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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 January 31, 2012

o
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:  000-52854

FBC HOLDING, INC.
(Exact name of registrant as specified in its charter)

 Nevada
(State or other jurisdiction of
incorporation or organization)
 
71-1026782
(I.R.S. Employer
Identification No.)
 
66 Piscataqua Road
Dover, NH
(Address of principal executive offices)
 
03820
(Zip Code)

Registrant’s telephone number, including area code (603) 540-0828

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 o     

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).  Yes o     No x
 
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 o    Accelerated filer o
   
Non-accelerated filer o Smaller reporting company x 
 (Do not check if a smaller reporting company)  
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o     No x

 
 
Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes No o

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of April 9, 2012, there were 204,286,058 shares of common stock, $0.001 par value, issued and outstanding.
 
 
 
 
FBC HOLDING, INC.
 
TABLE OF CONTENTS
 
PART I – FINANCIAL INFORMATION
4
     
ITEM 1
5
     
ITEM 2
16
     
ITEM 3
23
     
ITEM 4
23
     
PART II – OTHER INFORMATION
25
     
ITEM 1
25
     
ITEM 1A
25
     
ITEM 2
25
     
ITEM 3
25
     
ITEM 4
25
     
ITEM 5
25
     
ITEM 6
26

 
PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”).  These statements are based on management’s beliefs and assumptions, and on information currently available to management.  Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

Forward-looking statements are not guarantees of future performance.  They involve risks, uncertainties, and assumptions.  Our future results and shareholder values may differ materially from those expressed in these forward-looking statements.  Readers are cautioned not to put undue reliance on any forward-looking statements.
 
 

ITEM 1                      Financial Statements
 
FBC Holding Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
 
   
January 31, 2012
   
July 31 ,2011
 
             
ASSETS
           
Current Assets
           
Cash
  $ 1,732     $ 9,438  
Deferred Financing Expense
    125,500     $ 108,500  
                 
Total Current Assets
    127,232       117,938  
                 
Total Assets
  $ 127,232     $ 117,938  
                 
                 
LIABILITIES AND STOCKHOLDERS EQUITY
               
                 
Current Liabilities
               
Accounts Payable
    5,085       5,085  
Accrued Interest
    345,192       338,614  
Equity Obligations - current
    1,249,500       1,249,500  
Current Portion of Notes Payable
    523,200       464,900  
Total Current Liabilities
    2,122,977       2,058,099  
                 
                 
Total Liabilities
    2,122,977       2,058,099  
                 
Stockholders Deficit
               
Preferred Stock .001 Par Value, Series A  
   5,000,000 shares authorized, 2,500,000, issued and outstanding
    2,500       2,500  
Common Stock .001 Par Value; 150,000,000 shares authorized;  
   149,974,002 and 128,178,304 issued and outstanding, respectively
    149,974       128,178  
Additional paid in capital
    18,703,923       18,612,998  
Defitcit accumlated during the development stage
    (20,852,142 )     (20,683,837 )
Total Stockholders' Deficit
    (1,995,745 )     (1,940,161 )
                 
Total Liabilities and Stockholders' Equity
  $ 127,232     $ 117,938  

See notes accompanying to the consolidated financial statements
 
 
FBC Holding Inc
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
 
    Three Months     Three Months     Six Months     Six Months     May 30, 2006  
   
Ended
   
Ended
   
Ended
   
Ended
   
(Inception) through
 
   
January 31, 2012
   
January 31, 2011
   
January 31, 2012
   
January 31, 2011
   
January 31, 2012
 
                               
Revenue
  $ 19,000     $ -     $ 33,500     $ -     $ 33,500  
                                         
Expenses
                                       
General Selling and Adminstrative
    48,723       15,000       120,706       15,000       1,811,715  
Depreciation
    -       -                       1,889  
Warrant Expense
    -       -                       861,694  
Conversion Fee
    57,300       -       57,300       1,356,000       1,688,800  
Land Claim Fees
    -       -                       597,957  
Non Cash Compensation
    17,221       414,000       17,221       2,914,000       11,563,958  
Amortization of Deferred Finance Charges
    -       -                       141,861  
Impairment of Goodwill
    -       -               1,250,000       2,236,667  
      123,244       429,000       195,227       5,535,000       18,904,541  
                                         
Gain(Loss) on Operations
    (104,244 )     (429,000 )     (161,727 )     (5,535,000 )     (18,871,041 )
                                         
Other Income (expense):
                                 
Amortization of Debt Discount
    -                               (1,648,198 )
Interest Expense
    (3,000 )     (3,304 )     (6,578 )     (6,608 )     (348,496 )
      (3,000 )     (3,304 )     (6,578 )     (6,608 )     (1,996,694 )
                                         
Net Income (Loss) before provision for income tax
    (107,244 )     (432,304 )     (168,305 )     (5,541,608 )     (20,867,735 )
                                         
Provision for income tax
    -       -                       -  
                                         
Net Income(Loss) from Continuing Operations
    (107,244 )     (432,304 )     (168,305 )     (5,541,608 )     (20,867,735 )
                                         
Discontinued Operations: Gain (Loss) from
discontinued operations (including gain on disposal
in 2007 of $28,553)  - net of tax
    -       -                       15,593  
                                         
Net Income (Loss)
  $ (107,244 )   $ (432,304 )   $ (168,305 )   $ (5,541,608 )   $ (20,852,142 )
                                         
                                         
Net Income(Loss) per share
Basic and Fully Diluted, From:
                                 
Continuing operations
  $ (0.00 )   $ (0.01 )   $ (0.00 )   $ (21.50 )        
Discontinuted operations
    -       -       -       -          
Combined
  $ (0.00 )   $ (0.01 )   $ (0.00 )   $ (21.50 )        
                                         
                                         
Weighted Average Number of Common Shares
    100,910,281       53,371,128       100,910,281       257,728          
 
See notes accompanying to the consolidated financial statements
 
 
FBC Holding Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
                                 
Deficit
       
                                 
Accum.
       
