10-Q

UNITED STATES

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, 2010

OR

¨  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 1-13984

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

(Exact name of registrant as specified in its charter)

New York	13-3832215
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

2070 Central Park Avenue 2nd Fl. Yonkers, NY 10710

(Address of principal executive offices)

(914) 361-1420

(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 proceeding 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 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 ¨ No ¨

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 (check one): Large Accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer (do not check if a smaller reporting company) ¨ 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). Yes ¨  No x

As of October 26, 2010, there were 1,139,208 shares of the registrant’s common stock, par value $0.025 per share, outstanding.

INDEX
PART I. FINANCIAL INFORMATION
Item 1.  Financial statements:
Balance Sheets as of September 30, 2010 (unaudited) and December 31, 2009	1
Statements of Operations for the nine and three months ended September 30, 2010 and 2009 (unaudited)	2
Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 (unaudited)	3
Notes to Financial Statements (unaudited)	4
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.  Quantitative and Qualitative Disclosures about Market Risk	11
Item 4  Controls and Procedures	11
PART II. OTHER INFORMATION
Item 1.  Legal Proceedings	12
Item 1A. Risk Factors	12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3. Defaults Upon Senior Securities	12
Item 4. [Removed and Reserved]	12
Item 5. Other Information	12
Item 6. Exhibits	13
SIGNATURES	14
CERTIFICATIONS

PART I. FINANCIAL INFORMATION

Item 1. Financial statements

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

BALANCE SHEETS

	September 30, 2010			December 31, 2009
	(Unaudited)			(1)
ASSETS
Current assets:
Cash	$	200		$	155
Accounts receivable		4,000			22,732
Total current assets		4,200			22,887
Other assets:
Trademark, net of amortization		38,625			43,125
Total other assets		38,625			43,125
	$	42,825		$	66,012
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable	$	2,448		$	35,951
Accrued expense		3,089			403,863
Notes payable		8,304			815,000
Cash advances, officer		-			83,900
Total current liabilities		13,841			1,338,714
Stockholders' equity (deficiency):
Preferred stock $.001 par value, authorized 5,000,000 shares, none issued		-			-
Common stock, $.025 par value, authorized 75,000,000 shares, issued and outstanding 1,139,208 shares		28,480			17,110
Additional paid in capital		13,585,673			12,254,135
Accumulated deficit		(13,585,169	)		(13,543,947	)
Total stockholders’ equity (deficiency)		28,984			(1,272,702	)
Total liabilities and stockholders’ equity (deficiency)	$	42,825		$	66,012

(1) Derived from Audited Financial Statements.

See notes to unaudited financial statements.

1

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	Nine Months						Three Months
	Ended September 30						Ended September 30
	2010			2009			2010			2009
Licensing fees	$	7,000		$	7,000		$	2,000		$	2,000
Selling, general and administrative expenses		13,877			17,879			7,578			6,427
Interest expense		34,346			79,463			-			26,487
		48,223			97,342			7,578			32,914
Net loss	$	(41,223	)	$	(90,342	)	$	(5,578	)	$	(30,914	)
Earnings per common share:
Basic and diluted:	$	( .07	)	$	(.92	)	$	(.01	)	$	(.32	)
Weighted average number of  common shares outstanding		560,064			97,778			1,139,208			97,778

See notes to unaudited financial statements.

2

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months
	Ended September 30
	2010			2009
Operating activities:
Net (loss)	$	(41,223	)	$	( 90,342	)
Amortization		4,500			4,500
Increase (decrease) in operating assets and liabilities:
Accounts receivable		(4,500	)		6,500
Accounts payable		(33,503	)		(6,857	)
Accrued expenses		30,885			72,211
Net cash used in operating activities		(43,841	)		(13,988	)
Financing activities:
Proceeds from  loans		8,304			-
Proceeds from cash advances, officer		35,582			10,000
Net cash provided by financing activities		43,886			10,000
Net increase (decrease) in cash and cash equivalents		45			(3,988	)
Cash and cash equivalents, beginning of period		155			4,058
Cash and cash equivalents, end of period	$	200		$	70
Supplemental disclosures:
Cash paid during the year for:
Taxes:	$	-		$	-
Interest:	$	-		$	-
Non cash financing activities:
Shares issued in exchange for debt	$	791,768		$	-
Shares issued in exchange for officer advances	$	119,482		$	-
Accrued interest contributed to capital	$	431,659		$	-

See notes to unaudited financial statements.

