Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
BKSHF > SEC Filings for BKSHF > Form 10-Q on 16-Oct-2013All Recent SEC Filings

Show all filings for BERKSHIRE HOMES, INC. | Request a Trial to NEW EDGAR Online Pro

Form 10-Q for BERKSHIRE HOMES, INC.


16-Oct-2013

Quarterly Report


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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Company Overview

We were incorporated as Indigo International Corp. on June 2, 2010 in the State of Nevada originally to operate a consulting business in commercial cultivation of white mushrooms (agaricus bisporus).

On December 4, 2012, we changed our name to Berkshire Homes, Inc. in connection with the pursuit of a new business plan. We are now focused on the acquisition and rehabilitation of distressed residential properties in the United States. Our corporate offices are located at 2375 East Camelback Road, Suite 600, Phoenix, AZ 85016 and our phone number is (602) 387-5393.

We believe that the current housing market environment presents an unprecedented opportunity for those who have the expertise, operating platform, technology systems and capital in place to execute an acquisition and operating strategy in a cost-effective manner. We intend to build a geographically diversified portfolio of residential homes in target markets that we believe exhibit favorable demographics and long-term economic trends, attractive acquisition prices, rental yields and appreciation potential. We intend to implement a buy and renovate strategy to increase value, livability, and attractiveness, and then sell the properties or keep them for value as rental properties.

In furthering our business plan, we have been active searching for capital to purchase distressed properties and build our inventory. During the reporting period, we sold an aggregate of $2,650,000 of our 5% unsecured promissory notes (the "5% Notes") for gross proceeds to us of $2,650,000. The 5% Notes accrued interest at the rate of 5% per annum are due and payable twenty four months from their respective dates of issuance, subject to acceleration in the event of default and the 5% Notes may be prepaid, in whole or in part, without penalty or premium.

While we were able to raise some financing, we will need substantial financing to implement our business strategy to acquire a portfolio of investment properties. We plan to continue our efforts to secure financing.

With the money we were able to raise, we purchased three residential homes in the greater Seattle area. We plan to expand our portfolio of homes and have been looking at other major urban markets to buy, renovate and sell homes. Our goal is to seek out opportunistic investments of buying and selling homes to achieve a twenty percent return on our investments. There is no assurance, however, that we will find the residential homes that fit our parameters or that we will raise the needed capital to implement our business plan.

Results of Operations for the three and nine months ended August 31, 2013 and 2012

Revenues

We have generated limited revenue since our inception. We are a development stage company and there is no guarantee that we will be able to execute on our business. We have incurred losses since our inception.

Table of Contents

Operating Expenses

Operating expenses increased to $74,239 for the three months ended August 31, 2013 from $66,969 for the three months ended August 31, 2012. Our operating expenses for the three months ended August 31, 2013 consisted of professional fees in the amount of $ 3,700, management fees and expenses of $37,500, and general and administrative expenses of $33,039. In comparison, our operating expenses for the three months ended August 31, 2012 consisted of professional fees in the amount of $9,600, management fees and expenses of $34,960 and general and administrative expenses of $22,409.

Operating expenses decreased to $190,911 for the nine months ended August 31, 2013 from $351,191 for the nine months ended August 31, 2012. Our operating expenses for the nine months ended August 31, 2013 consisted of professional fees in the amount of $47,076, management fees and expenses of $ 87,500, consulting fees of $1,000 and general and administrative expenses of $55,335. In comparison, our operating expenses for the nine months ended August 31, 2012 consisted of professional fees in the amount of $45,213 , management fees and expenses of $144,382, consulting fees of $84,419 and general and administrative expenses of $77,177.

We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with the acquisition, renovation and sale of residential properties and the professional fees associated with our becoming a reporting company under the Securities Exchange Act of 1934.

Other Expenses

We incurred other expenses of $73,237 and $109,637 for the three and nine months ended August 31, 2013, respectively, as compared with $0 for other expenses for the three and nine months ended August 31, 2012. Our other expenses for the three and nine months ended August 31, 2013 consisted of interest expenses and the loss on extinguishment of liabilities.

Net Loss

We incurred a net loss of $147,476 for the three months ended August 31, 2013, compared to a net loss of $82,969 for the three months ended August 31, 2012.

We incurred a net loss of $300,548 for the nine months ended August 31, 2013 compared to a net loss of $378,346 for the nine months ended August 31, 2012.

We incurred a cumulative net loss of $1,279,892 for the period from June 2, 2010 (Inception) to August 31, 2013.

Table of Contents

Liquidity and Capital Resources

As of August 31, 2013, we had total current assets of $2,064,589, consisting of cash and inventories. We had current liabilities of $545,881 as of August 31, 2013. Accordingly, we had working capital of $1,518,708 as of August 31, 2013.

Operating activities used $1,245,106 in cash for the nine months ended August 31, 2013, as compared with $374,679 provided for the nine months ended August 31, 2012. Our negative operating cash flow for August 31, 2013 was mainly a result of our increase in inventories and our net loss for the period.

Financing activities for the nine months ended August 31, 2013 generated $2,230,350 in cash, as compared with cash flows provided by financing activities of $400,000 for the nine months ended August 31, 2012. Our positive cash flow for the nine months ended August 31, 2013 was the result of proceeds from the issuance of a promissory note, offset mainly by $500,000 in payments on long term debt.

As of August 31, 2013, we had $1,020,959 in cash. Until we are able to sustain our ongoing operations through revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Going Concern

The accompanying financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We have incurred losses since inception resulting in an accumulated deficit of $1,279,981 as of August 31, 2013 and further losses are anticipated in the development of our business raising substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management anticipates financing operating costs over the next twelve months with loans and/or private placement of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies currently fit this definition.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Off Balance Sheet Arrangements

As of August 31, 2013, there were no off balance sheet arrangements.

Table of Contents

  Add BKSHF to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for BKSHF - All Recent SEC Filings
Sign Up for a Free Trial to the NEW EDGAR Online Pro
Detailed SEC, Financial, Ownership and Offering Data on over 12,000 U.S. Public Companies.
Actionable and easy-to-use with searching, alerting, downloading and more.
Request a Trial      Sign Up Now


Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.