LegacyXChange, Inc. - Quarter Report: 2010 April (Form 10-Q)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934
For the quarterly period ended April 30, 2010
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934
For the transition period from ________ to ________
TRUE 2 BEAUTY INC. (Formerly BURROW MINING, INC.)
(Exact Name Of Registrant As Specified In Charter)
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Nevada
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333-148925
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20-8628868
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(State Or Other Jurisdiction Of Incorporation
Or Organization)
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(Commission File No.)
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(IRS Employee Identification No.)
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4695 MacArthur Court, Suite 1430
Newport Beach, CA 92660
(Current Address of Principal Executive Offices)
Phone number: 949-475-9086
(Issuer Telephone Number)
Check whether the issuer (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 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEDDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date:
The issuer has 119,000,000 outstanding shares of common stock outstanding as of July 23, 2010.
Transitional Small Business Disclosure Format (Check one): Yes o No x
TABLE OF CONTENTS
| Page | |
| PART I - FINANCIAL INFORMATION | F-1 |
| ITEM 1. FINANCIAL STATEMENTS | F-1 |
| ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 1 |
| ITEM 3. CONTROLS AND PROCEDURES | 3 |
| PART II-OTHER INFORMATION | 4 |
| ITEM 1. LEGAL PROCEEDINGS | 4 |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 4 |
| ITEM 3. DEFAULTS UPON SENIOR SECURITIES | 4 |
| ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 4 |
| ITEM 5. OTHER INFORMATION | 4 |
| ITEM 6. EXHIBITS | 4 |
| SIGNATURES | 5 |
i
PART I FINANCIAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
| BALANCE SHEETS | F-2 |
| STATEMENTS OF OPERATIONS | F-3 |
| STATEMENTS OF SHAREHOLDERS’ DEFICIT | F-4 |
| STATEMENTS OF CASH FLOWS | F-5 |
| NOTES TO THE FINANCIAL STATEMENTS | F-6 |
F-1
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True 2 Beauty, Inc. (formerly Burrow Mining, Inc.)
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(An Exploration Stage Company)
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Balance Sheets
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Assets
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April 30, 2010
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October 31, 2009
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unaudited
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audited
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Current Assets
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Cash
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$ | 4,587 | $ | 2,193 | ||||
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Note receivable
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150,000 | 0 | ||||||
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Total Current Assets
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154,587 | 2,193 | ||||||
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Total Assets
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$ | 154,587 | $ | 2,193 | ||||
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Liabilities and Stockholders' Equity
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Current Liabilities
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Accounts payable
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$ | 30,000 | $ | 0 | ||||
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Accrued liabilities
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10,500 | - 0 | ||||||
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Note payable
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175,000 | - 0 | ||||||
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Loan from current officer
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10,300 | - 0 | ||||||
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Loans from former officer
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33,876 | 32,000 | ||||||
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Total Current Liabilities
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$ | 259,676 | 32,000 | |||||
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Stockholders' Equity
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Capital stock Authorized:
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10,000,000 preferred shares with a par value of $0.001
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authorized, none outstanding
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- 0 | - 0 | ||||||
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200,000,000 common shares with a par value of $0.001
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Issued and outstanding:
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79,000,000 outstanding as of April 30, 2010 and
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79,000,000 common shares as of October 31, 2009
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7,900 | 7,900 | ||||||
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Additional paid-in-capital
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98,100 | 98,100 | ||||||
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Share subscription receivable
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(81,000 | ) | (81,000 | ) | ||||
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Deficit accumulated during the exploration stage
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(130,089 | ) | (54,807 | ) | ||||
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Total stockholders' equity
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(105,089 | ) | (29,807 | ) | ||||
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Total liabilities and stockholders' equity
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$ | 154,587 | $ | 2,193 | ||||
See notes to the unaudited interim financial statements
F-2
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True 2 Beauty, Inc. (formerly Burrow Mining, Inc.)
