Item 1.
Description of Business
(a) Business Development.
Barossa Coffee Company, Inc. is a small start up company that was incorporated in March 2005. In July, 2005, the Company filed a registration statement on Form SB-2 with the U.S. Securities & Exchange Commission under the Securities Act of 1933, to register an offering, on a "best efforts minimum/maximum" basis, of up to 400,000 shares of $.001 par value common stock, at a price of $0.25 per share. The registration statement was declared effective September 20, 2005. The Company sold 298,000 shares of common stock pursuant to the offering. The offering closed November 30, 2005, and raised gross proceeds of $74,500. This increased the total issued and outstanding common stock to 2,098,000 shares as of June 30, 2006. During the fiscal year ended June 30, 2007, 200,000 shares were cancelled and 160,000 shares were issued. On November 10, 2008, 126,000 shares of common stock were issued for consideration of $12,600 cash. On December 31, 2009 the Company sold 75,050 shares of its restricted common stock at $.10 per share, and again on March 18, 2010, another 75,050 shares. On November 1, 2010 Barossa sold 2,400,000 shares of its common stock for $15,000 or $.00625 per share, bringing the current total number of outstanding shares to 4,734,100.
(b) Business of Company.
Barossa was formed to open and operate, through a wholly owned subsidiary, Alchemy Coffee Company, Inc., a retail, specialty coffee outlet. The Company opened a retail coffee outlet featuring specialty coffees in February, 2006 and utilized the experience of management in the coffee/café industry to specialize in the sale of the highest quality, fresh locally- roasted coffee beans and espresso related beverages; as well as organic food and baked goods, teas, juices, and specific health foods and beverages.
However, even though the Company generated revenues from operations of $60,691 for the fiscal year ended June 30, 2006, operating losses forced it to seek additional funding, which it borrowed from shareholders. Because of the continuing cash needs of Alchemy which could not be met by the Corporation, management and principal shareholders negotiated and reached a Stock Exchange Agreement on October 11, 2006, between the Corporation and Jason Briggs, manager of the coffee shop, wherein Briggs received all of the issued and outstanding common stock of Alchemy Coffee Company, Inc. in exchange for all 200,000 shares of the Corporation’s common stock beneficially owned by Briggs, which were delivered to the Corporation and cancelled. The Corporation determined that since the inception of Alchemy as a wholly-owned subsidiary of the Corporation, $55,715 has been advanced to Alchemy and not repaid. The Corporation determined that the value of Alchemy was substantially less than the amount invested and determined that the 200,000 shares it received as consideration for Alchemy had at least as great a value as Alchemy and that this was the best value that could be received by the Corporation for Alchemy and that this transaction was in the best interests of the Corporation.
On August 30, 2012, the Registrant entered into an agreement to acquire all of the outstanding common stock of eCareer, Inc. (ECI), a Florida corporation, in exchange for 4,260,690 shares of the Registrant's common stock which shares will represent 90% of the Registrant's common stock upon completion of the transaction (Closing). In addition, ECI will pay $245,000 for the Registrant's common stock. Thus, at Closing ECI will become a wholly-owned or controlled subsidiary of the Registrant, however, the Registrant will be a holding company and all business operations will be conducted through ECI.
The current sole officer and director of the Registrant will resign at Closing and persons designated by ECI will be appointed as management of the Registrant and the Registrant will change its office location to that currently maintained by ECI. At Closing Registrant will change its corporate name to ECI Holdings, Inc.
The Agreement also provides that the Registrant will redeem 4,260,690 of its currently outstanding shares of common stock from its 3 principal stockholders for $215,000, all of which funds will come from the monies paid by ECI for the Registrant's common stock.
$20,000 of the $245,000 was paid by ECI upon execution of the Agreement on August 30, 2012, and 4 additional non-refundable installments of $10,000 each are to be paid by ECI through December 15, 2012. The Agreement provides that the Closing must take place on or before December 31, 2012.
No assurance can be given that the transaction will be completed. Furthermore, the Closing is contingent upon ECI being able to raise the funds to pay the full $245,000 and to complete an audit of its financial statements by December 31, 2012. Management of the Registrant is unable to conclude that it is more likely than not that the transaction will be completed.
The Registrant is a shell corporation as defined by the SEC. ECI is a start-up, development stage company that has not yet commenced revenue producing operations and no assurance can be offered that it will ever be able to generate revenues or be successful in its proposed endeavors.
