SEC Filing Summary: Berry Only Inc. (Form 10-K)
Business Context and Reporting Period
This filing covers the fiscal year ended June 30, 2011, for Berry Only Inc., a Nevada corporation incorporated in June 2009. The company is classified as a development stage company and a shell company. It previously attempted to operate as an exclusive distributor for "Wireless Wipes" in Canada but failed to meet minimum sales requirements, causing the agreement to lapse. The company currently has no active revenue-generating operations and is seeking a business combination or merger with an established entity to pursue its plan of operation.
Key Financial Metrics
| Metric | Year Ended June 30, 2011 | Year Ended June 30, 2010 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating Expenses | $33,136 | $5,582 |
| Net Loss | $(33,136) | $(5,582) |
| Cash and Cash Equivalents | $5,695 | $44,561 |
| Working Capital | $10,695 | $44,561 |
| Total Assets | $10,695 | $44,561 |
| Accumulated Deficit (Since Inception) | $(38,718) | $(5,582) |
| Shares Outstanding | 5,950,000 | 5,950,000 |
Debt and Liquidity: The company reported no current liabilities as of June 30, 2011. Cash used in operating activities was $33,136 for the year. There were no cash flows from financing activities in 2011, compared to $49,500 raised in 2010.
Material Changes vs. Prior Period
- Expense Increase: Operating expenses increased by approximately 494% year-over-year, rising from $5,582 to $33,136. This was driven primarily by a $21,284 increase in "Other Selling, General & Administrative" expenses (attributed to website development and marketing) and a $6,288 increase in professional fees.
- Cash Depletion: Cash and cash equivalents decreased by 87% (from $44,561 to $5,695) due to operating losses and the absence of new financing in the current period.
- Business Status: The exclusive dealership agreement with Wireless Wipes lapsed during the period due to failure to meet sales targets. The company shifted focus entirely to seeking a reverse merger or business combination.
Outlook, Risks, and Management Commentary
Going Concern: The company's independent auditors have issued a going concern opinion, stating there is substantial doubt about the company's ability to continue operations. The company has accumulated losses of $38,718 since inception and lacks sufficient working capital to fund its plan of operation for the next 12 months without additional financing.
Plan of Operation: Management anticipates requiring approximately $20,000 over the next 12 months for operating expenses and legal/accounting fees. The company intends to raise these funds through private placements of common stock, though no arrangements are currently in place.
Risks:
- Speculative Nature: The stock is classified as a "penny stock" with no established trading market (no trades since February 27, 2011).
- Financing Risk: Failure to secure additional equity financing will likely result in business failure.
- Management Change: Upon a potential business combination, current management may be replaced, and existing shareholders may face significant dilution.
Investor Verification Checklist
- Capital Adequacy: Verify if the company has secured the estimated $20,000 required for the next 12 months of operations, given the current cash balance of only $5,695.
- Business Combination Status: Confirm if any definitive agreements for a merger or acquisition have been signed, as the company currently has no revenue source.
- Stock Liquidity: Note that the stock has not traded on the OTC Bulletin Board since February 2011, presenting significant liquidity risk.
- Related Party Transactions: Review the role of David Guest (sole officer/director), who owns 50.42% of shares and provides office space free of charge, and has agreed to provide minimal loans for reporting needs.
- Audit Opinion: Acknowledge the "going concern" qualification in the financial statements, indicating high risk of insolvency without new capital.