3

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

(UNAUDITED)

1. Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission on April 15, 2010.

The results of operations for the three and nine months ended September 30, 2010 are not necessarily indicative of the results for the full fiscal year ending December 31, 2010.

Accounting standards have been issued or proposed by the FASB and other standards-setting bodies that are not expected to have a material impact on the financial statements for the period ending September 30, 2010 upon adoption.

2. Description of business and going concern:

The Company was a manufacturer of baking and confectionery products, which were sold to supermarkets, food distributors, educational institutions, restaurants, mail order and to the public. Although the Company sold its products throughout the United States, its main customer base was on the East Coast of the United States. The Company has now become a holder and licensor of intellectual property.

The accompanying financial statements are prepared assuming the Company will continue as a going concern. At September 30, 2010, the Company had an accumulated deficit of $13,585,169, and a working capital deficiency of $ 9,641. Additionally, for the nine months ended September 30, 2010, the Company incurred a net loss from operations of $41,223 and had negative cash flows from operations in the amount of $43,841. The ability of the Company to continue as a going concern is dependent upon increasing licensing fees and obtaining additional capital and financing. While the Company believes in the viability of its strategy to increase licensing fees and in its ability to raise additional funds, there can be no assurances to that effect.

3. Summary of significant accounting policies:

Cash and cash equivalents:

For the purpose of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

Accounts receivable and allowances:

Accounts receivable are reported at net realizable value. Management considers the need for an allowance for doubtful accounts related to its accounts receivable that are deemed to have potential collectability issues. Management reviews its accounts receivable on a quarterly basis. The Company includes any receivables balances determined to be uncollectible along with a general reserve for doubtful accounts. No allowance was considered necessary at September 30, 2010.

Use of estimates:

The process of preparing financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

4

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

(UNAUDITED)

3. Summary of significant accounting policies (continued):

Net (Loss) Income per Share:

The Company computes basic net (loss) income per share based on the weighted average common shares outstanding during the same period. Diluted net (loss) income per share adjusts the weighted average for potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock, which would then share in the earnings of the Company. At September 30, 2010, the Company had no such securities outstanding.

Revenue Recognition:

Income from licensing fees are recognized from the sale by our licensee of goods bearing the Brooklyn Cheesecake & Desserts Company, Inc. trademark. The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Income Taxes:

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax asset and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than changes in the tax law or rates. A valuation allowance is recorded when it is deemed more likely than not that a deferred tax asset will not be realized.

Impairment of Long-Lived Assets:

The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The recoverability of assets held and used in operations is measured by a comparison of the carrying amount of the assets to the future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Fair Value of Financial Instruments:

The Company’s financial instruments consist of, accounts receivable, accounts payable, accrued expenses, and notes payable. The carrying amounts of the financial instruments reported in the balance sheet approximate fair value based on the short-term maturities of these instruments.

Recent accounting pronouncements:

In June 2009, the Financial Accounting Standards Board (FASB), issued ASC 105, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162". ASC 105 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This SFAS is effective for financial statements issued for interim and annual periods ending after September 15, 2009, and is not expected to have a material impact on our financial statements.

In June 2009, the FASB issued Accounting Standards Update No. 2009-01, “Generally Accepted Accounting Principles” (ASC Topic 105) which establishes the FASB Accounting Standards Codification (“the Codification” or “ASC”) as the official single source of authoritative U.S. generally accepted accounting principles (“GAAP”). All existing accounting standards are superseded. All other accounting guidance not included in the Codification will be considered non-authoritative. The Codification also includes all relevant Securities and Exchange Commission (“SEC”) guidance organized using the same topical structure in separate sections within the Codification.

5

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

(UNAUDITED)

3. Summary of significant accounting policies (continued):

Following the Codification, the Board will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASU”) which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification.

The Codification is not intended to change GAAP, but it will change the way GAAP is organized and presented. The Codification is effective for our fiscal year ending 2009 financial statements and the principal impact on our financial statements is limited to disclosures as all future references to authoritative accounting literature will be referenced in accordance with the Codification. In order to ease the transition to the Codification, we are providing the Codification cross-reference alongside the references to the standards issued and adopted prior to the adoption of the Codification.

