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EX-32.1 - CEO AND CFO SOX 906 CERTIFICATE - American Heritage International Inc.exhibit321.htm
EX-31.1 - CEO AND CFO SOX 302 CERTIFICATE - American Heritage International Inc.exhibit311.htm




UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q


x 

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

 


o

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period _____________to______________


Commission File Number 333-181784


 

CUMBERLAND HILLS LTD.

 

 

(Exact name of small Business Issuer as specified in its charter)

 


Nevada

  

71-1052991

---------------------------------

 

------------------------------

(State or other jurisdiction of

  

(IRS Employer Identification No.)

incorporation or organization)

  

  


250 Newport Centre Drive

  

  

Newport Beach, CA  

  

92660

----------------------------------------

 

------------------------------

(Address of principal executive offices)

  

(Postal or Zip Code)


Issuer's telephone number, including area code:

 

    (949) 420-0504

  

 

 ----------------------------


 

 

 

 

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

 

 

last report)

 


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes    o No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes    o No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Small reporting company

x


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

oYes   x No






2




Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 72,750,000 shares of $0.001 par value common stock outstanding as of November 13, 2012.





3




PART I.

FINANCIAL INFORMATION


Item 1.

Financial Statements








4



CUMBERLAND HILLS LTD.

(A Development Stage Company)

BALANCE SHEETS


ASSETS

 

 

 

September 30, 2012

December 31, 2011

 

(Unaudited)

 

Current assets:

 

 

Cash

 $                 8,656

 $               1,870

Prepaid deposits

-

5,500

 

 

 

Total current assets

8,656

7,370

 

 

 

Capital assets:

 

 

Furniture and fixtures, net

4,000

-   

 

 

 

Total capital assets

4,000

-   

 

 

 

Total assets

 $               12,656

 $               7,370

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

Current liabilities:

 

 

Accounts payable and accrued interest

 $                 2,054

 $                  173

Accounts payable - related party

14,200

16,000

Related party advances

29,600

-   

 

 

 

Total current liabilities

45,854

16,173

 

 

 

Long term liabilities:

 

 

Notes payable

54,000

-   

 

 

 

Total long term liabilities

54,000

-   

 

 

 

Total liabilities

99,854

16,173

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000

72,750

72,750

shares authorized, 72,750,000  shares at September 30, 2012

 

 

and December 31, 2011 respectively issued and outstanding

 

 

 

 

 

Additional paid-in capital

(38,250)

(38,250)

 

 

 

Deficit accumulated during the development stage

(121,698)

(43,303)

 

 

 

Total stockholders' deficit

(87,198)

(8,803)

 

 

 

Total liabilities and stockholders' deficit

 $               12,656

 $               7,370


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






5



CUMBERLAND HILLS LTD.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

For the three and nine months ended September 30, 2012 and 2011

and the period from January 19, 2010 (inception) through September 30, 2012

(Unaudited)


 

Three months

Three months

Nine months

Nine months

Inception through

 

September

30, 2012

September

30, 2011

September

30, 2012

September

30, 2011

September

30, 2012

 

 

 

 

 

 

Sales

 $       10,853

 $                  -   

 $      46,500

 $               -   

 $           46,500

 

 

 

 

 

 

Cost of goods sold

5,158

-   

34,611

-   

34,611

 

 

 

 

 

 

Gross profit

5,695

-   

11,889

-   

11,889

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Development costs

-   

742

-   

2,252

12,233

 

 

 

 

 

 

General and administrative

35,698

5,361

88,874

14,774

119,944

 

 

 

 

 

 

Total expenses

35,698

6,103

88,874

17,026

132,177

 

 

 

 

 

 

Loss from operations

(30,003)

(6,103)

(76,985)

(17,026)

(120,288)

 

 

 

 

 

 

Interest expense

(518)

-   

 (1,410)

-   

(1,410)

 

 

 

 

 

 

Net loss

$     (30,521)

$      (6,103)

$    (78,395)

$     (17,026)

$         (121,698)

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$         (0.00)

$        (0.00)

$        (0.00)

$        (0.00)

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

72,750,000

72,750,000

72,750,000

70,442,308

 



