10-Q 1 hti10q93013.htm HALL TEES, INC.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from ___________ to ____________.

Commission File Number 333-150829

HALL TEES, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	26-0875401
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

7405 Armstrong, Rowlett, Texas 75088

(Address of principal executive offices)

(214) 883-0140

(Issuer's telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:. Yes [ X ] No [ ].

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

Large Accredited Filer	[ ]	Accelerated Filer	[ ]

Non-Accredited Filer	[ ]	Smaller Reporting Company	[X]

Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [] No [ X ].

Indicate by check mark whether the registrant has submitted electronically and posted on its website, if any, every Interactive File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS325.405 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 [ ] No [X ]

As of November 18, 2013, there were 7,755,400 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS

	PART I FINANCIAL STATEMENTS

Item 1	Financial Statements (Unaudited)	3

Item 2	Management's Discussion and Analysis or Plan of Operation	11

Item 3	Quantitative and Qualitative Disclosures about Market Risk	13

Item 4	Controls and Procedures	13

	PART II OTHER INFORMATION


Item 4	Mine Safety Disclosures	14

Item 6	Exhibits and Reports on Form 8-K	14

HALL TEES, INC.

Condensed Consolidated Balance Sheets

September 30, 2013 and December 31, 2012

(Unaudited)

	2013			2012
ASSETS
Current Assets
Cash and Cash Equivalents	$	62,549		$	98,435

Accounts Receivable, Net		0			1,799
Total Current Assets		62,549			100,234


Fixed Assets, Net		23,290			35,421


TOTAL ASSETS	$	85,939		$	135,655

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	$	12,583		$	8,283
Accrued Expenses		32,098			22,230
Amounts due Shareholder		49,643			49,575

Total Current Liabilities		94,324			80,088

Total Liabilities		94,324			80,088

Stockholders' Equity
Preferred Stock, $.001 par value, 25,000,000 shares authorized,
0 and 0 shares issued and outstanding		0			0
Common Stock, $.001 par value, 50,000,000 shares authorized,
7,755,400 and 7,755,400 shares issued and outstanding		7,755			7,755
Additional Paid-In Capital		389,945			389,945
Accumulated Deficit		(406,185	)		(342,133	)
Total Stockholders' Equity		(8,485	)		55,567

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	85,839		$	135,655

The Accompanying Notes are an Integral Part of these Condensed Consolidated Financial Statements.

HALL TEES, INC.

Condensed Consolidated Statements of Operations

For the Three and Nine months ended September 30, 2013 and 2012

(Unaudited)

	Three Months Ended						Nine months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012

REVENUE	$	21,927		$	28,400		$	50,353		$	53,505
COST OF SALES		4,417			14,206			12,176			24,835
GROSS PROFIT		17,510			14,194			38,177			28,670

OPERATING EXPENSES
Depreciation		3,641			5,110			12,131			15,446
Selling and Advertising Expenses		—			890			—			1,406
Other General Expenses		27,942			21,980			90,153			60,649
TOTAL OPERATING EXPENSES		31,583			27,980			102,284			77,501

NET OPERATING LOSS		(14,073	)		(13,786	)		(64,107	)		(48,831	)

OTHER INCOME
Interest Income		13			47			55			150

TOTAL OTHER INCOME		13			47			55			150

NET LOSS BEFORE INCOME TAXES		(14,060	)		(13,739	)		(64,052	)		(48,681	)

Provision for Income Taxes (Expense) Benefit		—			—			—			—

NET LOSS	$	(14,060	)	$	(13,739	)	$	(64,052	)	$	(48,681	)

EARNINGS PER SHARE, Basic and Diluted

Weighted Average of Outstanding Shares		7,755,400			7,755,400			7,755,400			7,755,400
Income (Loss) for Common Stockholders	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

The Accompanying Notes are an Integral Part of these Condensed Consolidated Financial Statements.

HALL TEES, INC.