   
Preferred Stock
   
Common Stock
          During the    
 
 
         
Amount
         
Amount
   
Paid In
    Development    
Stockholders'
 
   
Shares
   
($.001Par)
   
Shares (1)
   
($.001Par)
   
Capital
    Stage    
Equity
 
                                           
Balance at May 30, 2006
    -     $ -       -     $ -     $ -     $ -     $ -  
                                                         
Issuance of stock for cash
              250,000       250       4,750               5,000  
                                                         
Foreign currency gain(loss)
                                              (64 )
                                                         
Net loss for year
                                            (9,881 )     (9,881 )
                                                         
Balance at July 31, 2006
    -       -       250,000       250       4,750       (9,881 )     (4,945 )
                                                         
Shares issued for:
                                                       
   Cash
                    100,400       100       50,100               50,200  
   Acquisition
                    133,333       133       266,534               266,667  
                                                         
Discontinued Operations
                                              64  
                                                         
Net loss for year
                                            (310,032 )     (310,032 )
                                                         
 Balance at July 31, 2007
    -       -       483,733       483       321,384       (319,913 )     1,954  
                                                         
Share Cancellation
                    (250,000 )     (250 )     250               -  
                                                         
Shares issued for:
                                                       
Cash, net of offering costs of $64,315
      3,047       3       255,582               255,585  
   Services
                    9,500       10       854,990               855,000  
   Conversion of Debt
                    3,563       4       386,649               386,653  
   Land Claims
                    284               42,500               42,500  
                                                         
Issuance of Warrants
                                    861,694               861,694  
                                                         
Net loss for the year
                                            (3,980,287 )     (3,980,287 )
                                                         
 Balance at July 31, 2008
    -       -       250,127       250       2,723,049       (4,300,200 )     (1,576,901 )
                                                         
Shares Issued for services
              10,000       10       14,990               15,000  
                                                         
Fractional Shares - Reverse Stock Split
      135                                  
                                                         
Net loss for the year
                                            (2,348,748 )     (2,348,748 )
                                                         
Balance at July 31, 2009
    -       -       260,262       260       2,738,039       (6,648,948 )     (3,910,649 )
                                                         
Shares issued for:
                                                       
   Service
                    14,550,000       14,550       6,974,717               6,989,267  
Stock subscription payable
              8,000,000       8,000       712,000               720,000  
                                                         
Net loss for the year
                                            (7,283,972 )     (7,283,972 )
                                                         
Balance at July, 31 2010
    -       -       22,810,262       22,810       10,424,756       (13,932,920 )     (3,485,354 )
                                                         
Shares issued for:
                                                       
   Services
                    104,051,375       104,051       5,264,863               5,368,914  
   Assets acquired
                    25,000,000       25,000       1,253,131               1,278,131  
   Stock subscription
                    316,667       317       36,683               37,000  
                                                         
Preferred Stock
    2,500,000       2,500       -       -       1,609,565               1,612,065  
                                                         
Shares Cancelled
                    (24,000,000 )     (24,000 )     24,000               -  
                                                         
Net Loss For Year
                                            (6,750,917 )     (6,750,917 )
                                                         
Balance at July, 31 2011
    2,500,000       2,500       128,178,304       128,178       18,612,998       (20,683,837 )     (1,940,161 )
                                                         
Issued common shares:
                                                 
   Exchange of debt
                    19,100,000       19,100       76,400               95,500  
   Services
                    2,695,698       2,696       14,525               17,221  
                                                         
                                                         
Net Loss, Year to Date
                                          $ (168,305 )     (168,305 )
Balance at January 31, 2012
    2,500,000     $ 2,500       149,974,002     $ 149,974     $ 18,703,923     $ (20,852,142 )   $ (1,995,745 )

See notes accompanying to the consolidated financial statements
 
 
FBC Holding Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
    Six Months     Six Months     May 30, 2006  
   
Ended
   
Ended
   
Inception through
 
   
January 31, 2012
   
January 31, 2011
   
January 31, 2012
 
                   
Cash flow from operating activitis:
             
Net loss from operations
  $ (168,305 )   $ (5,541,608 )   $ (20,836,485 )
Discontinued operations
    -       -       (15,657 )
  Net loss from continuing operations
    (168,305 )     (5,541,608 )     (20,852,142 )
                         
Adustments to reconcile net loss to cash:
         
Stock issued for services
    17,221       4,283,737       13,574,823  
Impairment of goodwill
    -       1,250,000       1,998,131  
Conversion Fee
    57,300               1,760,965  
Amortization - debt discount
    -               168,403  
Depreciation
    -       -       1,062  
Deferred Financing Fees
    -       -       -  
Changes in assets & liabilities:
                 
Prepaids
    (17,000 )     -       (17,000 )
Accounts Payable
    -               (3,984 )
Accrued Expenses
    6,578       7,871       341,888  
Due Related Parties
            -       -  
Cash flow provided by (used in) operating activities
    (104,206 )     -       (3,027,854 )
                         
Cash flow from investing activities
                 
Purchase of fixed assets
    -               (2,259 )
Net cash provided by (used in) investing activities
    -       -       (2,259 )
                         
Cash flow from financing activities
                 
Notes payable - borrowings
    96,500       -       2,122,000  
Notes payable - payments
    -       -       (8,847 )
Issuance of stock
    -       -       918,692  
Net cash provided by (used in) financing activities
    96,500       -       3,031,845  
                         
