10-Q 1 bmi10qs.txt BORDER MANAGEMENT, INC. SEPTEMBER 30, 2011 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 10-Q [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011 [] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from to ----------- ----------- Commission file number: 333-139129 ----------------- BORDER MANAGEMENT, INC. (Exact name of small business issuer as specified in its charter) Nevada 20-5088293 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8618 Fall Road 20854 Potomac, Maryland (Address of principal (Zip Code) executive offices) ------------------ Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class ------------------- Common stock, par value $0.001 per share Preferred stock, par value $0.001 per share Issuer's telephone number, including area code: (703) 623-3851 (Former name or former address, if changed since last report)Not Applicable Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] No ---------------------------------------------------------------------- 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 [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not Smaller reporting company [X] check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as Defined in Rule 12b-2 of the Exchange Act). [x] Yes [ ] No As of February 29, 2012 the Issuer had 50,000,000 shares of common stock issued and outstanding. ----------------------------------------------------------------------- BORDER MANAGEMENT, INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011 TABLE OF CONTENTS PART I Item 1. Financial Statements Balance Sheets as of Sept 30, 2011 and December 31, 2010. . . . . . . F-1 Statements of Operations for the Three Months Ended Sept 30, 2011 and Sept 30, 2010 and from Inception (June 7,2006) to Sept 30, 2011 . F-2 Statement of Stockholders' Equity . . . . . . . . . . . . . . . . . . F-3 Statements of Cash Flows for the Three Months Ended Sept 30, 2011 and Sept 30, 2010 and from Inception (June 7, 2006) to Sept 30, 2011. . . F-4 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . F-5 Item 2. Management's Discussion and Analysis or Plan of Operation . . . 6 Item 3. Quantitative and Qualitative Disclosures about Market Risk. . .10 Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . . .10 PART II. OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .11 Item 2. Unregistered Sale of Equity Securities and Use of Proceeds. . .11 Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . .11 Item 4. Submission of Matters to a Vote of Security Holders . . . . . .11 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . .11 Item 6. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . .11 BORDER MANAGEMENT, INC. (A Development Stage Company) FINANCIAL STATEMENTS SEPTEMBER 30, 2011

APPROVED BY THE DIRECTORS: /s/Qi Sun ---------------- Qi Sun Director /s/ Da Zhi Yan ------------------- Da Zhi Yan Director The accompanying notes are an integral part of these financial statements. .F-1.

The accompanying notes are an integral part of these financial statements. .F-2. Border Management, Inc. (a development stage company) Statement of Stockholders' Equity (Unaudited) For the Period from June 7, 2006 (inception) to September 30, 2011

The accompanying notes are an integral part of these financial statements. .F-3.

The accompanying notes are an integral part of these financial statements. .F-4. BORDER MANAGEMENT, INC. (a development stage company) SEPTEMBER 30, 2011 1.ORGANIZATION AND DEVELOPMENT STAGE ACTIVITIES The Company was incorporated under the laws of the State of Nevada on June 7, 2006. The company purpose in the Articles of Incorporation is to engage in any lawful activity or activities in the State of Nevada and throughout the world. The Company will specialize in offering management and consulting services to non-Canadian businesses, organizations and individuals wishing to conduct business in Canada. As of September 30, 2011, the Company is considered to be in the development stage as the Company is devoting substantially all of its effort to establishing its new business and the Company has not generated revenues from its business activities. The Company has no cash flows from operations. The Company is currently seeking additional funds through future debt or equity financing to offset future cash flow deficiencies. Such financing may not be available or may not be available on reasonable terms. The resolution of this going concern issue is dependent on the realization of management's plans. If management is unsuccessful in raising future debt or equity financing, the Company will be required to liquidate assets and curtail or possibly cease operations. 