XOTC:BONP Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended
March 31, 2012
 
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
 
to
 

Commission File No.
000-16974

BONAMOUR PACIFIC, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
59-2158586
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

5190 N. Central Expressway, Suite 900, Dallas, Texas
75206
(Address of principal executive offices)
(Zip Code)

(214) 855-0808
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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  x  No  ¨
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨
Accelerated filer  ¨
   
Non-accelerated filer ¨
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  x  No ¨

The number of shares outstanding of the Registrant’s Common Stock as of April 30, 2012 was 50,000,000.
 
 
 
 

 
 

TABLE OF CONTENTS
 
     
   
Page
   
PART I –FINANCIAL INFORMATION
1
ITEM 1.
FINANCIAL STATEMENTS
1
 
Balance Sheets as of March 31, 2012 (Unaudited) and December 31, 2011 (Audited)
1
 
Statements of Operations for the Three Months Ended March 31, 2012 and 2011 (Unaudited)
2
 
Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011 (Unaudited)
3
 
Notes to Financial Statements
4
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
6
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
7
ITEM 4.
CONTROLS AND PROCEDURES
7
     
PART II – OTHER INFORMATION
9
ITEM 1.
LEGAL PROCEEDINGS
9
ITEM 1A.
RISK FACTORS
9
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
9
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
9
ITEM 4.
MINE SAFETY DISCLOSURES
9
ITEM 5.
OTHER INFORMATION
9
ITEM 6.
EXHIBITS
9
     
SIGNATURES
 
9
 
 
 
 
 
 

 
 
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

BONAMOUR PACIFIC, INC.
 
BALANCE SHEETS
 
             
             
   
March 31,
   
December 31,
 
   
2012
   
2011
 
   
(unaudited)
   
(audited)
 
             
ASSETS
           
             
Current Assets:
           
Prepaid expense
  $ 963     $ 1,925  
                 
     Total current assets
    963       1,925  
                 
     Total assets
  $ 963     $ 1,925  
                 
 LIABILITIES AND STOCKHOLDERS' DEFICIT
               
 
               
Current Liabilities:
               
Loans payable-related party
  $ 48,217     $ 34,348  
Accounts payable-trade
    26,344       13,278  
                 
     Total current liabilities
    74,561       47,626  
                 
                 
Stockholders' Deficit:
               
Common stock - par value $0.001; 500,000,000 shares authorized;
               
       50,000,000  shares issued and outstanding
    50,000       50,000  
Additional paid in capital
    261,701       261,701  
Accumulated deficit
    (385,299 )     (357,402 )
                 
        Total stockholders' deficit
    (73,598 )     (45,701 )
                 
     Total liabilities and stockholders' deficit
  $ 963     $ 1,925  
 
 

 
The accompanying footnotes are an integral part of these financial statements.
 
 
 
1

 
 
 
BONAMOUR PACIFIC, INC.
 
STATEMENTS OF OPERATIONS
 
UNAUDITED
 
             
             
   
Three Months Ended
 
   
March 31, 2012
   
March 31, 2011
 
             
Revenues
  $ -     $ -  
                 
Operating expenses:
               
General and administration
    27,897       18,753  
                 
     Total operating expenses
    27,897       18,753  
                 
Loss before taxes
    (27,897 )     (18,753 )
                 
Provision for income taxes
    -       -  
                 
Net loss
  $ (27,897 )   $ (18,753 )
                 
Loss per share, basic and diluted
  $ -     $ -  
                 
Weighted average number of shares outstanding
    50,000,000       38,837,837  
 
 
The accompanying footnotes are an integral part of these financial statements.
 
 
 
2

 
 
 
BONAMOUR PACIFIC, INC.
 
STATEMENTS OF CASH FLOWS
 
UNAUDITED
 
             
             
             
   
Three Months Ended
 
   
March 31, 2012
   
March 31, 2011
 
             
             
CASH FLOWS FROM OPERATING ACTIVITIES
           
  Net loss
  $ (27,897 )   $ (18,753 )
     Adjustments to reconcile net loss to net cash flows used in
               
        operating activities:
               
     Change in operating assets and liabilities:
               
          Prepaid expenses
    963       -  
          Accounts payable
    13,065       12,406  
                 
                 
Net cash flows used in operating activities
    (13,869 )     (6,347 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
    -       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
  Funds advanced by related party
    13,869       -  
  Capital contribution
    -       6,347  
                 
                 
Net cash flows provided by financing activities
    13,869       6,347  
                 
Decrease in cash
    -       -  
Cash, beginning of period
    -       50  
Cash, end of period
  $ -     $ 50  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
         
                 
Interest paid
  $ -     $ -  
                 
Income taxes paid
  $ -     $ -  
                 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INFORMATION:
         
                 
Conversion of debt to equity
  $ -     $ 36,457  
 
 
The accompanying footnotes are an integral part of these financial statements.
 