Net cash used in continuing operations
    (7,706 )     -       1,732  
Beginning cash
    9,438       -       -  
Ending cash
  $ 1,732     $ -     $ 1,732  
                         
                         
                         
                         
Supplemental Disclosures
                       
Cash Paid For:
                       
   Interest
  $ -     $ -          
   Income Taxes
  $ -     $ -          
 
See accompanying notes to the consolidated financial statements
 
 
FBC Holding Inc.
Notes to Consolidated Financial Statements
For the Three and Six Months Ended January 31, 2012 and 2011

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Wave Uranium Holding's ("Wave", the "Company") business had been to acquire mineral land positions. In October 2009 the Company was redomiciled as a Nevada corporation under the name FBC Holding Corp. On July 21, 2009, the Company entered into an acquisition agreement to purchase FBC Holdings, Inc., a California corporation ("FBC Holdings, Inc. - California"), with the plan that the Company would abandon its former business plan in the industry of mining and land acquisition and pursue the business plan of FBC Holdings, Inc.  FBC Holdings, Inc. - - California had no material activity up to the agreement date and no material assets or liabilities.  The acquisition agreement called for the Company to purchase FBC Holdings, Inc. - California, by acquiring all the outstanding shares of FBC Holdings, Inc. -– California, in exchange for 8 million shares of the Company’s common stock.  As of July 31, 2009 the Company had not completed the transaction by issuing the 8 million shares, so the Company recorded a stock subscription payable of $720,000 based on the market price of $.09 per share on the date the acquisition agreement was entered into, with a corresponding recording and immediate write-off of goodwill in the same amount.  The stock was subsequently issued in November 2009. The new entity was to focus in three areas:  (i) branding (product placement) in television production, movies, etc.; (ii) the sale of mini-choppers and the associated merchandise of the brand Beverly Hills Choppers, including clothing, accessories, parts, etc; and (iii) internet platforms focused on social networking and the database built around the Johnny Fratto Social Club.   The acquisition did not work out according to the Company’s plan and the Company returned all interest in FBC Holdings, Inc. – California, in exchange for the return for return of all the 8 million shares of the Company’s common stock.  On August 11, 2010, the Company signed an Asset Purchase Agreement with Super Rad Corporation.  Under the agreement the Company purchased certain assets related to the collectible toy and art industry.  Super Rad Toys, Inc. was founded as a California corporation in December 2006.  As a result of preparing to go public, it reincorporated in Nevada under the name of Super Rad Industries, Inc. doing business as Super Rad Toys.  Since the Super Rad’s inception it has emerged at the forefront of the collectible art world, by producing innovative and high-quality vinyl collectibles.  Since the acquisition of these assets from Super Rad, this has been the primary business of the Company.  Recently the Company entered into an agreement with Todd Whanish to purchase his web platform in order to get involved in  the online toy business, catering to artists and the toy industry in general.  While the Company will still be involved in the production of high-quality vinyl collectibles it plans on making the new acquisition of Mr. Whanish’s web platform its primary business focus.  This purchase also provides the Company with the ability to earn additional revenues in areas ancillary to the sale of actual toys, such as apparel and jewelry.

DEVELOPMENT STAGE COMPANY

The Company is in the development stage and has just begun to recognize revenues from its planned operations. The Company's business plan is to evaluate structure and complete a merger with, or acquisition of, prospects consisting of private companies, partnerships or sole proprietorships.

Based upon the Company's business plan, it is a development stage enterprise.  Accordingly, the Company presents its financial statements in conformity with the accounting principles generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.


CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its’ wholly owned subsidiaries. All intercompany accounts and balances have been eliminated in consolidation.

USE OF 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of three to seven years.  Currently we do not have any capitalized property and equipment.

EARNINGS (LOSS) PER SHARE

The Company calculates net income (loss) per share as required by ASC 260, "Earnings per Share." Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods when they would be anti-dilutive common stock equivalents, if any, are not considered in the computation.

STOCK-BASED COMPENSATION

The Company accounts for stock based compensation in accordance with ASC 718, "Accounting for Stock-Based Compensation." The provisions of ASC 718 allow companies to either expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25") but disclose the pro forma effects on net income (loss) had the fair value of the options been expensed.

FAIR VALUE OF FINANCIAL INSTRUMENTS

AFC Topic 820, "Disclosures About Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2011 and 2010.
 

The respective carrying value of certain on-balance-sheet financial instruments approximates their fair values. These financial instruments include cash, restricted cash, trade accounts receivables, accounts payable, accrued expenses, notes payable and due to investors. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value or they are receivable or payable on demand. The carrying value of the Company's long-term debt, notes payable and due to investors approximates fair values of similar debt instruments.

INCOME TAX

The Company accounts for income taxes under ASC 720, Under ASC 720 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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 effects of changes in tax laws and rates on the date of enactment.

At July 31, 2011 and 2010 the Company had net operating loss carryforwards of approximately $20,000,000 and $14,000,000 which begin to expire in 2026. The Deferred tax asset of approximately $3,100,000 and $2,090,000 in 2011 and 2010 has been offset by a 100% valuation allowance. The change in the valuation allowance in 2011and 2010 was $1,010,000 and $1,090,000.

