ALL GRADE MINING, INC. - FORM 10-Q/A

Attached files

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EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES OXLEY ACT - ALL GRADE MINING, INC.	allgrademiningexh321.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT - ALL GRADE MINING, INC.	allgrademiningexh311.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q/A

(Amendment No. 1)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

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 No. 033-17774-NY

HYBRED INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Colorado	*
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

370 W. Pleasantview Ave., Suite 163, Hackensack, NJ 0760 (Address of principal executive office)

Registrant's telephone number, including area code: (201) 788-3785

____________________________________________

Former name, former address and former fiscal year,

if changed since last report.

Check whether the Issuer: (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	þ	No	o

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. (Check one):


Large accelerated filer o		Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

169,365,519 shares of Common Shares, par value $0.001 per share, were outstanding as of June 30, 2011.

HYBRED INTERNATIONAL, INC.

(A Developmental Stage Company)

Form 10-Q/A

(Amendment No. 1)

Explanatory Note

Table of Contents

Hybred International Inc.(a development stage company) (“the Company”). is filing this Amendment No. 1 to its Quarterly Report on Form 10-QSB (the "Form 10-QSB") for the quarterly period ended June 30, 2011 filed with the Securities and Exchange Commission on October 5, 2011. This filing amends and restates our previously reported financial statements for the three and six months ended June 30, 2011 to reflect the determination by the Company that, for the six and three months ended June 30, 2011, it did not properly identify certain convertible debt with conversion options, the incorrect computations of our derivative liabilities as discussed in Note 2 to the unaudited financial statements contained herein. Further our Form 10-Q as originally filed, inadvertently omitted the required disclosures relating to development stage entities and the earning per share disclosures.

Accordingly, on April 26, 2012, the Company filed a Form 8-K reporting that the Company had incorrectly computed its derivative liabilities as of the date of issuance and through each of the reporting periods ended June 30, 2011 and September 30, 2011. Accordingly the Company’s previously filed quarterly 10-Q filings should not be relied upon since the Company’s quarterly reports would need to be restated. Further as a result of the aforementioned restatements, the Company has also modified Item 4- Controls and Procedures and parts of Management’s Discussion and Analysis as impacted.

Pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Form 10-Q/A includes new certifications by our principal executive officer under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Except for the items noted above, no other information included in the Original Filing is being amended by this Form 10-Q/A. This Form 10-Q/A continues to speak as of the date of the Original Filing and we have not updated the filing to reflect events occurring subsequent to the date of the Original Filing other than those associated with the restatement of the Company’s financial statements. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s filings with the Securities and Exchange Commission subsequent to the Original Filing, including any amendments to those filings.

HYBRED INTERNATIONAL, INC.

(A Developmental Stage Company)

CONTENTS

		Page
PART I-	FINANCIAL INFORMATION

ITEM 1-	FINANCIAL STATEMENTS

	Condensed balance sheets as of June 30, 2011 (unaudited) and December 31, 2010		2

	Condensed statements of operations for the six and three months ended June 30, 2011 and June 30, 2010 (unaudited) and for the period January 3, 2006 (date of Commencement as a development stage company) through June 30, 2011		3

	Condensed statements of cash flows for the six months ended June 30, 2011 and June 30, 2010 (unaudited) and for the period January 3, 2006 (date of Commencement as a development stage company) through June 30, 2011		4

	Notes to financial statements		5

ITEM 2-	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		14

ITEM 3-	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		16

ITEM 4-	CONTROLS AND PROCEDURES		16

PART II-	OTHER INFORMATION

ITEM 1-	LEGAL PROCEEDINGS		17

ITEM 1A-	RISK FACTORS		17

ITEM 2-	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		18

ITEM 3-	DEFAULT UPON SENIOR SECURITIES		18

ITEM 4-	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		18

ITEM 5-	OTHER INFORMATION		18

ITEM 6-	EXHIBITS		19

SIGNATURES			20

Exhibit 31.1	Certification Pursuant to Section 302 of the Sarbanes Oxley Act		21

Exhibit 32.1	Certification Pursuant to Section 906 of the Sarbanes Oxley Act		22

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

CONDENSED BALANCE SHEETS

ASSETS

	June 30,
	2011 (Restated)		December 31,
	(Unaudited)		2010
CURRENT ASSETS:
Cash in bank	$	634	$	-

