Better Choice Co Inc. - Quarter Report: 2011 February (Form 10-Q)

sport_10q-022811.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended February 28, 2011

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

Commission File Number: 333-161943

SPORT ENDURANCE, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-2754069
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1890 South West Salt Lake City, Utah 84104

(Address of principal executive offices) (Zip Code)

(877) 255-9218

(Registrant’s telephone number, including area code)

Not Applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)

Yes o No x

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable

date: 60,200,000 shares of $0.001 par value common stock outstanding as of April 13, 2011.

SPORT ENDURANCE, INC.

FORM 10-Q

Quarterly Period Ended February 28, 2011

		Page
INDEX

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Balance Sheets as of February 28, 2011 (Unaudited) and August 31, 2010	4
	Condensed Statements of Operations for Three and Six Months ended February 28, 2011 and 2010 and the period from January 3, 2001 (inception) to February 28, 2011 (Unaudited)	5
	Statement of Stockholders’ Equity (Deficit) from January 3, 2001 (inception) to August 31, 2010 and for the six months ended February 28, 2011 (Unaudited)	6
	Condensed Statements of Cash Flows for the Six Months ended February 28, 2011 and 2010and the period from January 3, 2001 (inception) to February 28, 2011(Unaudited)	8
	Notes to the Condensed Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4T.	Controls and Procedures	19

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 5.	Other Information	20
Item 6.	Exhibits	21

SIGNATURES		22

EXPLANATORY NOTE

Unless otherwise noted, references in this registration statement to "Sport Endurance, Inc." the "Company," "we," "our" or "us" means Sport Endurance, Inc.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

AVAILABLE INFORMATION

We file annual, quarterly and special reports and other information with the SEC that can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SPORT ENDURANCE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS


	February 28,			August 31,
	2011			2010
ASSETS	(Unaudited)

Current assets:
Cash and cash equivalents	$	205		$	59
Prepaid expenses		-			1,995
Total current assets		205			2,054

Equipment, net		19,052			21,148

Total assets	$	19,257		$	23,202


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	19,925		$	14,620
Accrued Interest		759			243
Due to related parties		16,585			7,440
Total current liabilities		37,269			22,303

Total liabilities		37,269			22,303

Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 20,000,000 shares authorized 1,000,000 and 2,000,000 shares issued and outstanding at February 28, 2011 and August 31, 2010, respectively		1,000			2,000
Common stock, $0.001 par value, 480,000,000 shares authorized, 60,200,000 and 57,200,000 shares issued and outstanding at February 28, 2011 and August 31, 2010, respectively		60,200			57,200
Additional paid-in capital		119,320			121,320
(Deficit) accumulated during development stage		(198,532	)		(179,621	)
Total stockholders' equity (deficit)		(18,012	)		899

Total liabilities and stockholders' equity (deficit)	$	19,257		$	23,202

See accompanying notes to these financial statements.

SPORT ENDURANCE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)

	For the three months ended						For the six months ended						January 3, 2001
	February 28,						February 28,						(inception) to
	2011			2010			2011			2010			February 28, 2011

Revenue	$	-		$	-		$	-		$	-		$	-

Expenses:
General and administrative		4,137			2,201			6,574			2,265			25,260
Professional fees		6,725			3,500			9,725			12,000			153,225
Depreciation		1,048			1,048			2,096			2,096			6,288
Total operating expenses		11,910			6,749			18,395			16,361			184,773

Net operating (loss)		(11,910	)		(6,749	)		(18,395	)		(16,361	)		(184,773	)

Other expense:
Interest expense		(313	)		-			(516	)		-			(759	)
Offering costs		-			-			-			-			(13,000	)
Total other expense		(313	)		-			(516	)		-			(13,759	)

Loss before provision for income taxes		(12,223	)		(6,749	)		(18,911	)		(16,361	)		(198,532	)

Provision for income taxes		-			-			-			-			-

Net (loss)	$	(12,223	)	$	(6,749	)	$	(18,911	)	$	(16,361	)	$	(198,532	)

Weighted average number of common shares outstanding - basic and fully diluted		60,200,000			57,200,000			59,303,867			57,200,000

Net (loss) per share - basic and fully diluted	$	-		$	-		$	-		$	-

See accompanying notes to these financial statements.

