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EX-32.1 - EXHIBIT 32.1 - BUNCOMBE INCv336244_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - BUNCOMBE INCv336244_ex31-1.htm
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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, 2013

 

or

 

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: 000-54763

 

BUNCOMBE, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   45-5296776
(State or other jurisdiction of incorporation or
organization)
  (I.R.S. Employer Identification No.)
     
100 Europa Drive, Suite 455
Chapel Hill, North Carolina
  27517
(Address of principal executive offices)   (Zip Code)

 

(732) 409-1212

(Registrant’s telephone number, including area code)

 

Not applicable.

(Former Name or Former Address if Changed Since Last Report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x      No  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.

 

Large accelerated filer o   Accelerated filer         o

Non-accelerated filer  o

(Do not check if a smaller reporting company)

  Smaller reporting company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes x No o

 

As of March 12, 2013 there were 100,000 shares of Common Stock, par value $0.001 per share, outstanding.

 

 
 

 

 

BUNCOMBE, INC.

 

QUARTERLY REPORT ON FORM 10-Q

January 31, 2013

 

TABLE OF CONTENTS

 

  PAGE
   
PART 1 - FINANCIAL INFORMATION  
     
Item 1. Financial Statements (Unaudited) 4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Item 4. Controls and Procedures 15
     
PART II - OTHER INFORMATION  
     
Item 1. Legal Proceedings 15
Item 1A. Risk Factors 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 16
Item 4. Mine Safety Disclosures 16
Item 5. Other Information 16
Item 6. Exhibits 16
     
SIGNATURES 17

 

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

 

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

CERTAIN TERMS USED IN THIS REPORT

 

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Buncombe, Inc.  ”SEC” refers to the Securities and Exchange Commission.

 

 
 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

 

BUNCOMBE, INC.

(A DEVELOPMENT STAGE COMPANY)

 

CONTENTS

 

PAGE 4 CONDENSED BALANCE SHEETS AS OF JANUARY 31, 2013 (UNAUDITED) AND AS OF APRIL 30, 2012
     
PAGE 5 CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2013 AND FOR THE PERIOD APRIL 27, 2012 (INCEPTION) TO JANUARY 31, 2013 (UNAUDITED)
     
PAGE 6 CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE PERIOD FROM APRIL 27, 2012 (INCEPTION) TO JANUARY 31, 2013 (UNAUDITED)
     
PAGE 7 CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JANUARY 31, 2013 AND FOR THE PERIOD APRIL 27, 2012 (INCEPTION) TO JANUARY 31, 2013 (UNAUDITED)
     
PAGES 8-10 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

 

3
 

  

Buncombe, Inc.

(A Development Stage Company)

Condensed Balance Sheets

 

   January 31, 2013   April 30, 2012 
   (Unaudited)     
         
ASSETS          
           
Total Assets  $-   $- 
           
LIABILITIES AND STOCKHOLDERS' DEFICIENCY          
           
Current Liabilities          
Accounts Payable  $13,339   $1,500 
Loans Payable to Related Party   2,189    364 
Total Liabilities   15,528    1,864 
           
Stockholders' Deficiency          
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding   -    - 
Common stock, $0.001 par value; 100,000,000 shares authorized, 100,000 and 100,000 issued and outstanding respectively   100    100 
Additional paid-in capital   12,400    900 
Deficit accumulated during the development stage   (28,028)   (2,864)
Total Stockholders' Deficiency   (15,528)   (1,864)
           
Total Liabilities and Stockholders' Deficiency  $-   $- 

 

See Accompanying Notes to Condensed Unaudited Financial Statements

 

4
 

 

Buncombe, Inc.

(A Development Stage Company)

Condensed Statements of Operations

(Unaudited)

 

   For The Three Months Ended   For The Nine Months Ended   For the Period from April 27, 2012 
   January 31, 2013   January 31, 2013   (Inception) to January 31, 2013 
             
Operating Expenses               
Professional fees  $7,314   $13,339   $15,203 
General and administrative   2,500    11,825    12,825 
Total Operating Expenses   9,814    25,164    28,028 
                
LOSS FROM OPERATIONS BEFORE INCOME TAXES   (9,814)   (25,164)   (28,028)
                
Provision for Income Taxes   -    -    - 
                
NET LOSS  $(9,814)  $(25,164)  $(28,028)
                
Net Loss Per Share - Basic and Diluted  $(0.10)  $(0.25)  $(0.28)
                
Weighted average number of shares outstanding during the period - Basic and Diluted   100,000    100,000    100,000 

 

See Accompanying Notes to Condensed Unaudited Financial Statements

 

5
 

 

Buncombe, Inc.

