Attached files

file filename
EX-31 - STUDIO II BRANDS INCstudioiibrands_exh312.htm
EX-31 - STUDIO II BRANDS INCstudioiibrands_exh311.htm
EX-32 - STUDIO II BRANDS INCstudioiibrands_exh322.htm
EX-32 - STUDIO II BRANDS INCstudioiibrands_exh321.htm

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 September 30, 2010


[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ___________ to ______________


Commission File Number: 0-51355


STUDIO II BRANDS, INC.

(Exact name of registrant as specified in its charter)



Florida

 

65-0664963

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification Number)

 

16F/ Honest Motors Building

9-11 Leighton Road

Causeway Bay, Hong Kong

(Address of principal executive offices)

(852) 2890-1818

Registrant’s telephone number, including area code:


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 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.  [ X ] Yes   [ ] No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Not Applicable.


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 [ ]  (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). [X] Yes [ ] No


As of October 29, 2010, the Issuer had 3,745,676 shares of common stock issued and outstanding.




1






PART I-FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS.


The financial statements of Studio II Brands, Inc. (the "Company"), a Florida corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K, and all amendments thereto, for the fiscal period ended March 31, 2010.


STUDIO II BRANDS, INC.

(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2010



INDEX TO FINANCIAL STATEMENTS:

Page

 

 

Balance Sheet

3

 

 

Statements of Operations

4

 

 

Statements of Stockholders’ Equity (Deficit)

5-6

 

 

Statements of Cash Flows

7

 

 

Notes to Unaudited Financial Statements   

8-11





2








Studio II Brands, Inc.

(A Development Stage Company)

BALANCE SHEET

As of September 30, 2010 and Mar 31, 2010

 

 

 

 

 Unaudited

 Audited

 

Sep 30,

Mar 31,

ASSETS

2010

2010

CURRENTS ASSETS

 

 

   Cash

 $               -   

 $              -   

 

 

 

TOTAL ASSETS

 $               -   

 $              -   

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

CURRENT LIABILITIES

 

 

  Accrued Expenses

 $          6,881

 $        5,470

  Payable to Stockholder

102,026

         94,669

      TOTAL CURRENT LIABILITIES

108,907

       100,139

 

 

 

TOTAL LIABILITIES

 $       108,907

 $    100,139

 

 

 

STOCKHOLDERS' DEFICIT

 

 

   Common Stock (100,000,000 shares authorized; Par value .001;

 

 

     3,745,676 shares issued; 3,745,676 shares outstanding)

             3,746

           3,746

  Additional paid in capital

           42,486

         42,486

  Deficit accumulated during the development stage

(155,139)

     (146,371)

      TOTAL STOCKHOLDERS' DEFICIT

        (108,907)

     (100,139)

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 $                 0

 $               0

 

 

 

 

 

 

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





3






Studio II Brands, Inc.

(A Development Stage Company)

STATEMENT OF OPERATIONS

For the Period May 6, 1996 (Inception) through September 30, 2010

 

 

 

 

 

 

 

For the Three Months      Ended  Sep

30, 2010

For the Three Months      Ended  Sep

30, 2009

For the Six Months      Ended  Sep

30, 2010

For the Six Months      Ended  Sep

30, 2009

Cumulative Amount from May 6, 1996 (inception) to Sep 30, 2010

REVENUES

 

 

 

 

 

   Sales

 $                 -

 $                 -

 $                -

 $                 -

 $                 -

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

   Administrative and General

            6,881

           11,819

            8,768

           22,232

        155,139

      TOTAL OPERATING EXPENSES

            6,881

           11,819

            8,768

           22,232

        155,139

 

 

 

 

 

 

NET OPERATING INCOME (LOSS) BEFORE

INCOME TAXES

          (6,881)

        (11,819)

          (8,768)

        (22,232)

      (155,139)

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

                    -

                    -

                   -

                   -

                    -

 

 

 

 

 

 

NET INCOME (LOSS)

 $       (6,881)

 $     (11,819)

 $       (8,768)

 $     (22,232)

 $   (155,139)

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Common Share

 **

 **

 **

**

 

Basic and fully diluted

** Less than .01

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

     3,745,676

      3,745,676

      3,745,676

      3,745,676

 

 

 

 

   

 

 

 

 

 

 

 

 

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





4






Studio II Brands Inc.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

For the Period May 6, 1996 (Inception) through September 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

Additional

Retained

Total

Par Value of $0.001

 