Condensed Consolidated Statement of Changes in Stockholders’ Equity(Deficit)

For the Nine months ended September 30, 2013 and

The Year Ended December 31, 2012

(Unaudited)

	Common Stock
	Shares		Amount		Paid-In Capital		Accumulated (Deficit)			Totals

Stockholders' Equity (Deficit),
January 1, 2012	7,755,400	$	7,755	$	389,945	$	(282,353	)	$	115,347

Net Loss							(59,780	)		(59,780	)

Stockholders' Equity (Deficit),
December 31, 2012	7,755,400	$	7,755	$	389,945	$	(342,133	)	$	55,567

Net Loss							(64,052	)		(64,052	)

Stockholders' Equity (Deficit),
September 30, 2013	7,755,400	$	7,755	$	389,945	$	(406,185	)	$	(8,485	)

The Accompanying Notes are an Integral Part of these Condensed Consolidated Financial Statements.

HALL TEES, INC.

Condensed Consolidated Statements of Cash Flows

For the Nine months ended September 30, 2013 and 2012

(Unaudited)

	2013			2012
CASH FLOWS USED BY OPERATING ACTIVITIES
Net Loss	$	(64,052	)	$	(48,681	)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation		12,131			15,446
Bad Debt Expense		—			1,406
Changes in assets and liabilities:
Accounts Receivable		1,799			(989	)
Accounts Payable		4,300			(1,107	)
Accrued Expenses		9,868			(11,359	)
Net Cash Used by Operating Activities		(35,954	)		(45,284	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		—			4,568
Net Cash Provided by Investing Activities		—			4,568

CASH FLOWS FROM FINANCING ACTIVITIES
Capitalized Lease Payments		—			(4,383	)
Borrowings: Stockholder Advances		68			4,099
Net Cash Provided (Used) by Financing Activities		68			(284	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(35,886	)		(41,000	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		98,435			141,106

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	62,549		$	100,106

SUPPLEMENTAL DISCLOSURES

Cash Paid During the Year for Interest Expense	$	—		$	—
Cash Paid During the Year for Taxes	$	—		$	—

The Accompanying Notes are an Integral Part of these Condensed Consolidated Financial Statements.

HALL TEES, INC.

NOTES TO FINANCIAL STATEMENTS

September 30, 2013

(Unaudited)

NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities, History and Organization:

Hall Tees, Inc. (The “Company”) operates as a printer and silk screener. The Company is located in Rowlett, Texas and was incorporated on September 13, 2007 under the laws of the State of Nevada.

Hall Tees, Inc., is the parent company of Hall Tees & Promotions, L.L.C., (“Hall Tees Texas”), a company incorporated under the laws of the State of Texas. Hall Tees Texas was established in 2007 and for the past fifteen months has been operating a single facility in Texas.

On September 12, 2007, Hall Tees, Inc. ("Hall Tees Nevada"), a private holding company established under the laws of Nevada, was formed in order to acquire 100% of the outstanding membership interests of Hall Tees Texas. On September 15, 2007, Hall Tees Nevada issued 7,000,000 shares of common stock in exchange for a 100% equity interest in Hall Tees Texas. As a result of the share exchange, Hall Tees Texas became the wholly owned subsidiary of Hall Tees Nevada. As a result, the members of Hall Tees Texas owned a majority of the voting stock of Hall Tees Nevada. The transaction was regarded as a reverse merger whereby Hall Tees Texas was considered to be the accounting acquirer as its members retained control of Hall Tees Nevada after the exchange, although Hall Tees Nevada is the legal parent company. The share exchange was treated as a recapitalization of Hall Tees Nevada. As such, Hall Tees Texas (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if Hall Tees Nevada had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital stock.

Change of Domicile: In May the Company filed a Form S-4 with the US Securities & Exchange Commission (SEC) to effectuate the redomiciling of its charter from Nevada to the British Virgin Islands through the merger of Hall Tees, Inc. with Studio 82, a British Virgin Islands company. Studio 82 has no assets and liabilities and the redomiciling will have a negligible effect on the financial condition of the company. The SEC has submitted comments and is continuing its review. As of the date of this filing the Form S-4 has not been declared effective.

Unaudited Interim Consolidated Financial Statements:

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (“SEC”) regulations for interim financial information. These consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim financial information have read or have access to the audited financial statements and footnote disclosure for the preceding fiscal year contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2013. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

Significant Accounting Policies:

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. Below is a summary of certain significant accounting policies selected by management.