Total current assets		634		-

PROPERTY AND EQUIPMENT, NET		4,373		5,305

Total assets	$	5,007	$	5,305

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

LIABILITIES:
Accounts payable	$	150,863		$	120,363
Cash overdraft		-			317
Taxes payable		1,500			-
Accrued interest payable		8,406			6,990
Due to-shareholders		6,000			9,146
Loans payable		17,900			17,900
Convertible debentures, net of debt discount of $5,700 and $0 as of June 30, 2011 and December 31, 2010		42,300			10,000
Derivative liability		93,000			-
Deferred income		17,500			17,500

Total liabilities		337,469			182,216

STOCKHOLDERS’ DEFICIENCY:
Convertible Preferred Stock Class A, no par value, 100,000 shares authorized at June 30, 2011 and none authorized at December 31, 2010. None issued and outstanding at June 30, 2011 and December 31, 2010.		-			-
Convertible Preferred Stock Class B, no par value, 400,000 shares authorized at June 30, 2011 and none authorized at December 31, 2010. None issued and outstanding at June 30, 2011 and December 31, 2010.		-			-
Preferred Stock Class C, no par value, 50,000 shares authorized at June 30, 2011 and none authorized at December 31, 2010.None issued and outstanding at June 30, 2011 and December 31, 2010.		-			-
Common stock, par value $.001 per share; authorized 500,000,000 shares, 169,365,519 issued and outstanding at June 30, 2011 and December 31, 2010.		169,366			169,366
Deficit accumulated during the development stage		(501,828	)		(346,277	)

Total stockholder’s deficiency		(332,462	)		(176,911	)

Total liabilities and stockholder’s deficiency	$	5,007		$	5,305

The accompanying notes should be read in conjunction with the financial statements

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

CONDENSED STATEMENTS OF OPERATIONS

													January 3, 2006
													(date of
	Six Months Ended						Three Months Ended						commencement
	June 30,						June 30,						as a
	2011			June 30,			2011			June 30,			development
	(Restated)			2010			(Restated)			2010			stage company)
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			through June 30, 2011

REVENUES	$	-		$	-		$	-		$	-		$	7,500
COST OF REVENUES		-			-			-			-			3,135

Gross profit		-			-			-			-			4,365

OPERATING EXPENSES:
Consulting fees		30,000			30,000			15,000			15,000			90,000
General and administrative		37,152			13,880			35,686			4,319			292,000

Total operating expenses		67,152			43,880			50,686			19,319			382,000

Operating loss		(67,152	)		(43,880	)		(50,686	)		(19,319	)		(377,635	)

OTHER INCOME AND (EXPENSES):
Change in fair value of derivative liability		6,000			-			6,000			-			6,000
Interest expense		(94,399	)		(719	)		(93,790	)		(359	)		(104,093	)
Loss on negotiated debt settlement		-			-			-			-			(26,100	)

Total other expenses		(88,399	)		(719	)		(87,790	)		(359	)		(124,193	)

Net loss	$	(155,551	)	$	(44,599	)	$	(138,476	)	$	(19,678	)	$	(501,828	)

Earnings per share – basic and diluted	$	(.009	)	$	(.003	)	$	(.008	)	$	(.001	)

Weighted average number of common shares outstanding		169,365,519			169,365,519			169,365,519			169,365,519

The accompanying notes should be read in conjunction with the financial statements

