Notes payable - The Company entered into note payable with National Cash and Credit, LLC on August 27, 2010, for working capital in the amount of $50,000.  Terms of the note call for repayment in two years with interest accrued at 18% per year.

Subsequent Events

Subsequent to September 30, 2010 the Company declared a 5:1 stock dividend on October 14, 2010 to stockholders of record on November 9, 2010.  The issuance date for each share issued as a stock dividend will be deemed to be the same as the issuance date of their counterpart shares in respect of which they were issued.  Likewise, the shares issued as a stock dividend will carry the same restrictions as to trading, if any, as their counterpart shares in respect of which they were issued.  Due to the size of the stock dividend it has been accounted for as a stock split and the effect of this stock dividend has been reflected in the financial statements and pro forma financial statements for periods ending September 30, 2010 and September 30, 2009.
 
 
 

 
 
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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Safe Harbor Statement

This report on Form 10-Q/A contains certain forward-looking statements.  All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs, and risk of declining revenues.  Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors.  These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements.  The following discusses our financial condition and results of operations based upon our consolidated financial statements which have been prepared in conformity with accounting principles generally accepted in the United States.  It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

Company Overview
 
We were incorporated in Delaware on December 22, 2008.  We initially intended to engage in the manufacturing and distribution of a non-powered toothbrush with longitudinal to lateral motion conversion.  On August 2, 2010 we entered into a share exchange agreement with Bundled Builder Solutions Inc. (“Bundled Builder”) whereby we acquired all of the issued and outstanding shares of Bundled Builder, in exchange for the issuance of 4,500,000 (22,500,000 after effect of a 5 for 1 forward stock split) common shares.  The transaction resulted in Bundled Builder becoming our wholly-owned subsidiary.  Prior to the share exchange, we were a development stage company with no operations. As a result of the acquisition, we now intend to carry on the business of Bundled Builder as our primary business.

Bundled Builder was incorporated on August 29, 2008 under the laws of the state of Delaware.  Bundled Builder provides construction services through the combination of trade contractors and management integrated into one consolidated organization.  On March 31, 2010, Bundle Builder acquired Floor Art, LLC (“Floor Art") and Builder Design Center, LLC (“BDC”) in an asset purchase transaction.  These companies have common ownership and all significant intercompany accounts and transactions have been eliminated in presenting the consolidated results.  Floor Art has been an ongoing company for fifteen years and its primary business is focused on the interior finishes of a building such as installation of flooring and countertops.  BDC develops software for use by builders and designers.  Both subsidiaries have been in business for over five years.

Bundled Builder offers construction management services for the following three types of projects, which make up our current product line: a) construction of residential houses in Native American communities; b) use of structured insulated panels ("SIPS") for commercial buildings; and c) construction by “bundles” of related trade activities for both residential and commercial projects.

Regarding the first product, Bundled Builder provides construction management services to Native American communities in the Southwestern United States through a contract with a Native American owned company, Tribal Building Solutions, LLC, which began in September, 2009.  There is no common ownership between the Company and Tribal Building Solutions, LLC.  Currently, we provide construction management services primarily for residential homes within these Native American communities, but we anticipate expanding our services in the near future to include commercial buildings and projects.  The Native American product began in August of 2010 with the construction of six homes which are in their final stages of construction and are expected to be completed in January 2011.  Operating results from the Native American product did not begin until August of 2010.
 
 
 
 
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Bundled Builder’s second product involves providing construction management services for the construction of “green” light commercial buildings using structured insulated panels ("SIPS").  Light commercial buildings by definition are buildings that have five stories or less. We offer this product throughout the United States only through Bundled Builders’ subsidiary, EZ Build Systems, LLC (“EZ Systems") which was formed in August of 2010.  SIPS are high performance building panels used in floors, walls and roofs that are extremely strong, energy efficient and cost effective.  The panels form the shell of the commercial building. As part of our services, we work with the engineer, architect and customer to design the most appropriate building shell based on the customer’s needs.  Then, we order the panels from the manufacturer, work with the supplier on receiving the panels, deliver the panels to the construction site and oversee installation of the SIPS by the general contractor.  Our focus for this product is on small hotels (five stories or less) and other businesses within the hospitality industry.  Currently, our only SIPS customer is the Bossier, LA hotel, a boutique hotel, which is in its final design stage and will begin construction at the beginning of March 2011.  The Bossier, LA hotel has not yet begun to generate revenues.