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. Because a precise determination of many assets and liabilities is dependent on future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below: (a)Cash and cash equivalents The Company considers all short-term investments, including investments in certificates of deposit, with a maturity date at purchase of three months or less to be cash equivalents. (b)Revenue recognition. Revenue is recognized on the sale and transfer of goods and services. (c)Foreign currencies The functional currency of the Company is the United States dollar. Transactions in foreign currencies are translated into United States dollars at the rates in effect on the transaction date. Exchange gains or losses arising on translation or settlement of foreign currency denomination monetary items are included in the statement of operations. (d)Financial instruments The Company's financial instruments consist of cash, refundable taxes, and accounts payable and accrued liabilities. Management is of the opinion that the Company is not subject to significant interest, currency or credit risks on the financial instruments included in these financial statements. The fair market values of these financial instruments approximate their carrying values. (e)Income taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, current taxes are recognized for the estimated income taxes payable for the current period. Deferred income taxes are provided based on the estimated future tax effects of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases as well as the benefit of losses available to be carried forward to future years for tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be covered or settled. The effect of deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized. (f)Loss per share Basic loss per share is computed by dividing loss for the period available to common stockholders by the weighted average number of common stock outstanding during the period. (g)Future Accounting Pronouncements The U.S. Securities and Exchange Commission (the "SEC") is considering timelines for the use of International Financial Reporting Standards ("IFRS") by SEC issuers. The Company expects to adopt IFRS as its reporting standard when the SEC requires its domestic registrants in the U.S. to transition to IFRS. The Company has not assessed the impact of this potential change on its financial position, results of operations or cash flows. In May 2011, the FASB provided amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments provide clarification and/or additional requirements relating to the following a) application of the highest and best use and valuation premise concepts, b) measurement of the fair value of instruments classified in an entity's shareholders' equity, c) measurement of the fair value of financial instruments that are managed within a portfolio, d) application of premiums and discounts in a fair value measurement, and e) disclosures about fair value measurements. These amendments will be effective prospectively for interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of the amendments to have a material impact on its financial position, results of operations or cash flows. In June 2011, the FASB provided amendments requiring an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a singular continuous statement of comprehensive income or in two separate but continuous statements, eliminating the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. Additionally, the amendments require an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. These amendments will be effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect the adoption of the amendments to have a material impact on its financial position, results of operations, or cash flows, but will require the Company to present the statements of comprehensive income separately from its statements of equity, as these are currently presented on a combined basis. Other pronouncements issued by the FASB or other authoritative accounting standard groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company. 3.STOCKHOLDERS' EQUITY: Common Stock Offerings: On June 7, 2006, the Company completed a private placement offering of 7,600,000 common shares to its officers and directors for $76,000. On September 30, 2006, the Company completed a private placement offering of 6,450,000 to its remaining founders for $66,676. 4.RELATED PARTY TRANSACTIONS a.Included in accounts payable and accrued liabilities is (2011 -$41,112; 2010 - $18,718) owing to the President of the Company. b.On April 1, 2007, a management agreement was entered into with JPI, a company controlled by the President of the company. Management fees (2011- $Nil; 2010 - $10,196) relate to this agreement. Management fees for July 2009 to June 2010 have been waived. Included in accounts payable and accrued liabilities is (2011 $Nil; 2010 - $22,228) owing to the Company. c.On October 1, 2010, a management agreement was entered into with Buzan Electrical Consultants (2003) Ltd., a company controlled by the President of the Company. Management fees (2011 - $6,595 ; 2010 - $Nil) relate to this agreement. Included in accounts payable and accrued liabilities is (2011 - $12,281; 2010 - $Nil) owing to the Company. d.Rental charges paid on a month-to-month basis to JPI are(2011 - $Nil; 2010 - $1,457) and Buzan Electrical Consultants (2011 - $2,271 ; 2010 - Nil). Rental charges for July 2009 to June 2010 have been waived. e.Professional fees include amounts attributed to S N Ventures Inc. (2011 - $15,315 ; 2010 - $4,979), a company controlled by the Treasurer of the Company. Included in accounts payable and accrued liabilities is (2011 - $26,458 ; 2010 - $5,602) owing to the Company. f.Listing and share transfer fees include amounts attributable to UN Holdings Inc. (2011 - $3,566 ; 2010 - $3,054) a company controlled by the brother of the Treasurer. Included in accounts payable and accrued liabilities is (2011 - $11,742; 2010 - $3,433) owing to the Company. These amounts are recorded at the exchange amount based on the amounts paid and/or received by the parties. 