XOTC:DRHC Quarterly Report 10-Q Filing - 4/30/2012

Effective Date 4/30/2012

FORM 10-Q Quarterly Report April 30 2012


UNITED STATES

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 April 30, 2012



.      . TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE EXCHANGE ACT


For the transition period from ___________ to _____________



EXCLUSIVE BUILDING SERVICES, INC.

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



Nevada

 

333-170393

 

27-3566307

(State or other jurisdiction of incorporation or organization)

 

(Commission file number)

 

(IRS Employer Identification Number)


5137 E. Armor St., Cave Creek, AZ 85331

(Address of principal executive office)


602.326.8290

(Issuer’s telephone number)





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 filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


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

Yes      . No   X  .


State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 94,150,000 shares of Common Stock as of May 29, 2012.




1




EXCLUSIVE BUILDING SERVICES, INC.


FORM 10-Q

 

April 30, 2012

 

INDEX



 

 

PART I - FINANCIAL INFORMATION

Page

 

 

Item 1.    Consolidated Financial Statements

3

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

8

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

12

Item 4.    Controls and Procedures

12

 

 

PART II - OTHER INFORMATION

 

 

 

Item 1.    Legal Proceedings

13

Item 1A. Risk Factors

13

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

18

Item 3.    Defaults Upon Senior Securities

18

Item 4.    (Removed and Reserved)

18

Item 5.    Other Information

18

Item 6.    Exhibits and Reports on Form 8-K

18

 

 

SIGNATURES

18






2




PART I - FINANCIAL INFORMATION


Item 1.Financial statements


EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

APRIL 30, 2012 AND JULY 31, 2011

(Unaudited)



ASSETS

 

April 30, 2012

 

July 31, 2011

Current Assets

 

 

 

 

   Current assets of discontinued operation

$

-

$

919

Total Current Assets

 

-

 

919

 

 

 

 

 

TOTAL ASSETS

$

-

$

919

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

 

 

 

 

Current Liabilities

 

 

 

 

   Accrued expenses

$

16,154

$

6,350

Total Current  Liabilities

 

16,154

 

6,350

 

 

 

 

 

Total Liabilities

 

16,154

 

6,350

 

 

 

 

 

Stockholders’ (Deficit)

 

 

 

 

Preferred stock: $0.001 par value; 1,000,000 shares authorized; no shares issued or outstanding

 

-

 

-

Common stock: $0.001 par value; 500,000,000 shares authorized; 93,750,000 and 321,875,000 shares, respectively, issued and outstanding

 

93,750

 

321,875

Additional Paid-in Capital

 

(72,309)

 

(311,575)

Retained earnings from discontinued operations

 

6,944

 

6,969

Accumulated deficit

 

(44,539)

 

(22,700)

Total Stockholders’ (Deficit)

 

(16,154)

 

(5,431)

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

$

-

$

919



See accompanying notes to the financial statements.





3




EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED APRIL 30, 2012 AND 2011

(Unaudited)


 

 

2012

 

2011

CONTINUING OPERATIONS:

 

 

 

 

REVENUES

$

-

$

-

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

General and administrative

 

5,378

 

350

Compensation

 

-

 

-

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

5,378

 

350

 

 

 

 

 

LOSS FROM CONTINUING OPERATIONS

 

(5,378)

 

(350)

 

 

 

 

 

DISCONTINUED OPERATION - net

 

-

 

966

 

 

 

 

 

NET INCOME (LOSS)

$

(5,378)

$

616

 

 

 

 

 

NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED

$

(0.00)

$

0.00

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

259,027,778

 

321,875,000



See accompanying notes to the financial statements.





4




EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED APRIL 30, 2012 AND 2011

AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 28, 1997) TO APRIL 30, 2012

(Unaudited)


 

 

2012

 

2011

 

Period from

inception

(Feb 28, 1997)

to

April 30, 2012

 

 

 

 

 

 

 

REVENUES

$

-

$

-

$

-

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

General and administrative

 

21,839

 

1,526

 

44,539

Compensation

 

-

 

-

 

-

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

21,839

 

1,526

 

44,539

 

 

 

 

 

 

 

LOSS FROM CONTINUING OPERATIONS

 

(21,839)

 

(1,526)

 

(44,539)

 

 

 

 

 

 

 

DISCONTINUED OPERATION - net

 

(25)

 

769

 

6,944

 

 

 

 

 

 

 

NET LOSS

$

(21,864)

$

(757)

$

(37,595)

 

 

 

 

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

$

(0.00)

$

(0.00)

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

313,822,993

 

321,875,000

 

 



See accompanying notes to the financial statements.




