Cyberfort Software, Inc. - Quarter Report: 2013 September (Form 10-Q)
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 September 30, 2013
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File # 333-174894
Patriot Berry Farms, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
38-3832726
(IRS Employer Identification Number)
7380 Sand Lake Road, Suite 500
Orlando, FL 32819
(Address of principal executive offices)
(503) 505-6946
(Issuer’s telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required 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 day. x Yes o 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-Y (§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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small 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 |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of November 5, 2013, there are 70,859,871 shares of common stock outstanding.
All references in this Quarterly Report on Form 10-Q to the terms “we”, “our”, “us”, the “Company”, “Patriot Berry” and the “Registrant” refer to Patriot Berry Farms, Inc. unless the context indicates another meaning.
PATRIOT BERRY FARMS, INC.
TABLE OF CONTENTS
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Page
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| PART I – FINANCIAL INFORMATION | |||||
| Item 1. |
Financial Statements
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3 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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4 | |||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
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6 | |||
| Item 4. |
Controls and Procedures
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6 | |||
| PART II – OTHER INFORMATION | |||||
| Item 1. |
Legal Proceedings
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7 | |||
| Item 1A. |
Risk Factors
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7 | |||
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
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7 | |||
| Item 3. |
Defaults Upon Senior Securities
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7 | |||
| Item 4. |
Mine Safety Disclosures (Not Applicable)
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7 | |||
| Item 5. |
Other Information
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7 | |||
| Item 6. |
Exhibits
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8 | |||
| SIGNATURES | 9 | ||||
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PATRIOT BERRY FARMS, INC.
(A Development Stage Company)
Index to the Financial Statements (Unaudited)
SEPTEMBER 30, 2013
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Contents
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Page (s)
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Balance Sheets (Unaudited) at September 30, 2013 and March 31, 2013
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F-1 | |||
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Statements of Operations (Unaudited) for the six month periods ended September 30, 2013 and 2012, and for the three month periods ended September 30, 2013 and 2012, and for the period from December 15, 2010 (Inception) to September 30, 2013
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F-2 | |||
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Statements of Cash Flows (Unaudited) for the six month periods ended September 30, 2013 and 2012, and for the period from December 15, 2010 (Inception) to September 30, 2013
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F-3 | |||
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Notes to the Financial Statements (Unaudited)
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F-4 – F-6 | |||
3
Patriot Berry Farms, Inc.
(A Development Stage Company)
Balance Sheets (Unaudited)
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September 30,
2013
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March 31,
2013
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ASSETS
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Current assets:
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Cash
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$ | 15,139 | $ | 2,575 | ||||
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Blueberry Farm Deposit (Note 6)
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20,000 | - | ||||||
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Total current assets
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35,139 | 2,575 | ||||||
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Total assets
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$ | 35,139 | $ | 2,575 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable
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$ | 15,648 | $ | 26,413 | ||||
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Accounts payable – related party (Note 4)
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11,000 | - | ||||||
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Related party advances
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11,432 | 20,730 | ||||||
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Total current liabilities
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38,080 | 47,143 | ||||||
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Stockholder's Deficit
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Common stock, par value $0.001, 100,000,000 shares authorized, 70,759,871 and 69,720,000 shares issued and outstanding as of September 30, 2013 and March 31, 2013, respectively
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70,760 | 69,720 | ||||||
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Additional paid-in capital
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472,739 | (23,170 | ) | |||||
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Deficit accumulated during the development stage
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(546,440 | ) | (91,118 | ) | ||||
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Total stockholder's deficit
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(2,941 | ) | (44,568 | ) | ||||
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Total liabilities and stockholder's deficit
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$ | 35,139 | $ | 2,575 | ||||
See accompanying notes to the financial statements.
F-1
Patriot Berry Farms, Inc.