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(An Exploration Stage Company)
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Statements of Operations
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Cumulative
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from
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December 11,
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For the
quarter
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For the
quarter
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For the six months
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For the six months
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2006
(Inception) to |
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ended April 30,
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ended April 30,
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ended April 30,
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ended April 30,
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April 30,
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||||||||||||||||
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2010
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2009
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2010
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2009
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2010
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Bank charges and interest
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$ | 42 | $ | 63 | $ | 73 | $ | 110 | $ | 448 | ||||||||||
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Office expenses
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- 0 | 2,750 | 392 | 3,125 | 5,426 | |||||||||||||||
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Mineral property
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- 0 | - 0 | - 0 | 2,500 | 10,000 | |||||||||||||||
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Professional fees
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61,879 | 3,300 | 61,879 | 3,300 | 85,477 | |||||||||||||||
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Officers compensation
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10,500 | - 0 | 10,500 | - 0 | 10,500 | |||||||||||||||
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Transfer and filing fees
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2,075 | - 0 | 2,438 | 682 | 18,238 | |||||||||||||||
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Net loss
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$ | (74,798 | ) | $ | (6,113 | ) | $ | (75,282 | ) | $ | (9,717 | ) | $ | (130,089 | ) | |||||
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Loss per share - Basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
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Weighted Average Number of Common Shares Outstanding
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79,000,000 | 79,000,000 | 79,000,000 | 79,000,000 | ||||||||||||||||
See notes to the unaudited interim financial statements
F-3
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True 2 Beauty, Inc. (formerly Burrow Mining, Inc.)
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(An Exploration Stage Company)
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Statements of Stockholder's Equity
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Deficit
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accumulated
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Number of
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Additional
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During the
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Common
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Par
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Paid-in-
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exploration
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Shares
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Value
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Capital
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stage
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Total
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December 18, 2006
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Subscribed for cash at $0.001
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4,000,000 | $ | 4,000 | $ | 0 | $ | 0 | $ | 4,000 | |||||||||||
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January 26, 2007
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Subscribed for cash at $0.001
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2,000,000 | 2,000 | - 0 | 2,000 | ||||||||||||||||
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February 27, 2007
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Subscribed for cash at $0.01
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700,000 | 700 | 6,300 | 7,000 | ||||||||||||||||
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March 22, 2007
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Subscribed for cash at $0.01
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300,000 | 300 | 2,700 | 3,000 | ||||||||||||||||
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March 30, 2007
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Subscribed for cash at $0.1
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900,000 | 900 | 89,100 | 90,000 | ||||||||||||||||
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Net loss for fiscal year ended October 31, 2007
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(11,976 | ) | (11,976 | ) | ||||||||||||||||
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Share subscriptions receivable
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- 0 | - 0 | - 0 | - 0 | (81,000 | ) | ||||||||||||||
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Balance as of October 31, 2007
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7,900,000 | $ | 7,900 | $ | 98,100 | $ | (11,976 | ) | $ | 13,024 | ||||||||||
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Net loss for fiscal year ended October 31, 2008
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- 0 | - 0 | - 0 | (25,228 | ) | (25,228 | ) | |||||||||||||
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Balance as of October 31, 2008
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7,900,000 | $ | 7,900 | $ | 98,100 | $ | (37,204 | ) | $ | (12,204 | ) | |||||||||
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Net loss for fiscal year ended October 31, 2009
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- 0 | - 0 | - 0 | (17,603 | ) | (17,603 | ) | |||||||||||||
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Balance as of October 31, 2009
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7,900,000 | $ | 7,900 | $ | 98,100 | $ | (54,807 | ) | $ | (29,807 | ) | |||||||||
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Adjust for forward stock split
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71,100,000 | |||||||||||||||||||
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Net loss in period ended April 30, 2010
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- 0 | - 0 | - 0 | (75,282 | ) | (75,282 | ) | |||||||||||||
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Balance as of April 30, 2010
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79,000,000 | $ | 7,900 | $ | 98,100 | $ | (130,089 | ) | $ | (105,089 | ) | |||||||||
See notes to unaudited interim financial statements
F-4
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True 2 Beauty, Inc. (formerly Burrow Mining, Inc.)