5




EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM INCEPTION (FEBRUARY 28, 1997) TO APRIL 30, 2012

(Unaudited)



 

 

 

Common

Stock

Amount

 

Additional

Paid-in

Capital

 

Retained

Earnings

from

Discontinued

Operations

 

Accumulated

Deficit

 

Total

Common

Stock

Original issuance of shares (February 28, 2007)

321,875,000

$

321,875

$

(311,575)

$

-

$

-

$

10,300

Net income (loss) inception Through July 31, 2011

-

 

-

 

-

 

6,969

 

(22,700)

 

(15,731)

Balance July 31, 2011

321,875,000

 

321,875

 

(311,575)

 

6,969

 

(22,700)

 

(5,431)

Sale of common stock in August 2011

37,500,000

 

37,500

 

(25,500)

 

-

 

-

 

12,000

Return of shares to Treasury

(265,625,000)

 

(265,625)

 

264,766

 

-

 

-

 

(859)

Loss for period

-

 

-

 

-

 

(25)

 

(21,839)

 

(21,864)

Balance, April 30, 2012

93,750,000

$

93,750

$

(72,309)

$

6,944

$

(44,539)

$

(16,154)



See accompanying notes to the financial statements.




6




EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED APRIL 30, 2012 AND 2011

AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 28, 1997) TO APRIL 30, 2012

(Unaudited)



 

 

2012

 

2011

 

Period from inception (Feb 28, 1997) to April 30, 2012

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

    Net income (loss)

$

(21,864)

$

(757)

$

(37,595)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

    Stock issued in exchange for professional expenses

 

12,000

 

-

 

22,300

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

Increase in accrued expenses

 

9,804

 

850

 

16,154

Cash Flows Provided by (Used in) Operating Activities

 

(60)

 

93

 

859

 

 

 

 

 

 

 

CASH FLOWS FROM  INVESTING ACTIVITIES

 

-

 

-

 

-

 

 

 

 

 

 

 

CASH FLOWS FROM  FINANCING ACTIVITIES

 

 

 

 

 

 

    Retirement of shares

 

(859)

 

-

 

(859)

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

-

 

93

 

-

Cash, beginning of period

 

919

 

944

 

-

    Cash, end of period

$

-

$

1,037

$

-

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash paid for interest

$

-

$

-

$

-

Cash paid for income taxes

$

-

$

-

$

-



See accompanying notes to the financial statements.





7




EXCLUSIVE BUILDING SERVICES, INC.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

April 30, 2012 and 2011

(unaudited)


NOTE 1 – ORGANIZATION


Exclusive Building Services, Inc. (the “Company”) was founded as an unincorporated DBA in February 1997 and was incorporated as a C corporation under the laws of the State of Nevada on October 11, 2010. The incorporation effort included the Company issuing 312,500,000 shares of common stock to Patricia G. Skarpa, who founded and managed the business which had been providing commercial cleaning services to office buildings of 10,000 to 15,000 square feet in Harris County, TX (part of the Metropolitan Houston area) since February 1997, and 9,375,000 shares to Hallie Beth Skarpa, its other director, for services rendered. These services, involving the incorporation and planning, were valued at $10,300. Hallie Beth Skarpa is the daughter of Patricia G. Skarpa.


On March 26, 2012, the Company entered into a Spinoff Agreement with Patricia G. Skarpa and Hallie Beth Skarpa, who were its officers and directors, as well as its largest shareholders, under which the Company agreed to sell all of the assets relating to the segment of its business that provided commercial cleaning services to office buildings in exchange for all of the liabilities, as defined, of the commercial cleaning business and the return by Patricia G. Skarpa and Hallie Beth Skarpa of an aggregate of 265,625,000 shares of the Company’s common stock. As a result of the Spinoff Agreement the Company ceased to be engaged in providing commercial cleaning services to office buildings.


On March 26, 2012, Patricia G. Skarpa and Hallie Beth Skarpa entered into agreements with Toby McBride and Michael Jay Holley, officers of TO, under which they agreed to sell 28,125,000 shares of common stock to each (or an aggregate of 56,250,000 shares. After the return of the 265,625,000 shares of common stock to treasury described above, Messrs. McBride and Holley own approximately 58% of our issued and outstanding common shares.