In April 2009, the FASB issued FASB Staff Positions FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (ASC Topic 320-10-65). This update provides guidance for allocation of charges for other-than-temporary impairments between earnings and other comprehensive income. It also revises subsequent accounting for other-than-temporary impairments and expands required disclosure. The update was effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 115-2 and FAS 124-2 did not have a material impact on the results of operations and financial condition

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (ASC Topic 855). This guidance is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. It is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this guidance did not have a material impact on our financial statements. The Company evaluated all events and transactions that occurred after September 30, 2010 up through the date the financial statements were available to be issued. During this period no material subsequent events came to our attention.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

4. Trademark and licensing agreements:

On March 7, 2002, the Company purchased the rights to the trademarks Brooklyn Cheesecake Company, Inc. and Brooklyn Cheesecake and Desserts Company, Inc. and the related corporate logo in exchange for 300,000 shares of the Company's common stock, valued on the purchase date at $90,000. The trademark rights are being amortized on the straight-line basis over a fifteen-year term. Amortization expense was $1,500 and $1,500 for the three months September 30, 2010 and 2009, respectively.

On March 28, 2006, the Company entered into a licensing agreement with its former Chairman and CEO, whereby a one percent of sales fee would be charged for the use of the Brooklyn Cheesecake & Desserts Company, Inc. trademarks. Licensing fees were $2,000 and $2,000 for the three months ended September 30, 2010 and 2009, respectively.

	September 30			December 31
	2010			2009
Trademark	$	90,000		$	90,000
Less: Accumulated Amortization		(51,375	)		(46,875	)
Trademark, Net	$	38,625		$	43,125

6

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

(UNAUDITED)

The following is a schedule of future amortization of the trademark:

2010		6,000
2011		6,000
2012		6,000
2013		6,000
2014		6,000
Thereafter		8,625
	$	38,625

5. Notes payable:

A note dated January 31, 2006 was issued to Ronald L. Schutté the former Chairman and CEO payable on demand, with interest at the rate of 13% per annum, and secured by the Company’s trademarks. The original amount of the loan was $995,818 of which $195,818 plus additional loans and accrued interest was satisfied upon completion of an exchange agreement dated March 28, 2006. Mr. Schutté also advanced $15,000 to the Company to cover additional expenses during the period. The balance at September 30, 2010 and December 31, 2009 was $0 and $815,000 respectively. On April 29, 2010, pursuant to the Debt Conversion Agreement that we entered into with Mr. Schutte: (i) we forgave accounts receivable for licensing fees due from the baking company owned by Mr. Schutte of $23,232 in exchange for a $23,232 reduction of the principal balance of the note payable to Mr. Schutte in the original principal amount of $815,000, and (ii) we converted the remaining principal balance of $791,768 of Mr. Schutte’s promissory note by issuing 6,334,144 shares of common stock to Mr. Schutte. During the period ending September 30, 2010 Mr. Schutté advanced $8,304 to the Company. The advances were used for operating expenses.

6. Cash Advances Officer:

Anthony Merante, the Company’s Chairman, President and CEO, makes cash advances to the Company from time to time to enable it to meet its payment obligations. These advances bear no interest and are payable on demand. Mr. Merante made cash advances in the aggregate amount of $35,582 to the Company during the nine months ended September 30, 2010. Amounts due to Mr. Merante at September 30, 2010 and December 31, 2009 were zero and $83,900, respectively. On April 29, 2010, pursuant to the Debt Conversion Agreement that we entered into with Mr. Merante, we converted the outstanding principal balance of his indebtedness of $119,482 by issuing 955,856 shares of common stock to Mr. Merante.

7. Common Stock:

The following common stock issuances were made during the period ended September 30, 2010:

· The Company issued 6,334,144 shares of common stock in satisfaction of an outstanding note payable. Pursuant to a Debt Conversion Agreement: (i) we forgave accounts receivable for licensing fees of $23,232 in exchange for a $23,232 reduction of the principal balance of a note payable in the original principal amount of $815,000, and (ii) we converted the remaining principal balance of $791,768 by issuing 6,334,144 shares of common stock. The shares were issued to the former Chairman and CEO of the Company, valued at $791,768 or $.125 per share, on April 29, 2010 the closing trading price on the date of issuance.

· The Company issued 955,856 shares of common stock in satisfaction of outstanding Officer Cash Advances. Pursuant to a Debt Conversion Agreement that we entered into, we converted the outstanding principal balance of $119,482 by issuing 955,856 shares of common stock. The shares were issued to our current Chairman and CEO, valued at $119,482 or $.125 per share, on April 29, 2010 the closing trading price on the date of issuance.

