x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended |
June 30, 2013 |
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. |
000-52297 |
FRONTIER BEVERAGE COMPANY, INC.
Nevada |
06-1678089 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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c/o Paul Law Group, LLP, 902 Broadway, New York, NY |
10010 |
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(Address of principal executive offices) |
(Zip Code) |
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(646) 278-9953 |
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(Registrants telephone number, including area code) |
Large accelerated filer o |
Accelerated filer o |
|
Non-accelerated filer o |
Smaller reporting company x |
Page |
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PART I FINANCIAL INFORMATION |
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Item. 1 |
Financial Statements |
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Condensed Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012 |
3 |
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Condensed Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) |
4 |
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Condensed Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited) |
5 |
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Notes to the Condensed Consolidated Financial Statements |
6 |
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Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
9 |
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Item 3. |
Quantitative and Qualitative Disclosures about Market Risks |
12 |
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Item 4. |
Controls and Procedures |
12 |
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Part II OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
14 |
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Item 1A. |
Risk Factors |
14 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
14 |
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Item 3. |
Defaults Upon Senior Securities |
14 |
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Item 4. |
Mine Safety Disclosures |
14 |
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Item 5. |
Other Information |
14 |
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Item 6. |
Exhibits |
14 |
June 30, 2013 (unaudited) |
December 31, 2012 |
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ASSETS |
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Current Assets: |
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Cash |
$ | 367 | $ | | ||||||
Total assets |
$ | 367 | $ | | ||||||
LIABILITIES AND STOCKHOLDERS DEFICIT |
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Current Liabilities: |
||||||||||
Notes and loans payable due to related party |
$ | 394,264 | $ | 394,264 | ||||||
Accounts payable |
81,888 | 64,257 | ||||||||
Accrued interest-related parties |
80,487 | 64,704 | ||||||||
Other current liabilities |
18,750 | | ||||||||
Total current liabilities |
575,389 | 523,225 | ||||||||
Commitments and Contingencies |
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Stockholders Deficit: |
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Preferred stock par value $0.001; 100,000,000 shares authorized; no shares issued and outstanding |
| | ||||||||
Common stock par value $0.001; 500,000,000 shares authorized; 18,781,000 shares issued and outstanding |
18,781 | 18,781 | ||||||||
Additional paid-in capital |
1,703,262 | 1,700,262 | ||||||||
Accumulated deficit |
(2,297,065 | ) | (2,242,268 | ) | ||||||
Total stockholders deficit |
(575,022 | ) | (523,225 | ) | ||||||
Total liabilities and stockholders deficit |
$ | 367 | $ | |
Three Months Ended |
Six Months Ended |
||||||||||||||
June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
||||||||||||
Revenues, net |
$ | | $ | 1,117 | $ | | $ | 71,252 | |||||||
Cost of goods sold |
| 831 | | 8,430 | |||||||||||
Gross profit |
| 286 | | 62,822 | |||||||||||
Selling, general and administrative |
13,432 | 64,573 | 39,014 | 131,295 | |||||||||||
Total operating expenses |
13,432 | 64,573 | 39,014 | 131,295 | |||||||||||
Loss from operations |
(13,432 | ) | (64,287 | ) | (39,014 | ) | (68,473 | ) | |||||||
Interest expense |
(8,019 | ) | (6,515 | ) | (15,783 | ) | (14,037 | ) | |||||||
Total other expense |
(8,019 | ) | (6,515 | ) | (15,783 | ) | (14,037 | ) | |||||||
Loss before taxes |
(21,451 | ) | (70,802 | ) | (54,797 | ) | (82,510 | ) | |||||||
Provision for income taxes |
| | | | |||||||||||
Net loss |
$ | (21,451 | ) | $ | (70,802 | ) | $ | (54,797 | ) | $ | (82,510 | ) | |||
Loss per share, basic and diluted |
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Weighted average number of shares outstanding, basic and diluted |
18,781,000 | 18,781,000 | 18,781,000 | 18,781,000 |
Six Months Ended |
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---|---|---|---|---|---|---|---|---|---|---|---|
June 30, 2013 |
June 30, 2012 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
$ | (54,797 | ) | $ | (82,510 | ) | |||||
Adjustments to reconcile net loss to net cash flows from operating activities: |
|||||||||||
Impairment of inventory |
| (2,621 | ) | ||||||||
Changes in assets and liabilities: |
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Accounts receivable |
| (377 | ) | ||||||||
Inventory |
| 7,140 | |||||||||
Prepaid expenses and other current assets |
