Urban Barns Foods Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - SEC. 906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - Urban Barns Foods Inc.	ex32-1.htm
EX-31.2 - SEC. 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - Urban Barns Foods Inc.	ex31-2.htm
EX-31.1 - SEC. 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - Urban Barns Foods Inc.	ex31-1.htm
EX-32.2 - SEC. 906 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - Urban Barns Foods Inc.	ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 January 31, 2011

o 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: 333-145897

URBAN BARNS FOODS INC.

(Exact name of registrant as specified in its charter)

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

7170 Glover Road Milner, B.C., Canada V0X 1T0		604-888-0420
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)

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 x No o

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

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 o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. o Yes o No

APPLICABLE ONLY TO CORPORATE ISSUERS

As of March 16, 2011 the registrant’s outstanding common stock consisted of 53,304,758 shares.

Table of Contents

PART I - FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Results of Operations	3
Balance Sheet Data: 1/31/11	3
Plan of Operation	4
ITEM 1. LEGAL PROCEEDING	6
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCCEDS	6
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	6
ITEM 4. REMOVED AND RESERVED	6
ITEM 5. OTHER INFORMATION	6

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited interim financial statements of Urban Barns Foods Inc. (the “Company”, “Urban Barns”, “we”, “our”, “us”) follow. All currency references in this report are to U.S. dollars unless otherwise noted.

Urban Barns Foods Inc.

(A Development Stage Company)

January 31, 2011

(Unaudited)

Financial Statement Index

Consolidated Balance Sheets	F-1
Consolidated Statements of Operations	F-2
Consolidated Statements of Cash Flows	F-3
Notes to the Consolidated Financial Statements	F-4

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Consolidated Balance Sheets

(expressed in U.S. dollars)

	January 31, 2011 $ (unaudited)			July 31, 2010 $

ASSETS

Current Assets

Cash		285			5,642
Prepaid Expenses		2,172			23,410

Total Current Assets		2,457			29,052

Deferred Financing Charges		250,000			250,000
Property and Equipment (Note 3)		12,457			13,686

Total Assets		264,914			292,738


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts Payable		45,030			20,685
Due to a Related Party (Note 4)		35,935			4,423

Total Liabilities		80,965			25,108

Stockholders’ Equity

Preferred Stock Authorized: 100,000,000 preferred shares, with a par value of $0.01 per share Issued and outstanding: nil shares		–			–

Common Stock Authorized: 100,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 53,304,768 and 49,804,768 common shares, respectively		53,305			49,805

Additional Paid-In Capital		757,344			569,176

Accumulated Deficit During the Development Stage		(626,700	)		(351,351	)

Total Stockholders’ Equity		183,949			267,630

Total Liabilities and Stockholders’ Equity		264.914			292,738

Nature of Operations and Continuance of Business (Note 1)

(The accompanying notes are an integral part of these financial statements)

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Consolidated Statements of Operations

(expressed in U.S. dollars)

(unaudited)

	For the Three Months Ended January 31, 2011			For the Three Months Ended January 31, 2010			For the Six Months Ended January 31, 2011			For the Six Months Ended January 31, 2010			Accumulated from July 3, 2009 (Date of Inception) to January 31, 2011
	$			$			$			$			$

Revenue		–			–			–			–			–


Expenses
Depreciation (Note 3)		615			652			1,229			652			3,474
Foreign exchange loss		233			–			1,580			–			8,367
Impairment of website development costs		–			–			–			–			6,553
General and administrative		195,733			3,912			216,644			18,811			302,608
Professional fees		21,101			52,448			54,698			58,202			181,760
Research and development		611			19,827			1,198			20,431			25,972

Total Expenses		218,293			76,839			275,349			98,096			528,734

Operating Loss		(218,293	)		(76,839	)		(275,349	)		(98,096	)		(528,734	)

Other expenses
Interest and accretion expense		–			(11,669	)		–			(11,724	)		(63,578	)

Net Loss		(218,293	)		(85,509	)		(275,349	)		(109,820	)		(592,312	)

Loss Per Share – Basic and Diluted Net Loss Per Share – Basic and Diluted		–			–			(0.01	)		(0.01	)

Weighted Average Shares Outstanding		51,100,000			30,485,000			50,451,000			16,014,000

(The accompanying notes are an integral part of these financial statements)

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Consolidated Statements of Cash Flows

(expressed in U.S. dollars)

(unaudited)

	For the Six Months Ended January 31, 2011			For the Six Months Ended January 31, 2010			Accumulated from July 3, 2009 (Date of Inception) to January 31, 2011
	$			$			$

Operating Activities

Net loss for the period		(275,349	)		(109,820	)		(592,312	)

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:

Accretion of discounts on convertible debentures		–			18,841			47,433
Shares issued for services		191,668			–			191,668
Depreciation		1,229			652			3,474
Impairment of website development costs		–			–			6,553

Changes in operating assets and liabilities:

Prepaid expense		21,238			–			(1,997	)
Accounts payable		24,345			16,479			29,782
Due to related parties		31,512			–			35,935