(A Development Stage Company)
Statements of Operations (Unaudited)
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For the Six Months Ended September 30, 2013
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For the Six Months Ended September 30, 2012
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For the Three Months Ended September 30, 2013
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For the Three Months Ended September 30, 2012
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From Inception
(December 15, 2010)
Through September 30, 2013
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Net Revenue
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
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Operating expenses:
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Selling, general and administrative
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155,322 | 11,865 | 104,207 | 4,549 | 246,440 | |||||||||||||||
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Stock compensation expenses
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300,000 | - | 300,000 | - | 300,000 | |||||||||||||||
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Operating loss before income taxes
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(455,322 | ) | (11,865 | ) | (404,207 | ) | (4,549 | ) | (546,440 | ) | ||||||||||
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Income tax (expense) benefit
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- | - | - | - | - | |||||||||||||||
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Net loss
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$ | (455,322 | ) | $ | (11,865 | ) | $ | (404,207 | ) | $ | (4,549 | ) | $ | (546,440 | ) | |||||
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Basic and diluted loss per common share
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$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | ||||||||
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Weighted average shares outstanding, basic and diluted
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69,820,750 | 5,557,500 | 69,920,405 | 5,557,500 | ||||||||||||||||
See accompanying notes to the financial statements.
F-2
Patriot Berry Farms, Inc.
(A Development Stage Company)
Statements of Cash Flows (Unaudited)
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For the
Six Months Ended September 30,
2013
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For the
Six Months Ended September 30,
2012
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From Inception
(December 15, 2010)
Through
September 30,
2013
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Cash flows from operating activities:
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Net loss
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$ | (455,322 | ) | $ | (11,865 | ) | $ | (546,440 | ) | |||
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Stock compensation expenses
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300,000 | - | 300,000 | |||||||||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Accounts payable
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(10,765 | ) | 750 | 15,648 | ||||||||
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Accounts payable – related party
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11,000 | - | 11,000 | |||||||||
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Net cash used in operating activities
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(155,087 | ) | (11,115 | ) | (219,792 | ) | ||||||
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Cash flows from investing activities:
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Deposit paid for PP&E purchase:
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(20,000 | ) | (20,000 | ) | ||||||||
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Net cash used in investing activities
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(20,000 | ) | - | (20,000 | ) | |||||||
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Cash flows from financing activities:
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Proceeds from related party advances
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86,651 | - | 107,381 | |||||||||
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Issuance of common stock for cash
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100,000 | - | 146,550 | |||||||||
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Contributed capital
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1,000 | - | 1,000 | |||||||||
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Net cash provided by financing activities
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187,651 | - | 254,931 | |||||||||
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Net increase (decrease) in cash
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12,564 | (11,115 | ) | 15,139 | ||||||||
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Cash at beginning of period
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2,575 | 12,686 | - | |||||||||
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Cash at end of period
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$ | 15,139 | $ | 1,571 | $ | 15,139 | ||||||
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Supplemental Cash Flow Information:
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Conversion of related party advances to common stock
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$ | 95,949 | $ | - | $ | 95,949 | ||||||
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Cash paid for interest
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$ | - | $ | - | $ | - | ||||||
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Cash paid for income taxes
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$ | - | $ | - | $ | - | ||||||
See accompanying notes to the financial statements.
F-3
Patriot Berry Farms, Inc.
(A Development Stage Company)
Notes to the Financial Statements (Unaudited)
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1)
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ORGANIZATION
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Patriot Berry Farms, Inc. (formerly Gaia Remedies (“Patriot” or the “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc.). Patriot is in the business of acquiring and establishing profitable berry farms throughout the United States. The main focus of the Company is on blueberry production with a secondary focus on strawberry and raspberry production. Patriot is a development stage company and has not yet realized any revenues from its planned principal activities. On December 27, 2012, a change in control occurred as a director of the Company purchased 54,400,000 shares of common stock of the Company. On January 28, 2013, the Company changed its name to Patriot Berry Farms, Inc. The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is March 31.
DEVELOPMENT STAGE COMPANY
The Company is considered to be in the development stage as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.” The Company’s efforts have been devoted primarily to raising capital, borrowing funds and attempting to implement its planned, principal activities.
RECLASSIFICATIONS
For comparability, certain prior period amounts have been reclassified, where appropriate, to conform to the financial statement presentation used in 2013.
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2)
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STOCKHOLDERS’ EQUITY
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In August 2013, the Company issued 200,000 shares of common stock, par value $0.001 in exchange for $100,000 cash.
In September 2013, the Company’s board of directors voted to convert $95,949 of related party advances by its President into shares of common stock, par value $0.001 at $0.40 per share, resulting in a total issuance of 239,871 shares of common stock (see Note 3).