ECI was formerly known as eCareer Connections, Inc., formed in October 2009. Its stated goal is to provide a profession-specific, interactive “branded” online environment for organizations, job seekers and passive employment candidates in order to improve and expand its “Talent Acquisition System”. This is intended to combine a career-specific content-rich online community with a career-specific and branded professional group and social networking environment.
These profession-specific verticals are intended to be the core of ECI's Talent Acquisition System. Each vertical represents a limited talent sphere combining online professional/social interaction and occupation-specific career content.
Information about education, industry events, industry trends, industry news and other areas related to the specific profession are provided in each industry vertical. Each vertical becomes a job board, personalized career center and professional and social network, fully integrated through a website and connected to branded professional and well-known general social networks on, as well as within, narrowly specialized networks on and other online communities.
Employees
Effective August 20, 2012, Adam Gatto resigned as the President, Secretary/Treasurer and as the sole director of the Corporation. The resignation was due to other pressing time commitments of Mr. Gatto. Also, effective August 20, 2012, Thomas G. Kimble was appointed to serve as President, Secretary/Treasurer, and as the sole director of the Corporation by written consent of the shareholders of the Corporation holding in excess of a majority of the outstanding shares of common stock of the Corporation. Mr. Kimble is the largest shareholder of the Corporation, owning 35.14% of the outstanding shares.
Mr. Kimble, age 66, has been a controlling shareholder of the Corporation since its inception. Mr. Kimble retired in 2011 as a securities attorney after practicing law for 38 years in private practice. He will serve as the sole officer and director of the Corporation until a successor is appointed.
Management of the Company expects to use consultants, attorneys, and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating businesses. The need for employees and their availability will be addressed in connection with a decision whether or not to acquire or participate in a specific business industry.
Item 2.
Item 2.
Description of Property.
We have no office facilities. Since its inception, the Company has been provided a mailing address by a majority shareholder of the Company. The Company never has paid or been assessed any fees for this service .
Item 3.
Item 3.
Legal Proceedings.
The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no action has been threatened by or against the Company.
Item 4.
Item 4.
Mine Safety Disclosure.
N/A
PART II
Item 5.
Item 5.
Market for Common Equity and Related Stockholder Matters.
(a) Market information.
In August, 2006, the Company's common stock was approved for quotation in the NASD's Bulletin Board system under the symbol "BSSA". Although quotations for the Company's common stock can appear on the OTC Bulletin Board, there is no established trading market for the common stock. Transactions in the common stock can only be described as sporadic. Consequently, the Company is of the opinion that any published prices cannot be attributed to a liquid and active trading market and, therefore, is not indicative of any meaningful market value. No high and low bid price quotations for any calendar quarter during the last two fiscal years were available. Any such quotations would reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
On November 1, 2010 Barossa sold 2,400,000 shares of its common stock for $15,000 or $.00625 per share, bringing the current total number of outstanding shares to 4,734,100.
On August 30, 2012, the Registrant entered into an agreement to acquire all of the outstanding common stock of eCareer, Inc. (ECI), a Florida corporation, in exchange for 4,260,690 shares of the Registrant's common stock which shares will represent 90% of the Registrant's common stock upon completion of the transaction (Closing). In addition, ECI will pay $245,000 for the Registrant's common stock. Thus, at Closing ECI will become a wholly-owned or controlled subsidiary of the Registrant, however, the Registrant will be a holding company and all business operations will be conducted through ECI. These stock issuances are considered exempt from Securities Act registration requirements under section 4(2), as isolated nonpublic sales to accredited investors.
(b) During the period covered by this report (the fiscal year ended June 30, 2012), there were no securities that the issuer sold by registering the securities under the Securities Act.
(c) During the period covered by this report, there was no repurchase made of equity securities registered pursuant to section 12 of the Exchange Act. The issuer's securities are not registered pursuant to section 12 of the Exchange Act.
Item 6.
Item 6.
Selected Financial Data.
A registrant that qualifies as a smaller reporting company is not required to provide the information required by this Item.
Item 7.
Item 7.
Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
The Company does not expect to generate any meaningful revenue or incur operating expenses, except for administrative, legal, professional, accounting and auditing costs associated with the filing requirements of a public reporting company, unless and until it acquires an interest in an operating company. The Company may not have sufficient cash to meet its operational needs for the next twelve months. Management's plan of operation for the next twelve months is to attempt to raise additional capital through loans from related parties, debt financing, equity financing or a combination of financing options. Currently, there are no understandings, commitments or agreements for such an infusion of capital and no assurances to that effect. Unless the Company can obtain additional financing, its ability to continue as a going concern during the next twelve-month period is doubtful. The Company's need for capital may change dramatically if and during that period, it acquires an interest in a business opportunity.