 

Paid-in

Earnings

Stockholders'

 

Shares

Amount

Capital

(Deficit)

Equity

 

 

 

 

 

 

Balance at May 6, 1996 (date of inception)

                    -

 $               -   

 $              -   

 $               -   

 $               -   

Net loss for the period

                    -

                    -

                   -

          (1,500)

          (1,500)

Balance December 31, 1996

                    -

                    -

                   -

          (1,500)

          (1,500)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

        (12,930)

        (12,930)

Balance December 31, 1997

                    -

                    -

                   -

        (14,430)

        (14,430)

 

 

 

 

 

 

Common stock issued for cash

         273,750

                274

          28,580

                   -

           28,854

Net loss for the year

                    -

                    -

                   -

        (13,835)

        (13,835)

Balance December 31, 1998

         273,750

                274

          28,580

        (28,265)

                589

 

 

 

 

 

 

Common stock issued for cash

           84,500

                  85

            2,065

                   -

             2,150

Net loss for the year

                    -

                    -

                   -

          (3,940)

          (3,940)

Balance December 31, 1999

         358,250

                359

          30,645

        (32,205)

          (1,201)

 

 

 

 

 

 

Common stock issued for cash

      2,706,626

             2,706

            3,870

                   -

             6,576

Net loss for the year

                    -

                    -

                   -

          (5,727)

          (5,727)

Balance December 31, 2000

      3,064,876

             3,065

          34,515

        (37,932)

             (352)

 

 

 

 

 

 

Common stock issued for cash

           78,800

                  79

            5,369

                   -

             5,448

Net loss for the year

                    -

                    -

                   -

          (3,061)

          (3,061)

Balance December 31, 2001

      3,143,676

             3,144

          39,884

        (40,993)

             2,035

 

 

 

 

 

 

Common stock issued for cash

         602,000

                602

            2,602

                   -

             3,204

Net loss for the year

                    -

                    -

                   -

          (2,884)

          (2,884)

Balance December 31, 2002

      3,745,676

             3,746

          42,486

        (43,877)

             2,355

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

          (3,716)

          (3,716)

Balance December 31, 2003

      3,745,676

             3,746

          42,486

        (47,593)

          (1,361)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

          (6,500)

          (6,500)

Balance December 31, 2004

      3,745,676

             3,746

          42,486

        (54,093)

          (7,861)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

          (5,350)

          (5,350)

Balance December 31, 2005

      3,745,676

             3,746

          42,486

        (59,443)

        (13,211)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

             (200)

             (200)




5








Balance December 31, 2006

      3,745,676

             3,746

          42,486

        (59,643)

        (13,411)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

             (260)

             (260)

Balance December 31, 2007

      3,745,676

             3,746

          42,486

        (59,903)

        (13,671)

 

 

 

 

 

 

Net loss for the period

                    -

                    -

                   -

        (19,310)

        (19,310)

Balance March 31, 2008

      3,745,676

             3,746

          42,486

        (79,213)

        (32,981)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

        (29,150)

        (29,150)

Balance March 31, 2009

      3,745,676

             3,746

          42,486

      (108,363)

        (62,131)

 

 

 

 

 

 

Net loss for the year

                    -

                    -

                   -

        (38,008)

        (38,008)

Balance March 31, 2010

      3,745,676

             3,746

          42,486

      (146,371)

      (100,139)

 

 

 

 

 

 

Net loss for the period

                    -

                    -

                   -

          (1,887)

          (1,887)

Balance June 30, 2010

      3,745,676

             3,746

          42,486

      (148,258)

      (102,026)

 

 

 

 

 

 

Net loss for the period

                    -

                    -

                   -

          (6,881)

          (6,881)

Balance Sep 30, 2010

      3,745,676

             3,746

          42,486

      (155,139)

      (108,907)

 

 

 

 

 

 

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




6






Studio II Brands Inc.