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(An Exploration Stage Company)
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Statements of Cash Flows
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Cumulative
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from
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December 11,
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2006
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Six months ended
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Six months ended
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(Inception) to
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April 30, 2010
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April 30, 2009
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April 30, 2010
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Cash flows from operating activities
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Net loss
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$ | (75,282 | ) | $ | (9,717 | ) | $ | (130,089 | ) | |||
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Adjustments to reconcile net loss to net cash
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Increase (decrease) in accounts payable
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30,000 | 30,000 | ||||||||||
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Increase (decrease) in accrued liabilities
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10,500 | - 0 | 10,500 | |||||||||
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Net cash used in operations
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(34,782 | ) | (9,717 | ) | (89,589 | ) | ||||||
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Cash flows from financing activities
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Loans from related parties
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15,300 | 5,000 | 47,300 | |||||||||
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Payments on related party loans
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(3,124 | ) | (3,124 | ) | ||||||||
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Proceeds from note issued
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175,000 | 175,000 | ||||||||||
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Issuance of note receivable
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(150,000 | ) | (150,000 | ) | ||||||||
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Shares subscribed for cash
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- 0 | - 0 | 25,000 | |||||||||
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Net cash provided by financing activities
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37,176 | 5,000 | 94,176 | |||||||||
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Net increase (decrease) in cash
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2,394 | (4,717 | ) | 4,587 | ||||||||
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Cash beginning
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2,193 | 7,796 | - 0 | |||||||||
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Cash ending
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4,587 | 3,079 | 4,587 | |||||||||
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Supplemental cash flow information:
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Cash paid for:
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Interest
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$ | 0 | $ | 0 | $ | 0 | ||||||
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Taxes
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$ | 0 | $ | 0 | $ | 0 | ||||||
See notes to unaudited interim financial statements
F-5
TRUE 2 BEAUTY, INC. (formerly Burrow Mining, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited financial statements of True 2 Beauty, Inc., a Nevada corporation (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X for the three and six-month periods ended April 30, 2010 and 2009 and reflect, in the opinion of management, all adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for such periods. The foregoing financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to financial statements for the year ended October 31, 2009 included in the Company’s Form 10-K filed with the Securities and Exchange Commission on February 1, 2010. The interim unaudited financial statements should be read in conjunction with the annual financial statements and accompanying notes. Operating results for the three and six months ended April 31, 2010 are not necessarily indicative of the results that may be expected for the year ending October 31, 2010.
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Exploration Stage Company
The Company complies with the Financial Accounting Standards Board - ASC 915, its characterization of the Company as an exploration stage enterprise.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The carrying value of cash and accounts payable and accrued liabilities approximates their fair value because of the short maturity of these instruments. Unless otherwise noted, it is management’s opinion the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
F-6
At April 30, 2010, a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.
Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
NOTE 3. - INCOME TAXES
As of April 30, 2010, the Company had net operating loss carry forwards of approximately $55,591 that may be available to reduce future years’ taxable income through 2027. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
NOTE 4 – GOING CONCERN
The Company has been a development stage company and has incurred net operating losses of $130,089 since inception (December 11, 2006). The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business. Due to the being in a development stage, the Company expects to incur losses as it expands. To date, the Company’s cash flow requirements have been primarily met by debt, equity financings, and loans from related parties. There is no assurance that such additional funds will be available for the Company to finance its operations should the Company be unable to realize profitable operations. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.
NOTE 4 – ADVANCES FROM OFFICER
The sole officer of the Company made advances to the Company of $10,300 in the current quarter. These advances were made to pay necessary corporate expenses and have been loaned without interest. A former officer of the Company made total loans of $37,000 prior to her resignation. She was paid $3,124 in the current quarter on this loan.
F-7
NOTE 6 – STOCKHOLDERS’ EQUITY
On March 26, 2010, pursuant to a vote by the Company’s majority shareholder, the Company filed Articles of Amendment to its Articles of Incorporation to increase the Company’s authorized shares of Common Stock from 75,000,000 shares to 200,000,000 shares, par value $0.001. The Company also authorized 10,000,000 shares of preferred stock with a par value of $0.001. On the same date, the Company authorized a forward stock split in the form of a dividend of 9 shares for every one share of common stock held (effectively a ten for one forward stock split). The payment date on this dividend was April 9, 2010.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Richard O. Weed was appointed as the Company’s President and elected its sole director on January 25, 2010. The Company agreed to compensate him $3,500 per month for his service as the Company’s corporate secretary.
Effective February 1, 2010, the Company entered into a fee agreement with the law firm Weed & Company, LLP of which its President is a partner. Under the terms of this retainer agreement, the Company is to pay Weed & Company a monthly fee of $10,000.
NOTE 8 - RELATED PARTY TRANSACTIONS
Richard O. Weed is the sole officer and director of the Company. In the quarter ended April 30, 2010 he made advances of $10,300 to the Company. The Company also has accrued a monthly fee of $3,500 to him as compensation for serving as corporate secretary (a total of $10,500 was accrued in the current quarter). A law firm of which Mr. Weed is a partner is also due a monthly fee of $10,000 under a retainer agreement that was effective on February 1, 2010 (a total of $30,000 was accrued in the current quarter under this agreement). Mr. Weed and Weed & Company, LLP are due a total of $50,800 as a result of the aforementioned arrangements and the advances.