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

CONDENSED STATEMENTS OF CASH FLOWS

							January 3, 2006
							(date of
							commencement as
	Six Months Ended			Six Months Ended			a development
	June 30, 2011 (Restated) (Unaudited)			June 30, 2010 (Unaudited)			stage company)
							through
							June 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(155,551	)	$	(44,599	)	$	(501,828	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation expense		932			932			8,663
Amortization of debt discount		32,300			-			32,300
Change in fair value of derivative liability		(6,000	)		-			(6,000	)
Deferred income		-			-			17,500
Interest Expense		61,000			-			61,000
Stock based compensation		-			-			20,000
Changes in assets and liabilities:
Accounts payable		30,500			31,000			209,838
NJ Corporation business tax payable		1,500			1,000			1,500
Accrued interest payable		1,416			719			8,406

NET CASH USED BY OPERATING ACTIVITIES		(33,903	)		(10,948	)		(148,621	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			-			(13,036	)

NET CASH USED BY INVESTING ACTIVITIES		-			-			(13,036	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft		(317	)		379			-
Repayment of advances		(3,146	)		-			(3,146	)
Cash proceeds from advances		-			5,844			9,146
Cash proceeds from loans		-			-			17,900
Cash proceeds from issuance of convertible debentures		38,000			-			48,000
Issuance of common stock for cash		-			-			90,391

NET CASH PROVIDED BY FINANCING ACTIVITIES		34,537			6,223			162,291

Increase (decrease) in cash		634			(4,725	)		634

Cash, beginning of period		-			4,725			-

Cash, end of period	$	634		$	-		$	634

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	-		$	-		$	-

Non-cash investing and financing activities:
Debt discount related to convertible debentures	$	38,000		$	-		$	38,000
Issuance of shares for the settlement of debt	$	-					$	43,125

The accompanying notes should be read in conjunction with the financial statements

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1-

NATURE OF BUSINESS AND BASIS OF PRESENTATION:

Organization:

Temporary Time Capital Corp., Inc., (a development stage company) a corporation organized under the laws of the State of Colorado, was a shell company with no or nominal business operations. On January 31, 2008, the Company entered into a merger agreement with Hybred International, Inc., (a development stage company) a corporation organized under the laws of the State of New Jersey. No prior relationship between the companies, or any natural person, is known to have existed.

The Company has generated nominal revenues to date; accordingly, the Company is considered a development stage enterprise as defined in the Accounting Standards Codification 915 “Development Stage Entities.” The Company is subject to a number of risks similar to those of other companies in an early stage of development.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, these interim financial statements do not include all of the information and footnotes required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

The results for the six and three months ended June 30, 2011, are not necessarily indicative of the results to be expected for any subsequent quarter or the entire fiscal year. The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes, however, that the disclosures in this report are adequate to make the information presented not misleading in any material respect. The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto of Hybred International, Inc. (a development stage company) for the year ended December 31, 2010 included in the Company’s Annual Report on Form 10-K as filed with the SEC and the attached Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Note 2-

CORRECTION AND RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS:

On April 20, 2012, the Company determined that certain amounts reported in its quarter ended June 30, 2011 and September 30, 2011 financial statements needed to be restated as described below.

The Company while undergoing an audit of its annual financial statements for the year ended December 31, 2011 determined that it had incorrectly computed its derivative liabilities. Upon further review of the Form 10-Q’s as originally filed, it inadvertently omitted the required disclosures relating to development stage entities and the earning per share disclosures. The accounting treatment of derivative financial instruments required that the Company record the conversion options at their fair values as of the inception date of the convertible debenture agreements and at fair value as of June 30, 2011. As a result of entering into the convertible promissory note, the Company was required to classify all other conversion options as derivative liabilities and record them at their fair values at June 30, 2011.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 2-

CORRECTION AND RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS: (continued)

Accordingly, on April 26, 2012, the Company filed a Form 8-K reporting that the Company had incorrectly computed its derivative liabilities as of the date of issuance and through each of the reporting periods ended June 30, 2011 and September 30, 2011. The change in fair value of the derivative liability for the six months ended June 30, 2011 was $6,000 as reported in the accompanying financial statements. The convertible debenture debt discount as of June 30, 2011 was $5,700. The derivative liability as of June 30, 2011 was $93,000.

The accounting treatment of derivative financial instruments required that the Company record the conversion options at their fair values as of the inception date of the convertible debenture agreements and at fair value as of June 30, 2011. As a result of entering into the convertible promissory note, the Company was required to classify all other conversion options as derivative liabilities and record them at their fair values at June 30, 2011.