NEW PRONOUNCEMENTS

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is intended to improve comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles and International Financial Reporting Standards. This standard clarifies the application of existing fair value measurement requirements including (1) the application of the highest and best use valuation premise, (2) the methodology to measure the fair value of an instrument classified in a reporting entity’s shareholders’ equity, (3) disclosure requirements for quantitative information on Level 3 fair value measurements and (4) guidance on measuring the fair value of financial instruments managed within a portfolio. In addition, the standard requires additional disclosures of the sensitivity of fair value to changes in unobservable inputs for Level 3 securities. This standard is effective for interim and annual reporting periods ending on or after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income”, which requires that comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard also requires entities to disclose on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net earnings. This standard no longer allows companies to present components of other comprehensive income only in the statement of equity. This standard is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements other than the prescribed change in presentation.
 

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future financial statements.

(2) BASIS OF REPORTING

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has experienced a significant loss from operations as a result of its investment necessary to achieve its operating plan, which is long-range in nature.  For the period ended January 31, 2012, the Company incurred a net loss of ($110,652).

The Company's ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

The Company is pursuing equity financing for its operations. Failure to secure such financing or to raise additional capital or borrow additional funds may result in the Company depleting its available funds and not being able pay its obligations.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

(3) NOTES PAYABLE

At January 31, 2012 and 2011 the Company had two unsecured notes payable outstanding for $523,200 total, all currently due and bearing compound interest at 9% per annum.

On March 20, 2008, Wave Uranium Holding (the "Company") entered into a securities purchase agreement (the "Agreement") with accredited investors (the "Investors") pursuant to which the Investors purchased an aggregate principal amount of $1,562,500 of 8% Original Issue Discount Senior Secured Convertible Debentures for an aggregate purchase price of $1,250,000 (the "Debentures"). The Debentures bore interest at 8% and mature twenty-four months from the date of issuance. The Debentures were convertible at the option of the holder at any time into shares of common stock, at an initial conversion price equal to $0.25 ("Initial Conversion Price").  These notes were converted to preferred shares with an exercise price of $0.625.

In connection with the Agreement, each Investor received a warrant to purchase such number of shares of common stock equal to their subscription amount divided by the Initial Conversion Price ("Warrants"). Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $90. The investors may exercise the Warrants on a cashless basis if the shares of common stock underlying the Warrants are not then registered pursuant to an effective registration statement. In the event the Investors exercise the Warrants on a cashless basis, then we will not receive any proceeds.  The conversion price of the Debentures and the exercise price of the Warrants are subject to full ratchet and anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.
 

The full principal amount of the Debentures is due upon default under the terms of Debentures. Beginning on the seven (7) month anniversary of the closing of the Debentures and continuing on the same day of each successive month thereafter, the Company must prepay 1/18th of the aggregate face amount of the Debentures, plus all accrued interest thereon, either in cash or in common stock, at the option of the Company. If the Debenture is prepaid in shares of common stock, the conversion price of such shares shall be equal to the lesser of (i) the conversion price then in effect and (ii) 80% of the average of the three (3) closing bid prices for the 20 consecutive trading days ending on the trading day that is immediately prior to the applicable redemption date. Notwithstanding the foregoing, the Company's right to prepay the Debentures in shares of common stock on each prepayment date is subject to, among other things, the following conditions: (i) that a registration statement must be effective on such prepayment date and available for use by the Investors (ii) the shares to be issued are registered with the Securities and Exchange Commission and (iii) the aggregate number of shares to be issued under any monthly redemption amount is less than 20% of the total dollar trading volume of the Company's common stock for the 20 trading days prior to the applicable monthly redemption date.  Beneficial conversion was calculated based on the “if converted” value and amortized over the life of the loan.

At any time after the effectiveness of the registration statement described below, the Company may, upon written notice, redeem the Debentures in cash at 115% of the then outstanding principal amount of the Debentures provided, among other things, that (i) the volume weighted average price ("VWAP") for any 20 consecutive trading days exceeds $0.50, (ii) a registration statement must be effective on such redemption date and available for use by the Investors and (iii) the Company has satisfied all conditions under the transaction documents.

Each of the Investors have contractually agreed to restrict their ability to exercise the Warrants and convert the Debentures such that the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 4.99% of the Company's then issued and outstanding shares of common stock.

The Company is obligated to file a registration statement registering the resale of shares of (i) the Common Stock issuable upon conversion of the Debentures, (ii) the Common Stock issuable upon exercise of the Warrants, and (iii) the shares of common stock issuable as payment of interest on the Debenture. If the registration statement is not filed within 45 days from the final closing, or declared effective within 105 days thereafter (120 days if the registration statement receives a review by the SEC), the Company is obligated to pay the investors certain fees in the amount of 2% of the total purchase price of the Debentures, per month, and the obligations may be deemed to be in default.

Additionally the Company has shown the current portion of the debt in current liabilities; also the Company has discounted the note under the interest method and is amortizing the debt discount over the life of the loan. On July 6, 2009 the debenture terms were amended with the interest rate being changed to nil (0.00%) and the conversion price changed to $.62 per share.

The Company has discounted the Debentures under the interest method, and the original issue discount on the Debentures of $312,500 plus the additional calculated debt discount of $1,250,000 derived from the calculated cost of the conversion feature and attached warrants as limited by the face amount of the Debentures ($1,562,500 total) is being amortized over the life of the loan. The effective amortization rate is 96%. During the years ended July 31, 2010 and 2009 the Company amortized $168,403 and $961,167 of the debt discount, leaving a remaining balance of $0. The Company's potential equity cost from the conversion feature and attached warrants of $1,249,500 was recorded as an equity obligation liability in 2008.
 

On March 16th, 2009 the Company borrowed $40,000 under a note payable, due in June 2009, bearing interest at 10% per annum with upward adjustments for default, secured by Company assets, and convertible into Company common shares at $.10 per share anytime at the maker's discretion. In Conjunction with the note the maker agreed to convert 16,668 warrants from the March 20, 2008 debenture financing into 16,668 shares of common stock.