7

BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

(UNAUDITED)

Each of these issuances of common stock was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

8. Additional Paid in Capital

On April 29, 2010, pursuant to a Debt Conversion Agreement with Ronald L. Schutté, our former Chairman and Chief Executive Officer, Mr. Schutte forgave and agreed to permanently forbear on collection of the accrued but unpaid interest of $431,659 on his note payable which was recorded as a contribution to capital.

9. Debt Conversion Agreement

Effective April 29, 2010, we entered into a Debt Conversion Agreement with each of Mr. Ronald L. Schutte, our former Chairman and Chief Executive Officer, and Mr. Anthony J. Merante our current Chairman and Chief Executive Officer pursuant to which we eliminated approximately $934,482 of our indebtedness in exchange for the forgiveness of $23,232 owed to us and the issuance of an aggregate of 7,290,000 shares of our common stock. These transactions helped reduce our negative working capital which we hope will increase our ability to raise the capital needed to fully implement our business plan.

Pursuant to the Debt Conversion Agreement that we entered into with Mr. Schutte: (i) we forgave accounts receivable for licensing fees due from the baking company owned by Mr. Schutte of $23,232 in exchange for a $23,232 reduction of the principal balance of the note payable to Mr. Schutte in the original principal amount of $815,000, (ii) Mr. Schutte forgave and agreed to permanently forbear on collection of the accrued but unpaid interest of $431,659 on his note payable which was recorded as a contribution to capital, and (iii) we converted the remaining principal balance of $791,768 of Mr. Schutte’s promissory note by issuing 6,334,144 shares of common stock to Mr. Schutte (the “Schutte Conversion Shares”).

Pursuant to the Debt Conversion Agreement that we entered into with Mr. Merante, we converted the outstanding principal balance of his indebtedness of $119,482 by issuing 955,856 shares of common stock to Mr. Merante (the “Merante Conversion Shares” and, collectively with the Schutte Conversion Shares, the “Conversion Shares”).

In order to induce them to execute the Debt Conversion Agreements, we provided each of Messrs. Schutte and Merante with the right to sell their respective Conversion Shares to any potential investor in any subsequent equity offering that we complete at the price and other terms and conditions of such offering.

10. Subsequent Events

For purposes of determining whether a post balance sheet event should be evaluated, to determine whether it has an effect on the financial statements for the period ending September 30, 2010, subsequent events were evaluated by the company through the date on which the unaudited financial statements for the period ending September 30, 2010 were available to be issued. On October 11, 2010, the Company's majority shareholder approved the Company's Board of Directors' recommendation to effect a one share for seven reverse common stock split, as well as an increase in the Company's $.025 par value common stock and $.001 par value preferred stock to 75,000,000 and 5,000,000 shares, respectively. For accounting purposes, the reverse split and increase in authorized capital stock is deemed to have occurred on such date. Accordingly, the effect of the reverse split and increase in authorized capital has been retroactively reflected in these financial statements."

8

Forward Looking Statements

This Quarterly Report on Form 10-Q includes 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.  We have based these forward-looking statements on our current expectations and projections about future events.  These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” ”believe,” “estimate,” ”continue,” or the negative of such terms or other similar expressions.  Factors that might cause or contribute to such a discrepancy include, but are not limited to, those in our other Securities and Exchange Commission filings, including our Annual Report on Form 10K  filed on April 15, 2010.  The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

  From March 2002 through March 2006, we were a manufacturer of baking and confectionary products.  In March 2006, we entered into an Exchange Agreement pursuant to which we exchanged our baking equipment and other fixed assets and JM Specialties, Inc., our wholly owned subsidiary, for the satisfaction and assumption of approximately $1,145,000 of outstanding liabilities and obligations owed to Ronald L. Schutté, our former president and chief executive officer. We retained our trademarks and now license these trademarks to a New Jersey corporation formed by Mr. Schutté to continue the baking operations that were transferred to him pursuant to the Exchange Agreement.

We presently do not have sufficient cash to implement our business plan.

We have experienced this lack of liquidity throughout 2009 and the first nine months of 2010, causing us to be unable to meet our obligations as they come due. We believe that we need to raise or otherwise obtain at least $1,000,000 in additional financing in order to satisfy our existing obligations and implement our business plan.If we are not successful in obtaining such financing, we may not be able to continue to operate our business.