SPORT ENDURANCE, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)


									Additional		Common stock		(Deficit) accumulated during			Total
	Preferred stock				Common stock				paid-In		subscriptions		development			stockholders'
	Shares		Amount		Shares		Amount		capital		receivable		stage			equity (deficit)
Common stock issued to founder at $0.001 per share, of which $500 was paid in cash		-	$	-		1,200,000	$	1,200	$	-	$	-	$	-		$	1,200

Sale of common stock for cash		-		-		3,000,000		3,000		12,000		-		-			15,000

Net loss for the year ended August 31, 2001		-		-		-		-		-		-		(16,200	)		(16,200	)

Balance, August 31, 2001		-		-		4,200,000		4,200		12,000		-		(16,200	)		-

Issuance of common stock for professional fees		-		-		25,000,000		25,000		100,000		-		-			125,000

Net loss for the year ended August 31, 2002		-		-		-		-		-		-		(125,000	)		(125,000	)

Balance, August 31, 2002		-		-		29,200,000		29,200		112,000		-		(141,200	)		-

Net loss for the year ended August 31, 2003		-		-		-		-		-		-		-			-

Balance, August 31, 2003		-		-		29,200,000		29,200		112,000		-		(141,200	)		-

Net loss for the year ended August 31, 2004		-		-		-		-		-		-		-			-

Balance, August 31, 2004		-		-		29,200,000		29,200		112,000		-		(141,200	)		-

Net loss for the year ended August 31, 2005		-		-		-		-		-		-		-			-

Balance, August 31, 2005		-		-		29,200,000		29,200		112,000		-		(141,200	)		-

Net loss for the year ended August 31, 2006		-		-		-		-		-		-		-			-

Balance, August 31, 2006		-		-		29,200,000		29,200		112,000		-		(141,200	)		-

Net loss for the year ended August 31, 2007		-		-		-		-		-		-		-			-

SPORT ENDURANCE, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)

Additional

Common stock

(Deficit)

accumulated

during

Total

Preferred stock

Common stock

paid-In

subscriptions

development

stockholders'

Amount

capital

receivable

stage

equity (deficit)

Balance, August 31, 2007	-			-		29,200,000			29,200			112,000			-			(141,200	)		-

Net loss for the year ended August 31, 2008	-			-		-			-			-			-			-			-

Balance, August 31, 2008	-			-		29,200,000			29,200			112,000			-			(141,200	)		-

Issuance of convertible preferred stock for cash	2,000,000			2,000		-			-			3,000			-			-			5,000

Issuance of founder's shares in exchange for contributed equipment at $0.001 per share	-			-		25,340,000			25,340			-			-			-			25,340

Common stock subscription receivable issued to founder at $0.001 per share	-			-		8,980,000			8,980			-			(8,980	)		-			-

Previously issued common stock cancelled	-			-		(6,320,000	)		(6,320	)		6,320			-			-			-

Net loss for the year ended August 31, 2009	-			-		-			-			-			-			-			-

Balance, August 31, 2009	2,000,000			2,000		57,200,000			57,200			121,320			(8,980	)		(141,200	)		30,340

Sale of common stock for cash	-			-		-			-			-			8,980			-			8,980

Net loss for the year ended August 31, 2010	-			-		-			-			-						(38,421	)		(38,421	)

Balance, August 31, 2010	2,000,000			2,000		57,200,000			57,200			121,320			-			(179,621	)		899

Conversion of preferred stock into common, 3:1	(1,000,000	)		(1,000	)	3,000,000			3,000			(2,000	)		-			-			-

Net loss for the six months ended February 28, 2011	-			-		-			-			-			-			(18,911	)		(18,911	)

Balance, February 28, 2011 (Unaudited)	1,000,000		$	1,000		60,200,000		$	60,200		$	119,320		$	-		$	(198,532	)	$	(18,012	)

See accompanying notes to these financial statements.