The Company's current operating plan is to (i) handle the administrative and reporting requirements of a public company, and (ii) search for potential businesses, products, technologies and companies for acquisition. At present, the Company has no understandings, commitments or agreements with respect to the acquisition of any business venture other than the ECI proposed acquisition referred to previously, and there is no assurance when or that the Company will identify any other business venture suitable for acquisition in the future. Further, there is no assurance the Company will be successful in consummating ECI, or any other acquisition on favorable terms or that it will be able to profitably manage ECI or any other business venture it acquires.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since its inception, and has not yet been successful in establishing profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern.
In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans and/or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Item 7A.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
The Company has no market risk sensitive instruments entered into for trading or any other purpose.
Item 8.
Item 8.
Financial Statements.
See attached Financial Statements and Schedules.
Item 9.
Item 9.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles or practices or financial statement disclosure.
Item 9A.
Item 9A.
Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our President, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
(b) 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) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes using accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Our management, with the participation of the President, evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on this evaluation, our management, with the participation of the President, concluded that, as of June 30, 2012, our internal control over financial reporting was effective.
An unavoidable weakness in the Company’s internal controls is that the principal executive officer and principal financial officer are the same individual, which does not allow for segregation of duties. Since the Company is a shell company, management does not feel that this has a material effect on the accuracy and completeness of our financial reporting and disclosure included in this annual report.
(c) Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B.
Item 9B.
Other Information.
There were no reports on Form 8-K filed during the last quarter of the fiscal year ended June 30, 2012, nor any information required to be disclosed in a report on Form 8-K, but not reported, during the fourth quarter of the year covered by this Form 10-K.
PART III
Item 10.
Item 10.
Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
(a) Identify Directors and Executive Officers.
The following table shows directors, executive officers and other significant employees, their ages, and all offices and positions with Barossa. Each director is elected for a period of one year and serves until his successor is duly elected by the stockholders and qualifies. There are no other arrangements or understandings regarding the length of time a director is to serve in that capacity. The board of directors serves as the audit committee. None are audit committee financial experts. Officers and other employees serve at the will of the board of directors.
Certain biographical information with respect to the officer is set forth below.
Effective August 20, 2012, Adam Gatto resigned as the President, Secretary/Treasurer and as the sole director of the Corporation. The resignation was due to other pressing time commitments of Mr. Gatto. Also, effective August 20, 2012, Thomas G. Kimble was appointed to serve as President, Secretary/Treasurer, and as the sole director of the Corporation by written consent of the shareholders of the Corporation holding in excess of a majority of the outstanding shares of common stock of the Corporation. Mr. Kimble is the largest shareholder of the Corporation, owning 35.14% of the outstanding shares.
Mr. Kimble, age 66, has been a controlling shareholder of the Corporation since its inception. Mr. Kimble retired in 2011 as a securities attorney after practicing law for 38 years in private practice. He will serve as the sole officer and director of the Corporation until a successor is appointed.
The director holds no directorships in any other companies subject to the reporting requirements of the Securities Exchange Act of 1934.
(b) Identify Significant Employees.
None other than the person previously identified.
(c) Family Relationships. None
(d) Involvement in Certain Legal Proceedings.
Except as described herein, no officer or director of the Company; 1) has had any petition filed, within the past five years, in Federal Bankruptcy or state insolvency proceedings on behalf of any entity of which such person was an officer or general partner within two years of filing; or 2) has been convicted in a criminal proceeding within the past five years or is currently a named subject of a pending criminal proceeding; or 3) has been the subject, within the past five years, of any order, judgment, decree or finding (not subsequently reversed, suspended or vacated) of any court or regulatory authority involving violation of securities or commodities laws, or barring, suspending, enjoining or limiting any activity relating to securities, commodities or other business practice.
(e) Audit committee financial expert. The issuer does not have an audit committee financial expert serving on its audit committee, due to lack of funds.
Compliance with Section 16(a) of the Exchange Act. Section 16(a) is inapplicable.