(A Development Stage Company)

STATEMENT OF CASH FLOWS

For the Period May 6, 1996 (Inception) through September 30, 2010

 

 

 

 

 

 

 

For the Six Months      Ended         September 30,  2010

For the Six Months      Ended         September 30,  2009

Cumulative Amount from May 6, 1996 (inception) to September 30, 2010

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

   Net income (loss)

 

$        (8,768)

 $       (22,232)

 $      (155,139)

   Accrued expenses

 

            1,411

                   5

             6,881

NET CASH USED IN OPERATING ACTIVITIES

 

           (7,357)

          (22,227)

         (148,258)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

                 -   

                 -   

                  -   

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

                 -   

                 -   

                  -   

 

 


 

 

  Increase in payable to stockholder

 

            7,357

           22,227

          102,026

  Issuance of common stock

 

                 -   

                 -   

           46,232

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

            7,357

           22,227

          148,258

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS

 

                 -   

                 -   

                  -   

 

 

 

 

 

CASH AND CASH EQUIVALENTS

 

 

 

 

   Beginning of Year

 

                 -   

                 -   

                  -   

 

 

 

 

 

   End of Year

 

 $              -   

 $               -   

 $               -   

 

 

 

   

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

  Cash paid for interest

 

 $              -   

 $               -   

 $               -   

  Cash paid for income taxes

 

 $              -   

 $               -   

 $               -   

 

 

 

 

 

 

 

 

 

 

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




7



STUDIO II BRANDS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FROM INCEPTION (MAY 6, 1996) THROUGH SEPTEMBER 30, 2010



NOTE 1 ORGANIZATION


Studio II Brands, Inc. (a development stage enterprise) (the Company) was formed on May 6, 1996 in the State of Florida. The Company’s activities to date have been primarily directed towards the raising of capital and seeking business opportunities.



NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation - Development Stage Company


The Company has not earned any revenue from operations.  Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Accounting Standards Codification (“ASC”) 915 “Development Stage Entities”, which was previously Financial Accounting Standards Board Statement No. 7 ("SFAS 7"). Among the disclosures required by SFAS 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity/(deficit)  and cash flows disclose activity since the date of the Company's inception.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.


Accounting Method


The Company's financial statements are prepared using the accrual method of accounting.  

                       

Income Taxes


Income taxes are provided for using the liability method of accounting in accordance with ASC 740 “Income Taxes”, which includes SFAS No. 109 "Accounting for Income Taxes," which is clarified by FASB Interpretation ("FIN") 48, "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109." A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.


Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. There were no current or deferred income tax expense or benefits due to the Company not having any material operations for the period ended September 30, 2010.


Cash Equivalents


The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.





8



STUDIO II BRANDS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FROM INCEPTION (MAY 6, 1996) THROUGH SEPTEMBER 30, 2010



Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates.


Determination of fair values involves subjective judgment and estimates not susceptible to substantiation by auditing procedures. Accordingly, under current auditing standards, the notes to our financial statements will refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.



Basic Loss per Common Share


Basic loss per common share has been calculated based on the weighted average number of shares outstanding during the period after giving retroactive effect to stock splits. There are no dilutive securities at September 30, 2010 and September 30, 2009 for purposes of computing fully diluted earnings per share.


Share-Based Payments


The Company adopted Statement of Financial Accounting standards (“SFAS”) No. 123 (Revised December 2004), “Share-Based Payment” (SFAS No. 123R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including stock options, employee stock purchases related to an employee stock purchase plan and restricted stock units based on estimated fair values of the awards over the requisite employee service period.  SFAS No. 123R is now included in ASC 718 “Compensation – Stock Compensation”. SFAS No. 123R supersedes Accounting Principles Board Opinion No. 25 (“APB No. 25”), “Accounting for Stock Issued to Employees”, which the company previously followed in accounting for stock-base awards.  In March 2005, the SEC issued Staff Bulletin No. 107(“SAB No. 107”), to provide guidance on SFAS 123R.  The Company has applied SAB No. 107 in its adoption of SFAS No. 123R.


Under SFAS No. 123R, stock-base compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized on a straight-line basis as expense over the employee’s  requisite service period.  The Company adopted the provisions of SFAS 123R in its fiscal year ended December 31, 2006, using the modified prospective application method.  The valuation provisions of SFAS 123R apply to new awards and to awards that are outstanding on the effective date (or date of adoption) and subsequently modified or cancelled; prior periods are not revised for comparative purposes.  Estimated compensation expense for awards outstanding on the effective date will be recognized over the remaining service period using the compensation cost calculated for pro forma disclosure under FASB Statement No. 123, “Accounting for Stock-Based Compensation”.





9



STUDIO II BRANDS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FROM INCEPTION (MAY 6, 1996) THROUGH SEPTEMBER 30, 2010



Fair value of Financial Instruments


Financial instruments consist principally of cash, trade and related party payables, accrued liabilities, short-term obligations and notes payable.  The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature.  It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.