SPORT ENDURANCE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)

							January 3, 2001
	For the six months ended						(inception) to
	February 28,						February 28,
	2011			2010			2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)	$	(18,911	)	$	(16,361	)	$	(198,532	)
Adjustments to reconcile net (loss) to net cash used in operating activities:
Depreciation		2,096			2,096			6,288
Shares issued for services		-			-			125,000
Decrease (increase) in assets:
Prepaid expenses		1,995			(195	)		-
Increase (decrease) in liabilities:
Accounts payable		5,305			4,135			19,925
Accrued interest		516			-			759

Net cash used in operating activities		(8,999	)		(10,325	)		(46,560	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party loans, net of repayments		9,145			-			16,585
Proceeds from sale of common and preferred stock		-			7,295			30,180

Net cash provided by financing activities		9,145			7,295			46,765

NET CHANGE IN CASH		146			(3,030	)		205

CASH AT BEGINNING OF PERIOD		59			3,200			-

CASH AT END OF PERIOD	$	205		$	170		$	205


SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

Non-cash activities:
Value of common stock issued for services	$	-		$	-		$	125,000
Value of common stock issued for equipment	$	-		$	-		$	25,340

See accompanying notes to these financial statements.

Sport Endurance, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Note 1 – Nature of Business and Significant Accounting Policies

Nature of business

Sport Endurance, Inc. (“the Company”) was incorporated as Cayenne Construction, Inc. in the state of Nevada on January 3, 2001 (“Inception”). The Company was formed to be an independent service provider of ready-mix concrete, whereby management was to arrange purchases of ready-mixed concrete by small contractors and customers on a fee basis. The Company ceased operations in 2002 and was revived in 2009 with a name change to, “Sport Endurance, Inc.” on August 6, 2009. The Company intends to manufacture and distribute a line of sports energy drinks.

Basis of presentation

The unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation. All such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative of the results to be expected for the fiscal year ending August 31, 2011. It is suggested that these interim condensed financial statements be read in conjunction with the form 10-K.

The Company is considered to be in the development stage as defined by FASB ASC 915-10-05. This standard requires companies to report their operations, shareholders equity and cash flows from inception through the reporting date. The Company will continue to be reported as a development stage entity until, among other factors, revenues are generated from management’s intended operations. Management has provided financial data since inception (January 3, 2001).

The Company has adopted a fiscal year end of August 31st.

Results of operations for the interim period are not indicative of annual results.

Recently Issued Accounting Pronouncements

In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. These changes become effective for the Company beginning January 1, 2011. The Company’s adoption of this update did not have an impact on the Company’s financial condition or results of operations.

In December 2010, the FASB issued ASU 2010-28, “Intangible –Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. These changes become effective for the Company beginning January 1, 2011. The adoption of this ASU did not have a material impact on our financial statements.

In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. The adoption of this ASU did not have a material impact on our financial statements.

Sport Endurance, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

In April 2010, the FASB issued ASU 2010-13, "Compensation—Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (A consensus of the FASB Emerging Issues Task Force)" (“ASU 2010-13”). ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. This clarification of existing practice is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. The Company’s adoption of this update did not have an impact on the Company’s financial condition or results of operations.

In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements. Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU. The adoption of this ASU did not have a material impact on our financial statements.

In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.

In October 2009, the FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard became effective for the Company on September 1, 2010. The adoption of this standard did not have a material impact on our financial statements

In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard became effective for the Company on September 1, 2010. The adoption of this standard did not have a material impact on our financial statements

In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard became effective for the Company on September 1, 2010. The adoption of this standard did not have a material impact on our financial statements.

Sport Endurance, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Note 2 – Going Concern

As shown in the accompanying financial statements, the Company has incurred recurring net losses from operations resulting in an accumulated deficit of $198,532, and a working capital deficit of $37,064 as of February 28, 2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Related Party

On December 15, 2010, the former CEO, Robert Timothy, resigned as from the Board of Directors and his position as CEO, and appointed Gerald Ricks as the Chairman of the Board of Directors and CEO.