In September 2013, the Company’s board of directors voted to issue its President 250,000 shares of fully vested, issuable common stock as compensation, in addition to any existing compensation agreed to (see Note 3). Further, upon each quarter end beginning September 30 2013, and continuing for the term of the President’s employment with the Company, an additional 250,000 shares of the Company’s common stock shall become vested and issuable. Accordingly, in September 2013, the Company issued 500,000 shares of common stock, par value $0.001 to its President for compensation of services rendered. These shares have been valued at $0.50 per share. This amount has been expensed as common stock issued as executive compensation for the six month period ended September 30, 2013.
In September, 2013, the Company issued 100,000 shares of its common stock, par value $0.001, to two parties for services rendered. These shares have been valued at $0.50 per share and expensed as common stock issued as executive compensation for the six month period ended September 30, 2013.
F-4
Patriot Berry Farms, Inc.
(A Development Stage Company)
Notes to the Financial Statements (Unaudited)
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3)
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RELATED PARTY ADVANCES
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During the six months period ended September 30, 2013, the Company’s President advanced $86,651 to fund certain operating expenses. In September 2013, the Company’s board of directors voted to convert $95,949 of the then existing related party advances balance into shares of its common stock at $0.40 per share, for a total of 239,871 shares of common stock (see Note 2). The related party advances’ balance as of September 30, 2013 was $11,432 and are to be reimbursed by the Company upon implementation of its planned principal activities and as operating cash flows permit. These advances are non-interest bearing, due upon demand and unsecured.
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4)
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RELATED PARTY TRANSACTIONS
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In May 2013, the Company entered into a formal employment agreement with the Company’s President. Pursuant to the terms of the agreement, the Company’s President was appointed to act in this capacity for an initial period of three years, and at an annual salary of $120,000. Accordingly, during the six month period ended September 30, 2013, the Company incurred and accrued for $11,000 in executive compensation. This amount has been recorded as accounts payable – related party as of September 30, 2013.
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5)
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COMMITTMENTS AND CONTINGENCIES
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In May 2013, the Company entered into an investment agreement with a third-party (the “Investor”) whereby the Investor agreed to invest up to $8,500,000 in exchange for the Company’s common stock. The Investor’s investment in common stock of the Company is to be made in multiple closings between May 2013 and May 2015 pursuant to the agreement. On July 24, 2013, the Investor cancelled its investment agreement.
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6)
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BLUEBERRY FARM DEPOSIT
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In August, 2013, the Company entered into a contract to purchase an operational blueberry farm in Levy County, Florida, including equipment. In accordance with the terms of the contract the Company paid a $20,000 earnest money deposit that will be applied towards the purchase price of $400,000 upon closing in October, 2013. This deposit has been recorded as a current asset on the Company’s balance sheet as of September 30, 2013.
F-5
Patriot Berry Farms, Inc.
(A Development Stage Company)
Notes to the Financial Statements (Unaudited)
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7)
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EXECUTIVE AGREEMENT
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In August, 2013, the Company hired a Director of Farming and entered into an agreement, wherein the Company will pay a fee of $5,000 per month to the director for a period of 24 months in exchange for assistance in identifying, underwriting, and negotiating the terms of potential farm acquisitions on the Company’s behalf. Further, the director will assist the Company in the development of its operations and distribution, amongst other responsibilities. Upon the expiration of the initial 12 months of the director’s agreement’s term, the Company will ascertain if an increase in the monthly fee is warranted.
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8)
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GOING CONCERN AND LIQUIDITY CONSIDERATIONS
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The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2013, the Company has an accumulated deficit of $546,440. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.
The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations. In response to this and other potential problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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9)
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SUBSEQUENT EVENTS
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In October, 2013, the Company issued 100,000 shares of common stock, par value $0.001 per share, to one investor for $50,000, or $0.50 per share.
On November 11, 2013, the Company has executed all of the closing documents effective of the purchase of an operational blueberry farm in Florida totaling $400,000 (see Note 6). In connection with the closing, the Company originated a $280,000 promissory note, the terms of which require the Company to remit payments of principal in the amount of $20,000 in fourteen monthly installments until paid in full. The note bears no interest. The purchase will be officially closed after the title company receives the original documents.
The Company has evaluated all subsequent events from the balance sheet date through November 14, 2013, the date of this report and determined that there are no additional events to disclose.
F-6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" relating to the registrant which represent the registrant's current expectations or beliefs, including statements concerning registrant’s operations, performance, financial condition and growth. For this purpose, any statement contained in this quarterly report on Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "anticipation", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel and variability of quarterly results, ability of registrant to continue its growth strategy and competition, certain of which are beyond the registrant's control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.
