FBC Holding, Inc. - Quarter Report: 2010 April (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2011

£ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from _________ to _________

Commission File Number: 000-52854

FBC HOLDING INC.

(Name of Small Business Issuer in its charter)

66 Piscataqua Road Dover, NH 03820

(Address of principal executive offices)

(603) 540-0828

Issuer’s telephone number

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    £     No   þ

APPLICABLE ONLY TO CORPORATE ISSUERS

As of June 20, 2011 the registrant had 108,511,638 shares of common stock outstanding, par value $0.001.

FBC HOLDING INC.

Table of Contents

PART I - FINANCIAL INFORMATION

Safe Harbor Statement

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs, and risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

Item 1. Financial Statements

The unaudited interim financial statements of FBC Holding Inc. (the “Company”, “FBC Holding”, “we”, “our”, “us”) follow. All currency references in this report are in U.S. dollars unless otherwise noted.

The accompanying Financial Statements of FBC Holding Inc., Inc. should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended July 31, 2010. Significant accounting policies disclosed therein have not changed except as noted below.

FBC Holding Inc.

Notes to Consolidated Financial Statements

April 30, 2011

(Unaudited)

NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DESCRIPTION OF BUSINESS

Wave Uranium Holding's ("Wave", the "Company") business has been to acquire mineral land positions. In October 2009 the Company was redomiciled as a Nevada corporation under the name FBC Holding Corp. On July 21, 2009 the Company entered into an acquisition agreement to purchase FBC Holdings, Inc., a California corporation ("FBC Holdings, Inc. - California"), and as such the Company will abandon its former business plan in the industry of mining and land acquisition. FBC Holdings, Inc. - - California had no material activity up to the agreement date and no material assets or liabilities. The acquisition agreement calls for the Company to purchase FBC Holdings, Inc. - California by acquiring all the outstanding shares of FBC Holdings, Inc. - California in exchange for 8 million shares of the Company. As of July 31, 2009 the Company had not completed the transaction by issuing the 8 million shares, so the Company has recorded a stock subscription payable of $720,000 based on the market price of $.09 per share on the date the acquisition agreement was entered into, with a corresponding recording and immediate write-off of goodwill in the same amount. The stock was subsequently issued in November 2009. The new entity will be focused in three areas, branding (product placement) in tv production, movies, etc.; the sale of mini-choppers and the associated merchandise of the brand Beverly Hills Choppers, including clothing, accessories, parts, etc; last the new Company plan will have internet platforms focused on social networking and the database built around the Johnny Fratto Social Club.   The Company returned all interest in BHC, and JFSC for return of all shares issued.  We acquired all of the assets of Super Rad Corporation on August 11, 2010.

DEVELOPMENT STAGE COMPANY

The Company is in the development stage and has not yet realized any revenues from its planned operations. The Company's business plan is to evaluate structure and complete a merger with, or acquisition of, prospects consisting of private companies, partnerships or sole proprietorships.

Based upon the Company's business plan, it is a development stage enterprise.  Accordingly, the Company presents its financial statements in conformity with the accounting principles generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its Form 10-K/A filed on March 4, 2011. Operating results for the nine months ended April 30, 2011 are not necessarily indicative of the results to be expected for the year ending July 31, 2011.

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

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance.  Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events.  You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Overview

FBC Holding Inc. ("FBC Holding", "the Company", “our” or "we") was incorporated as a Nevada company on May 31, 2006 as Wave Uranium Holding.  On September 24, 2009 we merged with FBC Holding Inc. and changed our name to FBC Holding Inc.  We are a development stage company.  On May 1^st, 2010 we returned the assets of Beverly Hills Choppers, Johnny Fratto Social Club and FBC Group, in return all shares that were issued were returned to the company. We acquired all of the assets of Super Rad Corporation on August 11, 2010. On October 26, 2010, a majority of our shareholders and our board of directors authorized a name change to Super Rad Industries, Inc. Our principal offices are located at 66 Piscataqua Road, Dover, NH 03820.  Our fiscal year end is July 31.  

Our common stock trades on the FINRA-operated Over-the-Counter Bulletin Board (“OTCBB”) under the ticker symbol “FBCD.OB”.  The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information for over-the-counter equity securities.  OTCBB securities are traded by a community of market makers that enter quotes and trade through a sophisticated computer network.  Information on the OTCBB can be found at www.otcbb.com.  We have not paid any dividends on our common stock.  We currently intend to retain any earnings for use in our business, and therefore do not anticipate paying cash dividends in the foreseeable future.

Plan of Operation

As we have recently completed our acquisition of FBC Holding, we have not completed a plan of operation and have not anticipated the cost of further exploiting and expanding our new business opportunities.  We intend to complete a plan of operation during the next quarter.  There no assurance that we will be able to accurately anticipate the cost of expanding our new business opportunities.  

Our plan of operation will include a budget for a planned expansion program.  However, there is no assurance that our actual costs will not exceed the budgeted costs.  Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition for personnel and supplies, unanticipated problems in implementing our business plan and delays experienced in completing our business plan.  Increases in costs could result in us not being able to carry out our business without additional financing.  There is no assurance that we would be able to obtain additional financing in this event.  This could prevent us from achieving revenues.