Code of Ethics. The issuer has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. For purposes of this Item, the term code of ethics means written standards that are reasonably designed to deter wrongdoing and to promote: Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; Full, fair, accurate, timely, and understandable disclosure in reports and documents that the issuer files with, or submits to, the Commission and in other public communications made by the issuer; Compliance with applicable governmental laws, rules and regulations; The prompt internal reporting of violations of the code to the board of directors or another appropriate person or persons; and Accountability for adherence to the code. The issuer hereby undertakes to provide to any person without charge, upon request, a copy of such code of ethics. Such request may be made in writing to the board of directors at the address of the issuer.
Item 11.
Item 11.
Executive Compensation.
The following table summarizes executive compensation paid or accrued for the Chief Executive Officer and other officers who received any compensation during the past three fiscal years.
SUMMARY COMPENSATION TABLE
Compensation of Directors None
Employment Contracts, Termination of Employment, Change-in-Control Arrangements
The Company has not entered into any contracts or arrangements with any named executive officer which would provide such individual with a form of compensation resulting from such individual's resignation, retirement or any other termination of such executive officer's employment with the Company or its subsidiary, or from a change-in-control of the Company or a change in the named executive officer's responsibilities following a change-in-control.
Item 12.
Item 12.
Security Ownership of Certain Beneficial Owners and Management.
The following table contains stock ownership information about officers, directors and other stockholders known to be beneficial owners of more than 5% of the registrant’s stock. A beneficial owner of stock is any person who has or shares the power to decide how to vote or whether to dispose of the stock.
(1) Owned of record by Devonshire Partners, a limited liability company solely owned by Mr. Kimble.
The foregoing amounts include all shares these persons are deemed to beneficially own regardless of the form of ownership.
Item 13.
Item 13.
Certain Relationships and Related Transactions.
The Company has entered into certain transactions with officers, directors or affiliates of the Company which include the following:
Since its inception, the Company has been provided a mailing address by a majority shareholder of the Company. The Company never has paid or been assessed any fees for this service .
Except as disclosed in this item, in notes to the financial statements or elsewhere in this report, the Company is not aware of any indebtedness or other transaction in which the amount involved exceeds $120,000 between the Company and any officer, director, nominee for director, or 5% or greater beneficial owner of the Company or an immediate family member of such person; nor any relationship in which a director or nominee for director of the Company was also an officer, director, nominee for director, greater than 10% equity owner, partner, or member of any firm or other entity which received from or paid the Company, for property or services, amounts exceeding 5% of the gross annual revenues or total assets of the Company or such other firm or entity.
Item 14.
Item 14.
Principal Accountant Fees and Services.
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR 249.308b) for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was $8,267 for the fiscal year ended June 30, 2011 , and $9,923 for the fiscal year ended June 30, 2012 .
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the Company’s financial statements was $-0- for the fiscal year ended June 30, 2011, and $ -0- for the fiscal year ended June 30, 2012.
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was $ 300 for the fiscal year ended June 30, 2011, and $ -0- for the fiscal year ended June 30, 2012.
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above was $ -0- for the fiscal year ended June 30, 2011, and $ -0- for the fiscal year ended June 30, 2012
(5) Pre-approval Policies and Procedures
Before the accountant is engaged by the issuer to render audit or non-audit services, the engagement is approved by the company's board of directors acting as the audit committee.
Item 15.
Item 15.
Exhibits
Exhibits to this report are all documents previously filed which are incorporated herein as exhibits to this report by reference to registration statements and other reports previously filed by the Company pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.
Exhibits required by Item 601 of Regulation S-K.
Exhibit Index - Exhibits not previously filed that are applicable to the period covered by this report and required by Item 601 of Regulation S-K.
* The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Barossa Coffee Company, Inc.
By: /s/ Thomas G. Kimble
Date: September 27, 2012
Thomas G. Kimble , President
Chief Executive Officer and
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and the dates indicated.
By: /s/ Thomas G. Kimble
Date: September 27, 2012
Thomas G. Kimble , President
Chief Executive Officer and
Chief Financial Officer
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Barossa Coffee Company, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheets of Barossa Coffee Company, Inc. [a development stage company] as of June 30, 2012 and 2011 and the related statements of operations, stockholders' equity (deficit) and cash flows for each of the years in the two-year period ended June 30, 2012 and for the period from inception on March 24, 2005 through June 30, 2012. Barossa Coffee Company, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Barossa Coffee Company, Inc. as of June 30, 2012 and 2011 and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2012 and for the period from inception on March 24, 2005 through June 30, 2012, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming Barossa Coffee Company, Inc. will continue as a going concern. As discussed in Note 6 to the financial statements, Barossa Coffee Company, Inc. has incurred losses since its inception and has not yet established profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management’s plans in regards to these matters are also described in Note 6. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
September 27, 2012
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these unaudited condensed financial statements.