Our third product involves providing construction management services for “bundles” of related trade activities for both residential and commercial buildings.  Bundled building means combining several construction trade activities into one group based on interrelated functions and installation sequences.  Here, part of our services includes the actual construction of these bundles.  For example, Floor Art provides finishes for houses and commercial buildings including flooring, tile, counter tops, and bath surroundings.  Currently, Floor Art is our only trade bundle in operation.  Floor Art has been an ongoing business for fifteen years.

Liquidity and Capital Resources

As of September 30, 2010, we had cash and cash equivalents of $240,416 and a working capital surplus of $138,993.  As of September 30, 2010 our accumulated deficit was $16,262.  For the nine months ended September 30, 2010 our net loss was $18,439 compared to $392,235 during the same period in 2009.  This decrease was due mostly to lower selling, general and administrative fees.

Our loss for the nine months ended September 30, 2010 was $18,439. Cash generated from operating activities was $30,112, cash used in financing activities was $151,595, and cash generated from financing activities was $80,250. This resulted in a decrease in our cash position of $40,233.    

We generated net cash of $30,112 in operating activities for the nine months ended September 30, 2010 compared to net use of cash of $165,400 in operating activities for the same period in 2009.  We used net cash of $151,595 in investing activities for the nine months ended September 30, 2010 compared to net cash of $2,538 for investing activities during the same period in 2009.  During the nine months ended September 30, 2010 our monthly cash generated by operating activities was approximately $3,456, compared to monthly cash required by operating activities of approximately $18,377 for the same period in 2009.

We expect to require a total of approximately $1,000,000 to fully carry out our business plan over the next twelve months beginning December 2010 as set out in this table:
   
Description
                                                                              Estimated Expense
Marketing our services
$200,000
Payment of accounts payable and accrued liabilities
$100,000
General and administrative expenses 
$550,000
Professional fees 
$100,000
Investor relations expenses
$50,000
Total
$1,000,000
 
 
 
 
 
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We intend to meet our cash requirements for the next 12 months through operations and external sources: a combination of debt financing and equity financing through private placements.  We are currently not in good short-term financial standing.  We will not have enough positive internal operating cash flow until we can generate substantial revenues, which may take the next year to fully realize.  There is no assurance we will achieve profitable operations.  We have historically financed our operations primarily by cash flows generated through operations and cash infusions from officers and outside investors in exchange for debt and/or common stock.

These consolidated financial statements have been prepared on the assumption that we are a going concern, meaning we will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  Different bases of measurement may be appropriate when a company is not expected to continue operations for the foreseeable future.  Our continuation as a going concern is dependent upon our ability to attain profitable operations and generate funds from there, and/or raise equity capital or borrowings sufficient to meet current and future obligations.  Management plans to raise equity financings over the next twelve months to finance operations. There is no guarantee that we will be able to complete any of these objectives.  

We intend to raise funds to meet our cash requirements (approximately $1,000,000) from operations, private placements, loans, or possibly a registered public offering (either self-underwritten or through a broker-dealer) within the next year. At this time we do not have any commitments from any broker-dealer to provide us with financing.  There is no guarantee that we will be successful in raising any capital.  There is no assurance that we will be able to obtain such additional funds on favorable terms, if at all.  If we fail in raising capital, our business may fail and we may curtail or cease our operations.

We believe that a major industry trend is the construction of energy efficient buildings.  All of the commercial buildings that we design under the SIPS system are designed to be certified under the Leadership in Energy & Environmental Design (“LEED”) system.  LEED is an internationally recognized “green” building certification system that provides a set of standards for the environmentally sustainable design, construction and operation of buildings and neighborhoods.  We believe that the LEED certification of our SIPS product gives us a significant market advantage.  In our experience, financial lenders also prefer LEED certified projects, which increases the chances that we will receive funding for our projects.