Net Cash Used In Operating Activities		(5,357	)		(73,848	)		(279,464	)

Investing Activities

Purchase of property and equipment		–			–			(3,242	)
Cash acquired on recapitalization		–			86,401			86,401

Net Cash Used In Investing Activities		–			86,401			83,159

Financing Activities

Proceeds from Capital Lease Payable		–			5,641			–
Proceeds from issuance of common shares		–			2,774			204,536
Repayment of loan payable		–			–			(7,946	)

Net Cash Provided By Financing Activities		–			8,415			196,590

Increase (Decrease) in Cash		(5,357	)		20,968			285

Cash – Beginning of Period		5,642			1,081			–

Cash – End of Period		285			22,049			285

(The accompanying notes are an integral part of these financial statements)

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

1. Nature of Operations and Continuance of Business

The accompanying consolidated financial statements of Urban Barns Foods Inc. (the “Company”) should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2010. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at January 31, 2011, the Company has working capital deficit of $78,508 and has accumulated losses of $626,700 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Recent Accounting Pronouncements

In March 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this update. The adoption of this standard is not expected to have an impact on the Company’s consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

3. Capital Assets

	Cost $		Accumulated Amortization $		January 31, 2011 Net Carrying Value $ (unaudited)		July 31, 2010 Net Carrying Value $

Production equipment		15,529		3,072		12,457		13,686

		15,529		3,072		12,457		13,686

4. Related Party Transactions

As at January 31, 2011, the Company owed $35,934 (July 31, 2010 - $4,423) to the CEO, the CFO and one Director of the Company for expenditures incurred on behalf of the Company. The amounts owing are unsecured, non-interest bearing, and due on demand.

5. Common Shares

(a)	On December 28, 2010, the Company issued 2,000,000 common shares with a fair value of $80,000 for consulting services.

(b)	On December 28, 2010, the Company issued 1,500,000 common shares upon the exercise of stock options for consulting services with a fair value of $52,500.

6. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

	Number of Warrants		Weighted Average Exercise Price $

Outstanding, July 31, 2009		–		–

Issued		371,500		1.18

Outstanding, July 31, 2010 and January 31, 2011 (unaudited)		371,500		1.18

As at January 31, 2011, the following share purchase warrants were outstanding:

Number of Warrants	ExercisePrice $	Expiry Date

49,000	1.50	March 25, 2011
10,000	1.50	March 30, 2011
12,500	1.50	April 30, 2011
50,000	1.25	December 17, 2011
250,000	1.08	February 10, 2012

371,500

Urban Barns Foods Inc.

(formerly HL Ventures Inc.)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(unaudited)

7. Stock Options

On March 5, 2010, the Company adopted the Company’s 2010 Stock Option Plan (the “2010 Plan”). Under the 2010 Plan, a maximum of 4,000,000 common shares are issuable with a maximum of 5% issuable to any one individual.

On December 28, 2010, the Company granted stock options to acquire 1,500,000 common shares at an exercise price of $0.035 per share for a period of ten years. The Company recorded the fair value of the options, using the Black-Scholes option price model with an estimated volatility of 150%, expected life of the options of 10 years, and risk free rate of 3.50%, of $59,168.

A summary of the changes in the Company’s stock options is presented below:

Number of

Options

Weighted Average

Exercise Price

Weighted-Average Remaining

Contractual

Term

(years)

Aggregate

Intrinsic

Value

Outstanding, July 31, 2009 and 2010

–

Granted

1,500,000

0.035

Exercised

(1,500,000

)

0.035

Outstanding, January 31, 2011

–

As at January 31, 2011, the weighted average fair value of options granted was $0.04, and the Company had no unrecognized compensation costs.

8. Supplemental Disclosures

For the Six

Months

Ended

January 31,

2011

For the Six

Months

Ended

January 31,

2010

Accumulated from

July 3, 2009

(Date of

Inception) to

January 31,

2011

Interest paid

–

Income tax paid

–

Non-cash investing and financing activities:

Shares issued for payment of consulting fees

122,500

–

122,500

Shares issued for settlement of loan payable

–

42,500

Shares issued for settlement of convertible debt

–

74,511

Shares issued for deposit for financing fee

–

250,000

Loans payable acquired from recapitalization

–

50,446

Convertible debentures acquired from recapitalization

–

58,367

9. Subsequent Event

On March 7, 2011, the Company entered into a Share Exchange Agreement (the “Agreement”) with Non-Industrial Manufacturing (“NIM”). Pursuant to the terms and provisions of the Agreement, the Company agreed to acquire 100% of the issued and outstanding common shares of NIM in exchange for the issuance of 2,500,000 shares of our restricted Class B common shares. Each Class B common share entitles the holder to have 20 votes per share, and is convertible in 20 Class A common shares after one year from the Agreement date.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Forward Looking Statements

This report on Form 10-Q 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 the 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.

Results of Operations

We are still in our development stage and have generated no revenues to date.

