Helmer Directional Drilling Corp. - Quarter Report: 2010 June (Form 10-Q)

exap_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 June 30, 2010

[ ] 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.)

11759 Crystal Avenue, Chino, CA 91710

(Address of Principal Executive Offices)

(909) 465-1030

(Issuer’s telephone number)

8860 Greenlawn Street, Riverside, CA 92508

(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 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 (§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 [ ] 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

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

Yes [X] No [ ]

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of July 26, 2010 there were 37,000,000 shares of common stock outstanding and no shares of preferred stock outstanding.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4
Item 4T.	Controls and Procedures	4

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	6
Item 1A.	Risk Factors	6
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	Submission of Matters to a Vote of Security Holders	6
Item 5.	Other Information	6
Item 6.	Exhibits	6

SIGNATURES		7

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 8 of Regulation S-X. 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 three and six months ended June 30, 2010 are not necessarily indicative of results that may be expected for the year ending December 31, 2010. The financial statements are presented on the accrual basis.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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

F-1

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

BALANCE SHEETS

		(Unaudited)
ASSETS		June 30, 2010			December 31, 2009

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

	Total assets	$	-		$	-


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and accrued expenses		$	6,500		$	-
Advance from shareholder			43,128			39,832
	Total current liabilities		49,628			39,832

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			(242,128	)		(232,332	)
	Total stockholders' equity (deficit)		(49,628	)		(39,832	)

		$	-		$	-

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

F-2

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

													(Unaudited)
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			September 8, 2006
	For the three			For the three			For the six			For the six			(date of inception)
	months ended			months ended			months ended			months ended			through
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009			June 30, 2010



Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses:
General and administrative expenses		3,045			3,275			9,796			11,503			242,261
Total operating expenses		3,045			3,275			9,796			11,503			242,261

(Loss) from operations		(3,045	)		(3,275	)		(9,796	)		(11,503	)		(242,261	)

Other income (expenses):
Interest (expense)		-			-			-			-			-
Other income		-			-			-			-			133
Total other income (expenses)		-			-			-			-			133

(Loss) before provision for income taxes		(3,045	)		(3,275	)		(9,796	)		(11,503	)		(242,128	)
Provision for income taxes		-			-			-			-			-

Net (loss)	$	(3,045	)	$	(3,275	)	$	(9,796	)	$	(11,503	)	$	(242,128	)



Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)

Basic and diluted weighted average
common shares outstanding		37,000,000			37,000,000			37,000,000			37,000,000			32,853,319

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

F-3

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOW

							(Unaudited)
	(Unaudited)			(Unaudited)			September 8, 2006
	For the six			For the six			(date of inception)
	months ended			months ended			through
	June 30, 2010			June 30, 2009			June 30, 2010


Operating activities:
Net loss	$	(9,796	)	$	(11,503	)	$	(242,128	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock issued for services		-			-			44,000
Changes in operating assets and liabilities:
(Decrease) increase in accounts payable		-			-			-
Increase in accrued expenses		6,500			-			6,500
Net cash (used in) operating activities		(3,296	)		(11,503	)		(191,628	)


Financing activities:
Advance to/ from shareholder		3,296			11,356			43,128
Proceeds from issuance of common stock		-			-			148,500
Net cash provided by financing activities		3,296			11,356			191,628

Net change in cash		-			(147	)		-

Cash, beginning of period		-			75			-

Cash, end of period	$	-		$	(72	)	$	-



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-4

EXCLUSIVE APPAREL, INC.

(A Development Stage Company)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

Note 1. Condensed Financial Statements

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 June 30, 2010, 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, 2009 audited financial statements. The results of operations for the periods ended June 30, 2010 and 2009 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 incurred a net operating loss of $242,128 through June 30, 2010 and has not commenced its operations, rather, still in the development stages, raising substantial doubt about the Company’s ability to continue as a going concern.

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

During the six months ended June 30, 2010 and 2009, a shareholder advanced $3,296 and $11,356, respectively, to the Company.

These amounts are reflected as unsecured and non-interest bearing advances with no maturity date. As of June 30, 2010 and December 31, 2009, the balance of these amounts was $43,128 and $39,832, respectively.

Note 4. Subsequent events

The Company has evaluated subsequent events and no such events have occurred.

Note 5. Newly issued pronouncements

In February 2010, FASB issued ASU 2010-09 Subsequent Event (Topic 855) Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09 removes the requirement for an SEC filer to disclose a date in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of GAAP. All of the amendments in ASU 2010-09 are effective upon issuance of the final ASU, except for the use of the issued date for conduit debt obligors, which is effective for interim or annual periods ending after June 15, 2010. The Company adopted ASU 2010-09 in February 2010 and did not disclose the date the financial statements are available to be issued.

F-5

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

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Overview

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 June 30, 2010. For the quarter ended June 30, 2010, the Company recognized a net loss of $3,045. Expenses for the period were comprised of costs mainly associated with legal, accounting and office.

Liquidity and Capital Resource

At June 30, 2010 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, 2009. 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 3. Quantitative and Qualitative Disclosures About Market Risk

N/A

Item 4T. Controls and Procedures

Evaluation of 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 June 30, 2010. 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 June 30, 2010 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 June 30, 2010. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2010, our disclosure controls and procedures were ineffective to ensure that the information required to be disclosed by us in this Report was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and instructions for Form 10-Q.

We have concluded that our disclosure controls and procedures were deficient. We were unable to maintain segregation of duties within our business operations due to our reliance on a single individual fulfilling the role of both office and director. While this control deficiency did not result in any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties. We have determined that this control deficiency constitutes a material weakness. Until remedial actions can be realized, we will continue to rely on the advice of outside professionals and consultants.

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 June 30, 2010 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 1A. Risk Factors

N/A

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.

On June 16, 2010 we terminated our current transfer agent, Pacific Stock Transfer and retained Worldwide Stock Transfer, LLC as our new transfer agent. On July 16, 2010 Worldwide Stock Transfer, LLC became the transfer agent of the Company.

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 Form 8-K filed August 13, 2009 regarding items 4.01 and 9.01

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

Incorporated by reference Form 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: August 2, 2010	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	August 2, 2010
Georgette Mathers	(Principal Executive Officer)

/s/ Georgette Mathers	Chief Financial Officer and Director	August 2, 2010
Georgette Mathers	(Principal Financial and Accounting Officer)