The condensed consolidated financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

Management believes that all adjustments necessary for a fair statement of the results of the nine months ended September 30, 2013 and 2012 have been made.

Basis of Presentation:

The Company prepares its consolidated financial statements on the accrual basis of accounting. All intercompany balances and transactions are eliminated. The Company’s subsidiaries are consolidated with the parent company.

Cash and Cash Equivalents:

All highly liquid investments with original maturities of six months or less are included in cash and cash equivalents. All deposits are maintained in FDIC insured depository accounts in local financial institutions and balances are insured up to $250,000.

Fair Value of Financial Instruments:

The carrying amounts of cash, cash equivalents, accounts receivable, capital leases, accounts payable and notes payable approximate their fair values due to the short-term maturities of these instruments.

Accounts Receivable:

Accounts receivable are carried at their face amount, less an allowance for doubtful accounts. On a periodic basis, the Company evaluates accounts receivable and establishes the allowance for doubtful accounts based on a combination of specific customer circumstances and credit conditions, based on a history of write offs and collections. The Company’s policy is generally not to charge interest on trade receivables after the invoice becomes past due. A receivable is considered past due if payments have not been received within agreed upon invoice terms. The Company provides an allowance for all receivables that are greater than 90 days old. Allowances for Doubtful Accounts totaled $2,200 and $2,200 at September 30, 2013 and December 31, 2012 respectively. Write offs are recorded at a time when a customer receivable is deemed uncollectible. During the nine months ended September 30, 2013 the Company had no write-offs.

Fixed Assets:

Fixed assets are stated at cost if purchased, or at fair value in a nonmonetary exchange, less accumulated depreciation. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation is computed by applying the straight-line method over the estimated useful lives which are generally three to seven years. Leases that meet the requirements of ASC 840-10, are capitalized and included in fixed assets.

Revenue Recognition:

The Company recognizes revenue in accordance with ASC 605-10. Revenue will be recognized only when all of the following criteria have been met:

Persuasive evidence of an arrangement exists;

Ownership and all risks of loss have been transferred to buyer, which is generally upon shipment or at the time the service is provided;

The price is fixed and determinable; and

Collectability is reasonably assured.

Earnings per Share:

Earnings per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered. As the Company has no potentially dilutive securities, fully diluted earnings per share is identical to earnings per share (basic).

Income Taxes:

Income from the corporation is taxed at regular corporate rates per the Internal Revenue Code. There are no provisions for current taxes due to net available operating losses.

Recent Accounting Pronouncements:

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTE 2 – FIXED ASSETS

Fixed assets at September 30, 2013 and December 31, 2012 are as follows:

	2013			2012
Furniture & Equipment	$	95,086		$	95,086
Capitalized Leases		29,220			29,220
Gross Fixed Assets		124,306			124,306
Less: Accumulated Depreciation		(101,016	)		(88,885	)
Net Fixed Assets	$	23,290		$	35,421

Depreciation expense for the three months ended September 30, 2013 and 2012 was $3,641 and 5,110, respectively. Depreciation expense for the nine months ended September 30, 2013 and 2012 was $12,131 and $15,446, respectively.

NOTE 3 – CAPITALIZED AND OPERATING LEASES

The Company leases a 1,200 square foot space from the President on a month to month basis for $1,000 per month. Rent expense was $3,000 and $9,000 for the three and nine month periods ended September 30, 2013 and 2012, respectively.

NOTE 4 – EQUITY

The Company is authorized to issue 25,000,000 preferred shares at a par value of $0.001 per share. These shares have full voting rights. At September 30, 2013 and December 31, 2021, there were zero shares outstanding.

The Company is authorized to issue 50,000,000 common shares at a par value of $0.001 per share. These shares have full voting rights. At September 30, 2013 and December 31, 2012, there were 7,755,400 shares outstanding respectively.

The Company does not have any stock option plans or warrants.

NOTE 5 – INCOME TAXES

The Company has adopted ASC 740, which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset). Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be.