On June 8th, 2009 the Company borrowed $25,000 under a note payable, due in December 2009, bearing interest at 10% per annum with upward adjustments for default, secured by Company assets, and convertible into Company common shares at $.10 per share anytime at the maker's discretion.

On July 6th, 2009 the Company borrowed $150,000 under a convertible debenture, due in January 2011, bearing interest at 8% per annum with upward adjustments for default, secured by Company assets, and convertible into Company common shares at $.75 per share anytime at the maker's discretion. The debenture calls for monthly principal and interest payments over 18 months of approximately $8,900 per month commencing in August 2009.

The balance due under all notes payable at January 31, 2012 and July 31, 2011 was $523,200 and $464,900, respectively, with all notes having been due as of July 31, 2010. Interest expense from notes payable for the six months ended January 31, 2012 and 2011 was $6,578 and $6,608, and accrued interest payable at January 31, 2012 and July 31, 2011 was $345,192 and $338,614, respectively.

(4) STOCKHOLDERS' EQUITY

As of January 31, 2012 and 2011, the Company had 5,000,000 authorized shares of preferred stock, $.001 par value, with 2,500,000 and 0 shares issued and outstanding, respectively.

As of January 31, 2012 and 2011, the Company had 400,000,000 authorized shares of common stock, $.001 par value, with 149,974,002 and 128,174,304 shares issued and outstanding, respectively.

STOCK OPTIONS AND WARRANTS

At July 31, 2011 and 2010 the Company had stock options and warrants outstanding as described below.

NON-EMPLOYEE STOCK OPTIONS AND WARRANTS

The Company accounts for non-employee stock options and warrants under ASC718, whereby option and warrant costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise provided for, the Company covers option and warrant exercises by issuing new shares.

During fiscal year 2008 the Company granted 20,833 common stock warrants in connection with debenture borrowings as more fully described in Note 5. In addition the Company issued 1,828 warrants to various individuals and entities for compensation, allowing the holder to purchase one share of common stock per warrant, exercisable immediately at $150 per share with the warrant terms expiring in November and December of 2009. The fair value of these warrant grants were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 3.2%, dividend yield of 0%, expected life of 2 years, volatility of 26%. The Company recorded total compensation expense under these warrant issuances of $861,694 in fiscal year 2008.

As of July 31, 2008, all of the 2008 warrant grants of 22,661 remained outstanding.
 

The Company issued 100,000 warrants in 2009 under a $150,000 convertible debenture, allowing the holder to purchase one share of common stock per warrant, exercisable immediately at $1 per share with the warrant terms expiring in July 2014. The warrants were out of the money with no material recording value. At July 31, 2009 there were 122,661 warrants outstanding.

In year end July 31, 2010, 1,828 warrants expired leaving a year end balance of 120,833 warrants.  No warrants expired during the year ended July 31, 2011, leaving the remaining balance of 120,833 warrants outstanding.

 (5) CONTINGENCIES

In November 2008 a note holder filed a legal action against the Company in the Superior Court of Orange County, California alleging breach of contract and other malfeasance and seeking damages of approximately $225,000. The Company disputes the allegations and the matter is currently ongoing.

(6) RELATED PARTY TRANSACTIONS

The Company does not have employment contracts with its officers and directors.  The Company does not have a funding commitment or any written agreement for our future required cash needs with these officers or any beneficial owners of the Company.

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in additional business opportunities that become available.  A conflict may arise in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

The Company does not own or lease property or lease office space. The Company has minimal needs for office space at this time.  Office space, as needed has been provided by the officers and directors of the Company at no charge.

The above amount is not necessarily indicative of the amount that would have been incurred had a comparable transaction been entered into with independent parties.


ITEM 2                      Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
Forward-Looking Statements

This quarterly report on Form 10-Q of FBC Holding, Inc. for the period ended January 31, 2012 contains forward-looking statements, principally in this Section and “Business.” Generally, you can identify these statements because they use words like “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar terms. These statements reflect only our current expectations. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which are unforeseen, including, among others, the risks we face as described in this filing. You should not place undue reliance on these forward-looking statements which apply only as of the date of this annual report. These forward-looking statements are within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation of belief will be accomplished.

We believe it is important to communicate our expectations to our investors. There may be events in the future; however, that we are unable to predict accurately or over which we have no control. The risk factors listed in this filing, as well as any cautionary language in this annual report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results or events to differ materially from those anticipated, include, but are not limited to: our ability to successfully maintain a credit facility to purchase new and used machines, manufacture new products; the ability to obtain financing for product acquisition; changes in product strategies; general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in various tax laws; and the availability of key management and other personnel.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which requires us to make estimates and assumptions in certain circumstances that affect amounts reported. In preparing these financial statements, management has made its best estimates and judgments of certain amounts, giving due consideration to materiality. We believe that of our significant accounting policies (more fully described in Notes to the Consolidated Financial Statements), the following are particularly important to the portrayal of our results of operations and financial position and may require the application of a higher level of judgment by our management, and as a result are subject to an inherent degree of uncertainty.

DEVELOPMENT STAGE COMPANY

We are in the development stage and have not yet realized any revenues from our planned operations. Our business plan is to continue to develop our existing toys, as well as attempt to develop and/or license new toy ideas.
 

Based upon our business plan, we are a development stage enterprise.  Accordingly, we present our financial statements in conformity with the accounting principles generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, we disclose the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.

STOCK BASED COMPENSATION

We account for stock based compensation in accordance with ASC 718, "Accounting for Stock-Based Compensation."  The provisions of ASC 718 allow companies to either expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25") but disclose the pro forma effects on net income (loss) had the fair value of the options been expensed.