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






6



CUMBERLAND HILLS LTD.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2012 and 2011

and the period from January 19, 2010 (inception) through September 30, 2012

(Unaudited)


 

Nine months

Nine months

Inception through

 

September 30, 2012

September 30, 2011

September 30, 2012

 

 

 

 

CASH FLOWS FROM OPERATING

 

 

 

ACTIVITIES

 

 

 

 

 

 

 

Net loss

$             (78,395)

$              (17,026)

$                (121,698)

 

 

 

 

Adjustment to reconcile net loss to

 

 

 

cash used in operating activities:

 

 

 

 

 

 

 

Net change in:

 

 

 

Prepaid deposits

5,500

(5,500)

-

Accounts payable and accrued interest

1,881

-   

2,054

Accounts payable - related party

(1,800)

4,000

14,200

 

 

 

 

CASH FLOWS USED IN OPERATING ACTIVITIES

(72,814)

(18,526)

(105,444)

 

 

 

 

CASH FLOWS FROM INVESTING

 

 

 

ACTIVITIES

 

 

 

 

 

 

 

Purchase of furniture and fixtures

(4,000)

-  

(4,000)

 

 

 

 

CASH FLOWS USED IN INVESTING ACTIVITIES

(4,000)

-  

(4,000)

 

 

 

 

CASH FLOWS FROM FINANCING

 

 

 

ACTIVITIES:

 

 

 

 

 

 

 

Cash received from the sale of

 

 

 

common stock

-   

21,000

34,500

Proceeds from notes payable

54,000

-   

54,000

Shareholder advances

29,600

-   

29,600

 

 

 

 

CASH FLOWS PROVIDED BY

 

 

 

FINANCING ACTIVITIES

83,600

21,000

118,100

 

 

 

 

NET CHANGE IN CASH

                            6,786

                            2,474

                              8,656

 

 

 

 

Cash, beginning of period

1,870

1,270

-   

 

 

 

 

Cash, end of period

 $                   8,656

 $                   3,744

 $                     8,656

 

 

 

 

SUPPLEMENTAL CASH FLOW

 

 

 

INFORMATION

 

 

 

 

 

 

 

Cash paid on interest expenses

 $                         -   

 $                         -   

 $                            -   

 

 

 

 

Cash paid for income taxes

 $                         -   

 $                         -   

 $                            -   


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






7



CUMBERLAND HILLS LTD.
(An Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

September 30, 2012

(UNAUDITED)



Note 1

Basis of Presentation


The accompanying unaudited interim financial statements of Cumberland Hills Ltd. (“Cumberland” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Registration Statement filed with the SEC on Form S-1. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2011, as reported in the Form S-1 of the Company, have been omitted.


General


The Company is in the development stage. We are pursuing a business strategy whereby we will invest in raw paper products and resell them to various paper recycling companies and mills. Cumberland acquires books, cardboard and post consumer paper and resells the raw material. During the next twelve months, we intend to focus on expanding our business. We will focus on solidifying our supplier arrangements in the United States and Canada and on engaging in promotional activities in an attempt to expand our customer and supplier base.



Note 2

Going Concern


These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2012, the Company had not yet achieved profitable operations, has accumulated losses of $121,698 and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.







8



Note 3

Related Party Transactions


The Company was charged the following by the director of the Company:

 

 

9 months ended
  September 30, 2012

9 months ended
  September 30, 2011

 

 

 

 

 

Management fees

$

36,000

$

8,500


In the nine month period ending September 30, 2012, the Company president has advanced the company $600.  The advances are unsecured, non-interest bearing and have no specific terms for repayment.  In the nine month period ending September 30, 2102, the company consultant has advanced the company $29,000.  Similarly the advances are unsecured, non-interest bearing and have no specific terms for repayment.


Note 4

Notes Payable


$50,000 of the note payable is due to Liz Smith for funds advanced. The loan is unsecured, with a 5% interest rate with repayment on April 4, 2014. $4,000 of the note payable is due to Rod McLellan for office furniture purchased. The loan is unsecured, with a 10% interest rate with repayment on October 1, 2013.