| 3,614 | |||||||||
Accounts payable |
17,631 | (4,456 | ) | ||||||||
Accrued expenses and other current liabilities |
15,783 | 73,872 | |||||||||
Net cash flows used in operating activities |
(21,383 | ) | (5,338 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
| | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||||||
Proceeds from advances |
18,750 | | |||||||||
Proceeds from related parties |
| 24,519 | |||||||||
Capital contribution |
3,000 | 9,000 | |||||||||
Repayment of related party debt |
| (27,995 | ) | ||||||||
Net cash flows provided by financing activities |
21,750 | 5,524 | |||||||||
Increase in cash |
367 | 186 | |||||||||
Cash, beginning of period |
| 255 | |||||||||
Cash, end of period |
$ | 367 | $ | 441 | |||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Interest paid |
$ | | $ | | |||||||
Income taxes paid |
$ | | $ | |
NOTE 1 |
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
Loan Amount |
Amount Repaid |
Balance Due June 30, 2013 |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
HBB, LLC |
$ | 557,278 | $ | 185,880 | $ | 371,398 | ||||||||
Baked World, LLC |
$ | 24,801 | $ | 5,860 | $ | 18,941 | ||||||||
Terry Harris |
$ | 179,479 | $ | 176,479 | $ | 3,000 | ||||||||
Timothy Barham |
$ | 120,000 | $ | 119,075 | $ | 925 |
Three Months Ended |
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REVENUE |
June 30, 2013 |
June 30, 2012 |
Change |
||||||||||||
Beverage Products |
$ | 0 | $ | 0 | $ | 0 | |||||||||
Snack Products |
0 | 1,117 | (1,117 | ) | |||||||||||
Total Revenue |
$ | 0 | $ | 1,117 | $ | (1,117 | ) | ||||||||
Six Months Ended |
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COST OF SALES |
June 30, 2013 |
June 30, 2012 |
Change |
||||||||||||
Beverage Products |
$ | 0 | $ | 0 | $ | 0 | |||||||||
Snack Products |
0 | 831 | (831 | ) | |||||||||||
Total Cost of Sales |
$ | 0 | $ | 831 | $ | (831 | ) |
Six Months Ended |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
REVENUE |
June 30, 2013 |
June 30, 2012 |
Change |
||||||||||||
Beverage Products |
$ | 0 | $ | 63,205 | $ | (63,205 | ) | ||||||||
Snack Products |
0 | 8,047 | (8,047 | ) | |||||||||||
Total Revenue |
$ | 0 | $ | 71,252 | $ | (71,252 | ) | ||||||||
Six Months Ended |
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COST OF SALES |
June 30, 2013 |
June 30, 2012 |
Change |
||||||||||||
Beverage Products |
$ | 0 | $ | 0 | $ | 0 | |||||||||
Snack Products |
0 | 8,430 | (8,430 | ) | |||||||||||
Total Cost of Sales |
$ | 0 | $ | 8,430 | $ | (8,430 | ) |
Exhibit |
Description |
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31.1 |
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14a/Rule
14d-14(a)* |
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32.1 |
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section
1350* |
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101.1 |
Interactive data files pursuant to Rule 405 of Regulation S-T* |
* |
Filed herewith. |
August 12, 2013 |
FRONTIER
BEVERAGE COMPANY, INC. |
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By: |
/s/ Ruben Yakubov |
||||||||||
President and Treasurer (Principal Executive Officer, Principal Financial and Accounting Officer and Authorized Signatory) |
(1) |
I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2013 of Frontier Beverage Company, Inc.; |
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c)
|
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d)
|
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
(5) |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
August 12, 2013 |
/s/ Ruben Yakubov |
|||||||||
Principal Executive Officer and Principal Financial Officer |
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Statement [Abstract] | ||||
Revenues, net | $ 1,117 | $ 71,252 | ||
Cost of goods sold | 831 | 8,430 | ||
Gross profit | 286 | 62,822 | ||
Selling, general and administrative | 13,432 | 64,573 | 39,014 | 131,295 |
Total operating expenses | 13,432 | 64,573 | 39,014 | 131,295 |
Loss from operations | (13,432) | (64,287) | (39,014) | (68,473) |
Interest expense | (8,019) | (6,515) | (15,783) | (14,037) |
Total other expense | (8,019) | (6,515) | (15,783) | (14,037) |
Loss before taxes | (21,451) | (70,802) | (54,797) | (82,510) |
Provision for income taxes | ||||
Net loss | $ (21,451) | $ (70,802) | $ (54,797) | $ (82,510) |
Loss per share, basic and diluted (in dollars per share) | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
Weighted average number of shares outstanding, basic and diluted (in shares) | 18,781,000 | 18,781,000 | 18,781,000 | 18,781,000 |
SUBSEQUENT EVENTS
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 5 SUBSEQUENT EVENTS
Change of Control
On July 1, 2013, Ruben Yakubov, an unrelated third party, entered into a stock purchase agreement with the Company and certain stockholders (the Selling Shareholders) of the Company, pursuant to which, the Selling Shareholders sold an aggregate of 15,978,000 shares of Common Stock of the Company to Mr. Yakubov for an aggregate purchase price of $197,500, constituting approximately 85% of the Companys issued and outstanding Common Stock.
Resignation of Terry Harris as Sole Officer
On July 1, 2013, Terry Harris resigned as the Companys President, Secretary and Treasurer. This resignation was effective on July 1, 2013.
Appointment of Ruben Yakubov as Sole Officer
On July 1, 2013, Ruben Yakubov was appointed President, Secretary and Treasurer of the Company.