On December 30, 2010, the Board of Directors dismissed Ronald Schuurman as Secretary and Treasurer and appointed Vincent Kelly to the Board and positions of Secretary and Treasurer.

On December 31, 2010, the Board of Directors appointed James Hughes to the Board of Directors.

On January 7, 2011, the Company received an unsecured loan of $7,000, due on demand, bearing interest at 10%, from a major shareholder, Bryan K. Hawker, to fund operations.

On December 15, 2010, the Company received an unsecured loan of $1,140, due on demand, bearing interest at 10%, from a major shareholder, Bryan K. Hawker, to fund operations.

On October 7, 2010 and October 15, 2010, the Company received loans of $1,500, for total proceeds of $3,000, from a major shareholder, Bryan K. Hawker, to fund operations.

From time to time the Company has received loans from the former CEO, Robert Timothy, to fund operations. The total outstanding balance of the unsecured, demand notes, bearing interest at 10% was $5,445 and $7,415 at February 28, 2011 and August 31, 2010, respectively. Accrued interest of $540 and $243 was outstanding as of February 28, 2011 and August 31, 2010, respectively.

On October 1, 2009, the Company entered into a five year, non-cancellable, commercial and industrial lease with the parents of the Company’s CEO, Robert Timothy, Robert Timothy Sr. and DeVon Timothy, that calls for monthly lease payments of $2,135, including monthly charges of $140 for taxes and insurance. On October 1, 2009 the Company paid a $1,995 deposit. The lease never commenced and was cancelled on December 15, 2010 with Robert Timothy’s resignation as CEO, and the deposit was returned to the lessor.

On February 10, 2002, the Company issued 25,000,000 shares to the Company President for professional services rendered. The fair value of those shares was $125,000 on the grant date.

Sport Endurance, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

On January 10, 2001 the Company issued 1,200,000 shares of common stock to the founder of the Company in exchange for proceeds of $500. Since the par value of the Company’s common stock is the legal minimum value, management recorded compensation for the difference between the amount paid of $500 and the minimum value of $1,200, or $700 in the accompanying statement of operations.

Note 4 – Due to Related Parties

From time to time the Company has received loans from a major shareholder, Bryan K. Hawker, to fund operations. The total outstanding balance of the unsecured, demand notes, bearing interest at 10% was $11,140 and $-0- at February 28, 2011 and August 31, 2010, respectively. Accrued interest of $219 and $-0- was outstanding as of February 28, 2011 and August 31, 2010, respectively.

Total amounts due to related parties were $16,585 and $7,440 at February 28, 2011 and August 31, 2010, respectively.

The Company has accrued interest of $759 and $243 to related parties as of February 28, 2011 and August 31, 2010, respectively.

Note 5 – Equipment

Equipment consists of the following:

	February 28,			August 31,
	2011			2010

Computer equipment	$	10,000		$	10,000
Furniture and fixtures		15,340			15,340
		25,340			25,340
Less accumulated depreciation		(6,288	)		(4,192	)
	$	19,052		$	21,148

Depreciation expense totaled $2,096 and $2,096 for the six months ended February 28, 2011 and 2010, respectively.

Note 6 – Stockholders’ Equity

On June 7, 2010, the shareholders of the Company voted to increase the authorized common shares of the Company’s common stock from 90,000,000 authorized shares of common stock to 480,000,000 authorized shares of common stock. Additionally, the shareholders voted to increase the authorized shares of the Company’s preferred stock from 10,000,000 authorized shares to 20,000,000 authorized shares of preferred stock. As a result of this vote, the Company filed an amendment to its Articles of Incorporation to reflect this change.

Preferred stock

On August 15, 2009, the Company issued a total of 2,000,000 shares of preferred stock to two individual investors in a private placement under Rule 506 of the Securities Act of 1933 for $5,000 in cash, or $0.0025 per share.