In regard to our Native American housing product, we believe that we have a niche in this market because there is a great need for this type of housing in Arizona and New Mexico, where we are based, as well as throughout the United States.  We have seen that Native Americans are gaining a stronger financial footing and are more able to invest in housing.  We believe that the homebuilding market will remain low but that it has reached a bottoming out level.  Significant numbers of foreclosures are occurring nationwide and we anticipate that there will be a demand for our “bundles” product for rehabilitation of these REO properties.

Overall, we believe that our revenues will increase in 2011 and 2012 for the reasons stated above as well as other projects and business opportunities we are currently in the process of discussing and negotiating.  However, as there have been no definitive agreements reached other than those previously disclosed, the terms and conditions of any contemplated projects or business opportunities remain confidential information.

Results of Operations for the three months ended September 30, 2010 compared to the three months ended September 30, 2009

Revenues and Cost of Revenues

We earned gross revenues of $964,625 during the three months ending on September 30, 2010: Floor Art $572,007, BBSI $389,618, and BDC $3,000.  We earned gross revenues of $908,408 for the same period in 2009: Floor Art $888,533 and BDC $19,875.  Revenues for Floor Art and BDC are lower in 2010 due to the slow down in homebuilding activity from 2009. Revenues for BBSI don’t begin until August, 2010 when BBSI started its first Native American housing project.   The addition of BBSI revenues results in the increase of total sales between the quarters.

Our total cost of revenue for the three months ended September 30, 2010 was $865,346: Floor Art $497,361, BBSI  $367,985, and BDC  $0.  Total cost of revenue was $679,655 for the three months ended September 30, 2009: Floor Art $679,655, BBSI $0, and BDC $0.  Costs of revenues include costs for job related labor, material, subcontractor costs for engineering, architects, trade contractors, and job site general conditions.  Gross margin for Floor Art decreased from 23% for the three months ended September 30, 2009 to 13% for the same period in 2010 due to pricing pressures incurred while competing for market share in the decreasing homebuilding market.
 
 
 
 
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Net Loss

We incurred a net loss of $78,833 for the three months ended September 30, 2010, compared to a net loss of $49,958, for the same period in 2009.  This increase in net loss is due to reduced sales and gross margins discussed above offset by a reduction in total operating costs of $95,953.    

Expenses

Our total operating expenses decreased from $277,182 to $181,229 for the three months ended September 30, 2010 compared to the same period in 2009.  This decrease in expenses is due to lower selling, general and administrative expenses.  Our general and administrative expenses consist of payroll and related payroll taxes, employer’s portion of employee health insurance costs, legal and accounting fees, bank charges, travel, meals and entertainment, office rent and maintenance, communication expenses (internet, fax, and telephone), courier, postage costs, office supplies.  Our selling, general and administrative expenses decreased $77,144 from $258,373 to $181,229 for the three months ended September 30, 2010 compared to the same period in 2009, due to reduced payroll costs caused by staff reductions due to sales decreases and reduced occupancy costs due to reduced rent as a result of relocating the corporate office.  

Our depreciation and amortization expense decreased $18,809 from $18,809 to $nil for the three months ended September 30, 2010 compared to the same period in 2009.  The Company did not acquire any depreciable assets in the acquisition of Floor Art and BDC. The Company had no depreciable assets during the three months ended September 30, 2010.
 
Results of Operations for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009

Revenues and Cost of Revenues

We earned gross revenues of $2,662,487 during the nine months ending on September 30, 2010: Floor Art $2,263,859, BBSI $389,618, and BDC $9,000.  We earned gross revenues of $2,277,371 for the same period in 2009: Floor Art $2,224,707 and BDC $52,664.  Revenues for Floor Art remained fairly constant due to an increase in sales in first quarter 2010 due to the short term upswing in housing starts from the Federal tax rebates.  BDC sales are lower in 2010 due to the slow down in homebuilding activity from 2009. BDC did not share in the temporary upswing in first quarter revenues in 2010 since BDC revenues occur earlier in the construction process than Floor Art revenues and were thus included in 2009. Revenues for BBSI don’t begin until August, 2010 when BBSI started its first Native American housing project.  The addition of BBSI revenues results in the increase of total sales between the periods.
 
