BRK, Inc. - FORM 10-Q - September 4, 2012

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - BRK, Inc.	Financial_Report.xls
EX-31 - CERTIFICATION - BRK, Inc.	brk_ex31.htm
EX-32 - CERTIFICATION - BRK, Inc.	brk_ex32.htm

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 July 31, 2012

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

From transition period from _________, to _________.

Commission File No.: ____________

BRK, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2840468
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3871 S. Valley View Blvd, Unit 70 Las Vegas, Nevada		89103
(Address of principal executive offices)		(Zip Code)

(800) 253-1013

(Registrant’s telephone number, including area code)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of September 4, 2012, the registrant had 4,213,920 shares of common stock outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1:	Financial Statements	2
	Balance Sheets (Unaudited) as of July31, 2012 and April 30, 2012	3
	Statements of Operations (Unaudited) for the Three Months Ended July 31, 2012 and 2011and from inception (May 22, 2008) to July 31, 2012	4
	Statements of Cash Flows (Unaudited) for the Three Months Ended July 31, 2012 and 2011 and from inception (May 22, 2008) to July 31, 2012	5
	Notes to Financial Statements (Unaudited)	6

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	9
Item 4T:	Controls and Procedures	9

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Securities and Use of Proceeds	10
Item 3.	Default upon Senior Securities	10
Item 4.	Mine Safety Disclosures	10
Item 5.	Other information	10
Item 6:	Exhibits	11
Signatures		12

Reference in this report to “BRK” “we,” “us,” and “our” refer to BRK, Inc.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

The financial information set forth below with respect to our statements of operations for the three months periods ended July 31, 2012 and 2011 is unaudited. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three month period ended July 31, 2012, are not necessarily indicative of results to be expected for any subsequent period. Our year end is April 30.

BRK, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

(Unaudited)

	July 31,			April 30,
	2012			2012
ASSETS
Current assets
Cash	$	41		$	15,594
Prepaid expense		3,415			3,050
Deposit		4,030			-
Total current assets		7,486			18,644
Fixed assets
Equipment, net of accumulated depreciation of $1,317 and $0, respectively		22,573			23,890

Total assets		30,059			42,534

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable		18,607			7,392
Compensation payable-related party		6,155			5,930
Convertible notes-related party		7,089			7,089
Convertible notes payable		68,000			68,000
Short term debt-related party		25,530			8,430
Short term debt		39,200			36,200
Total liabilities		164,581			133,041

Stockholders’ deficit
Preferred shares, par value $0.001
1,000,000 authorized; none issued and outstanding		-			-
Common stock, par value $0.001
authorized 100,000,000 shares,
issued and outstanding 4,165,920
as of July 31, 2012 and April 30, 2012, respectively		4,166			4,166
Additional paid-in capital		12,084			12,084
Accumulated deficit during development stage		(150,772	)		(106,757	)
Total stockholders’ deficit		(134,522	)		(90,507	)

Total liabilities and stockholders’ deficit	$	30,059		$	42,534

The accompanying notes are an integral part of the unaudited financial statements.

BRK, INC.

(A DEVELOPMENT-STAGE COMPANY)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended July 31,						From Inception (May 22, 2008) to July 31,
	2012			2011			2012
Operating expenses:
Selling, general and administrative expenses	$	42,698		$	14,514		$	149,540

Depreciation		1,317			-			1,317

Loss from operations		(44,015	)		(14,514	)		(150,857	)

Other income (expense) Other Income		-			80			85

Net loss	$	(44,015	)	$	(14,434	)	$	(150,772	)

Net loss per common share basic and diluted	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding		4,165,920			2,500,000

The accompanying notes are an integral part of the unaudited financial statements.

BRK, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended July 31,						From inception (May 22, 2008) to July 31,
	2012			2011			2012
Cash Flows From Operating Activities:
Net loss	$	(44,015	)	$	(14,434	)	$	(150,772	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,317			-			1,317
Changes in operating assets and liabilities:
Advance from related party		-			-			-
Accounts payable		11,215			-			18,607
Prepaid expense		(365	)		-			(3,415	)
Deposit		(4,030	)		-			(4,030	)
Prepaid compensation		225			-			6,155

Net cash used in operating activities		(35,653	)		(14,434	)		(132,138	)

Cash Flows From Investing Activities:
Payment for construction in progress		-			-			(23,890	)

Net cash used in investing activities		-			-			(23,890	)

Cash Flows From Financing Activities:
Sale of common stock		-			-			8,250
Borrowings on convertible notes payable		-			20,000			75,000
Borrowings on convertible notes payable-related party		-			-			8,089
Borrowing on notes payable-related party		17,280			-			36,500
Borrowings on notes payable		4,000			-			40,459
Repayments on debt		(1,000	)		-			(1,259	)
Repayments on notes payable-related party		(180	)		-			(10,970	)

Net cash provided by financing activities		20,100			20,000			156,069

Net increase in cash		(15,553	)		5,566			41
Cash at beginning of period		15,594			437			-

Cash at end of period	$	41		$	6,003		$	41

Non-Cash Transactions
Conversion of notes payable to common stock	$	-		$	-		$	8,000

The accompanying notes an integral part of the unaudited financial statements.

BRK, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION AND ORGANIZATION

BRK, Inc. (“BRK” or the “Company”) was incorporated on May 22, 2008 as a Nevada corporation. The Company has developed a product for the repair of hanging venetian blinds. As part of this development the Company has completed the development and is building a machine to make the parts for blind repair that it is selling. The development and testing of the machine is near completion with production and marketing of the product to begin in the very near future.

BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required to be included in a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended July 31, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending April 30, 2012. The accompanying unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s 2012 Annual Report filed with the SEC on July 31, 2012.

NOTE 2 - GOING CONCERN

As shown in the accompanying financial statements, BRK has an accumulated deficit of $150,772 as of July 31, 2012. Unless profitability and increases in stockholders’ equity continues, these conditions raise substantial doubt as to BRK’s ability to continue as a going concern. The July 31, 2012 financial statements do not include any adjustments that might be necessary if BRK is unable to continue as a going concern.

BRK continues to review its expense structure reviewing costs and their reduction to move towards profitability. The Company’s expenses are planned to decrease resulting in profitability and increased shareholders’ equity.

NOTE 3 – CONVERTIBLE NOTES PAYABLE

As of July 31, 2012 the Company owes $68,000 to multiple convertible promissory note holders for proceeds received during fiscal year April 30, 2012. These notes bear interest at 0%, are due two years from issuance and are unsecured. The notes are convertible at $0.005 into the Company’s common stock.

The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none.

NOTE 4- NOTES PAYABLE

During the three months ended July 31, 2012, the Company borrowed $4,000 from a non-related party. The total due to non-related party note holders is $39,200 as of July 31, 2012. These advances are non-interest bearing and due on demand.

NOTE 5 – CONVERTIBLE NOTES PAYABLE RELATED PARTY

As of July 31, 2012, the Company has $7,089 in convertible notes outstanding to one related party. The convertible notes bear 0% interest and are convertible at $0.005 into the Company’s common stock.

NOTE 6 – RELATED PARTY

During the three months ended July 31, 2012, the Company borrowed $17,280 from related parties. These advances are non interest bearing and due on demand. The total due to related parties as of July 31, 2012 is $25,530.

During the three months ended July 31, 2012, the Company expensed $11,100 for services provided by CEO and shareholder of which $6,155 is due as of July 31, 2012.

NOTE 7 – SUBSEQUENT EVENT

On August 27, 2012 the Company issued 48,000 shares of common stock at $0.125 per share to three entities for $6,000 in cash.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

BRK Inc. (“BRK” or the “Company”) was incorporated on May 22, 2008 as a Nevada corporation. The Company has developed a product for the repair of hanging venetian blinds. As part of this development the Company has completed the development and is building a machine to make the parts for blind repair that it is selling. The development and testing of the machine is near completion with production and marketing of the product to begin in the very near future.

As of the date of this filing we have minimal operations and have recorded minimal revenues for the past two years. Our focus for the next twelve months will be to obtain additional funding to develop and expand our operations and new projects. Our success will depend on our ability to obtain funding through equity and/or debt transactions. However, with the downturn of the United States and world economies, we will encounter substantial competition for the limited financing that will be available in the market place. If we are unable to obtain financing, then we will likely delay further business development and marketing of our product.

In summary, management continues to position the company in a way to best benefit from worldwide economic conditions, trends, events, and demand for new technologies.

Liquidity and Capital Resources

From inception (May 22, 2008) to July 31, 2012, we had an accumulated deficit of $150,772. We recorded a net loss of $ 44,015 for the three months ending July 31, 2012. The net loss was $14,634for the same period during 2011. Based on these numbers there is substantial doubt that we can continue as a going concern unless we obtain external funding. Management plans to continue limited operations until we obtain additional funding to expand our operations.

Working capital is a negative $157,095 as of July 31, 2012 compared to negative $114,397 as of April 30, 2012. Cash used in operations totaled $35,653 during the period ending July 31, 2012 compared to $14,554 during the same period in 2011. Funds provided from financing activities were $20,100 in 2012 compared to $20,000 in 2011.

Management expects to continue to issue common stock to pay for the marketing of the product once the machine is complete and in production. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions. We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock.

We intend to rely on debt and equity financing, capital contributions from management and sales of our common stock to pay for costs, services, operating leases, litigation expense and future development of our business opportunities. Accordingly, our focus for the next twelve months will be to obtain additional funding through debt or equity financing. Our success in obtaining funding will depend upon our ability to sell our common stock or borrow on terms that are financially advantageous to us. If we are unable to obtain financing, then expansion of our operations will be delayed.

Results of Operations

The Company recorded no revenue for the periods ended July 31, 2012 and 2011.

General and administrative expenses for the months ended totaled $42,698 and $14,514 at July 31, 2012 and 2011, respectively. The increase was due to higher accounting, legal and consulting costs.

Depreciation was $1,317 for the three month period ended July 31, 2012 compared to zero in the same period in 2011. The increase was due purchase of equipment during fiscal year April 31, 2012.

Other income of zero was recorded in the three month period ended July 31, 2012 and $80 during the same period in 2011.

The Company incurred a net loss of $44,015 in the three month period ended July 31, 2012 compared to $14,434 in the same period in 2011.

Off-Balance Sheet Arrangements

None

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise. Our CEO /CFO do not possess accounting expertise and our company does not have an audit committee. This weakness is due to the company’s lack of working capital to hire additional staff. To remedy this material weakness, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.

Changes in Internal Control over Financial Reporting

Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have 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 1A: RISK FACTORS

There have been no material changes to BRK, Inc.’s risk factors as previously disclosed in our most recent 10-K filing for the year ending April 30, 2012.

ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: MINE SAFETY DISCLOSURES

None

ITEM 5: OTHER INFORMATION.

None

ITEM 6: EXHIBITS

No.		Description

31		Chief Executive Officer Certification

32		Section 1350 Certification

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BRK, INC.

Date: September 4, 2012	By:	/s/ Brian Keasberry
		Brian Keasberry
		President
		Chief Executive Officer
		Principal Financial and Accounting Officer

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