Helmer Directional Drilling Corp. - Quarter Report: 2009 September (Form 10-Q)

exapp_10q.htm

U.S. 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, 2009

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

For the transition period from

Commission File No. 333-140305

EXCLUSIVE APPAREL, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	20-5567127
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8860 Greenlawn Street, Riverside, California 92508

(Address of Principal Executive Offices)

(951) 902-2022

(Issuer’s telephone number)

6555 W. Gary Avenue, Las Vegas, Nevada 89139

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

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

[ ] Large accelerated filer	[ ] Accelerated filer

[ ] Non-accelerated filer	[X] Smaller reporting company

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 23, 2009: 37,000,000 shares of common stock.

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

Yes [X] No [ ]

Transitional Small Business Disclosure Format (Check One) Yes [ ] No [X]

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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

Item 4. Control and Procedures

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

SIGNATURE

PART I – FINANCIAL INFORMATION

Item 1. Financial Information

BASIS OF PRESENTATION

The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-K. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results from inception (September 8, 2006) and nine months ended September 30, 2009 are not necessarily indicative of results that may be expected for the year ending December 31, 2009. The financial statements are presented on the accrual basis.

FINANCIAL STATEMENTS

EXCLUSIVE APPAREL, INC.

Table of Contents

	PAGE

BALANCE SHEETS	F-1

STATEMENTS OF OPERATIONS	F-2

STATEMENTS OF CASH FLOWS	F-3

FOOTNOTES TO FINANCIAL STATEMENTS	F-4

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

BALANCE SHEETS

		(Unaudited)
ASSETS		September 30, 2009			December 31, 2008

Current assets:
Cash		$	-		$	75
	Total current assets		-			75

	Total assets	$	-		$	75


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and accrued expenses		$	193		$	61
Bank overdraft			72			-
Advance from shareholder			33,121			16,950
	Total current liabilities		33,386			17,011

Stockholders' equity (deficit)
Preferred stock; $.001 par value, 5,000,000 shares
authorized, zero shares issued and outstanding			-			-
Common stock; $.001 par value, 70,000,000 shares
authorized, 37,000,000 and 37,000,000 shares issued and outstanding			37,000			37,000
Additional paid in capital			155,500			155,500
Accumulated (deficit) during development stage			(225,886	)		(209,436	)
	Total stockholders' equity (deficit)		(33,386	)		(16,936	)

		$	-		$	75

The accompanying notes are an integral part of these financial statements.

F-1

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

													(Unaudited)
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited, restated)			September 8, 2006
	For the three			For the three			For the nine			For the nine			(date of inception)
	months ended			months ended			months ended			months ended			through
	September 30, 2009			September 30, 2008			September 30, 2009			September 30, 2008			September 30, 2009



Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses:
General and administrative expenses		4,947			4,123			16,450			17,161			225,886
Total operating expenses		4,947			4,123			16,450			17,161			225,886

(Loss) from operations		(4,947	)		(4,123	)		(16,450	)		(17,161	)		(225,886	)

Other income (expenses):
Interest (expense)		-			-			-			-			-
Other (expense)		-			-			-			-			-
Total other income (expenses)		-			-			-			-			-

(Loss) before provision for income taxes		(4,947	)		(4,123	)		(16,450	)		(17,161	)		(225,886	)
Provision for income taxes		-			-			-			-			-

Net (loss)	$	(4,947	)	$	(4,123	)	$	(16,450	)	$	(17,161	)	$	(225,886	)



Basic and diluted loss per common share	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)

Basic and diluted weighted average
common shares outstanding		37,000,000			37,000,000			37,000,000			37,000,000			31,841,662

The accompanying notes are an integral part of these financial statements.

F-2

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOW

							(Unaudited)
	(Unaudited)			(Unaudited, restated)			September 8, 2006
	For the nine			For the nine			(date of inception)
	months ended			months ended			through
	September 30, 2009			September 30, 2008			September 30, 2009


Operating activities:
Net loss	$	(16,450	)	$	(17,161	)	$	(225,886	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock issued for services		-			-			44,000
Changes in operating assets and liabilities:
Increase in accounts payable		132			60			193
Increase in accrued expenses		-			-			-
Net cash (used in) operating activities		(16,318	)		(17,101	)		(181,693	)

Financing activities:
Bank overdraft		72			-			72
Advance to/ from shareholder		16,171			12,925			33,121
Proceeds from issuance of common stock		-			-			148,500
Net cash provided by financing activities		16,243			12,925			181,693

Net change in cash		(75	)		(4,176	)		-

Cash, beginning of period		75			4,611			-

Cash, end of period	$	-		$	435		$	-

Non Cash Investing and Financing Activities:
Issuance of Common Stock for Services	$	-		$	-		$	44,000

The accompanying notes are an integral part of these financial statements.