The accompanying notes are an integral part of these unaudited condensed financial statements.
The accompanying notes are an integral part of these unaudited condensed financial statements.
The accompanying notes are an integral part of these unaudited condensed financial statements.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Barossa Coffee Company, Inc. (“Parent”) was organized under the laws of the State of Nevada on March 24, 2005.
Alchemy Coffee Company, Inc. (“Subsidiary”) was organized under the laws of the State of Utah on April 22, 2005 as a wholly-owned subsidiary of Parent. In October 2006 the Parent and Subsidiary entered into an agreement to terminate their relationship.
Barossa Coffee Company, Inc. and Subsidiary (the “Company”) previously sold coffee beans and espresso related beverages. The Company has not yet generated significant revenues from their planned principal operations and is considered a development stage company as defined in ASC Topic No. 915. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.
Consolidation - The financial statements include the operations of Parent and its wholly-owned Subsidiary through September 30, 2006. The operations of subsidiary were discontinued effective September 30, 2006. All significant inter-company transactions have been eliminated in consolidation.
Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.
Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented, in accordance with ASC Topic No. 260, “Earnings Per Share” [See Note 7].
Accounting Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimated.
Income Taxes - The Company accounts for income taxes in accordance with ASC Topic No. 740, “Accounting for Income Taxes” [See Note 4].
Fair Value of Financial Instruments - The Company estimates that the fair value of all financial instruments does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets because of the short-term maturity of these financial instruments.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(Continued)
Recently Enacted Accounting Standards -The FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
Accounting Standards Update (“ASU”) ASU’s No. 2009-2 through ASU No. 2012-03 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
NOTE 2 - DISCONTINUED OPERATIONS
During October 2006, the Company entered into a Stock Exchange Agreement with a shareholder who was an officer and director of the Company, wherein Parent received back 200,000 shares of common stock for cancellation from the shareholder in exchange for all the issued and outstanding common stock of the Company’s subsidiary, Alchemy Coffee. As a result of the exchange agreement, the shareholder resigned as an officer and director of the Company and the Company no longer has any ongoing business operations.
The following is a summary of the results of operations of the Company’s discontinued business:
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK
Preferred Stock - The Company has authorized 1,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding at June 30, 2012.
Common Stock - The Company has authorized 50,000,000 shares of common stock with a $.001 par value. 4,734,100 shares are issued and outstanding at June 30, 2012.
In March 2005, in connection with its organization, the Company issued 1,800,000 shares of its previously authorized but unissued common stock. Total proceeds of the sale amounted to $18,000 (or $.01 per share).
In November 2005, the Company completed a public offering of 298,000 shares of common stock for gross proceeds of $74,500 (or $.25 per share). Offering costs of $13,348 were offset against the proceeds of the offering.
The Company entered into an agreement on October 11, 2006 wherein it purchased back 200,000 shares of its common stock in exchange for all the issued and outstanding common stock of its former subsidiary, Alchemy Coffee Company. The transaction was recorded using the retirement method resulting in a $44,428 direct charge to retained earnings.
On March 8, 2007 the Company sold 160,000 shares of its restricted common stock at $.15 per share of which $160 was credited to common stock and $23,840 was credited to capital in excess of par value. The stock issuance was exempt from any state or federal securities registration requirements as an isolated nonpublic sale to accredited investors.
On November 10, 2008 the Company sold 126,000 shares of its restricted common stock at $.10 per share of which $126 was credited to common stock and $12,474 was credited to capital in excess of par value. The stock issuance was exempt from any state or federal securities registration requirements as an isolated nonpublic sale to accredited investors.
On December 31, 2009 the Company sold 75,050 shares of its restricted common stock at $.10 per share of which $75 was credited to common stock and $7,430 was credited to capital in excess of par value. The stock issuance was exempt from any state or federal securities registration requirements as an isolated nonpublic sale to accredited investors.
On March 18, 2010 the Company sold 75,050 shares of its restricted common stock at $.10 per share of which $75 was credited to common stock and $7,430 was credited to capital in excess of par value. The stock issuance was exempt from any state or federal securities registration requirements as an isolated nonpublic sale to accredited investors.