(A Development Stage Company)

Condensed Statement of Changes in Stockholders' Deficiency

For the Period from April 27, 2012 (Inception) to January 31, 2013

(Unaudited)

 

                       Deficit     
           Additional   accumulated during   Total 
   Preferred Stock   Common stock   paid-in   development   Stockholders' 
   Shares   Amount   Shares   Amount   capital   stage   Deficiency 
                             
Balance, April 27, 2012   -   $-    -   $-   $-   $-   $- 
                                    
Common stock issued for services to founder ($0.01/share)   -    -    100,000    100    900    -    1,000 
                                    
Net loss for the four day period ended April 30, 2012   -    -    -    -    -    (2,864)   (2,864)
                                    
Balance, April 30, 2012   -    -    100,000    100    900    (2,864)   (1,864)
                                    
In-Kind Contribution of Services   -    -    -    -    11,500    -    11,500 
                                    
Net loss for the nine months ended January 31, 2013   -    -    -    -    -    (25,164)   (25,164)
                                    
Balance, January 31, 2013   -   $-    100,000   $100   $12,400   $(28,028)  $(15,528)

 

See Accompanying Notes to Condensed Unaudited Financial Statements

 

6
 

 

Buncombe, Inc.

(A Development Stage Company)

Condensed Statements of Cash Flows

(Unaudited)

 

   For The Nine Months   For the Period from 
   Ended   April 27, 2012 (Inception) to 
   January 31, 2013   January 31, 2013 
Cash Flows From Operating Activities:          
Net Loss  $(25,164)  $(28,028)
Adjustments to reconcile net loss to net cash used in operations          
Common stock issued for services   -    1,000 
In-kind contribution of services   11,500    11,500 
Changes in operating assets and liabilities:          
Increase in accounts payable and accrued expenses   11,839    13,339 
Net Cash Used In Operating Activities   (1,825)   (2,189)
           
Cash Flows From Financing Activities:          
Increase in loans payable - related party   1,825    2,189 
Net Cash Provided by Financing Activities   1,825    2,189 
           
Net Increase in Cash   -    - 
Cash at Beginning of Period   -    - 
           
Cash at End of Period  $-   $- 
           
Supplemental disclosure of cash flow information:          
           
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 

 

See Accompanying Notes to Condensed Unaudited Financial Statements

 

7
 

 

BUNCOMBE, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF JANUARY 31, 2013

(UNAUDITED)

  

NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) Basis of Presentation

 

The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

 

It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

Buncombe, Inc. (a development stage company) (the "Company") was incorporated under the laws of the State of Nevada on April 27, 2012. The Company was organized to provide business services and financing to emerging growth entities.

 

The Company was formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. It has been in the developmental stage since inception and has no operations to date. It will attempt to locate and negotiate with a business entity for the combination of that target company with us. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances, the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that it will be successful in locating or negotiating with any target company.

 

Activities during the development stage include developing the business plan and raising capital.

 

(B) Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

 

8
 

 

BUNCOMBE, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF JANUARY 31, 2013

(UNAUDITED)

 

The most significant estimates include the valuation of stock based compensation and deferred tax valuation allowance.

 

(C) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At January 31, 2013 and April 30, 2012, the Company had no cash equivalents.

 

(D) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share.” As of January 31, 2013, there were no common share equivalents outstanding.

 

(E) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

(F) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

(G) Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

 

9
 

 

BUNCOMBE, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF JANUARY 31, 2013

(UNAUDITED)

 

(H)Fair Value of Financial Instruments

 

The carrying amount reported in the balance sheet for accounts payable approximate fair value based on the short-term maturity of these instruments.

 

(I) Recent Accounting Pronouncements

 

In February 2013, FASB issued Accounting Standards Update 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force). This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This stipulates that (1) it will include the amount the entity agreed to pay for the arrangement between them and the other entities that are also obligated to the liability and (2) any additional amount the entity expects to pay on behalf of the other entities. The objective of this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The amendments in this update are effective for fiscal periods (and interim reporting periods within those years) beginning after December 15, 2013. This standard is not expected to have a material impact on the Company’s reported results of operations or financial position.