Sport Endurance, Inc.

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

On October 12, 2010, a preferred stock shareholder elected to convert 1,000,000 shares of preferred stock in exchange for 3,000,000 shares of common stock.

Common stock

As noted above, on October 12, 2010, a preferred stock shareholder elected to convert 1,000,000 shares of preferred stock in exchange for 3,000,000 shares of common stock.

On August 20, 2009, the Company issued 8,980,000 founder’s shares of common stock in exchange for a subscription receivable of $8,980. The Company received proceeds of $8,980 at various dates between September 15, 2009 and May 13, 2010.

On August 20, 2009, the Company issued 25,340,000 founder’s shares of common stock in exchange for contributed equipment with a cost basis of $25,340. The cost basis approximated the fair market value of the equipment.

On August 20, 2009, the Company cancelled and returned to treasury 6,320,000 shares of common stock previously issued to founders. No consideration was provided and the total par value of $6,320 was recorded as additional paid-in capital.

On February 10, 2002, the Company issued 25,000,000 shares to the Company President for professional services rendered. The fair value of those shares was $125,000 on the grant date.

The Company issued a total of 3,000,000 shares of its $.001 par value common stock during May 2001 in a private placement under Rule 506 of the Securities Act of 1933 for $15,000 in cash, or $0.001 per share to a total of nineteen individual investors. Due to a lack of operations, management believes the purchase price of $0.001 per share is representative of fair value.

Note 7 – Subsequent Events

On April 8, 2011, the Company received an unsecured loan of $2,500, due on demand, bearing interest at 10%, from the Company’s CEO, Gerald Ricks.

On March 31, 2011, the Company received an unsecured loan of $2,500, due on demand, bearing interest at 10%, from the Company’s CEO, Gerald Ricks.

In accordance with ASC 855-10, all subsequent events have been reported through the filing date.

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

OVERVIEW AND OUTLOOK

Sport Endurance, Inc.(“Sport Endurance”) is a Nevada corporation that intends to manufacture and distribute a line of sports energy drinks. Production and distribution has not yet commenced, as such, the Company is considered to be in the development stage.

For the three months ended February 28, 2011, we had a net loss of $12,223 as compared to a net loss of $6,749 for the three months ended February 28, 2010. Our accumulated deficit as of February 28, 2011 was $198,532. These conditions raise substantial doubt about our ability to continue as a going concern over the next twelve months.

Results of Operations for the Three Months Ended February 28, 2011 and 2010

The following table summarizes selected items from the statement of operations for thethree month period ended February 28, 2011 compared to February 28, 2010.

EXPENSES:

	For the Three Months Ended
	February 28,						Increase /
	2011			2010			(Decrease)
General and administrative	$	4,137		$	2,201		$	1,936
Professional fees		6,725			3,500			3,225
Depreciation		1,048			1,048			-
Total Operating Expenses		11,910			6,749			5,161

Net Operating (Loss)		(11,910	)		(6,749	)		5,161

Interest expense		(313	)		-			313

Net (Loss)	$	(12,223	)	$	(6,749	)	$	5,474

Revenues

The Company had no revenues during the three month periods ending February 28, 2011 and 2010.

General and administrative expenses

General and administrative expenses were $4,137 for the three months ended February 28, 2011 compared to $2,201 for the three months ended February 28, 2010, anincrease of $1,936 or approximately 88%. The increase in general and administrative expense for the three months ended February 28, 2011 compared to 2010 was due primarily toincreased stock servicing costs related to maintaining our stock issuances to shareholders that was not necessary in the same period in 2010.

Professional fees

Professional fees were $6,725 for the three months ended February 28, 2011 compared to $3,500 for the three months ended February 28, 2010, anincrease of $3,225 or approximately 92%. The increase in professional fees for the three months ended February 28, 2011 compared to 2010 was due primarily toincreasedlegal fees attributed to our filing Form 10Q during the three months ended, February 28, 2011 that was not necessary in the same period in 2010.