On January 10, 2012, the Company incorporated a wholly-owned subsidiary, TO Sports Innovation, Inc. (“TO”), in Nevada. TO was inactive until March 15, 2012.


TO has now entered into an exclusive license agreement with Dethrone Royalty, Inc. giving TO the right to use the Dethrone Trademark worldwide in connection with the manufacture and sale of sports performance or energy drinks along with any other non-alcoholic beverage under the Trade Name, Dethrone Beverages.


The officers have formulas that will be used for the initial products that are planned. They have undertaken efforts to raise the financing necessary to manufacture the initial products using outside contractors and implement marketing programs. The initial amount that will be sought is approximately $300,000, although no assurances can be given as to the likelihood or timing of raising the needed funds.


TO is currently in negotiations with two production facilities but no agreement has been executed as yet.


The Company has determined that as a result of the discontinuance of janitorial service operations and entering into the manufacture and sale of sports performance or energy drinks along with any other non-alcoholic beverage under the Trade Name, Dethrone Beverages, it has re-entered the development stage as defined by Section 915-10-20 of the FASB Accounting Standards Codification. Accordingly, financial statement disclosures included in these financial statements include inception to date information. The Company has presented the accumulated deficit on the balance sheet through April 30, 2012 as deficit accumulated from discontinued operations.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Interim financial statements


The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Unaudited interim results are not necessarily indicative of the results for the full fiscal year.  These financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended July 31, 2011 and notes thereto contained in the Company’s Annual Report on Form 10-K.



8




Basic and Diluted Loss Per Common Share


Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic and diluted net income per common share has been calculated by dividing the net income for the period by the basic and diluted weighted average number of common shares outstanding assuming that the Company incorporated as of the beginning of the first period presented. There were no dilutive shares outstanding at April 30, 2012 or 2011.


Discontinued Operations


In accordance with ASC 205-20, Presentation of Financial Statements-Discontinued Operations (“ASC 205-20”), the Company reported the results of its commercial cleaning services as a discontinued operation. The results of operations of business dispositions are   segregated from continuing operations and reflected as discontinued operations in current and prior periods. The application of the principle is discussed in Note 5, Discontinued Operation.


Recently Issued Accounting Standards


There were no new accounting pronouncements that had a significant impact on the Company’s operating results or financial position.


NOTE 3 – GOING CONCERN


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had negative working capital and a net stockholders’ deficit at April 30, 2012 and had no source of debt or equity financing.


While the Company is emphasizing a new product line involving the manufacture and sale of sports performance or energy drinks along with any other non-alcoholic beverage under the Trade Name, Dethrone Beverages, there are uncertainties as to whether the Company will obtain sufficient financing to introduce and distribute the planned product or, if distributed, there will be sufficient market demand for the products.


The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 4 – SHARE CAPITAL


In February 2012, the Company increased the number of authorized shares to 500,000,000 and approved a 31.25 for 1 forward split of its common stock effective March 17, 2012, after which there were 359,375,000 shares of common stock outstanding. All share and per share disclosures give retroactive effect to this forward split.


On March 26, 2012, Patricia G. Skarpa and Hallie Beth Skarpa entered into agreements with Toby McBride and Michael Jay Holley, officers of TO, under which they agreed to sell 28,125,000 shares of common stock to each (or an aggregate of 56,250,000 shares. After the return of the 265,625,000 shares of common stock to treasury described in Note 1, above, Messrs. McBride and Holley own approximately 58% of our issued and outstanding common shares.


On May 4, 2012, the Company sold 400,000 newly-issued restricted shares of common stock for $50,000 ($0.125 per share). After these shares were issued, there were 94,150,000 shares outstanding.


NOTE 5 - SUBSEQUENT EVENTS


In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events from May 1, 2012 through June 15, 2012, the date of issuance of the financial statements and has determined it does not have any material subsequent events to disclose other than the raise of $50,000 disclosed in Note 4 above.




9




Item 2.   NOTE REGARDING FORWARD-LOOKING STATEMENTS


Certain matters discussed herein are forward-looking statements.  Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:


·

our future operating results;

·

our business prospects;

·

any contractual arrangements and relationships with third parties;

·

the dependence of our future success on the general economy;

·

any possible financings; and

·

the adequacy of our cash resources and working capital.


These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe," “anticipate,” “expect,” “estimate” or words of similar meaning.   Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements.   Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which

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