NOTE 9 - SUBSEQUENT EVENTS
In February 2010, the Company entered into an Exchange Agreement with Hair Tech International, Inc., a Georgia corporation (“Hairtech”), and Dreamcatchers International, Inc., a Georgia corporation (“Dreamcatchers”). Under the agreement, the Company agreed to issue 3,400,000 (34,000,000 post stock dividend) shares of common stock and the Company’s newly formed subsidiary, 2010 Asset Corp., agreed to acquire certain assets and assume certain liabilities. On May 18, 2010, the Exchange Agreement dated January 19, 2010 among True 2 Beauty Inc. (formerly, Burrow Mining, Inc.), a Nevada corporation, (the “Company”), Hair Tech International, Inc., a Georgia corporation (“Hairtech”), and Dreamcatchers International, Inc., a Georgia corporation (“Dreamcatchers”) was terminated. The transaction was terminated at the request of Hairtech and Dreamcatchers.
F-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward- looking statements. These forward-looking statements can be identified by the use of words such as "believes," "estimates," "could," "possibly," "probably," "anticipates," "projects," "expects," "may," "will," or "should" or other variations or similar words. We cannot assure you that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management's current expectations and are inherently uncertain. Our actual results may differ significantly from management's expectations.
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.
Unless the context indicates or requires otherwise, the terms "we," "our," "ours," "us" and the "Company" refer collectively to True 2 Beauty Inc. (formerly, Burrow Mining, Inc.), a Nevada corporation
OVERVIEW
From inception on December 11, 2006 through April 30, 2010, we have incurred a cumulative net loss of $130,089 and to date have generated no revenues. The Company has liabilities of $259,676 and currently does not have sufficient cash to operate for the remainder of the fiscal year ending October 31, 2010.
The Company is in the development stage and has realized no revenue from its planned operations. We may experience fluctuations in operating results in future periods due to a variety of factors, including our ability to obtain additional financing in a timely manner and on terms favorable to us, our ability to successfully develop our business model, the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure and the implementation of marketing programs, key agreements, and strategic alliances, and general economic conditions specific to our industry.
PLAN OF OPERATION
On May 27, 2007, we entered into an agreement with Wolf Mountain Enterprises of Garson, Ontario wherein they agreed to sell to us one mineral claim located approximately 45 kilometers southwest of Telegraph Creek, 75 kilometers west of Tatogga Lake and directly west and southwest of Yehiniko Lake in the Canadian province of British Columbia (the "Stikine-Asianada Property") in an area having the potential to contain copper-gold-silver bearing quartz-carbonate veins.
During the fiscal year ended October 31, 2009 we obtained a geological summary report prepared by an independent geologist on the Stikine-Asianada Property, and this report provided us with recommendations for additional exploration on the property. We have not yet been able to access the property to commence the work recommended by the report due to seasonal conditions.
In February 2010, the Company shifted its focus to the beauty industry. The Company entered into an Exchange Agreement with Hair Tech International, Inc., a Georgia corporation (“Hairtech”), and Dreamcatchers International, Inc., a Georgia corporation (“Dreamcatchers”). Under the agreement, the Company agreed to issue 3,400,000 (34,000,000 post stock dividend) shares of common stock and the Company’s newly formed subsidiary, 2010 Asset Corp., agreed to acquire certain assets and assume certain liabilities. On May 18, 2010, the Exchange Agreement dated January 19, 2010 among True 2 Beauty Inc. (formerly, Burrow Mining, Inc.), a Nevada corporation, (the “Company”), Hair Tech International, Inc., a Georgia corporation (“Hairtech”), and Dreamcatchers International, Inc., a Georgia corporation (“Dreamcatchers”) was terminated. The transaction was terminated at the request of Hairtech and Dreamcatchers.
1
The Company’s board of directors passed a resolution for a 10:1 forward stock split by way of stock dividend. The Company’s board of directors recommended and the stockholders with a majority of the voting power of the Company voted to increase the capital stock of the Company. Under the Articles of Incorporation, as amended, the corporation shall have authority to issue Two Hundred Ten Million Shares (210,000,000) of capital stock of which stock Two Hundred Million (200,000,000) shares, $.001 par value, shall be common stock and of which Ten Million (10,000,000) shares of $.001 par value shall be preferred stock. Further, the board of directors of this corporation, by resolution only, may cause the corporation to issue one or more classes or series of preferred stock and to fix the number of shares constituting any classes or series. Further, the classes or series may have such voting powers, (full, limited, extra, or none), such preferences, relative rights, and qualifications, limitations or restrictions as stated in the resolutions adopted by the board of directors.