Depreciation

Depreciation for the three months ended February 28, 2011 were $1,048 compared to $1,048 for the three months ended February 28, 2010. We anticipate our quarterly depreciation expense to continue to be $1,048 for the near term.

Net operating (loss)

The net operating loss for the three months endedFebruary 28, 2011 was $11,910compared to $6,749 for the three months ended February 28, 2010, anincrease of $5,161 or approximately 77%, due primarily to increased legal costs during the three months ended February 28, 2011 that were not incurred during the same period in 2010. Our net operating loss consisted primarily of stock servicing costs and professional fees as we revived the entity and pursued financing in anticipation of developing our line of sport energy drinks.

Interest expense

Interest expense for the three months endedFebruary 28, 2011 was $313 compared to $-0- for the three months ended February 28, 2010, an increase of $313 or approximately 100%. Our increasedinterest expensewas due to interest on loans from related parties that were not outstanding during the comparable previous period.

Net (loss)

The net loss for the three months ended February 28, 2011 was $12,223 compared to $6,749 for the three months ended February 28, 2010, anincrease of $6,749 or approximately 81%. Our net operating loss increased primarily as a result of stock servicing costs and professional fees related to maintaining our public entity that were not necessary in the comparative period in 2010.

Results of Operations for the Six Months Ended February 28, 2011 and 2010

The following table summarizes selected items from the statement of operations for the six month period ended February 28, 2011 compared to February 28, 2010.

EXPENSES:

	For the Six Months Ended
	February 28,						Increase /
	2011			2010			(Decrease)
General and administrative	$	6,574		$	2,265		$	4,309
Professional fees		9,725			12,000			(2,275	)
Depreciation		2,096			2,096			-
Total Operating Expenses		18,395			16,361			2,034

Net Operating (Loss)		(18,395	)		(16,361	)		2,034

Interest expense		(516	)		-			516

Net (Loss)	$	(18,911	)	$	(16,361	)	$	2,550

Revenues

The Company had no revenues during the six month periods ending February 28, 2011 and 2010.

General and administrative expenses

General and administrative expenses were $6,574 for the six months ended February 28, 2011 compared to $2,265 for the six months ended February 28, 2010, anincrease of $4,309 or approximately 190%. The increase in general and administrative expense for the six months ended February 28, 2011 compared to 2010 was due primarily toincreased stock servicing costs related to maintaining our stock issuances to shareholders that was not necessary in the same period in 2010.

Professional fees

Professional fees were $9,725 for the six months ended February 28, 2011 compared to $12,000 for the six months ended February 28, 2010, a decrease of $2,275 or approximately 19%. The decrease in professional fees for the six months ended February 28, 2011 compared to 2010 was due primarily tolegal and accounting fees attributed to our filing Form S1 that was incurred during the six months ended, February 28, 2010 that was not necessary during the six month period ended February, 2011.

Depreciation

Depreciation for the six months ended February 28, 2011 were $2,096 compared to $2,096 for the six months ended February 28, 2010. We anticipate our quarterly depreciation expense to continue to be $1,048 for the near term.

Net operating (loss)

The net operating loss for the sixmonths endedFebruary 28, 2011 was $18,395 compared to $16,361 for the six months ended February 28, 2010, anincrease of $2,034 or approximately 12%, due primarily to increased stock servicing costs related to maintaining our stock issuances to shareholders during the six months ended February 28, 2011 that were not incurred during the same period in 2010. Our net operating loss consisted primarily of stock servicing costs and professional fees as we revived the entity and pursued financing in anticipation of developing our line of sport energy drinks.

Interest expense

Interest expense for the sixmonths endedFebruary 28, 2011 was $516 compared to $-0- for the six months ended February 28, 2010, an increase of $516 or approximately 100%. Our increasedinterest expensewas due to interest on loans from related parties that were not outstanding during the comparable previous period.