On November 1, 2010 the Company sold 2,400,000 shares of its restricted common stock at $.00625 per share of which $2,400 was credited to common stock and $12,600 was credited to capital in excess of par value. The stock issuance was exempt from any state or federal securities registration requirements as an isolated nonpublic sale to accredited investors. The sum of $7,500 was paid on November 1, 2010 by the purchasers and the balance of $7,500 was paid on May 1, 2011.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK - CONTINUED
Common Stock - Continued
On June 30, 2011 a shareholder of the company contributed a loan payable from the company with a balance due of $4,240 in principal and $1,531 in accrued interest for a total of $5,771 to capital in excess of par value of the Company.
On December 21, 2011 a shareholder of the Company contributed $5,625 to capital in excess of par value of the Company.
On January 13, 2012 shareholders of the Company contributed $9,375 to capital in excess of par value of the Company.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with ASC Topic No. 740, “Accounting for Income Taxes”. ASC Topic No. 740 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. At June 30, 2012, the Company has available unused operating loss carryforwards of approximately $111,700 which may be applied against future taxable income and which expires in various years through 2032. All tax years starting with 2009 are open for examination.
The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The net deferred tax assets are approximately $16,800 and $13,900 as of June 30, 2012 and 2011, respectively, with an offsetting valuation allowance of the same amount, resulting in a change in the valuation allowance of approximately $2,900 and $1,900 during the years ended June 30, 2012 and 2011, respectively.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to its officers and directors, as the services provided by them to date have only been nominal.
Loans Payable - The Company’s loan payable due to a shareholder which had an interest rate of 6% and a balance due of $4,240 and accrued interest of $1,531 was contributed to the Company’s capital in excess of par value at June 30, 2011.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since inception and has not yet been successful at establishing profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 7 - LOSS PER SHARE
The following data show the amounts used in computing loss per share:
Dilutive loss per share was not presented, as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.
NOTE 8 - SUBSEQUENT EVENTS
On August 30, 2012, the Company entered into an agreement to acquire all of the outstanding common stock of eCareer, Inc. (ECI), a Florida corporation, in exchange for 4,260,690 shares of the Company’s common stock which shares will represent 90% of the Company’s common stock upon completion of the transaction (Closing). In addition, ECI will pay $245,000 for the Company’s common stock. Thus, at Closing ECI will become a wholly-owned or controlled subsidiary of the Company, however, the Registrant will be a holding company and all business operations will be conducted through ECI.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - SUBSEQUENT EVENTS - CONTINUED
The current sole officer and director of the Company will resign at Closing and persons designated by ECI will be appointed as management of the Company and the Compay will change its office location to that currently maintained by ECI. At Closing the Company will change its corporate name to ECI Holdings, Inc.
The Agreement also provides that the Company will redeem 4,260,690 of its currently outstanding shares of common stock from its 3 principal stockholders for $245,000, all of which funds will come from the monies paid by ECI for the Company’s common stock.
Payment provisions called for a $20,000 to be paid by ECI upon execution of the Agreement on August 30, 2012, and 4 additional non-refundable installments of $10,000 each are to be paid by ECI through December 15, 2012. The Agreement provides that the Closing must take place on or before December 31, 2012 where the remaining $185,00 will be due.
No assurance can be given that the transaction will be completed. Furthermore, the Closing is contingent upon ECI being able to raise the funds to pay the full $245,000 and to complete an audit of its financial statements by December 31, 2012. Management of the Company is unable to conclude that it is more likely than not that the transaction will be completed.
The Company is a shell corporation as defined by the SEC. ECI is a start-up, development stage company that has not yet commenced revenue producing operations and no assurance can be offered that it will ever be able to generate revenues or be successful in its proposed endeavors.
ECI was formerly known as eCareer Connections, Inc., formed in October 2009. Its stated goal is to provide a profession-specific, interactive “branded” online environment for organizations, job seekers and passive employment candidates in order to improve and expand its “Talent Acquisition System”. This is intended to combine a career-specific content-rich online community with a career-specific and branded professional group and social networking environment.
These profession-specific verticals are intended to be the core of ECI's Talent Acquisition System. Each vertical represents a limited talent sphere combining online professional/social interaction and occupation-specific career content.
Information about education, industry events, industry trends, industry news and other areas related to the specific profession are provided in each industry vertical. Each vertical becomes a job board, personalized career center and professional and social network, fully integrated through a website and connected to branded professional and well-known general social networks on, as well as within, narrowly specialized networks on and other online communities.
BAROSSA COFFEE COMPANY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and found there were no other events to report.