N-Q 1 bbnq200905.htm Sec filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM N-Q


QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

 MANAGEMENT INVESTMENT COMPANY


Investment Company Act file number 811-21748


Bread & Butter Fund, Inc.

(Exact Name of Registrant as Specified in Charter)


3633 Hill Rd. 3rd Floor

Parsippany,  NJ 07054

(Address of Principal Executive Offices)(Zip Code)


James B. Potkul

Potkul Capital Management LLC

3633 Hill Rd. 3rd Floor

Parsippany,  NJ 07054

 (Name and Address of Agent for Service)




Registrant’s Telephone Number, including Area Code:  (973) 331-3100


Date of fiscal year end: December 31


Date of reporting period: March 31, 2009


Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, and 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.



ITEM 1. SCHEDULE OF INVESTMENTS.


 

 

 

 

 
  

 Bread & Butter Fund

  
  

Schedule of Investments

  

 

 

 March 31, 2009 (Unaudited)

 

 
     

Shares

  

 Value

 
     

COMMON STOCKS - 83.33%

  
     

Business Services - 1.89%

  

500

 

Manpower, Inc. (France)

$          15,765

 
     

Consumer Products - 11.65%

  

900

 

Diageo PLC ADR

40,275

 

1,600

 

Philip Morris International, Inc.

            56,928

 
   

97,203

 

Diversified Holding Cos. - 21.00%

  

21

 

Berkshire Hathaway Class-B *

59,220

 

5,250

 

Loews Corp.

          116,025

 
   

175,245

 

Energy - 15.12%

    

550

 

Conocophillips

21,538

 

3,500

 

El Paso Corp.

21,875

 

400

 

Encana Corp. (Canada)

16,244

 

500

 

Ensco International, Inc.

13,200

 

3,000

 

Rowan Co., Inc.

35,910

 

1,000

 

Statoilhydro ADR

            17,440

 
   

126,207

 

Fanancials/Banking - 5.17%

  

1,000

 

American Express Co.

13,630

 

6,000

 

Mitsubishi UFJ Financial Group, Inc. ADR (Japan)

            29,520

 
   

43,150

 

Healthcare-Pharmaceutical - 3.92%

  

2,400

 

Pfizer, Inc.

32,688

 
     

Insurance - 13.28%

   

700

 

American National Insurance

36,687

 

2,000

 

CNA Financial Corp.

18,320

 

3,000

 

Mercer Insurance Group

42,900

 

75

 

White Mountains Insurance

            12,893

 
   

110,800

 

Life Insurance - 2.71%

   

200

 

National Western Life Insurance

22,600

 
     

Media/Entertainment - 2.30%

  

2,500

 

News Corp. Ltd. Class-B

19,250

 
     

Retail - 3.74%

    

600

 

Walmart Stores, Inc.

31,260

 
     

Transportation - 2.55%

   

1,500

 

Teekay Corp.

21,345

 
     

TOTAL FOR COMMON STOCKS (Cost $962,345) - 83.33%

$        695,513

 
     

REIT PREFERREDS - 3.50%

  

1,000

 

HRPT PPTYS 8.75% B

11,450

 

2,000

 

HRPT PPTYS TR 6.50% D

            17,740

 
   

29,190

 
     

TOTAL FOR REIT PREFERREDS (Cost $28,418) - 3.50%

$          29,190

 
     

SHORT TERM INVESTMENTS - 12.97%

  

108,270

 

Fidelity Institutional Money Market Portfolio 1.04% ** (Cost $108,270)

          108,270

 
     

TOTAL INVESTMENTS (Cost $1,127,451) - 99.80%

$        832,973

 

    

    

OTHER ASSETS LESS LIABILITIES - 0.20%

              1,635

 
     

NET ASSETS - 100.00%

 

$        834,608

 
     

    * Non-income producing security during the period

  

  **Variable rate security: the coupon rate shown represents the yield at March 31, 2009.

  

   ADR - American Depository Receipt

  
     

NOTES TO FINANCIAL STATEMENTS

  

Bread & Butter Fund

   

1. SECURITY TRANSACTIONS

  

At March 31, 2009, the net unrealized depreciation on investments, based on cost for federal income

  

tax purposes of $1,127,451 amounted to $294,478, which consisted of aggregate gross unrealized appreciation

 

of $14,923 and aggregate gross unrealized depreciation of $309,401.

  
     

2. NEW ACCOUNTING PRONOUNCEMENTS

  

The  Fund  adopted Financial Accounting Standards Board Statement of Financial Accounting  

  

Standards  No. 157, Fair Value Measurements ("FAS 157"), effective January 1, 2008. In  accordance  

 

with  FAS 157,  fair value is defined as the price  that  the Fund would receive to sell an asset or pay

  

to transfer a liability  in  an orderly transaction between market participants at the measurement date.

 

FAS 157 also establishes a framework for measuring fair value, and a three-level  hierarchy  for fair

  

value measurements based upon the transparency  of  inputs  to  the valuation of an asset or liability.

  

Inputs may be observable  or  unobservable  and refer broadly to the assumptions that market

  

participants  would  use  in pricing the asset or liability. Observable inputs reflect the assumptions

  

market participants would use in pricing the asset or liability  based on market data obtained from

  

sources independent of the Fund. Unobservable inputs reflect the Fund's own assumptions about the

  

assumptions that market participants would use in pricing the asset or liability developed based  on the

 

best information available in the circumstances. Each investment is assigned a level based upon the

  

observability of the inputs which are significant  to  the  overall valuation. The three-tier hierarchy of

  

inputs is summarized below:

   
     

Level 1 - quoted prices in active markets for identical investments

  
     

Level 2 - other significant observable inputs (including quoted prices for similar investments, interest

  

rates, prepayment speeds, credit risk, etc.)

  
     

Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the

  

fair value of investments)

   
     

The  inputs  or methodology used for valuing securities are not necessarily an indication of  the risk  

  

associated with investing in those securities. Money market securities are valued using amortized

  

cost, in accordance with rules under  the  Investment Company Act of 1940. Generally, amortized

  

cost approximates the current fair value of a security, but since the value is not obtained  from a

  

quoted price in an active market, such securities are reflected as Level 2.

  
     

The following table summarizes the valuation of the Fund's investments by the above fair value

  

hierarchy levels as of March 31, 2009:

  
     
   

INVESTMENT

OTHER

   

IN

FINANCIAL

   

SECURITIES

INSTRUMENTS*

======================================================================================================

Level 1 - Quoted prices

 

 $         832,973  

    $                      -  

Level 2 - Other significant observable inputs

                        -  

                             -  

Level 3 - Significant unobservable inputs

                        -  

                             -  

Total                             

 

 $         832,973  

    $                      -  

     

*Other  financial  instruments are derivative instruments not reflected in the Portfolio  of Investments,

  

such as futures forwards and swap contracts, which  are valued at the unrealized appreciation/

  

depreciation on the instrument.

   





ITEM 2. CONTROLS AND PROCEDURES.


(a)


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective.


(b)


CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q.


ITEM 3. EXHIBITS.


Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Bread & Butter Fund, Inc.


By /s/James B. Potkul

     James B. Potkul

     President/Principal Financial Officer


Date May 12, 2009


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By /s/ James B. Potkul

     James B. Potkul

     President/Principal Financial Officer


Date May 12, 2009