Net (loss)

The net loss for the six months ended February 28, 2011 was $18,911 compared to $16,361 for the six months ended February 28, 2010, anincrease of $2,550 or approximately 16%. Our net operating loss increased primarily as a result of servicing costs related to maintaining our stock issuances to shareholdersand maintaining our public entity that were not necessary in the comparative period in 2010.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at February 28, 2011 compared to February 28, 2010.

	February 28,			February 28,
	2011			2010

Current Assets	$	205		$	2,165

Current Liabilities	$	37,269		$	4,135

Working Capital (Deficit)	$	(37,064	)	$	(1,970	)

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development of alternative revenue sources. As of February 28, 2011, we had a working capital deficit of $(37,064). Our poor financial condition raises substantial doubt about our ability to continue as a going concern and we have incurred losses since inception and may incur future losses. In the past, we have conducted private placements of equity shares and during the sixmonths ending February 28, 2011 we did not receive any proceeds from private placements. During six months ended February 28, 2011, we received a total of $11,140 in unsecured loans due on demand, bearing interest at 10%, from related parties. There is no guarantee that the related parties will be willing to commit any further loans to the Company at this time.

Should we not be able to continue to secure additional financing when needed, we may be required to slow down or suspend our growth or reduce the scope of our current operations, any of which would have a material adverse effect on our business.

Our future capital requirements will depend on many factors, including the development of our line of sport energy drinks; the cost and availability of third-party financing for development; and administrative and legal expenses.

We anticipate that we will incur operating losses in the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management of growth. To address these risks, we must, among other things, expand our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

Satisfaction of our cash obligations for the next 12 months.

As of February 28, 2011, our cash balance was $205. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, sale of shares of our common stock, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that same period of time, but do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to secure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

Going concern.

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $198,532and a working capital deficit of $37,064 at February 28, 2011, and have reported negative cash flows from operations since inception. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.

Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

Summary of product and research and development that we will perform for the term of our plan.

We are not anticipating significant research and development expenditures in the near future.

Expected purchase or sale of plant and significant equipment.

We do not anticipate the purchase or sale of any plant or significant equipment as such items are not required by us at this time.

Significant changes in the number of employees.

As of February 28, 2011, we had no employees, other than our non-paid CEO, Gerald Ricks, who replaced Robert Timothy, who resigned on December 15, 2010. Currently, there are no organized labor agreements or union agreements and we do not anticipate any in the future.

Assuming we are able to pursue revenue through the commencement of sales of our sports energy drinks, we anticipate an increase of personnel and may need to hire employees. In the interim, we intend to use the services of independent consultants and contractors to perform various professional services when appropriate. We believe the use of third-party service providers may enhance our ability to control general and administrative expenses and operate efficiently.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements 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 or operations, liquidity, capital expenditures or capital resources that are material to investors.

Recently Issued Accounting Standards

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

This item is not applicable as we are currently considered a smaller reporting company.

Item 4T.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, Gerald Ricks, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on the evaluation, Mr. Ricks concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure, for the following reasons:

●

The Company does not have an independent board of directors or audit committee or adequate segregation of duties;

●

All of our financial reporting is carried out by our financial consultant;

●

We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.

We plan to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material pending legal proceedings to which our company or subsidiary is a party or of which any of their property is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any director, officer or affiliate of our company, or any registered or beneficial stockholder of our company, or any associate of any such director, officer, affiliate, or stockholder is a party adverse to our company or subsidiary or has a material interest adverse to our company or subsidiary.

Item 1A. Risk Factors.

There has been no change in the Company’s risk factors since the Company’s Annual Report on Form 10-K filed with the SEC on December 14, 2010.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date

31.1	Certification of Mr. Ricks pursuant to Section 302 of the Sarbanes-Oxley Act	X
32.1	Certification of Mr. Ricks pursuant to Section 906 of the Sarbanes-Oxley Act	X

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.

SPORT ENDURANCE, INC.

By:

/s/ Gerald Ricks

Gerald Ricks

President, Chief Executive Officer,

Director

(Principal Executive Officer, Principal Financial Officer,

and Principal Accounting Officer)

Date: April 14, 2011