Related Parties


Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company has these relationships.  


Recently Issued Accounting Pronouncements


The company has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.


Subsequent Events


We evaluated subsequent events through the issuance date of our financial statements.  No recognized or non-recognized subsequent events were noted.

                          

NOTE 3 GOING CONCERN


The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not established any source of revenue to cover its operating costs. The Company will engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.



NOTE 4 INCOME TAXES


Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable



10



STUDIO II BRANDS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FROM INCEPTION (MAY 6, 1996) THROUGH SEPTEMBER 30, 2010



income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date.


There is no provision for income taxes due to continuing losses.  At September 30, 2010, the Company has net operating loss carryforwards for tax purposes of approximately $155,000, which expire through 2030.  The Company has recorded a valuation allowance that fully offsets deferred tax assets arising from net operating loss carryforwards because the likelihood of the realization of the benefit cannot be established. The Internal Revenue Code contains provisions that may limit the net operating loss carryforwards available if significant changes in stockholder ownership of the Company occur.



NOTE 5 RELATED PARTY TRANSACTIONS


A shareholder of the Company named Cheung Ming has paid expenses on behalf of the Company in exchange for a payable bearing no interest and due on demand. Amounts payable to the aforesaid shareholder at September 30, 2010 and March 31, 2010 was $102,026 and $94,669, respectively.  


The Company does not lease or rent any property.  It does however maintain a mailing address that is provided without charge by an officer / shareholder.  Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.






11





ITEM. 2.

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


SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS


CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.


Overview and Recent Developments


Studio II Brands, Inc. (fka Studio II Productions, Inc.) was incorporated under the laws of the State of Florida on May 6, 1996. To date, the Company's only activities have been organizational ones, directed at developing its business plan and raising its initial capital. The Company has not commenced any commercial operations. The Company has no full-time employees and owns no real estate. The Company is currently a "shell" company with no or nominal operations and no or nominal assets. The Company’s current business plan is to identify, evaluate and investigate various companies with the intent that, if such investigation warrants, a reverse merger transaction be negotiated and completed pursuant to which the Company would acquire a target company with an operating business, with the intent of continuing the acquired company's business as a publicly held entity. The Company has limited capital with which to provide the owners of the target company with any significant cash or other assets and, as such, the Company will only be able to offer owners of a target company the opportunity to acquire a controlling ownership interest in the Company.


For the next twelve months, including the remainder of the fiscal year ending March 31, 2011, the Company expects to continue with its efforts to locate a suitable business acquisition candidate and to complete a business acquisition transaction. The Company does not expect to generate revenues until it completes a business acquisition, and, depending upon the performance of the acquired business, it may also continue to operate at a loss after completion of a business combination.  During the next twelve (12) months, the Company will require additional capital in order to pay the costs associated with carrying out its plan of operations and the costs of compliance with its continuing reporting obligations under the Securities Exchange Act of 1934 as amended.  This additional capital will be required whether or not the Company is able to complete a business combination transaction during the current fiscal year.  Furthermore, once a business combination is completed, the Company’s needs for additional financing are likely to increase




12





substantially.  


No specific commitments to provide additional funds have been made by management or other stockholders, and the Company has no current plans, proposals, arrangements or understandings to raise additional capital through the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses.  Notwithstanding the foregoing, however, to the extent that additional funds are required, the Company anticipates that it will either continue to rely on its majority shareholder to pay expenses on its behalf, or it will seek to raise capital through the private placement of restricted securities.  The majority shareholders are under no obligation to pay such expenses.  If the Company is unable to raise additional funds, it will not be able to pursue its business plan.  In addition, in order to minimize the amount of additional cash which is required in order to carry out its business plan, the Company might seek to compensate certain service providers by issuances of stock in lieu of cash.


Going Concern

 

Our financial statements have been prepared on the basis of accounting principles applicable to a going concern. As a result, they do not include adjustments that would be necessary if we were unable to continue as a going concern and would therefore be obligated to realize assets and discharge our liabilities other than in the normal course of operations.  As reflected in the accompanying financial statements, the Company is in the development stage with no operations or revenues, has used cash flows in operations of $148,258 from inception of May 6, 1996 to September 30, 2010 and has an accumulated deficit of $155,139 through September 30, 2010.  This raises substantial doubt about our ability to continue as a going concern, as expressed in the opinion on our financial statements included in this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.