 
 
3

 
 
 
BONAMOUR PACIFIC, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE A – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Interim Financial Reporting

While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America ("GAAP").  These interim financial statements follow the same accounting policies and methods of application as used in the December 31, 2011 audited financial statements of Bonamour Pacific, Inc. (the “Company”).  All adjustments are of a normal, recurring nature.  Interim financial statements and the notes thereto do not contain all of the disclosures normally found in year-end audited financial statements and these Notes to Financial Statements are abbreviated and contain only certain disclosures related to the three month periods ended March 31, 2012 and 2011.  It is suggested that these interim financial statements be read in conjunction with the our audited financial statements and related notes for the year ended December 31, 2011 included in our Form 10K, filed with the Securities Exchange Commission on March 30, 2012.  Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

NOTE B -- GOING CONCERN

The financial statements of the Company have been prepared in conformity with GAAP, and assume that the Company will continue as a going concern.  The Company expects to incur losses as it expands.  To date, the Company's cash flow requirements have been met through the sale of its common stock, cash advances from related parties, and established trade credit.  There is no assurance that additional funds will be available for the Company to finance its operations should the Company be unable to realize profitable operations.  These conditions, among others, give rise to substantial doubt about the Company’s ability to continue as a going concern.  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 C – RELATED PARTIES

During the three months ended March 31, 2012, Bon Amour International, LLC (“BAI”) advanced the Company $13,869 in the form of direct payments to certain vendors to the Company.  The advances are non-interest bearing and due on demand.  BAI, a shareholder of the Company, provides office space for the Company at no charge.  Management considers the Company's current office space arrangement adequate.

NOTE D – CAPITAL STOCK

The Company is authorized to issue up to 500,000,000 shares of common stock at $0.001 par value per share ("Common Stock").  As of March 31, 2012, December 31, 2011, and as of the date of this filing, the Company has 50,000,000 shares of Common Stock issued and outstanding.  Holders of Common Stock are entitled to one vote per share and are to receive dividends or other distributions when and if declared by the Company's Board of Directors.  None of our Common Stock is subject to outstanding options or rights to purchase, nor do we have any issued and outstanding securities that are convertible into our Common Stock.  We have not agreed to register any of our stock.  We do not currently have in effect an employee stock option plan.
 
 
 
4

 

BONAMOUR PACIFIC, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE E – INCOME TAXES

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not expect to pay any significant federal or state income tax for 2012 as a result of the losses recorded during the three months ended March 31, 2012 as well as additional losses expected for the remainder of 2012 as well as from generating net operating loss carry forwards from prior years.  Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is "more likely than not" that some component or all of the benefits of deferred tax assets will not be realized.  As of March 31, 2012, the Company maintains a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded.  There were no recorded unrecognized tax benefits at the end of the reporting period.
 
 
 
 
 
 
 
 
 
5

 
 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We urge you to read the following discussion in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2011, as well as with our financial statements and the notes thereto included elsewhere herein.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Our prospects are subject to uncertainties and risks. In this Quarterly Report on Form 10-Q, we make forward-looking statements in this Item 2 and elsewhere that also involve substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections about our business, and reflect our beliefs and assumptions based upon information available to us at the date of this report. In some cases, you can identify these statements by words such as “if,” “may,” “might,” “will, “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” and other similar terms. These forward-looking statements include, among other things, plans for proposed operations, descriptions of our strategies, our product and market development plans, and other objectives, expectations and intentions, the trends we anticipate in our business and the markets in which we operate, and the competitive nature and anticipated growth of those markets.

We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including but not limited, to the risks and uncertainties discussed in our other filings with the SEC. We undertake no obligation to revise or update any forward-looking statement for any reason.

Overview

We are currently a shell company as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  However, subsequent to the change of control that occurred upon acquisition of common stock by Bon Amour International, LLC in June 2011, management began evaluating various plans of operation. As of the date of this report, management has not determined a plan of future operation.

Our principal office is located at 5190 North Central Expressway, Suite 900, Dallas, Texas and our telephone number is (214) 855-0808.  We are traded on the OTC Market Groups, Inc. OTCQB (the “OTCQB”) under the symbol “BONP.”  We do not currently have a corporate website.