EARNINGS (LOSS) PER SHARE

We calculate net income (loss) per share as required by ASC 260, "Earnings per Share." Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding.  During periods when they would be anti-dilutive common stock equivalents, if any, are not considered in the computation.

Recent Accounting Pronouncements
 
In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is intended to improve comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles and International Financial Reporting Standards. This standard clarifies the application of existing fair value measurement requirements including (1) the application of the highest and best use valuation premise, (2) the methodology to measure the fair value of an instrument classified in a reporting entity’s shareholders’ equity, (3) disclosure requirements for quantitative information on Level 3 fair value measurements and (4) guidance on measuring the fair value of financial instruments managed within a portfolio. In addition, the standard requires additional disclosures of the sensitivity of fair value to changes in unobservable inputs for Level 3 securities. This standard is effective for interim and annual reporting periods ending on or after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements.
 
In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income”, which requires that comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard also requires entities to disclose on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net earnings. This standard no longer allows companies to present components of other comprehensive income only in the statement of equity. This standard is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements other than the prescribed change in presentation.
 
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future financial statements.
 

Results of Operations for the Three Months Ended January 31, 2012 and 2011

Introduction
 
For the three months ended January 31, 2012, we generated revenue of $19,000. This was slightly more than our revenue of $14,500 for the prior three-month period ended October 31, 2011, which was our first revenue since inception.  Our corresponding expenses from our revenue-generating activities are included in our selling, general and administrative expenses.  With these revenues and expenses for the three months January 31, 2012, we had a net loss of ($107,244).  For the three months January 31, 2011, we had no revenue and no cost of sales.  We had a net loss of ($432,304), for three months January 31, 2011.  An explanation of these numbers and how they relate to our business is contained below.

Revenues, Expenses and Loss from Operations:
 
   
Three Months
January 31, 2012
   
Three Months
January 31, 2011
 
Revenues   $ 19,000     $ -  
Selling, General and
Administrative Expenses
    48,723       15,000  
Conversion Fee
    57,300       -  
Non-Cash Compensation
    17,221       414,000  
Amortization of Deferred Finance Charges
    -       1,250,000  
Impairment of Goodwill
    -       -  
Operating Income (loss)
    (104,244 )     (429,000 )
Interest Expense
    (3,000 )     (3,304 )
Amortization of Debt Discount
    -       -  
Net Income (Loss)
  $ (107,244 )   $ (432,304 )

Revenues

Our revenues for the three months January 31, 2012 were $19,000 compared to revenues of $0 for the three months January 31, 2011.  This was slightly more than our revenue of $14,500 for the prior three-month period ended October 31, 2011, which was our first revenue since inception.  We expect to have revenue in future quarters as well, but the amount will be dependent on a variety of factors.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses are those expenses we have related to the actual sales of our products and the costs we incur in transporting those products.  For the three months January 31, 2012 our selling and distribution expenses were $48,723, compared to $15,000 for the three months January 31, 2011.  Our selling, general and administrative expenses for the three months January 31, 2012 were higher than the same period one year ago due to the amounts expended related to the sale of our toys.  Our selling, general and administrative expenses primarily consisted of cost of goods sold of approximately $16,000, relating to costs associated with the products we sold during the quarter ended January 31, 2012, salaries of $0, legal expenses of $12,521, accounting expenses of $3,000 and consulting expenses of approximately $7,000.  Currently our general and administrative expenses have been primarily related to the public reporting and attainment of working capital to commence our business operations.
 

Non-Cash Compensation

Our non-cash compensation for the three months January 31, 2012 was $17,221 compared to $414,000 for the three months January 31, 2011.  This significant decrease in our non-cash compensation was primarily due to the fact that in the three-month period ended January 31, 2011, we paid several consultants and services providers for their services with shares of our common stock.  This is a practice we are trying to get away from and instead we are trying to borrow the funds we need and pay for those services in cash rather than with shares of our common stock.

Interest Expense

For the three months January 31, 2012, our interest expense of ($3,000) was comparable to our interest expense for the same period one year ago of ($3,304).

Net Income (Loss)

Our net income (loss) for the three months ended January 31, 2012 was ($107,244) compared to ($432,304).  Our net loss was significantly less this year due to the fact that during the three months ended January 31, 2011 we had non-cash compensation of $414,000 related to stock issued to consultants for consulting fees.  Our non-cash compensation was only $17,221 for the three months ended January 31, 2012.  This significant decrease was due to a shift away from paying consultants and service providers with shares of our common stock. This decrease in non-cash compensation was offset by an approximately $33,000 increase in selling, general and administrative expenses, primarily due to our increase in cost of goods sold and a conversion fee of $57,300 related to conversions of outstanding debt into our common stock.  We did not have a conversion fee in the three months ended January 31, 2011.

Results of Operations for the Six Months Ended January 31, 2012 and 2011

Introduction
 
For the six months ended January 31, 2012, we generated revenue of $33,500. This was our first revenue since inception.  Our corresponding expenses from our revenue-generating activities are included in our selling, general and administrative expenses.  With these revenues and expenses for the six months January 31, 2012, we had a net loss of ($168,305).  For the six months January 31, 2011, we had no revenue and no cost of sales.  We had a net loss of ($5,541,468), for six months January 31, 2011.  An explanation of these numbers and how they relate to our business is contained below.
 