On May 10, 2010, the Company changed its name to True 2 Beauty Inc. The name change became effective for trading purposes on May 21, 2010. The Company implemented a 10:1 forward stock split by way of a dividend of 9 shares for every 1 share owned on the record date of May 6, 2010. The stock traded ex dividend on May 17, 2010. The dividend shares were mailed directly to shareholders without any further action on their part. The name change from Burrow Mining, Inc. to True 2 Beauty Inc. became effective for trading purposes on May 21, 2010. The Company’s common stock trades under the symbol TRTB.
The Company’s transfer agent is Island Stock Transfer
Island Stock Transfer
100 Second Avenue South, Suite 705S
St. Petersburg, FL 33701
Telephone: 727-289-0010
Fax: 727-289-0069
We anticipate spending the following over the next 12 months on administrative fees:
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●
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$60,000 on legal fees
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|
●
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$15,000 on accounting and audit fees
|
|
●
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$5,000 on EDGAR filing fees
|
|
●
|
$26,000 on general administration costs
|
Total administrative expenditures over the next 12 months are therefore expected to be approximately $106,000.
NUMBER OF EMPLOYEES
We currently have no full time or part-time employees other than Richard O. Weed, our President, Secretary, Treasurer, and sole director. From our inception through the period ended April 30, 2010, we have principally relied on the services of our directors. In order for us to attract and retain quality personnel, we anticipate we will have to offer competitive salaries to future employees. We anticipate that it may become desirable to add full and or part time employees to discharge certain critical functions during the next 12 months. This projected increase in personnel is dependent upon our ability to generate revenues and obtain sources of financing. There is no guarantee that we will be successful in raising the funds required or generating revenues sufficient to fund the projected increase in the number of employees. Should we expand, we will incur additional cost for personnel.
RESULTS OF OPERATIONS FOR THE QUARTER AND SIX MONTHS ENDING APRIL 30, 2010
We did not earn any revenue during the six-month period ending April 30, 2010.
We incurred operating expenses in the amount of $74,506 for the quarter period ending April 30, 2010 and operating expenses of $75,282 for the six-month period ending April 30, 2010. These operating expenses were comprised of general and administrative expenses, the majority of which were professional fees (legal and accounting). Professional fees comprised $61,879 of the total expenses incurred in both the quarter and six-months ending April 30, 2010.
We have not attained a sufficient level of profitable operations and are dependent upon obtaining financing to complete our proposed business plan.
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LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2010, we had working capital deficit of $105,089. For six-month period ending April 30, 2010, we generated a negative operating cash flow of $34,782. Since inception, we have been financed through three private placements of our common stock for total net proceeds of $25,000, loans from related parties in the amount of $47,300 and a third party loan in the amount of $175,000. During the quarter ended April 30, 2010, our expenses were financed by a loan from a related party in the amount of $10,300 and an additional loan of $175,000. As of April 30, 2010, our total assets are comprised of cash in the amount of $4,587 and a note receivable from Dreamcatchers, Inc. for $150,000. The note receivable resulted from the failed merger with Dreamcatchers. Our total current liabilities consist of accounts payable of $30,000, accrued liabilities of $10,500, a note payable of $175,000, a loan from our current officer of $10,300 and a loan from former officers of $33,876.
While we have sufficient funds on hand to continue business operations, our cash reserves may not be sufficient to meet our obligations beyond the end of our current fiscal year ending October 31, 2010. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock although we do not have any arrangements in place for any future equity financing.
We also may seek to obtain short-term loans from our directors, although no such arrangement has been made. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months.
If we are unable to raise the required financing, we will be delayed in conducting our business plan.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
INFLATION
It is the opinion of management that inflation has not had a material effect on our operations.
PRODUCT RESEARCH AND DEVELOPMENT
We do not anticipate incurring any material costs in connection with mineral research and development activities during the next twelve months.
DESCRIPTION OF PROPERTY
We do not have ownership or leasehold interest in any property. Our president, provides us with office space and related office services free of charge.
ITEM 3. CONTROLS AND PROCEDURES
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. As of April 30, 2010, the Company's principal executive officer and principal financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon the evaluation of these controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in the Company's internal control over financial reporting in the Company's second fiscal quarter of the fiscal year ended October 31, 2010 covered by this Quarterly Report on Form 10-Q, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
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EXHIBIT
NUMBER
|
DESCRIPTION |
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 | Certification 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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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| True 2 Beauty Inc. | |||
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Dated: July 29, 2010
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By:
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/s/ Richard O. Weed | |
| Richard O. Weed | |||
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President
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|
EXHIBIT
NUMBER
|
DESCRIPTION |
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 | Certification 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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