 

We have not yet established any source of revenues sufficient to cover our operating costs and allow us to continue as a going concern.  Our ability to continue as a going concern is dependent on us obtaining adequate capital or loans to fund operating losses until we become profitable.  If we are unable to obtain adequate capital or loans, we could be forced to cease operations.  There can be no assurance that we will operate at a profit or additional debt or equity financing will be available, or if available, can be obtained on satisfactory terms.

 

Critical Accounting Policies and Estimates

 

A summary of significant accounting policies is provided in Note 1 to our financial statements included in our filing on the Form 10-K Statement with the SEC on June 29, 2010.  Our sole officer and director believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the Company's operating results and financial condition.

 

The preparation of financial statements in conformity with generally accepted accounting principles requires our sole officer and director 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 reporting period. Actual results will differ from those estimates.

 

Plan of Operation

 

The Company was incorporated in Florida on May 6, 1996.  We intend to serve as a vehicle to effect an acquisition, merger, exchange of capital stock or other type of business combination with a domestic or foreign business.  Since our inception, we have not commenced any formal business operations and all




13





activity to date has related to the Company’s formation, capital stock issuance, professional fees with regard to the subject matter of the filings with the SEC and identification of businesses.

 

Summary of Consolidated Condensed Results of Operations

 

Any measurement and comparison of revenues and expenses from continuing operations should not be considered necessarily indicative or interpolated as the trend to forecast our future revenues and results operations.

 

Results for the Quarter Ended September 30, 2010 and May 6, 1996 (Inception) through September 30, 2010

 

Revenues. The Company’s revenues for the periods ended September 30, 2010 and May 6, 1996 (inception) through September 30, 2010 were $0.  No revenues occurred during these periods because there were no sales.

 

Cost of Revenues.  The Company’s cost of revenues for the periods ended September 30, 2010 and May 6, 1996 (inception) through September 30, 2010 were $0.  There were no costs of revenues because no sales were made by the Company.

 

Gross Profit/Loss. The Company’s gross profit/loss for the period ended September 30, 2010 and May 6, 1996 (inception) through September 30, 2010 was $0.  No gross profit/loss occurred during these periods because there were no sales.


General and Administrative Expenses. General and administrative expenses for the period ended September 30, 2010 and from May 6, 1996 (inception) through September 30, 2010 were $8,768 and $155,139, respectively.  General and administrative expenses consisted primarily of professional service fees.

 

Net Loss. Net loss for the periods ended September 30, 2010 and from May 6, 1996 (inception) through September 30, 2010 was $(8,768) and $(155,139), respectively.  The net loss was related to general and administrative expenses and no revenues for the periods indicated.

 

For the period of May 6, 1996 (inception) through September 30, 2010, we had an accumulated deficit of $(155,139).


Impact of Inflation

 

We believe that the rate of inflation has had a negligible effect on our operations.

 

Liquidity and Capital Resources


As of September 30, 2010, the Company’s balance sheet reflects total current assets of $nil and total current liabilities of $108,907. The Company has cash on hand of $nil and a deficit accumulated in the development stage of $155,139.  The Company does not have sufficient assets or capital resources to pay its on-going expenses while it is seeking out business opportunities, and it has no current plans to raise additional capital through the sale of securities.  As a result, although the Company has no agreement in place with its shareholders or other persons to pay expenses on its behalf, it is anticipated that the Company will continue to rely on its majority shareholder to pay expenses on its behalf at least until it is able to consummate a business transaction.  The majority shareholder is under no obligation to pay such expenses.


Off Balance Sheet Arrangements


The Company does not have any off-balance sheet arrangements.




14





ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


Not Applicable.


ITEM 4T.

CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to chief executive and chief financial officers to allow timely decisions regarding disclosure.


As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  


Changes in Internal Control over Financial Reporting


There was no change in the Company's internal control over financial reporting during the period ended September 30, 2010, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II-OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.





15





ITEM 1A.

 RISK FACTORS.


Not Applicable.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


None.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

(REMOVED AND RESERVED).


ITEM 5.    

OTHER INFORMATION.


ITEM 6.

EXHIBITS.


(a)

The following exhibits are filed herewith:


31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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.


STUDIO II BRANDS, INC.


By:  /S/ Cheung Ming

Cheung Ming, Chief Executive Officer


Date: October 29, 2010


By:  /S/ Cheung Ming

Cheung Ming, Chief Financial Officer

 

Date: October 29, 2010



16