Deferred tax assets at September 30, 2013 and December 31, 2012 consisted of the following:

	2013			2012
Deferred Tax Asset	$	95,285		$	79,285
Less: Valuation Allowance		(95,285	)		(79,285	)
Net Deferred Tax Asset	$	0		$	0

The net deferred tax asset generated primarily by the Company’s net operating loss carryforward has been fully reserved. The cumulative net operating loss carry-forward is approximately $406,185 at September 30, 2013 and $342,133 at December 31, 2012, and will expire in 2025 through 2031.

The difference in the income tax benefit not shown in the consolidated statements of operations and the amount that would result if the U.S. Federal statutory rate of 25% were applied to pre-tax loss for 2013 and 2012 is attributable to the valuation allowance.

The realization of deferred tax benefits is contingent upon future earnings, therefore, is fully reserved at September 30, 2013 and December 31, 2012.

The Company recognizes interest and penalties related to unrecognized tax benefits in general and administrative expense. During the nine months ended September 30, 2013 and the year ended December 31, 2012 the Company recognized no interest and penalties.

NOTE 6 – RELATED PARTY TRANSACTIONS

The President and a Stockholder of the Company has advanced the Company $49,643 and $49,575 as of September 30, 2013 and December 31, 2012, respectively, for working capital. No interest is paid on this advance.

Under a contract with the Company beginning November 6, 2007, originally expiring December 31, 2012 and updated to end December 31, 2013, the President provides general management services to the Company for up to $4,000 per month. Payroll expense incurred under this contract totaled approximately $20,220 and $0 for the nine months ended September 30, 2013 and 2012, respectively.

The Company pays rent of $1,000 per month to the President for warehouse facilities. Total charges were $9,000 in each of the nine months ended September 30, 2013 and 2012.

Yorkdale Capital, LLC advises and assists the President with many aspects related to the regulatory filings including assistance with the consolidation of financial statements for audit. Yorkdale Capital, LLC or its principals are shareholders and invoice the company reasonable fees for accounting, general consulting and administrative services. The accounts payable balance at September 30, 2013 was $9,250 and at December 31, 2012 was $7,000.

NOTE 7– FINANCIAL CONDITION AND GOING CONCERN

The Company has minimal operations and has negative working capital of $31,775 at September 30, 2013 and positive working capital of $20,146 as of December 31, 2012. Due to the limited operating history and limited operations, the Company may require additional working capital to survive. If the funds the Company has are not sufficient it will also consider bank loans or additional shareholder loans. There are no assurances that the Company will be able to obtain any of these. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital cannot be generated, the Company may not be able to continue its operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 8 – REVENUE CONCENTRATION

The Company’s three largest customers account for 85% ($42,977) of the 2013 year-to-date revenues. The table below discloses the largest customers 2013 versus 2012 for the nine months ended September 30, 2013 and 2012 (note: comparison of largest customers year-over-year).

	YTD 2013 Sales		YTD 2012 Sales
TOP 5 customer	$	%	$	%
Cust 1	29,200	58%	15,682	29%
Cust 2	12,757	25%	13,671	26%
Cust 3	1,020	2%	7,207	13%
Cust 4	963	2%	2,305	4%
Cust 5	889	2%	1,456	3%
Other	5,524	11%	13,184	25%

TOTAL	50,353	100%	53,505	100%

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in the Company’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

General

In the first nine months of 2013 top line revenue decreased 6% to $50,353. Sales slowed in the three months ended September 30, 2013 versus the same period in 2012 as promotional spending slowed as it did in the fiscal second quarter.

RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013

Our quarter ended on September 30, 2013. Any reference to the end of the fiscal quarter refers to the end of the first quarter for the period discussed herein.

REVENUE. Revenue for the three months ended September 30, 2013 was $21,927 compared to $28,400 for the three month period ended September 30, 2012. Revenue decreased $6,473 or 23% due to a decrease in marketing promotional items of $9,100; this was partially offset by an increase in pad printing of $4,000.

Revenue for the nine months ended September 30, 2013 was $50,353 compared to $53,505 for the nine month period ended September 30, 2012. Revenue decreased $3,152 or 6% due to an increase in pad printing of $21,300 which was offset by a decrease in marketing promotional items of $24,700.