A summary of the adjustments and their effect on the financial statements for the quarter ended June 30, 2011 is presented below:

	As of June 30, 2011
	As
	Originally
	Reported			Correction			As Restated
Balance Sheet

Loans payable (1)	$	65,900		$	(48,000	)	$	17,900
Convertible debentures (1), (2), (3)	$	-		$	42,300		$	42,300
Derivative liability (4), (5), (6)	$	-		$	93,000		$	93,000
Deficit accumulated during the development stage	$	(414,527	)	$	(87,301	)	$	(501,828	)

“As Originally Reported” reflects balances reported in the June 30, 2011 Form 10-Q filed on October 5, 2011

“As Restated” reflects the final restated balances

“Correction” reflect changes to the originally reported balances and are described as follows:

(1)To record reclassification of $48,000 of loans payable to convertible debentures presented on the balance sheet.

(2)To record debt discount of $38,000 on the date of note issuance.

(3)To record amortization of debt discount during the period of $32,300 to interest expense.

(4)To record $6,000 gain for the change in fair value of derivative liability for the period ended.

(5)To record initial derivative liability of $99,000 on the date of the note issuance.

(6)To record a charge of $61,000 to interest expense for the excess fair value of the derivative liability exceeding the fair value of the debt.


	For the six- months ended June 30, 2011
	As
	Originally						As
Statement of Operations	Reported			Correction			Restated

Interest Expense (3), (6)	$	1,415		$	92,984		$	94,399
Change in fair value of derivative liability (4)	$	-		$	(6,000	)	$	(6,000	)

Net Loss	$	(68,250	)	$	(87,301	)	$	(155,551	)

Net Loss per Share	omitted			$	(0.009	)	$	(0.009	)

Weighted average shares	omitted				169,365,519			169,365,519

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 3- GOING CONCERN:

The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative operating cash flow since inception and future losses are anticipated. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plan of operations, even if successful, may not result in cash flow sufficient to finance and expand its business.

Realization of assets is dependent upon continued operations of the Company, which in turn is dependent upon management’s plans to meet its financing requirements and the success of its future operations. The ability of the Company to continue as a going concern is dependent on improving the Company’s profitability and cash flow and securing additional financing.

While the Company believes in the viability of its strategy to generate revenues and profitability and in its ability to raise additional funds, and believes that the actions presently being taken by the Company provide the opportunity for it to continue as a going concern, there can be no assurances to that effect. These financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Note 4-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Derivative Financial Instruments

In connection with the issuance of certain convertible debentures, the terms of the convertible debentures included an embedded conversion feature; which provided for a conversion of the convertible debentures into shares of common stock at a rate which was determined to be variable. The Company determined that the conversion feature was an embedded derivative instrument pursuant to ASC 815 “Derivatives and Hedging”

The accounting treatment of derivative financial instruments requires that the Company record the conversion options at their fair values as of the inception date of the convertible debenture agreements and at fair value as of each subsequent balance sheet date. As a result of entering into the convertible promissory note, the Company was required to classify all other conversion options as derivative liabilities and record them at their fair values at each balance sheet date. Any change in fair value was recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

Reclassification

Certain accounts in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation in the current year’s financial statements. These reclassifications have no effect on previously reported earnings.

HYBRED INTERNATIONAL, INC.

(A Developmental Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 4-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)

Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would require adjustment or disclosure in the condensed financial statements.

Recent Accounting Pronouncements

The FASB, the Emerging Issues Task Force and the SEC have issued certain accounting standards updates and regulations as of December 31, 2011 that will become effective in subsequent periods; however, management of the Company does not believe that any of those updates would have significantly affected the Company’s financial accounting measures or disclosures had they been in effect during 2011 or 2010, and it does not believe that any of those pronouncements will have a significant impact on the Company’s consolidated financial statements at the time they become effective.

Note 5- FAIR VALUE:

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Standard clarifies that the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date and emphasizes that fair value is a market-based measurement and not an entity-specific measurement.