5.INCOME TAXES Deferred tax assets and liabilities: Deferred tax assets: September 30, 2011 Operating loss carry-forwards $ 87,562 Valuation allowance (87,562) --------------------------------------------------------------------- Net deferred tax asset $ - ===================================================================== Management believes that it is not more likely than not that it will create sufficient taxable income sufficient to realize its deferred tax assets. It is reasonably possible these estimates could change due to future income and the timing and manner of the reversal of deferred tax liabilities. Due to its losses, the Company has no income tax expense. The Company has computed its 2011 operating loss carry-forwards for income tax purposes to be $257,536. 6. Subsequent Event On January 6, 2012, the Company received written consents in lieu of a meeting of stockholders from holders of a majority of the shares of Common Stock approving a Certificate of Amendment to the Certificate of Articles of Incorporation of the Company, pursuant to which the Company will increase the authorized capital from 50,000,000 common shares authorized to 100,000,000 with a par value of .001. Preferred shares and par value will remain as it is at 20,000,000 and .001 par value. The Company on January 6, 2012, filed with the Secretary of the State of Nevada to increase the authorized share capital of the Corporation to be 100,000,000 shares of common stock with a par value of $0.001 per share plus 20,000,000 shares of preferred stock with a par value of $0.001 per share. .F-5. Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS / PLAN OF OPERATION The following discussion should be read in conjunction with our Financial statements and attached notes. This discussion may contain forward-looking statements that could involve risks and uncertainties. Forward-looking Statements: The statements contained in this 10-Q that are not historical fact are "forward-looking statements," which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "should," or "anticipates," the negatives thereof or other variations thereon or comparable terminology, and include statements as to the intent, belief or our current expectations with respect to the future operations, performance or position. These forward-looking statements are estimates and predictions. We cannot assure you that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these forward-looking statements are based upon a variety of assumptions relating to our business, which, although currently considered reasonable by us, may not be realized. Because of the number and range of the assumptions underlying our forward-looking statements, many of which are subject to significant uncertainties and contingencies beyond our reasonable control, some of the assumptions inevitably will not materialize and unanticipated events and circumstances may occur subsequent to the date of this 10-Q. These forward-looking statements are based on current information and expectation and we assume no obligation to update them at any stage. Therefore, our actual experience and results achieved during the period covered by any particular forward-looking statement may differ substantially from those anticipated. Consequently, the inclusion of forward-looking statements should not be regarded as a representation by us or any other person that these estimates will be realized, and actual results may vary materially. We cannot assure that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. Description of Business: Border Management was formed to offer a "one stop" management and consulting service to corporations and individuals wanting to commence business operations in Canada. We have a mature base of consultants that we can draw on to assist our Directors in providing services to our clients. We are therefore able to provide advice directly or through a sound base of business, engineering, legal, and other professionals relating to a wide variety of issues. .6. Border Management was incorporated on June 7, 2006 and has commenced operations. Critical Accounting Policies: Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The critical accounting policies that affect our more significant estimates and assumptions used in the preparation of our financial statements are reviewed and any required adjustments are recorded on a monthly basis. Results of Operations: Substantial positive and negative fluctuations can occur in our business due to a variety of factors, including variations in the economy, and the abilities to raise capital. As a result, net income and revenues in a particular period may not be representative of full year results and may vary significantly in this early stage of our operations. In addition results of operations, may vary in the future, and will be materially affected by many factors of a national and international nature, including economic and market conditions, currency values, inflation, the availability of capital, the level of volatility of interest rates, the valuation of security positions and investments and legislative and regulatory developments. Our results of operations also may be materially affected by competitive factors and our ability to attract and retain highly skilled individuals. Period Ended September 30, 2011: Our continued operations have not generated service revenues to date. Much of our preliminary organization has been completed including establishing our office premises and accounting system. During the last three months our focus has been on continued discussions with our business contacts. Should we