F-3

EXCLUSIVE APPAREL, INC.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

Note 1 - CONDENSED FINANCIAL STATEMENT

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2009, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2008 audited financial statements. The results of operations for the periods ended September 30, 2009 and 2008 are not necessarily indicative of the operating results for the full years.

Note 2 – GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - RELATED PARTY TRANSACTIONS

As of September 30, 2009, advance from shareholders was approximately $33,000.

NOTE 4 - RESTATEMENT

The Company has restated its previously issued September 30, 2008, financial statements for matters related to the following previously reported item: the Company had revised the general and administrative expense for the nine months ended September 30, 2008 to reflect the inventory account balance that was written off on December 31, 2007, which consequently resulted in $291 decrease in net loss for the nine months ended. The inventory write-off has no effect on the three-month operation results for the quarter ended September 30, 2008. The financial statements for the period ended September 30, 2008 have been restated to reflect the corrections in accordance with FASB ASC 250(Prior authoritative literature: SFAS No. 154, "Accounting Change and Error Correction”).

F-4

NOTE 5 – RECENT PRONOUNCEMENTS

Management does not believe any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through November 20, 2009, the date its financial statements were issued, and concluded there were no events or transactions occurring during this period that required recognition or disclosure in its financial statements.

F-5

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

Plan of Operation

On February 27, 2007 we received approval from the Securities and Exchange Commission of our Registration Statement on Form SB-2 wherein we registered 15,000,000 shares of our $.001 common stock in order to raise $150,000.00 as our initial capital prior to filing an application with the NASD on Form 211 to be listed on a public exchange. To date we have raised $148,500.00 net of $1,500 for costs and we completed, and submitted our Form 211 to the NASD.

Results of Operation

The Company did not have any operating income from inception (September 8, 2006) through September 30, 2009. For the quarter ended September 30, 2009, the registrant recognized a net loss of $4,947. Expenses for the period were comprised of costs mainly associated with legal, accounting and office.

Liquidity and Capital Resource

At September 30, 2009 the Company had no capital resources and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses pending full implementation of the Company’s business model.

Critical Accounting Policies

Exclusive Apparel’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our financial statements at December 31, 2008. While all these significant accounting policies impact its financial condition and results of operations, Exclusive Apparel’s views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Item 4. Controls and Procedures

(a)	Evaluation of disclosure controls and procedures.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 (Exchange Act) as a process designed by or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, 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 and includes those policies and procedures that:

Pertain to the maintenance of records that is in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors: and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, 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.

Management assessed the effectiveness of the Company’s Internal Control over financial reporting as of September 30, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in this Internal Control-Integrated Framework.

Base on our assessment, we believe that, as of September 30, 2009 our internal control over financial reporting was ineffective.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2009. Based on their evaluation, our chief executive officer and chief financial officer have concluded that, as of September 30, 2009, our disclosure controls and procedures were ineffective.

(b) Changes in internal controls.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Changes in Securities.

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 and Reports on Form 8-K

(a) Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

(b)	Reports on Form 8-K

Incorporated by reference to Form 8-K filed August 13, 2009 regarding items 4.01 and 9.01

Incorporated by reference to 8-K/A filed September 2, 2009 regarding items 4.01 and 9.01

Incorporated by reference to 8-K filed September 23, 2009 regarding items 4.01 and 9.01

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 hereunto duly authorized.

	EXCLUSIVE APPAREL, INC.


Date: November 23, 2009	By: /s/ Georgette Mathers
	Georgette Mathers
	Chief Executive Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title(s)	Date

/s/ Georgette Mathers	Chief Executive Officer and Director	November 23, 2009
Georgette Mathers	(Principal Executive Officer)

/s/ Georgette Mathers	Chief Financial Officer and Director	November 23, 2009
Georgette Mathers	(Principal Financial and Accounting Officer)