Note 5

Major Customer


Cumberland sold recycled goods to two different customers during the period ending September 30, 2012. Each customer represented approximately 67% and 33% of the revenue received by the Company.


Note 6

Subsequent Events


On October 30, 2012 the $29,000 owed to Robert Sawatsky was reclassified as a contribution to capital.  This was done in connection with the Company agreeing to issue Mr. Sawatsky 2,000,000 shares of common stock for his contributions through the completion of a listing with the OTC Bulletin Board.








9



Item 2.

Management’s Discussion and Analysis or Plan of Operation


Caution about Forward-Looking Statements


This Form 10-Q includes “forward-looking” statements about future financial results, future business changes and other events that haven’t yet occurred. For example, statements like we “expect,” “anticipate” or “believe” are forward-looking statements.  Investors should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties about the future.  We do not undertake to update the information in this Form 10-Q if any forward looking statement later turns out to be inaccurate.


General


We are a development stage company engaged in the business of paper recycling.  Currently, our business is the acquisition and reselling of raw materials for paper recycling, with the objective of identifying and building relationships with new customers and suppliers. We acquire books, cardboard and post consumer paper and resell the raw material to paper recycling companies. We purchase our paper supply through a variety of procurement methods such as pick up programs with large companies, schools and community recycling programs. The bulk paper we supply is either sold as a commodity by the pound or at a fixed price per box.  


We currently are dependent on two major customers for all our sales. We will focus on solidifying our supplier arrangements in the United States and Canada and on engaging in promotional activities in an attempt to expand our customer and supplier base.  


Plan of Operation for the Next Twelve Months


Over the next 12 months we will require at a minimum, operating capital consistent with the past twelve months to fund our purchase of bulk paper.  Revenue and profits from existing sales will continue to fund existing operations; however, the acquisition of new suppliers will require additional funding to place new deposits that secure new paper orders. This will have to be addressed on a case by case basis.


Our plan over the next 12 months is to increase our customer and supplier base. We will do this by continuing our existing model of phone and email solicitation, joining our major industry association ISRI (Institute of Scrap Recycling Industries) and attending trade shows.  We will also invest in travel to meet customers and suppliers in person (approximately $40,000 for travel, meals, accommodation over the next 12 months).


We will incur salary expenses for Mr. Isaacs of $48,000 per year. If we cannot afford to pay this salary, the salary will be accrued. In addition, we anticipate spending an additional $102,000 on administrative fees, legal and accounting fees, including fees payable in connection with complying with future SEC reporting obligations. We estimate that total expenditures over the next 12 months is therefore expected to be approximately $150,000.


We anticipate that we will meet our ongoing cash requirements of approximately $150,000 through equity or debt financing. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.


We intend to meet our cash requirements for the short term by generating limited revenue over the next twelve months through a combination of debt financing and equity financing by way of bank loans, private loans and private placements. We currently do not have any arrangements or commitments in






10



place to complete any bank loans, private loans or private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.


If we are not able to raise the full $150,000 for the operating plan as anticipated, we will scale our business development in line with available capital. Our primary priority will be to retain our reporting status with the SEC which means that we will first ensure that we have sufficient capital to cover our legal and accounting expenses. Once these costs are accounted for, in accordance with how much financing we are able to secure, we will focus on marketing and acquiring trucks to pick up and deliver the bulk paper products. We will likely not expend funds on the remainder of our planned activities unless we have the required capital.


Results of Operations


Results of Operations for the nine month periods ended September 30, 2012, and September 30, 2011.


For the nine months ended September 30, 2012 we had revenues of $46,500 from two customers, compared with $0 revenues for the nine months ended September 30, 2011.


Operating expenses for the nine months ended September 30, 2012 were $88,874 as compared to $17,026 for the nine months ended September 30, 2011. Operating expenses increased by $71,848 due to an increase in legal and accounting costs associated with the filing of the Company’s Form S-1 registration statement and general and administration cost relating to the increase in sales activity.


Net loss for the nine months ended September 30, 2012 was $78,395 compared to $17,026 for the same comparable period in 2011. The loss increased by $61,369 primarily due to the increase in operating expenses as stated above.