Although we are hopeful that licensing fees will increase in the future and be sufficient to pay related expenses, we will also look for additional opportunities, such as joint ventures, partnerships, strategic alliances or business combinations. The Company is not currently in discussions regarding any such opportunities

On October 11, 2010, one shareholder owning 6,459,513 shares of our Common Stock, or approximately 81% of the issued and outstanding shares, consented in writing to a one (1) for seven (7) reverse split of the shares of the Company’s issued and outstanding Common Stock and to an increase in the authorized shares of the Company’s capital stock.  It is expected that such corporate actions will be effected on or about November 14, 2010. For accounting purposes the reverse split and increase in authorized capital stock is deemed to have occurred on October 11, 2010 and, accordingly, have been retroactively reflected in the financial statements included in this report.

The following discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included in this Quarterly Report on Form 10-Q.

9

Critical Accounting Policies

Revenue Recognition:

Income from licensing fees are recognized from the sale by our licensee of goods bearing the Brooklyn Cheesecake & Desserts Company, Inc. trademark.  The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. 

Results of Operations

 Nine and Three Months Ended September 30, 2010 Compared to the Nine and Three Months Ended September 30, 2009

Licensing fees aggregated $7,000 and $7,000 for the nine months ended September 30, 2010 and 2009. There was no change. Licensing fees for the three months ended September 30, 2010 as compared to September 30, 2009 was $2,000 and $2,000 respectively. There was no change.

Selling, general and administrative expenses totaled $13,877 and $17,879 for the nine months ended September 30, 2010 and 2009.  The decrease of $4,002 or 23% was the result of lower legal fees. Selling, general and administrative expenses for the three months ended September 30, 2010 increased to $7,578 from $6,427 for the three months ended September 30, 2010.  This is an increase of $1,151 or 18%.  This is a result of higher legal fees during the quarter.

Interest expense was $34,346 and $79,463 for the nine months ended September 30, 2010 and 2009. Interest expense for the three months ended September 30, 2010 and 2009 was $0 and $26,487. The decrease was a result of the debt conversion of the former Chairman and Chief Executive Officer. Prior to conversion, interest accrued on the outstanding principal balance at a rate of 13% per annum on the $815,000 note payable.

Liquidity and Capital Resources

Since inception, our only source of working capital has been the $8,455,000 received from the sale of our securities.

As of September 30, 2010, we had negative working capital of $9,641 as compared to negative working capital of $1,315,827 at December 31, 2009.

Net Cash Used in Operating Activities during the nine months ended September 30, 2010 of $43,223 was due to our net loss of $41,223 and amortization expense of $4,500.  This was offset by an increase in accounts receivable of $4,500, a decrease in accounts payable of $33,503, and an increase in accrued expenses of $30,885.

Net Cash Provided by Financing Activities during thenine months ended September 30, 2010 of $43,886 was due to loans of $8,304 and officer advances of $35,582.

Effective April 29, 2010, we entered into a Debt Conversion Agreement with each of Mr. Ronald L. Schutte, our former Chairman and Chief Executive Officer, and Mr. Anthony J. Merante our current Chairman and Chief Executive Officer pursuant to which we eliminated approximately $934,482 of our  indebtedness in exchange for the forgiveness of $23,232 owed to us and the issuance of an aggregate of 7,290,000 shares of our common stock.  These transactions helped reduce our negative working capital which we hope will increase our ability to raise the capital needed to fully implement our business plan.

Pursuant to the Debt Conversion Agreement that we entered into with Mr. Schutte: (i) we forgave accounts receivable for licensing fees due from the baking company owned by Mr. Schutte of $23,232 in exchange for a $23,232 reduction of the principal balance of the note payable to Mr. Schutte in the original principal amount of $815,000, (ii) Mr. Schutte forgave and agreed to permanently forbear on collection of the accrued but unpaid interest of $431,659 on his note payable which was recorded as a contribution to capital, and (iii) we converted the remaining principal balance of $791,768 of Mr. Schutte’s promissory note by issuing 6,334,144 shares of common stock to Mr. Schutte (the “Schutte Conversion Shares”).

Pursuant to the Debt Conversion Agreement that we entered into with Mr. Merante, we converted the outstanding principal balance of his indebtedness of $119,482 by issuing 955,856 shares of common stock to Mr. Merante (the “Merante Conversion Shares” and, collectively with the Schutte Conversion Shares, the “Conversion Shares”).