Revenues, Expenses and Loss from Operations:
 
   
Six Months
January 31, 2012
   
Six Months
January 31, 2011
 
Revenues   $ 33,500     $ -  
Selling, General and
Administrative Expenses
    120,706       15,000  
Conversion Fee
    57,300       1,356,000  
Non-Cash Compensation
    17,221       2,914,000  
Amorization of Deferred Finance Charges
    -       -  
Impairment of Goodwill
    -       1,250,000  
Operating Income (loss)
    (161,727 )     (5,535,000 )
Interest Expense
    (6,578 )     (6,608 )
Amortization of Debt Discount
    -       -  
Net Income (Loss)
  $ (168,305 )   $ (5,541,468 )

Revenues

Our revenues for the six months January 31, 2012 were $33,500 compared to revenues of $0 for the six months January 31, 2011.  This was our first revenue since inception.  We expect to have revenue in future quarters as well, but the amount will be dependent on a variety of factors.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses are those expenses we have related to the actual sales of our products and the costs we incur in transporting those products.  For the six months January 31, 2012 our selling and distribution expenses were $120,706, compared to $15,000 for the six months January 31, 2011.  Our selling, general and administrative expenses for the six months January 31, 2012 were higher than the same period one year ago due to the amounts expended related to the sale of our toys.  Our selling, general and administrative expenses primarily consisted of cost of goods sold of $25,000, relating to costs associated with the products we sold during the six months ended January 31, 2012, salaries of $0, legal expenses of $15,400, accounting expenses of $4,000 and consulting expenses of $15,000.  Currently our general and administrative expenses have been primarily related to the public reporting and attainment of working capital to commence our business operations.

Non-Cash Compensation

Our non-cash compensation for the six months January 31, 2012 was $17,221 compared to $2,914,000 for the six months January 31, 2011.  This significant decrease in our non-cash compensation was primarily due to the fact that in the six-month period ended January 31, 2011, we paid several consultants and services providers for their services with shares of our common stock.  This is a practice we are trying to get away from and instead we are trying to borrow the funds we need and pay for those services in cash rather than with shares of our common stock.
 

Interest Expense

For the six months ended January 31, 2012, our interest expense of ($6,578) was comparable to our interest expense for the same period one year ago of ($6,608).

Net Income (Loss)

Our net income (loss) for the six months ended January 31, 2012 was ($168,305) compared to ($5,541,468).  Our net loss was significantly less this year due to the fact that during the six months ended January 31, 2011 we had non-cash compensation of $2,914,,000 related to stock issued to consultants for consulting fees.  Our non-cash compensation was only $17,221 for the six months ended January 31, 2012.  This significant decrease was due to a shift away from paying consultants and service providers with shares of our common stock.  During the six months ended January 31, 2011, we had a conversion fee of $1,356,000 related to conversions of outstanding debt into our common stock, compared to $57,300 for the six months ended January 31, 2012.  In addition, we had impairment of goodwill of $1,250,000 for the six months ended January 31, 2011, compared to $0 for the same period in 2012.  These significant decreases also led to our lower net income (loss) in the six-month period ended January 31, 2012.

Liquidity and Capital Resources

Our principal sources of liquidity consist of cash and cash equivalents and borrowing from various sources. At January 31, 2012, our cash totaled $1,732, we had a deferred finance expense of $125,500 related to an asset purchase and we had negative working capital of $20,000.

At January 31, 2012, we had current liabilities of $2,122,977, primarily consisting of equity obligations of $1,249,500 related to the equity component of our debt instruments, current portions of notes payable of $523,200, primarily related to debt obligations we had at January 31, 2012 and accrued interest of $342,192, related to our outstanding debt instruments.

Our existing sources of liquidity, along with cash expected to be generated from sales, will likely not be sufficient to fund our operations, anticipated capital expenditures, working capital and other financing requirements for the foreseeable future. If that is the case we may need to seek to obtain additional debt or equity financing, especially if we experience downturns or cyclical fluctuations in our business that are more severe or longer than anticipated, or if we fail to achieve anticipated revenue targets, or if we experience significant increases in the cost of raw material and manufacturing, lose a significant customer, or increases in our expense levels resulting from being a publicly-traded company. If we attempt to obtain additional debt or equity financing, we cannot assure you that such financing will be available to us on favorable terms, or at all.

As a result our audited financial statements for the year ended July 31, 2011 contain an explanatory note (footnote 4) to the effect that our ability to continue as a going concern is dependent on our ability to retain our current short term financing and ultimately to generate sufficient cash flow to meet our obligations on a timely basis in order to attain profitability, as well successfully obtain financing on favorable terms to fund the company’s long term plans.  We can give no assurance that our plans and efforts to achieve the above steps will be successful.
 

Cash Flows

The following table sets forth our cash flows for the six months ended January 31:

   
2012
   
2011
 
Provided by (used in):
           
Operating activities
  $ (104,206 )   $ -  
Investing activities
    -       -  
Financing activities
    96,500       -  
Net Cash Used in Continuing Operations
  $ (7,706 )   $ -  
 
Cash Flows for the Three Months Ended January 31, 2012 and 2010

Operating Activities

Net cash provided by (used in) operating activities was ($104,206) for the six months January 31, 2012, compared to $0 for the six months January 31, 2011.  Our cash from operating activities for the three months January 31, 2012 was primarily $17,221 in stock issued for services, $57,300 as a conversion fee, $6,578 in accrued expenses and ($17,000) in prepaids.

Investing Activities

Net cash provided by (used in) investing activities was $0 for the six months January 31, 2012, compared to $0 for the six months January 31, 2011.  

Financing Activities

Net cash provided by financing activities was $96,500 for the six months January 31, 2012, compared to $0 for the six months January 31, 2011.  The cash provided by financing activities for the six months January 31, 2012, consisted of $96,500 in note payables - borrowings.
 