ASC 820 establishes the following hierarchy used in fair value measurements and expands the required disclosures of assets and liabilities measured at fair value:

Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair measurements requires judgment and considers factors specific to each asset or liability.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 5- FAIR VALUE: (continued)

Liabilities measured at fair value on a recurring basis at June 30, 2011 are as follows:

		Quoted Prices in Active Markets for Identical Liabilities (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)			Balance at June 30, 2011
Embedded conversion feature – June 30, 2011		$	-			$	-			$	93,000		$ 93,000

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The Company’s Level 3 liabilities consist of derivative liabilities associated with the convertible debt that contains an indeterminable conversion share price and the tainted conversion to other outstanding convertible debt as the Company cannot determine if it will have sufficient authorized common stock to settle such arrangements.

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs during the period ended June 30, 2011.

	Embedded Conversion Feature
Balance January 1, 2011	$	-

Included in other income expense
Change in fair value of derivative liability		(6,000	)
Interest expense		61,000
Included in liabilities (debt discount)		38,000
Included in stockholder's equity		-
Transfers in and /or out of Level 3		-
Balance June 30, 2011	$	93,000

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 6- EARNINGS PER SHARE

Basic loss per share was computed using the weighted average number of outstanding common shares. Diluted loss per share includes the effect of dilutive common stock equivalents from the assumed conversion of debt and convertible preferred stock. Common stock equivalents were excluded from the computation of diluted loss per share since their inclusion would be anti-dilutive.

Total shares issuable upon the conversion of preferred stock and convertible debt for the six months ended June 30, 2011 and 2010, were comprised as follows:

	As of June 30
	2011		2010
Convertible debentures		142,010,000		20,000,000

Note 7- RELATED PARTY TRANSACTIONS:

The Company’s President had previously loaned the Company $5,244 on a non-interest bearing basis to provide funding for certain operating expenses. As of December 31, 2009, this amount was fully repaid. Additionally, during 2007, Martin Honig, a former Director and current shareholder of the Company loaned the Company $8,000 on a non-interest bearing basis in order to provide the Company with working capital. In July 2008 this same individual loaned the Company an additional $5,000 to be used for working capital. As of June 30, 2011, the Company had repaid $7,000 to Martin Honig, leaving a balance due him of $6,000.

Marshal Shichtman, the Company’s securities counsel and a shareholder of 2,500,000 common shares had previously billed the Company $15,648 for legal services performed in 2009. This amount is currently outstanding and reported in accounts payable in the accompanying financial statements.

Note 8- CONVERTIBLE DEBENTURES:

As of June 30, 2011 convertible debentures consist of the following:

	2011
Convertible Debentures	$	48,000
Less debt discount		5,700
Convertible Debentures net of debt discount	$	42,300

On September 9, 2010 the Company borrowed the sum of $10,000 from an unrelated third party. The convertible debenture is payable on demand and bears interest at the rate of 8% per annum. The loan agreement provides at the option of the note holder to convert their principal balance to 20,000,000 shares of common stock ($0.0005 per share) at any time that the loan remains unpaid. As of June 30, 2011 the $10,000 is payable.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 8- CONVERTIBLE DEBENTURES: (continued)

On April 13, 2011, the Company borrowed the sum of $10,000 from an unrelated third party. The convertible debenture matures on October 13, 2011 and bears interest at the rate of 10% per annum. The loan agreement provides for the right of this individual to convert the loan into shares of common stock at a stated conversion price of the average of the 3 lowest daily trades in the previous 20 days with a 50% discount.

The Company accounted for the issuance of the convertible debenture in accordance with ASC 815” Derivatives and Hedging.” The debenture is convertible into an indeterminate number of shares for which the Company cannot determine if it has sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. The gross proceed from the sale of the note of $10,000 was recorded net of a discount of $10,000 related to the beneficial conversion feature of the embedded conversion option. In addition to the $10,000 debt discount recorded the Company recorded a charge in the amount of $7,000 which represents the fair value of conversion options in excess of the debt discount. This amount has been included as a component of interest expense in the statement of operations. The debt discount will be charged to interest expense ratably over the term of the convertible debenture. As of June 30, 2011 the $10,000 is payable.