Net cash used in operating activities for the nine months ended September 30, 2012 and 2011 was $72,814 and $18,526, respectively.


Net cash provided by financing activities for the nine months ended September 30, 2012 was $54,000 due to the cash received from two notes payable to non-affiliated investor and $29,600 in related party advances. The $50,000 note payable bears interest at 5% per annum and is due and payable on April 4, 2014, and the $4,000 note payable is unsecured, bears interest at 10% and is due October 1, 2013.


As a result of the above activities, we experienced a net increase in cash of $6,786 for the nine months ended September 30, 2012.


Results of Operations for the three months ended September 30, 2012 and 2011.


For the three months ended September 30, 2012 we had revenues of $10,853 from two customers, compared with $0 revenues for the three months ended September 30, 2011.


Operating expenses for the three months ended September 30, 2012 were $35,698 as compared to $6,103 for the three months ended September 30, 2011. Operating expenses increased by $29,595 due to an increased operations including legal and accounting costs associated with the filing of the Company’s Form S-1 registration statement.


Net loss for the three months ended September 30, 2012 was $30,521 compared to $6,103 for the same comparable period in 2011. The loss increased by $24,418 primarily due to the increase in operating expenses as stated above.






11



 

Liquidity and Capital Resources


Since our inception, we have financed our cash requirements from cash generated from the sale of common stock, revenues from our business and by unsecured loans from our president and our company consultant.  Mr. Isaacs in the nine month period ending September 30, 2012 has advanced the company $600. The advances are unsecured, non-interest bearing and have no specific terms for repayment.   Our company consultant in the nine month period ending September 30, 2012 has advanced the company $29,000. These advances are also unsecured, non-interest bearing and have no specific terms for repayment.   


Our principal sources of liquidity as of September 30, 2012 consisted of $8,656 in cash. Since inception through to and including September 30, 2012, we raised $34,500 through a private placement of our common stock.


There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue with our business and our business will fail.


Off-Balance Sheet Arrangements


We have not engaged in any off-balance sheet arrangements.


Item 3.

Quantitative and Qualitative Disclosures About Market Risk


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.


Item 4:

Controls and Procedures


Evaluation of Disclosure Controls


Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our management, with participation of our Chief Executive Officer and Chief Financial Officer as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting.


As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.







12



Management’s Report on Internal Control Over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) under the Securities Exchange Act of 1934.  Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on our evaluation under the framework, management has concluded that our internal control over financial reporting was not effective as of September 30, 2012.


Certain internal control weaknesses became evident that, in the aggregate, represent material weaknesses, including:  (i) lack of segregation of incompatible duties; and (ii) insufficient Board of Directors representation.


There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.


PART II- OTHER INFORMATION


Item 1.

Legal Proceedings


We are not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.


Item 1A.    Risk Factors


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


We did not issue any securities during the quarter ended September 30, 2012.


Item 3. 

Defaults Upon Senior Securities


None.


Item 4. 

Mine Safety Disclosures


Not applicable.


Item 5.

Other Information


None.


Item 6. 

Exhibits and Report on Form 8-K


(a)

Exhibit(s)








13






Number

Exhibit Description

 

 

3.1

Articles of Incorporation (1)

 

 

3.2

Bylaws (1)

 

 

10.1

Promissory Note between the Company and Elizabeth Smith dated January 21, 2012 (2)

 

 

10.2

Description of an oral employment agreement between Joseph Isaacs and the Company (3)

 

 

31.1

Certificate of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

32.1

Certificate of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.

 

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


(1)

Filed as an exhibit to our registration statement on Form S-1 filed May 31, 2012 and incorporated herein by this reference.


(2)

Filed as an exhibit to our registration statement on Form S-1/A filed July 25, 2012 and incorporated herein by this reference.


(3)

Filed as an exhibit to our registration statement on Form S-1/A filed August 29, 2012 and incorporated herein by this reference.








14



SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



DATED:   November 13, 2012




CUMBERLAND HILLS LTD.



/s/ Joseph Isaacs
--------------------------------------------------

Joseph Isaacs,

CEO, President, Secretary/Treasurer, and Director

(Principal Executive Officer, Principal Financial Officer

and Principal Accounting Officer)