ITEM 3                      Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4                      Controls and Procedures

(a)            Disclosure Controls and Procedures

We conducted an evaluation, 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, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of January 31, 2012, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission's rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of January 31, 2012, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in Item 9A(b).

(b)           Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that:

 
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and any disposition of our assets;
 
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

 
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.  Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.  Based on this assessment, Management has identified the following two material weaknesses that have caused management to conclude that, as of January 31, 2012, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

1.           We do not have sufficient segregation of duties within accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2.           We have not documented our internal controls.  We have limited policies and procedures that cover the recording and reporting of financial transactions and accounting provisions.  As a result we were delayed in our ability to calculate certain accounting provisions.  While we believe these provisions are accounted for correctly in the attached audited financial statements our lack of internal controls led to a delay in the filing of this Annual Report.  Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
 
 
To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.  Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

(c)           Remediation of Material Weaknesses
 
To remediate the material weakness in our documentation, evaluation and testing of internal controls we may engage a third-party firm to assist us in remedying this material weakness.

(d)           Changes in Internal Control over Financial Reporting
 
There are no changes to report during our fiscal quarter ended January 31, 2012.
 

PART II – OTHER INFORMATION

ITEM 1                      Legal Proceedings

We are not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions.  The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations.  However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 1A                   Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 2                      Unregistered Sales of Equity Securities and Use of Proceeds

On November 11, 2011, we issued a total of 19,100,000 shares to Capitoline Ventures II, LLC, in exchange for consulting services.  The value placed on these shares was $0.01 per share.  The shares were restricted in accordance with Rule 144.  The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and Capitoline Ventures II, LLC, is a sophisticated investor and familiar with our operations.

If our stock is listed on an exchange we will be subject to the Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to a few exceptions which we do not meet. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.

ITEM 3                      Defaults Upon Senior Securities

There have been no events which are required to be reported under this Item.

ITEM 4                      Mine Safety Disclosure

There have been no events which are required to be reported under this Item.

ITEM 5                      Other Information

There have been no events which are required to be reported under this Item.
 

ITEM 6                      Exhibits
 

Exhibit
Number
 
Exhibit
Description
2.1
 
Agreement and Plan of Reorganization between Wave Uranium and the Registrant.(2)
2.2
 
Agreement of Sale between the Registrant and Alexandre Routkovski (2)
3.1
 
Articles of Incorporation (1)
3.2
 
Bylaws (1)
3.3
 
Certificate of Amendment to Articles of Incorporation changing name to Wave Uranium Holding (2)
3.4
 
Certificate of Amendment to Articles of Incorporation increasing authorized stock (4)
10.1
 
Software Development and Consulting Agreement (1)
10.2
 
Employment Agreement with Dr. Johnson (2)
10.3
 
Employment Agreement with Mr. LeClerc(2)
10.4
 
Wilson Creek Agreement (3)
10.5
 
Form of Debenture related to March 2008 financing (5)
10.6
 
Form of Warrant related to March 2008 financing (5)
10.7
 
Securities Purchase Agreement, dated March 20, 2008 by and between Wave Uranium Holding and the Purchasers signatory thereto (5)
10.8
 
Registration Right Agreement, dated March 20, 2008 by and between Wave Uranium Holding and the Purchasers signatory thereto (5)
10.9
 
Security Agreement, dated March 20, 2008 by and between Wave Uranium Holding and the Purchasers signatory thereto (5)
10.10
 
Pledge and Security Agreement, dated March 20, 2008 by and between Wave Uranium Holding and the Purchasers signatory thereto (5)
10.11
 
Subsidiary Guarantee, dated March 20, 2008 of Wave Uranium (5)
10.12
 
Form of Lock-Up Agreement (5)
10.13
 
Asset Purchase Agreement with Super Rad Corporation dated August 11, 2010 (6)
10.14
 
Securities Exchange Agreement dated March 31, 2011 (7)
10.15
 
Second Addendum to Amended Stock Transfer Agreement by and among FBC Holdings, Inc. and Super Rad Corporation dated July 6, 2011 (8)
31.1
 
32.1
 
101.INS**
 
XBRL Instance Document
101.SCH**
 
XBRL Taxonomy Extension Schema Document
101.CAL**
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**
 
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**
 
XBRL Taxonomy Extension Label Linkbase Document
101.PRE**
 
XBRL Taxonomy Extension Presentation Linkbase Document

**  Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.
   
(1)
Filed with the Registration Statement on Form SB-2 on September 27, 2006, file number 333-137,613 and incorporated by reference to this Annual Report.
(2)
Filed with the Current Report on Form 8-K dated June 18, 2007 and incorporated by reference to this Annual Report.
(3)
Filed with the Current Report on Form 8-K dated October 9, 2007 and incorporated by reference to this Annual Report.
(4)
Filed with our Annual Report on Form 10-K for the fiscal year ended July 31, 2007, filed November 13, 2007, and incorporated by reference to this Annual Report.
(5)
Filed with Current Report on Form 8-K dated March 20, 2008 and incorporated by reference to this Annual Report.
(6)
Filed with Current Report on Form 8-K/A dated August 11, 2010 and incorporated by reference to this Annual Report.
(7)
Filed with Current Report on Form 8-K dated March 31, 2011 and incorporated by reference to the Annual Report.
(8)
Filed with Current Report on Form 8-K dated July 12, 2011 and incorporated by reference to this Annual Report.
 


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.


 
FBC Holding, Inc.
     
     
Dated:  April 11, 2012
 
/s/ Christopher LeClerc
 
By:
Christopher LeClerc
   
President, Chief Executive Officer, Chief Financial Officer
   
and Sole Director