Results of Operations for the Period From May 31, 2006 (Date of Inception) to April 30, 2011 and for the Nine Months Ended April 30, 2011 and 2010

Lack of Revenues

We are a development stage company with limited operations since our inception on May 31, 2006 to April 30, 2011.  We have not generated any revenues.  As of April 30, 2011, we had total assets of $6.260 and total liabilities of $1,931,362.  Since our inception to April 30, 2011, we have accumulated a deficit of $20,642,539.  We anticipate that we will continue to incur substantial losses and our ability to generate any revenues in the next 12 months remains uncertain.

Expenses

We have accumulated total operating expenses of $18,671,290 since our inception on May 31, 2006 to April 30, 2011, including $1,649,441 in general and administrative expenses (including accounting, auditing and legal fees), $1,889 in depreciation, $861,694 in warrant expense, $1,631,500 in conversion fees related to the

conversion of debt into stock, $2,094 in bank charges, $597,957 in land claim fees, $11,546,737 in non-cash compensation, $141,861 in amortization of deferred finance charges, $2,236,667 in impairment of goodwill and $1,450 in other expenses.

We have accumulated other expenses of $1,986,842 since our inception on May 31, 2006 to April 30, 2011, including $1,648,198 in amortization of debt discount and $338,644 in interest expense.

Our total expenses increased by $4,709,889 to $6,704,254 for the nine months ended April 30, 2011 from $1,994,365 for the nine months ended April 30, 2010. For the nine months ended April 30, 2011, total expenses were comprised of $85,340 in general and administrative expenses, $1,631,500 on the loss on conversion, $3,737,414 in non-cash compensation, $1,250,000 in impairment of goodwill and $6,608 in interest expense.

The types of expenses that we may categorize as general and administrative expenses include foreign exchange loss, transfer agent and filing fees, office supplies, travel expenses, rent, communication expenses (cellular, internet, fax and telephone), bank charges, advertising and promotion costs, office maintenance, courier and postage costs and office equipment.

Net Loss

Since our inception on May 31, 2006 to April 30, 2011, we have incurred a net loss of $20,658,132.  For the three months ended April 30, 2011, we incurred a net loss of $1,169,254 compared to a net loss of $1,082,838 for the three months ended April 30, 2010, which is an increase in net loss of $86,416.

Off-Balance Sheet Arrangements

We have no significant 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 of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

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 information under this item.

Item 4. Controls and Procedures.

Management’s Report on Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)).  Our internal control over financial reporting is designed 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.

Because of our inherent limitations, our internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of April 30, 2011.  In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework.

Management conducted a walkthrough of the procedures and controls documented in this memo or relied on personal knowledge where no walk through was possible in order to test the effectiveness of the Company’s internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.  In its assessment of the effectiveness of internal control over financial reporting as of April 30, 2011, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

1.      There is a lack of segregation of duties and therefore the Company is susceptible to fraud and misappropriation of assets.

2.      There are no preventative and detective IT systems in place to prevent and/or detect fraud other than password protection.  There no software based accounting controls in place to prevent double entries, monitor performance, etc.

3.      There is a lack of entity wide controls establishing a “tone at the top”, including no audit committee, no policy on fraud and no code of ethics.  A whistleblower policy is not necessary given the small size of the organization.

The Company is working on the following remediation efforts:

1.      The Company has hired an external accountant to record transactions and prepare the financial statements.  The information should be sent to the accountant by someone who is not in control of the bank account.

2.      Obtain quotes for prevention and detection software in order to protect against fraud.

3.      Once we obtain funding, we will purchase basic accounting software to record accounting transactions and print checks.  

4.      Adopt a corporate records and document retention policy to ensure that all significant records are kept for the appropriate amount of time as required by law.

5.      Appoint a minimum of two independent directors to the board of directors and then implement an audit committee to review all financial statements and SEC filings and oversee the development of corporate policies.

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of the quarter ended April 30, 2011 based on criteria established in Internal Control—Integrated Framework issued by COSO.

This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the

company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

We did not change our internal control over financial reporting during our last fiscal quarter of 2011 in connection with the results of Management’s report, nor have we made any changes to our internal control over financial reporting.

As of April 30, 2011, the end of our first quarter covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. Our board of directors has only one member. We do not have a formal audit committee.

Item 4T. Controls and Procedure.

 Not applicable.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

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

On August 11, 2010, FBC Holding, Inc. issued 12,500,000 shares of its common stock to Super Rad Corporation for and in consideration for the acquisition of the Super Rad Corporation assets. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. The Company believes that the issuance of was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.

On August 13, 2010, FBC Holding, Inc. issued 24,000,000 shares of its common stock to Christopher LeClerc for and in consideration for reimbursement of salary and expenses. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. The Company believes that the issuance of was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.

On March 31, 2011, the Company approved the creation of Series “A” Restricted Preferred Stock. The Company approved the surrender, conversion and exchange of certain Senior Secured Convertible Debentures with a principal amount of $1,562,500 held by Enable Growth Partners, LP, Enable Opportunity Partners, LP, and Pierce Diversified Strategies Series ENA. As a result of the conversion of the Debentures into Preferred Shares, the Shareholders were issued 2,500,000 Preferred Shares. The fixed price per share for this Debenture conversion is $.625 per Preferred Share.

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

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.