We incurred operating expenses of $218,293 for the three months ended January 31, 2011. These expenses consisted of $195,733 in general operating expenses (of which $191,668 was paid in common shares to consultants for one year of services to be provided. See Notes 5 and 7 in the Notes to Financials.), $611 in research and development expenses, and $21,101 in professional fees. For the same period ended January 31, 2010 we incurred operating expenses of $76,839. These expenses consisted of $3,912 in general operating expenses, $19,827 in research and development expenses and $52,448 in professional fees.

We incurred operating expenses of $275,349 for the six months ended January 31, 2011. These expenses consisted of $216,644 in general operating expenses (of which $191,668 was paid in common shares to consultants for one year of services to be provided. See Notes 5 and 7 in the Notes to Financials.), $1,198 in research and development expenses, and $54,698 in professional fees. For the same period ended January 31, 2010 we incurred operating expenses of $98,096. These expenses consisted of $18,811 in general operating expenses, $20,431 in research and development expenses and $58,202 in professional fees.

Our net loss from inception (July 3, 2009) through January 31, 2011 was $592,312.

The following table provides selected financial data about our company for the quarter ended January 31, 2011.

Balance Sheet Data:	1/31/11
Cash	$	285
Fixed assets	$	12,457
Total assets	$	264,914
Total liabilities	$	80,965
Shareholders' equity	$	183,949

Liquidity and Capital Resources

As of January 31, 2011 we had cash of $285, total current assets of $2,457, total current liabilities of $80,965 and working capital deficit of $78,508 compared to working capital of $3,944 as of July 31, 2010. The increase in liabilities is due primarily to as increase in account payable due to lack of sufficient cashflows to pay our outstanding obligations.

During the period ended January 31, 2011, we received net cash of $nil from financing activities, compared to net cash received of $8,415 from financing activities during the period ended January 31, 2010.

During the period ended January 31, 2011, we used net cash of $5,357 on operating activities, compared to $73,848 net cash used on operating activities during the period ended January 31, 2010.

During the period ended January 31, 2011 and 2010, we did not have any investing activities.

Since July 3, 2009 (inception) to January 31, 2011, our accumulated deficit was $626,700. We are dependent on the funds raised through our equity or debt financing, investing activities, and revenue generated through the sales of our products to fund our operations.

We anticipate that we will meet our ongoing cash requirements by retaining income as well as through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.

Plan of Operation

Recently, our management decided to focus on acquiring or merging with one or more operating businesses. Our efforts to identify a target business resulted in the Share Exchange Agreement with Urban Barns Foods Inc., a private company. On December 4, 2009 the share exchange with Urban Barns closed, and we accordingly adopted the business of Urban Barns. We are now an urban produce production company that aims to be the supplier of choice of fresh, locally grown, high-quality organic and conventional fruits and vegetables for urban consumers.

We estimate that our expenses over the next 12 months (beginning December 2010) will be approximately $2,301,800 as summarized in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from investors or other sources.

Description	Potential Completion Date	Estimated Expenses ($)
Seedling purchases	12 months		96,000
Packaging	12 months		76,800
Direct cost of sales (including research and development)	12 months		979,200
Shipping	12 months		225,000
Payroll	12 months		350,000
Advertising and marketing	12 months		370,000
General and administrative expenses	12 months		204,800
Total			2,301,800

Our general and administrative expenses for the year will consist of professional fees, office maintenance, communication expenses (cellular, internet, fax and telephone), bank charges, courier and postage costs, office supply costs and fees related to our website. Our professional fees will include legal, accounting and auditing fees related to our regulatory filings throughout the year.

Based on our planned expenditures, we require additional funds of $2,301,800 to proceed with our business plan over the next 12 months. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

As of January 31, 2011 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.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies are included in note 2 of the Notes to our Financial Statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.

a. Basis of Accounting

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a July 31 year-end.

b. Loss Per Share

The Company computes net loss per share in accordance with ASC 260 Earnings Per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

c. Use of Estimates and Assumptions

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, fair value of convertible debt and share-based payments, and deferred income tax valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

d. Foreign Currency Translation

Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.

The Company’s integrated foreign subsidiary is financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting exchange gains or losses are recognized in income.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2011. Based on the evaluation of these disclosure controls and procedures the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Changes in Internal Controls

During the quarter covered by this report there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly filing:

Exhibit No.	Description
10.1	Share Exchange Agreement as filed on Form 8-K filed March 11, 2011
31.1	Sec. 302 Certification of Principal Executive Officer
31.2	Sec. 302 Certification of Principal Financial Officer
32.1	Sec. 906 Certification of Principal Executive Officer
32.2	Sec. 906 Certification of Principal Financial Officer

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, thereunto duly authorized.

March 16, 2011		Urban Barns Foods Inc.

		/s/ Jacob Benne
	By:	Jacob Benne
		(Chief Executive Officer, President, & Director)

		/s/ Daniel Meikleham
	By:	Daniel Meikleham
		(Chief Financial Officer, Principal Accounting Officer & Director)

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