On May 18, 2011, the Company borrowed the sum of $28,000 from an unrelated third party on a non-interest bearing basis and is payable on demand. The loan agreement provides for the right of the holder to convert the outstanding loan into common shares of the Company at any time that the loan remains unpaid, at a conversion price of $0.0003 per share.

The Company accounted for the issuance of the convertible debenture in accordance with ASC 815” Derivatives and Hedging.” In connection with Note 8(b) the Company cannot determine it will have sufficient authorized shares to settle the transaction with and accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. The gross proceeds from the sale of the note of $28,000 was recorded net of a discount of $28,000 related to the beneficial conversion feature of the embedded conversion option. In addition the Company recorded a charge in the amount of $54,000 which represents the fair value of the conversion options in excess of the debt discount. This amount has been included as a component of interest expense in the statement of operations. The debt discount will be charged to interest expense ratably over the term of the convertible debenture. As of June 30, 2011 the $28,000 is payable.

Note 9- STOCKHOLDERS’ EQUITY:

In June 2010, the Company’s Board of Directors voted to increase the amount of authorized common stock to 500,000,000 shares effective June 1, 2010. As of June 30, 2011 the Company reported 169,365,519 shares of common stock as issued and outstanding.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 10- PREFERRED STOCK:

During the six months ended June 30, 2011, the Company designated certain classes of Preferred Stock as follows:

Convertible Preferred Class A Series

On June 20, 2011, the Company designated and authorized 100,000 shares of Class A convertible preferred stock (“Class A”). The Class A has no par value, has no liquidation preference and each shares of Class A is convertible into 1,000 shares of common stock at the option of the holder. The Class A stockholders have voting rights equal to the number of common shares, into which the Class A shares are convertible into shares of common stock. The Class A does not provide for any cumulative dividends or any redemption features outside the control of the Company.

Convertible Preferred Class B Series

On June 20, 2011, the Company designated and authorized 400,000 shares of Class B convertible preferred stock (“Class B”). The Class B has no par value, has no liquidation preference and each shares of Class B is convertible into 40 shares of common stock at the option of the holder. The Class B stockholders have voting rights equal to the number of common shares, into which the Class B shares are convertible into shares of common stock. The Class B does not provide for any cumulative dividends or any redemption features outside the control of the Company.

Preferred Class C Series

On June 20, 2011, the Company designated and authorized 50,000 shares of Class C preferred stock (“Class C”). The Class C has no par value, has no liquidation preference and has no conversion provisions. The Class C stockholders have voting rights at a ratio of 1,000 votes for each Class C share. The Class C does not provide for any cumulative dividends or any redemption features outside the control of the Company.

Note 11- COMMITMENTS AND CONTINGENCIES:

Litigation

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 11- COMMITMENTS AND CONTINGENCIES:

Litigation (continued)

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. As of June 30, 2011 the Company has not accrued any amounts for loss contingencies.

Consulting Agreement

On December 25, 2009, The Company entered into an agreement with Brett Hamburger whereby he would attempt to introduce the Company to potential investors for the purpose of procuring funding for the Company. Additionally, he would advise the Company on general business development.

The agreement was in effect for a period of two years ending on December 24, 2011 and provided for monthly payments of $5,000 over the term of the contract. The Company incurred a charge of $30,000 for the six months years ended June 30, 2011 and 2010.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

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

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

Forward Looking Statements

This report contains forward looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933 (the “Securities Act”). Statements contained in this report which are not statements of historical facts may be considered forward-looking information with respect to plans, projections, or future performance of the Company as defined under the Private Securities litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. The words “anticipate”, “believe”, “estimate”, “expect”, “objective”, and “think” or similar expressions used herein are intended to identify forward-looking statements. The forward-looking statements are based on the Company’s current views and assumptions and involve risks and uncertainties that include, among other things, the effects of the Company’s business, actions of competitors, changes in laws and regulations, including accounting standards, employee relations, customer demand, prices of purchased raw material and parts, domestic economic conditions, including housing starts and changes in consumer disposable income, and foreign economic conditions, including currency rate fluctuations. Some or all of the facts are beyond the Company’s control.

Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business. The following discussion and analysis should be read in conjunction with the financial statements and related footnotes included elsewhere in this quarterly report which provide additional information concerning the Company’s financial activities and condition.

The Company is engaged in the research and development of therapeutic horseshoes whereby the Company utilizes urethane compound which is bonded to an aluminum horseshoe using a proprietary method. The Hybred Horseshoe’s design features contain side clips which act to further secure the shoe to the hoof, nail holes with a recess in the shoe, thus making it easier to remove the shoe at any time and a toe plate for longer wear. The shoe’s compatible design features allow the farrier to use traditional shoeing methods. The Hybred Horseshoe is expected to retail between $22 and $25 per pair.

The Company had filed for a provisional patent for the Hybred Horseshoe in 2007. The Company has spent approximately 1,000 hours researching and developing the Hybred Horseshoe. No known governmental approval is expected for the Hybred Horseshoe and no known governmental regulation is expected to impact the Hybred Horseshoe at this time.

The Company currently has one employees.

Revenues

We have not generated revenue for the six and three months ended June 30, 2011.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued)

Operating Expenses

Our operating expenses for the six months ended June 30, 2011 and the six months ended June 30, 2010 were $67,152 and $43,880 respectively. The $23,272 increase in operating expenses for the six months ended June 30, 2011 when compared to the six months ended June 30, 2010 was primarily due to the Company utilizing available funds from private financing to fund operating expenses.

Other expenses also increased in 2011 from $719 to $88,399 primarily due to the Company recording a change in the fair value of its derivative liabilities.

Net Loss

The net loss for the six months ended June, 2011 and the six months ended June 30, 2010 was $155,551 and $44,599, respectively. The net loss reported for the six months ended June 30, 2011 reflects the recognition of change in the fair value of a derivative liability of $6,000. The increase in our net loss for the respective periods is primarily attributable to the above referenced factors.

Liquidity and Capital Resources

As of June 30, 2011 we had total assets of $5,007 as compared to total assets of $5,305 as of December 31, 2010. The decrease in our assets is due primarily to depreciation expense of fixed assets.

We reported current liabilities totaling $337,469 as of June 30, 2011 as compared to $182,216 as of December 31, 2010. Accounts payable and loans payable totaled $211,063 and $148,263 respectively for each period. We also recognized a derivative liability arising from convertible debentures that were issued.

We use available finances to fund ongoing operations. Funds will be used for general and administrative expenses. We do not have sufficient funds available to meet our current liabilities. Unless we secure additional financing, it is unlikely that we will be able to continue our current operations.

Consulting Agreement

On December 25, 2009, The Company entered into an agreement with Brett Hamburger whereby he will attempt to introduce the Company to potential investors for the purpose of procuring funding for the Company. Additionally, he will advise the Company on general business development.

The agreement shall be in effect for a period of two years ending on December 24, 2011 and provides for monthly payments of $5,000 over the term of the contract.

Going concern

As reflected in the accompanying financial statements, the Company has current liabilities that exceed its current assets resulting in a working capital deficit. Management is presently seeking to raise permanent equity capital in the capital markets to eliminate negative working capital. Failure to raise equity capital or secure some other form of long-term debt arrangement will cause the Company to further increase its negative working capital deficit and could result in the operating expenses and generate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Smaller reporting companies are not required to provide the information required by item 305.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have each reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934), as of June 30, 2011. Based on such review and evaluation, our chief executive officer and chief financial officer have concluded that, as of June 30, 2011, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission pursuant to the reporting obligations of the Exchange Act, including this Quarterly Report on Form 10-Q/A, is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. 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 Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls also is based in part on certain assumptions regarding the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Given these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their stated goals under all potential future conditions.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and Rule 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, and effected by the 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 accounting principles generally accepted in the United States (“US GAAP”), including those policies and procedures that:

●	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company,

●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and

●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s 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 misstatements. Also, 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 policies and procedures may deteriorate.