COST OF SALES: Cost of sales (COS) were 4,417 (or 20% of revenue) for the three months ended September 30, 2013 compared to $14,206 (or 50% of revenue) for the same period in 2012. The decrease in COS as a percent of sales is due to product mix as sales were geared toward higher margin products.

Cost of sales (COS) were $12,176 (or 24% of revenue) for the nine months ended September 30, 2013 compared to $24,835 (or 46% of revenue) for the same period in 2012. The slight decrease in COS as a percent of sales is due to product mix as sales were geared toward higher margin products.

OPERATING EXPENSES. Operating expenses, exclusive of depreciation expense of $3,641 and $5,110, were $27,942 and $22,870 for the three month periods ended September 30, 2013 and 2012 respectively. The increase expenses were due to payroll costs to the President ($7,000) and fees/services ($7,000) related to redomiciling of the Company to the Cayman Islands and administration.

Operating expenses, exclusive of depreciation expense of $12,131 and $15,446, were $90,153 and $62,055 for the nine month periods ended September 30, 2013 and 2012 respectively. The increase expenses were due to payroll costs to the President ($20,200) and fees/services ($17,000) related to redomiciling of the Company to the Cayman Islands.

NET LOSS. The Net Loss for the three months ended September 30, 2013 and 2012 was $14,060 versus $13,739, respectively. The main drivers behind the change are discussed above.

The Net Loss for the nine months ended September 30, 2013 and 2012 was $64,052 versus $48,681, respectively. The main drivers behind the change are discussed above.

LIQUIDITY AND CAPITAL RESOURCES.

In addition to the preceding, the Company plans for liquidity needs on a short term and long term basis as follows:

Short Term Liquidity:

The Company relies on one primary funding source for short term liquidity needs: advances from the major shareholder / President of the Company. The President has advanced the Company $49,643 and $49,575 as of September 30, 2013 and December 31, 2012, respectively, for working capital. No interest is paid on this advance. This is also disclosed in Note 6.

Long Term Liquidity:

The long term liquidity needs of the Company are projected to be met primarily through the cash flow provided by operations. Cash flow from operations for the nine months ended September 30, 2013 was negative $35,954. The Company continually is seeking new opportunities to spur sales and increase top line revenue.

Going Concern

Our independent auditors included a going concern explanatory paragraph in their report included in our annual report on Form 10-K for the year ended December 31, 2012, which raises substantial doubt about our ability to continue as a going concern. See Note 7.

Capital Resources

We do not expect any significant change to our equity or debt structure and do not anticipate entering into any off-balance sheet arrangements.

Material Changes in Financial Condition

WORKING CAPITAL: Working Capital decreased by approximately $51,900 to negative $31,775 since December 31, 2012. This decrease is due to the reduction in cash of about $35,900 and an increase in current liabilities of about $14,200.

SHAREHOLDERS’ EQUITY: Shareholders’ Equity decreased by $64,052 due to the net loss.

Management Advisors

In May the Company filed a Form S-4 with the US Securities & Exchange Commission (SEC) to effectuate the redomiciling of its charter from Nevada to the British Virgin Islands through the merger of Hall Tees, Inc. with Studio 82, a British Virgin Islands company. Studio 82 has no assets and liabilities and the redomiciling will have a negligible effect on the financial condition of the company. The SEC has submitted comments and is continuing its review. As of the date of this filing the Form S-4 has not been declared effective.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2013. This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are not effective.

Based upon an evaluation conducted for the period ended September 30, 2013, our Chief Executive and Chief Financial Officer as of September 30, 2013 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:

•

Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction.

•

Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.

In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.

Changes in Internal Controls over Financial Reporting

We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Items No. 1, 2, 3, 4, 5 - Not Applicable.

Item No. 6 - Exhibits and Reports on Form 8-K

A Form 8-K was filed on November 18, 2013 disclosing the resignation of EFP Rotenberg as our Registered Independent Accounting Firm and the appointment of The Hall Group CPA’s as our new Registered Independent Accounting Firm.

(b)

Exhibits

Exhibit Number		Name of Exhibit

31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with 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.

HALL TEES, INC.

By /s/ William Lewis

William Lewis, President, CFO

Date: November 18, 2013