10

Although we have previously been successful in obtaining sufficient capital funds through issuance of common stock and warrants, there can be no assurance that we will be able to do so in the future especially given the recent liquidity crisis in the credit markets.  We expect that the continued deterioration in the worldwide economy will adversely affect licensing fee revenue.

Inflation and Seasonality

Licensing revenue will vary since it is tied to peak baking seasons. Revenues are generally higher during holiday seasons such as Thanksgiving, Christmas, Jewish New Year, Easter and Passover than they are during other times of the year.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements during the three and nine months ended  September 30, 2010 that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our interests.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This disclosure is not required for a smaller reporting company.

Item 4  Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

             As of  September 30, 2010, we carried out an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) under the supervision and with the participation of our management, including Anthony J. Merante, our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, Mr. Merante concluded that our disclosure controls and procedures are effective at a reasonable assurance level to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROLS

             During the quarter ended September 30, 2010, there was no change in the issuer’s internal control over financial reporting that has materially affected, or is reasonable likely to materially affect, the issuer’s internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS.

               A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations of its internal controls to enhance, where necessary, its procedures and controls.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

            From time to time we may be a party to legal proceedings occurring in the ordinary course of business.  We are not currently involved in any legal proceedings.

Item 1A. Risk Factors

            This disclosure is not required for a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On April 29, 2010, the Company issued 6,334,144 shares of common stock in satisfaction of an outstanding note payable.  The shares were issued to the former Chairman and CEO, valued at $791,768 or $.125 per share, the closing trading price on the date of issuance.

On April 29, 2010, the Company issued 955,856 shares of common stock in satisfaction of Officer Cash Advances.  These shares were issued to our current Chairman and CEO, valued at  $119,482 or $.125 per share, the closing trading price on the date of issuance.

Each of these issuances of common stock was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

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Item 6. Exhibits

  (a) Exhibits

3.1 Restated Certificate of Incorporation.  Incorporated by reference to the Company's Registration Statement on Form SB-2 Registration Number 33-96094.

3.2 Amended and Restated By-laws.  Incorporated by reference to the Company's Registration Statement on Form SB-2 Registration Number 33-96094.

3.3 Amendment to Certificate of Incorporation.   Incorporated by reference to the Company's Current Report on Form 8-K, dated February 23, 2005.

3.4 Amendment to Certificate of Incorporation.   Incorporated by reference to the Company's Current Report on Form 8-K, dated March 22, 2006.

4.1 Form of certificate for shares of Common Stock.  Incorporated by reference to the Company's Registration Statement on Form SB-2 Registration Number 33-96094.

4.2 2004 Stock Incentive Plan.  Incorporated by reference to the company’s Definitive Proxy statement filed on Form Schedule 14A dated July 15, 2004.

10.1 Debt Conversion Agreement dated as of April 29, 2010, by and between Brooklyn Cheesecake and Dessert Company, Inc. and Ronald Schutte.  Incorporated by reference to the Company’s Current Report on Form 8-K dated April 29, 2010.

10.2 Debt Conversion Agreement dated as of April 29, 2010, by and between Brooklyn Cheesecake and Dessert Company, Inc. and Anthony Merante.  Incorporated by reference to the Company’s Current Report on Form 8-K dated April 29, 2010.

31.1 Certification dated October 26, 2010 pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes Oxley-Act of 2002 by Anthony J. Merante, Chairman, President, Chief Executive Officer, and Chief Financial Officer.

32.1 Certification dated October 26, 2010 pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by Anthony J. Merante, Chairman, President, Chief Executive Officer, and Chief Financial Officer.

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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.

Brooklyn Cheesecake & Desserts Company, Inc.

By:	/s/Anthony J. Merante
Chairman, President, Chief Executive Officer and Chief Financial Officer
(principal financial officer and principal accounting officer)

Date: October 26, 2010

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Anthony J. Merante, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Brooklyn Cheesecake & Desserts 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 registrant’s 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 Rules13a-15(f) and 15(d)-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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: October 26, 2010

/s/ Anthony J. Merante

Anthony J. Merante

Chairman, President, Chief Executive Officer, and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Brooklyn Cheesecake & Desserts Company, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony J. Merante, President, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2010

/s/ Anthony J. Merante

Anthony J. Merante

Chairman, President, Chief Executive Officer and Chief Financial

 Officer