 
Our total cost of revenue for the nine months ended September 30, 2010 was $2,164,837:  Floor Art $1,796,852, BBSI $367,985, and BDC $0.  Total cost of revenue was $1,709,117 for the nine months ended September 30, 2009: Floor Art $1,709,117, BBSI $0, and BDC $0. Costs of revenues include costs for job related labor, material, subcontractor costs for engineering, architects, trade contractors, and job site general conditions. Gross margin for Floor Art decreased from 25% for the nine months ended September 30, 2009 to 19% for the same period in 2010 due to pricing pressures incurred while competing for market share in the decreasing homebuilding market.
 
Net Loss
 
We incurred a net loss of $18,439 for the nine months ended September 30, 2010, compared to a net loss of $392,235 for the same period in 2009.  This decrease in net loss is due to reduced sales and gross margins of $70,604 discussed above offset by a reduction in total operating costs of $471,977.    
 
 
 
 
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Expenses

Our total operating expenses decreased from $991,921 to $519,944 for the nine months ended September 30, 2010 compared to the same period in 2009. .  This decrease in expenses is due to lower selling, general and administrative expenses.  Our general and administrative expenses consist of payroll and related payroll taxes, employer’s portion of employee health insurance costs, legal and accounting fees, bank charges, travel, meals and entertainment, office rent and maintenance, communication expenses (internet, fax, and telephone), courier, postage costs, office supplies. Our selling, general and administrative expenses decreased $428,768 from $935,494 to $506,726 for the nine months ended September 30, 2010 compared to the same period in 2009, due to reduced payroll costs caused by staff reductions due to sales decreases and reduced occupancy costs due to reduced rent as a result of relocating the corporate office.  
  
Our depreciation and amortization expense decreased $43,209 from $56,427 to $13,218 for the nine months ended September 30, 2010 compared to the same period in 2009.

Cash

Cash decreased for the nine months ended September 30, 2010 by $40,233 as a result of cash generated by operating activities of $31,112, cash used in investing activities of $151,595, and cash provided by financing activities of $80,250.  The cash generated by operating activities resulted from a decrease in accounts payable and a decrease in accounts receivable which are the result of the decreasing homebuilding market.  Cash used in investing was for a partial repayment of $150,000 to a Director on funds advanced to the Company.
 
Cash decreased for the nine months ended September 30, 2009 by $60,856 as a result of cash used by operating activities of $165,400, cash used in investing activities of $2,538, and cash provided by financing activities of $107,082.  The net loss for the quarter of $392,235 less non-cash depreciation and amortization of $56,427 was funded by a reduction in receivables, increases in accounts payable, and cash provided by financing activities.
 
Off-Balance Sheet Arrangements

As of September 30, 2010, we had no off-balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.  Quantitative and Qualitative Disclosure About Market Risks.

Not applicable.
 
Item 4.  Controls and Procedures.

Disclosure Controls and Procedures
 
Under the supervision and with the participation of our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of September 30, 2010. Based on this evaluation, our chief executive officer and chief financial officer concluded as of September 30, 2010, that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
 
 
 
 
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Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

During the quarter ended September 30, 2010 the Company hired a new chief financial officer as a result of the stock exchange.  This was not as a result of any control weaknesses or acts by the CEO or CFO.  This change in the Company’s internal controls has not materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II
OTHER INFORMATION

Item 1.          Legal Proceedings.

None.

Item 1A.       Risk Factors

Not applicable to smaller reporting companies.

Item 2.                           Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.                           Defaults Upon Senior Securities.

None.

Item 4.                          [Removed and Reserved]

None.

Item 5.                          Other Information.
 
None.
 
Item 6.                          Exhibits.

  
 
 
 
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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     
 
Dynamic Ventures Corp.
 
  

     
Date: January 21, 2011
By:
/s/ Paul Kalkbrenner
  
Name: Paul Kalkbrenner
Title: President and Director
(Principal Executive Officer)


     
Date: January 21, 2011
By:
/s/ Mark Summers
  
Name: Mark Summers
Title: Chief Financial Officer
(Principal  Accounting Officer)
 
 
 
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