 

In February 2013, FASB issued Accounting standards update 2013-02, Comprehensive Income Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires an entity to provide information amount the amount reclassified out of accumulated other comprehensive income by component. The entity is also required to disclose significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting periods. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other discourses required under U.S. GAAP that provide additional detail about those amounts. The objective in this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update should be applied prospectively for reporting periods beginning after December 15, 2012. This standard is not expected to have a material impact on the Company’s reported results of operations or financial position.

 

NOTE 2STOCKHOLDERS’ DEFICIENCY

 

(A) Stock Issued for Services

 

On April 27, 2012, the Company issued 100,000 shares of common stock to its founder having a fair value of $1,000 ($0.01/share) in exchange for services provided (See Note 3).

 

(B) In-Kind Contribution of Services

 

For the nine months ended January 31, 2013, the founder of the Company contributed services having a fair value of $11,500 (See Note 3).

 

NOTE 3RELATED PARTY TRANSACTION

 

On April 27, 2012, the Company issued 100,000 shares of common stock to its founder having a fair value of $1,000 ($0.01/share) in exchange for services provided (See Note 2).

 

For the nine months ended January 31, 2013, the founder of the Company contributed services having a fair value of $11,500 (See Note 2).

 

As of January 31, 2013, the founder of the Company paid $2,189 in general and administrative expenses on behalf of the Company. This amount is recorded as related party loan payable.

 

NOTE 4GOING CONCERN

 

As reflected in the accompanying financial statements, the Company is in the development stage with limited operations. The Company has a net loss since inception of $28,028. The Company has a negative working capital and stockholders’ deficiency of $15,528 at January 31, 2013. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through stockholder loans and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional stockholder loans and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

 

10
 

 

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

 

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

 

Overview

 

The Company was incorporated in the State of Nevada on April 27, 2012. The Company was formed as a vehicle to pursue a business combination and has not yet made any efforts to identify possible business combinations. As a result, the Company has not conducted negotiations or entered into a letter of intent concerning any target businesses. The business purpose of the Company is to seek the acquisition of or merger with an existing company. The Company selected April 30 as its fiscal year end.

 

The Company, based on proposed business activities, is a “blank check” company. The SEC defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

 

The Company was organized as a vehicle to investigate, and if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

11
 

 

The analysis of new business opportunities will be undertaken by or under the supervision of Peter Coker, the sole officer and director of the Registrant. As of this date, the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. The Registrant has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Registrant will consider the following kinds of factors:

 

  a. Potential for growth, indicated by new technology, anticipated market expansion or new products;

 

  b. Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;

 

  c. Strength and diversity of management, either in place or scheduled for recruitment;

 

  d. Capital requirements and anticipated availability of required funds, to be provided by the Registrant or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;

 

  e. The cost of participation by the Registrant as compared to the perceived tangible and intangible values and potentials;

 

  f. The extent to which the business opportunity can be advanced;

 

  g. The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and

 

  h. Other relevant factors.

 

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Registrant's limited capital available for investigation, the Registrant may not discover or adequately evaluate adverse facts about the opportunity to be acquired.

 

Form of Acquisition

 

The manner in which the Registrant participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Registrant and the promoters of the opportunity, and the relative negotiating strength of the Registrant and such promoters.  We do not intend to solicit prospective investors for any transaction. The Company has not commenced our efforts to locate a merger candidate.  We will rely on word of mouth to locate potential merger candidates.

 

It is likely that the Registrant will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Registrant. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”) depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Code, all prior stockholders of the Registrant would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders of the Registrant may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Registrant prior to such reorganization.

 

The stockholders of the Registrant before the consummation of a reorganization transaction will likely not have control of a majority of the voting securities of the Registrant following such a transaction. As part of such a transaction, all, or a majority of, the Registrant's directors may resign and one or more new directors may be appointed without any vote by stockholders.

 

12
 

 

In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Registrant, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval. Regardless the number of shareholders, we intend to provide our shareholders with complete disclosure concerning a possible target entity and its business, including audited financial statements (if available to us) prior to any merger or acquisition. If the business combination is between a shell company and a private operating company whereby the registrant ceases to be a shell company, a Form 8-K that includes Items 2.01, 5.01, 5.06 and 9.01 will be filed no later than four business days after the consummation of the acquisition and that the Form 8-K will also include for the private operating company all content required by a Form 10 initial registration statement.