Basis of Presentation of Financial Information
 
The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business.  At March 31, 2012, the Company had an accumulated deficit of $385,299, and for the three months ended March 31, 2012 incurred net losses of $27,897.  Management expects that the Company will need to raise additional capital to commence and sustain operations until such time as the Company can achieve profitability. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining 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.

Critical Accounting Policies

There have been no changes from the Critical Accounting Policies described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2012.
 
 
 
6

 

Liquidity and Capital Resources

The Company has yet to implement a plan of operation or attain a level of operations which allows it to meet its current overhead.  We do not contemplate attaining profitable operations until such time as management determines a plan of future operation and implements such plans, nor is there any assurance that plans of operation will be determined or implemented, or that profitable operations can ever be achieved once such plans are implemented.  We expect to be dependent upon obtaining additional financing in order to adequately fund working capital, infrastructure and expenses in order to execute plans for future operations, so that we can achieve a level of revenue adequate to support our cost structure, none of which can be assured. These factors raise substantial doubt about our ability to continue as a going concern and the accompanying financial statements do not include any adjustments related to the recoverability or classification of asset carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

As of March 31, 2012, the Company had a cash balance of $0 and liabilities totaling $74,561, including $48,217 in loans payable to  a related party.  At March 31, 2012, the Company’s working capital deficit was $73,598.

Since the change in control that occurred in June 2011, BAI, a shareholder of the Company, has advanced funds on behalf of the Company to satisfy current legal, accounting and administrative obligations.

Management expects that the Company will need to raise additional capital or otherwise obtain financing to commence and sustain operations until such time as the Company can determine and implement its plan of future operation and achieve profitability. The Company may not be able to raise additional capital or otherwise obtain financing on desirable terms or at all. If adequate funds cannot be raised or obtained, the Company may need to ask current shareholders to contribute additional funds to sustain operations. The Company does not have any agreement with any shareholder to provide any capital and there can be no assurance that any shareholder would be able or willing to fund the Company's continued operations.

Results of Operations

Comparison of Three Months Ended March 31, 2012 and March 31, 2011

For the three months ended March 31, 2012 and 2011, the Company had no revenue.  For the three month period ended March 31, 2012, the Company incurred general and administrative costs totaling $27,897 compared to $18,753 for the comparable period in 2011, an increase of $9,144.  The increase is primarily attributable to increased consulting, audit and legal fees.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our Company is a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Nathan Halsey, our principal executive and financial officer, conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of March 31, 2012, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, the Company's principal executive and financial officer concluded that the Company's disclosure controls and procedures as of March 31, 2012 were effective to provide reasonable assurance that information required to be disclosed in the Company’s periodic filings under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
 
 
 
7

 

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended March 31, 2012 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures provide our principal executive and financial officer with reasonable assurances that our disclosure controls and procedures will achieve their objectives. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete assurance that all control issues and instances of error, if any, within our company are detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally, controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions.

Management is aware that there is a lack of segregation of duties at the Company due to the fact that the Company only has one director and executive officer dealing with general administrative and financial matters. This constitutes a significant deficiency in the internal controls. Management has decided that considering the officer/director involved, the control procedures in place, and the outsourcing of certain financial functions, the risks associated with such lack of segregation were low and the potential benefits of adding additional employees to clearly segregate duties did not justify the expenses associated with such increases. Management plans to re-evaluate this situation periodically. In light of the Company’s current cash flow situation, the Company does not intend to increase staffing to mitigate the current lack of segregation of duties within the general administrative and financial functions.
 
 
 
8

 

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS

Our Company is a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEEDS

There are no unreported sales of unregistered securities during the quarter ended March 31, 2012.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

The following exhibits are filed with this Quarterly Report on Form 10-Q or are incorporated by reference as described below.

Exhibit
Description
31.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350*
101.1
Interactive data files pursuant to Rule 405 of Regulation S-T*
*Filed herewith.
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, thereunto duly authorized.
     
May 10, 2012
BONAMOUR PACIFIC, INC.
     
 
By:
/s/ Nathan Halsey
 
Nathan Halsey
 
President and Chief Executive Officer (Principal Executive Officer, Principal Financial and Accounting Officer and Authorized Signatory)
 
 
 
 
 
9

 

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XOTC:BONP Quarterly Report 10-Q Filing - 3/31/2012
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