Black Bird Biotech, Inc. - Quarter Report: 2011 June (Form 10-Q)

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The Company was incorporated as Cyprium Resources, Inc. under the laws of the State of Nevada December 22, 2006.  The Company was originally formed for mineral exploration in the United States.  On May 19, 2009 the Company’s name was changed to Digital Development Partners, Inc.

 

 

In January, 2007 the Company entered into a 20 year lease agreement with the owner of 10 mining claims situated in Utah, known as the King claims.  The lease was maintained current through September 30, 2008, however mining activities were limited.  The lease was terminated by mutual agreement in November 2008.

 

In a move to further the Company’s plans to market an on-line coupon system to merchants, the Company gained control of two private companies in 2009 involved in related enterprises; 4gDeals Inc. (later Yu Deal Inc.), and Top Floor Studio. These companies began to work together on the project.

 

A reassessment of the Company’s direction resulted in a reorganization plan on February 17, 2010 which included:

 

1. Acquisition of a new line of technology through the acquisition of the worldwide distribution and servicing rights to a cell phone enterprise based in Hong Kong;

2. Change in management;

3. Sale of the Company’s option on Top Floor Studio;

4. Distribution of the Company’s shares in YuDeal, Inc. to the stockholders.

 

 

Pursuant to the plan, the Company’s interests in Top Floor Studio and YuDeal Inc. were disposed of in February, 2010.  The Company’s option on Top Floor was sold to YuDeal, Inc. for YuDeal common stock, which in turn was traded for 20,095,000 shares of Company stock.  These shares were returned to Treasury and cancelled.  A residual of YuDeal stock was distributed to Company stockholders in March and April, 2010.

 

As part of the reorganization plan, the management team of the Company resigned.   The Company’s president, Isaac Roberts, was replaced by Jack Jie Quin, president of EFT Biotech Holdings, Inc., now named EFT Holdings, Inc. (“EFT”). EFT  trades on the OTC Pink Sheets under the ticker symbol “EFTB”

 

EFT markets its “EFT-Phone” through direct marketing in China, including Hong Kong.   The distribution and servicing rights to the EFT phone were acquired by the Company in February 2010 exchange for 79,265,000 shares of the Company’s common stock.

 

 

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.  Actual results could differ materially from those estimates. Significant estimates made by management are, among others, reliability of long-lived assets and deferred taxes.

 

 

Cash and equivalents include investments with initial maturities of six months or

less.

 

 

The Financial Accounting Standards Board issued ASC No. 820, “Fair Value Measurements and Disclosures.” ASC No. 820 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value.  The carrying amounts of the Company’s financial instruments as of June 30, 2010 approximate their respective fair values because of the short-term nature of these instruments.  Such instruments consist of cash, accounts payable and accrued expenses.  The fair value of related party payables is not determinable.

 

 

 

The Company utilizes ASC 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated a deferred tax credit through net operating loss carry-forward.  However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined under “Going Concern” following.

 

 

In April 2010, the FASB codified the consensus reached in Emerging Issues Task Force Issue No. 08-09, “Milestone Method of Revenue Recognition.” FASB ASU No. 2010-29 “Revenue Recognition – Milestone Method (Topic 605)” provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions. FASB ASU No. 2010 – 17 is effective for fiscal years beginning on or after June 15, 2010, and is effective on a prospective basis for milestones achieved after the adoption date. The Company does not expect this ASU has a material impact on its financial position or results of operations at this time.

 

On December 1, 2010, we adopted guidance issued by the FASB ASU 2010-15 on the consolidation of variable interest entities.  The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests.  Adoption of the new guidance did not have a material impact on our financial statements.

 

The Company has reviewed issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position.

 

 

Net loss per share is calculated in accordance with ASC 260, Earnings Per Share, for the period presented.  Basic net loss per share is based upon the weighted average number of common shares outstanding.  Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised.  Dilution is computed by applying the treasury stock method.  Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

As of June 30, 2011 the Company has potentially dilutive securities in outstanding warrants for the purchase of 2,330,665 shares of common stock.  Since the Company is in a loss position the warrants are anti-dilutive and not considered in the calculation.

 

 

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the six months ended June 30, 2011 and 2010:

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