 

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Registrant of the related costs incurred.

 

We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

 

We presently have no employees apart from our management. Our officer and director is engaged in outside business activities and anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.

 

Results of Operations for the Quarterly Period Ended January 31, 2013

 

Revenues.  The Company had no revenues for the three and nine month period ended January 31, 2013, and had no revenues from April 27, 2012 (inception) to January 31, 2013.

 

Operating Expenses. Operating expenses for the three and nine month periods ended January 31, 2013 totaled $9,814 and 25,164, respectively, resulting in net loss of $9,814 and $25,164, respectively. Our operating expenses for the three and nine month periods ended January 31, 2013 were comprised of $2,500 and $11,825, respectively, of general and administrative expenses and$7,314 and $13,339 of professional fees.

 

From April 27, 2012 (inception) to January 31, 2013, the Company’s operating expenses totaled $28,028, resulting in a net loss of $28,028. Our operating expenses from April 27, 2012 (inception) to January 31, 2013 were comprised of $12,825 of general and administrative expenses and $15,203 of professional fees.

 

 

13
 

 

Liquidity and Capital Resources

 

Our cash and cash equivalents were $0 at January 31, 2013. We will need additional capital to continue operations for the next twelve months. We intend to rely upon the issuance of common stock and loans from Peter Coker, our sole officer and director, to fund administrative expenses pending a business combination. However, Mr. Coker is under no obligation to provide such funding.

 

Net Cash Used in Operating Activities.  Net cash of $1,825 was used for operating activities in the nine month period ended January 31, 2013. From April 27, 2012 (inception) to January 31, 2013, net cash of $2,189 was used for operating activities.

 

Net Cash Provided By Financing Activities. Net cash of $1,825 was provided from financing activities in the nine month period ended January 31, 2013. From April 27, 2012 (inception) to January 31, 2013, net cash of $2,189 was generated from financing activities. These funds consisted of general and administrative expenses paid by Peter Coker on behalf of the Company. This amount is recorded as related party loan payable.

 

Going Concern

 

The Company is in the development stage with limited operations, and has a net loss since inception of $28,028. The Company has a negative working capital and stockholders’ deficiency of $15,528 at January 31, 2013. This raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through stockholder loans and implement its business plan.

 

Management believes that actions presently being taken to obtain additional stockholder loans and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

Critical Accounting Policies

 

Development Stage

 

The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.

 

Risks and Uncertainties

 

The Company intends to operate in an industry that is subject to rapid change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks associated with a development stage company, including the potential risk of business failure.

 

Use of Estimates

 

The preparation of unaudited interim financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the unaudited interim financial statements and accompanying notes. Such estimates and assumptions impact, among others, the fair value of share based payments.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

 

Cash

 

The Company had no cash or cash equivalents at January 31, 2013.

 

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Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.

 

Off Balance Sheet Arrangements

 

None.

 

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

 

Buncombe, Inc. is a smaller reporting company and is therefore not required to provide this information.

 

Item 4.  Controls and Procedures.

 

Disclosure Controls and Procedures.

 

We carried out an evaluation, under the supervision and with the participation of our management, including 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 (the ‘‘Exchange Act’’). 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 disclosure. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective, as of January 31, 2013, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

 

Changes in Internal Control over Financial Reporting.

 

There were no changes in our system of internal controls over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

 

Item 1A.  Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

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

 

None.

 

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Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures.

 

Not Applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits.

 

(a)  Exhibits

 

Exhibit
Number
  Description
31.1   Certification 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*   Certification 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.INS **   XBRL Instance Document
101.SCH **   XBRL Taxonomy Schema
101.CAL **   XBRL Taxonomy Calculation Linkbase
101.DEF **   XBRL Taxonomy Definition Linkbase
101.LAB **   XBRL Taxonomy Label Linkbase
101.PRE **   XBRL Taxonomy Presentation Linkbase

 

* In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.

 

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BUNCOMBE, INC.
     
Date:  March 15, 2013 By: /s/ Peter Coker
    Peter Coker, President
    Chief Executive Officer
    (Duly Authorized, Principal Executive Officer and Principal Financial Officer) and Director

 

 

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