Under the supervision and with the participation of our management, we have assessed the effectiveness of our internal control over financial reporting as of June 30, 2011. In making this assessment, our management used the criteria described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls to lessen the issue of segregation of duties. Based on this assessment and those criteria, our management concluded that the Company did not maintain effective internal control over financial reporting as of June 30, 2011.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Our management identified the following material weaknesses as of June 30, 2011:

On April 20, 2012, the Company’s Independent Registered Public Accounting firm advised the Company it had incorrectly computed its derivative liabilities during its recently completed second and thirds quarters. Therefore the Company’s quarterly reports filed on October 5, 2011 and November 16, 2011 are required to be restated. In addition upon further review the Form 10-Q as originally filed, inadvertently omitted the required disclosures relating to development stage entities and the earning per share disclosures.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the second quarter of our fiscal year ending December 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to, or the subject of any material pending legal proceedings.

Item 1A. Risk Factors

The Company is a Smaller Reporting Company. A Smaller Reporting Company is not required to provide the risk factor disclosure required by this form.

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

PART II – OTHER INFORMATION

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

On March 25, 2005, the Company issued a note payable to its registered Agent in the amount of $15,000 for services rendered upon reincorporation of the Company. The note is payable on demand and bears interest at the rate of 10% per annum. On January 16, 2008, the Agent assigned the note to seven different parties. On February 12, 2008, those seven parties converted their portions of the original note into a 19,125,000 shares of the Company’s common stock.

On November 6, 2007 the Company issued 20,000,000 shares of its common stock to Hoss Capital, LLC in consideration for consulting services rendered to the Company amounting to $20,000. With the issuance of these shares, Hoss Capital, LLC effectively owned 98.08% of the issued and outstanding common stock of the Company. In January 2008 Hoss Capital sold its 20,000,000 in a private transaction to an individual. Concurrent with the merger, this individual surrendered 19,700,000 of these shared back to the Company in order to facilitate the merger discussed in Note 10 to the financial statements.

On January 31, 2008, Board of Directors of the Company agreed to merge with Hybred International, Inc. (Hybred), a New Jersey corporation. The effective date of the merger was February 1, 2008. Under the terms of the “Plan of Merger,” Hybred was merged into the Company and Temporary Time Capital Corp. became the surviving entity. The surviving Company then changed its name to Hybred International, Inc. The Board of Directors of the Company voted to increase the number of common shares authorized from 50,000,000 to 120,000,000. Under the terms of the merger agreement the shareholders of Hybred International, Inc. were issued 80,000,000 shares of the Company’s common stock in exchange for their shares of the former Company.

On January 28, 2008 the Company entered into a subscription agreement with AER Investment (AER) whereby AER would purchase 300,000 of the Company’s common stock, par value $.001, for $.30 per share of $90,000. The proceeds of this issuance were used to provide working capital.

On April 2008, the Company issued an additional 19,700,000 shares of its common stock in consideration for the cancellation of debt of $20,000 owed to an individual who is a shareholder.

The offering and sales above were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors or a limited number of unaccredited investors, business associates of the Company or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, the Company has made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment.

Item 3. Default upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security HoldersNone

Item 5. Other Information

None

HYBRED INTERNATIONAL, INC.

(A Development Stage Company Commencing January 3, 2006)

PART II – OTHER INFORMATION

Item 6. (a) Exhibits and Reports on Form 8-K

Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes Oxley Act

Exhibit 32.1 Certification Pursuant to Section 906 of the Sarbanes Oxley Act

(b) Reports on Form 8-K during Quarter

None

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


	HYBRED INTERNATIONAL, INC.
	(Registrant)



May 16, 2012
	/s/ Gary Kouletas
	Gary Kouletas
	President (Principal Executive Officer)

ALL GRADE MINING, INC. - FORM 10-Q/A - May 16, 2012

Attached files

ALL GRADE MINING, INC. Reports