The following discussion and analysis should be read in conjunction with the information set forth in the Company’s audited financial statements for the period ended March 31, 2013.
Overview
On May 15, 2013, the Registrant began implementation of its new business plan: the acquisition and operation of established and profitable berry farms throughout the United States. The Company’s main focus is on blueberry production with a secondary focus on strawberry and raspberry production.
Our company, based in Orlando, Florida, was incorporated under the laws of Nevada on December 15, 2010. Our principal executive offices are located at 7380 Sand Lake Road, Suite 500, Orlando, Florida 32819 and our telephone number is (503) 505-6946.
On January 28, 2013, the controlling shareholder of the company surrendered for voluntary cancellation, 1,200,000 shares of common stock of the Company for no consideration. On the same day, the Company executed a 16:1 forward split of the common stock. The authorized share capital of the Company was not changed as a result of the forward split. The Company changed its corporate name to Patriot Berry Farms, Inc. Earnings per share are calculated based on common stock reflecting the forward stock split.
Plan of Operation
Patriot Berry Farms is currently in a stage of aggressive initial asset growth through acquisition. To reach the goal of being a major operator within the US berry market, the Company plans to gather 1,000 to 2,000 acres of mature blueberry plantings under a single operational team. To expedite this process, the Company is currently identifying a farm development company capable of managing:
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·
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The development of initial systems:
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·
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The ongoing production of the established blueberry plants and delivery to market:
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·
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And the expansion of total acres cultivated and overall production going forward.
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4
Throughout the initial growth phase, the Company will also consider all opportunities for entry into farming operations with established strawberry and raspberry production.
By remaining focused on those farms and industry traditions that have already proven successful, Patriot Berry Farms will gain the solid – and profitable – foundation on which it needs to build.
Results of Operations
Six and Three months ended September 30, 2013 and 2012
Revenues
We did not generate any revenues for the three months ended September 30, 2013.
Expenses
The Company has more fully implemented its planned principal activities, resulting in the operating expense increase for the six and three month periods ended September 30, 2013.
We incurred operating expenses in the amount of $455,322 during the six months ended September 30, 2013 compared to $11,865 for the corresponding period in 2012. For the three month period ended September 30, 2013 we incurred operating expenses totaling $404,207 compared to $4,549 for the corresponding period in 2012.
Net Loss
We incurred a net loss of $455,322 during the six months ended September 30, 2013, compared to a net loss of $11,865 for the corresponding period in 2012. For the three month period ended September 30, 2013 we incurred a net loss of $404,207 compared to $4,549 for the corresponding period in 2012.
5
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its cash requirements from the sale of common stock and advances from related party. Uses of funds have included activities to establish our business, professional fees and other general and administrative expenses.
We believe the Company will need additional resources to implement its strategic objectives in upcoming quarters. Due to our lack of operating history and present inability to generate revenues, however, our auditors have stated their opinion that there currently exists substantial doubt about our ability to continue as a going concern.
Material Events and Uncertainties
Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable exploration stage companies.
There can be no assurance that we will successfully address such risks, expenses and difficulties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures
As of the end of the period covered by this report (the “Evaluation Date”), the Company carried out an evaluation, under the supervision and with the participation of the Company's Principal Executive Officer and Principal Financial Officer (the “Certifying Officers”) of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e)) under the Exchange Act. Based on that evaluation, the Certifying Officers have concluded that, as of the Evaluation Date, the disclosure controls and procedures in place were adequate to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported on a timely basis in accordance with applicable rules and regulations.
Internal control over financial reporting
The Certifying Officers reviewed our internal control over financial reporting (as defined in rules 13a-15(f) and 15d-15(f)) under the Exchange Act as of the Evaluation Date and concluded that no changes occurred in such control or in other factors during the quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
6
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against us.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company did not make any sales of equity securities during the quarter.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company has no senior securities outstanding.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
7
ITEM 6. EXHIBITS
EXHIBIT INDEX
| Number | Exhibit Description | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Extension Schema Document
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101.CAL **
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
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XBRL Taxonomy Extension Presentation Linkbase Document
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_______________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
8
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.
| PATRIOT BERRY FARMS, INC. | |||
|
November 14, 2013
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By:
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/s/ Alexander Houstoun-Boswall | |
| Alexander Houstoun-Boswall | |||
| President (Principal Executive Officer) and Treasurer (Principal Financial Officer) | |||
9