Director Change
On July 20, 2013, Terry Harris resigned as director of the Company and was replaced with Ruben Yakubov. The change in directors took place ten days after the mailing to the Companys shareholders of record of a Schedule 14f-1. The Schedule 14f-1 was filed with the Securities Exchange Commission on July 9, 2013 and the mailing to shareholders of record took place on July 10, 2013.
Increase in the Companys Authorized Capital Stock
On July 11, 2013, the Company filed a Certificate of Amendment to the Articles of Incorporation with the State of Nevadas Secretary of State. The Certificate of Amendment increased the Companys authorized common stock from 100 million to 500 million shares. In accordance with Rule 14c-2 of the Securities Exchange Act of 1934, as amended, the Company will not undertake any action with respect to the increase in the authorized common stock until at least 20 days following the mailing to the Companys shareholders of record. The mailing to the Companys shareholders of record took place on July 19, 2013. |
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BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 1 BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Interim Financial Reporting
While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"). These interim financial statements follow the same accounting policies and methods of application as used in the December 31, 2012 audited financial statements of Frontier Beverage Company, Inc. (the Company). All adjustments are of a normal, recurring nature. Interim financial statements and the notes thereto do not contain all of the disclosures normally found in year-end audited financial statements and these Notes to Financial Statements are abbreviated and contain only certain disclosures related to the six month periods ended June 30, 2013 and 2012. It is suggested that these interim financial statements be read in conjunction with our audited financial statements and related notes for the year ended December 31, 2012 included in our Form 10-K filed with the Securities Exchange Commission on April 15, 2013. Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.
Basis of presentation and going concern uncertainty
The accompanying financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business. At June 30, 2013, the Company has an accumulated deficit of $2,297,065, and for the six months ended June 30, 2013, incurred net losses of $54,797. The Companys ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations, and therefore, these matters raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.
Change of Control
On July 1, 2013, an unrelated third party acquired an aggregate of 15,978,000 shares of Common Stock of the Company consisting approximately 85% of the companys issued and outstanding Common Stock. See NOTE 5 SUBSEQUENT EVENTS Change of Control for additional details.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow. |
INCOME TAXES
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 3 INCOME TAXES
Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not expect to pay any significant federal or state income tax for 2013 as a result of the losses incurred during the six months ended June 30 2013, the additional losses expected for the remainder of 2013, and from net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is "more likely than not" that some component or all of the benefits of deferred tax assets will not be realized. As of June 30, 2013 and 2012, the Company maintained a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. |
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Reporting | While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"). These interim financial statements follow the same accounting policies and methods of application as used in the December 31, 2012 audited financial statements of Frontier Beverage Company, Inc. (the Company). All adjustments are of a normal, recurring nature. Interim financial statements and the notes thereto do not contain all of the disclosures normally found in year-end audited financial statements and these Notes to Financial Statements are abbreviated and contain only certain disclosures related to the six month periods ended June 30, 2013 and 2012. It is suggested that these interim financial statements be read in conjunction with our audited financial statements and related notes for the year ended December 31, 2012 included in our Form 10-K filed with the Securities Exchange Commission on April 15, 2013. Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that can be expected for the year ending December 31, 2013. |
Basis of presentation and going concern uncertainty | The accompanying financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business. At June 30, 2013, the Company has an accumulated deficit of $2,297,065, and for the six months ended June 30, 2013, incurred net losses of $54,797. The Companys ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations, and therefore, these matters raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. |
Change of Control |
On July 1, 2013, an unrelated third party acquired an aggregate of 15,978,000 shares of Common Stock of the Company consisting approximately 85% of the companys issued and outstanding Common Stock. See NOTE 5 SUBSEQUENT EVENTS Change of Control for additional details. |
Recent Accounting Pronouncements | The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow. |
RELATED PARTIES
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 4 RELATED PARTIES
During the six months ended June 30, 2013, the Company received no funds from HBB, LLC (HBB) and Baked World, LLC (Baked World), both Tennessee limited liability companies beneficially owned and controlled by Terry Harris, the Companys President, Treasurer, and sole director and Timothy Barham, a former officer and director of the Company (who resigned his positions effective November 15, 2011); however, during the period from January 2010 through December 2012, HBB provided cash and made payments on the Companys behalf totaling $371,399. During the period from September 2011 through December 2012, Baked World provided cash and made payments on the Companys behalf totaling $18,941. The Company agreed to pay interest on the loans at eight percent (8%) per annum. The loans are due on demand and remain outstanding at June 30, 2013.
In October 2012, Mr. Harris advanced the Company $3,000. The Company agreed to pay interest on the advance at six percent (6%) per annum. The $3,000 remained outstanding at June 30, 2013.
During the six months ended June 30, 2013 and 2012, the Company was provided office space, the use of office equipment and accounting personnel by HBB. HBB charged the Company $500 per month during the period in 2013 and $1,500 per month during the period in 2012 which amounts are included in operating expense and recorded as capital contribution on the accompanying condensed financial statements. |