be able to develop a client base, we anticipate our services will be rendered to our clients on both an ongoing basis as well as a one time and project consulting basis. If engaged on a project or one time basis, we will recognize revenues at the time that all services have been substantially completed. At the discretion of our management, we may accept restricted equity securities in certain entities as payments for services provided to these entities. Some of these entities may be newly formed, have no operating history, and the market for such securities would be very limited. In the event that there is a public market for the securities, we will record the securities at a discount from the market price, since (i) the securities are restricted and (ii) there is no assurance that the value of these securities will be realized. The amount of shares we will accept in lieu of a portion of a client's cash payment is situation specific. Comparison of Three Month Periods Ended September 30, 2011, and September 30, 2010 The major changes in specific accounts in our operating statement for the three month period ended September 30, 2011 as compared to the previous three month period ended September 30, 2010 are as follows: Revenue Revenue for the three month period ended September 30, 2011 was $Nil. Previous year's revenue for the three months ended September 30, 2010 was $Nil. Expenses Listing and share transfer fees decreased from $3,192 during the three month period of September 30, 2010 to $1,950 for the three month period ending September 30, 2011. Management fees for the three months ended September 30, 2011 were $2,462. Management fees of $10,196 were incurred during the three months ended September 2010. Professional fees of $3,750 were incurred for the three month period ended September 30, 2011 as compared to $6,579 for the three months ended September 30, 2010. Rent of $1,457 was incurred during the three month period ended September 30, 2010. Rent of $722 was incurred during the three month period ended September 30, 2011. The net loss for the three month period ended September 30, 2011 was $6,343 or $0.000451 per share compared to a loss of $22,438 for the three months ended September 30, 2010, a decrease of $16,095. Comparison of Nine Month Periods Ended September 30, 2011, and September 30, 2010 The major changes in specific accounts in our operating statement for the nine month period ended September 30, 2011 as compared to the previous nine month period ended September 30, 2010 are as follows: Revenue Revenue for the nine month period ended September 30, 2011 was $Nil. Previous year's revenue for the nine months ended September 30, 2010 was $Nil. Expenses Listing and share transfer fees decreased from $6,814 during the nine month period of September 30, 2010 to $4,866 for the nine month period ending September 30, 2011. Management fees for the nine months ended September 30, 2011 were $6,595. Management fees of $10,196 were incurred during the nine months ended September 30, 2010. Professional fees of $16,679 were incurred for the nine month period ended September 30, 2011 as compared to $12,207 for the nine month period ended September 30, 2010. Rent of $1,457 during the nine month period ended September 30, 2010 was incurred. Rent of $2,271 was incurred during the nine months ended September 30, 2011. The net loss for the nine month period ended September 30, 2011 was $30,141 or $0.000214 per share compared to a loss of $31,377 for the nine months ended September 30, 2010, a decrease of $1,236. .7. Off-Balance Sheet Arrangements: We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures. Contractual Obligations We have no Contractual obligations. Liquidity Management: Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds will consist of management and consulting revenues. During the next twelve months, we will continue our research into our specific industry, management systems, and marketing. We have also commenced operations with the creation of our website and the marketing of our services. As we now longer have cash, we will be required to issue additional share capital or secure debt financing. Depending on market conditions, we may be required to pay high rates of interest on such loans. We believe, we will not have enough cash available to satisfy our requirements during the next twelve months unless the Company produces sufficient revenues or we issue additional share capital or secure debt financing. As of September 30, 2011, the Company's balance sheet reflects total current assets of $7,143 and total current liabilities of $122,003. The Company has a deficit accumulated in the development stage of $257,536. As stated, we do not believe we will have sufficient assets or capital resources to pay the Company's on-going expenses during the next twelve months as well as seek out business opportunities. The Company has no agreement in place with its shareholders or other persons to pay expenses on its behalf. Individual shareholders are under no obligation to pay such expenses. Operational Matters: Over the next twelve months, assuming we are able to acquire funding we will proceed with limited research, recruitment, and marketing plans. Our industry research will be ongoing. We will monitor what services our competitors offer along with their strengths, weaknesses, and fees. We will also monitor changes in Federal and Provincial legislation, which is likely to affect our clients and our ability to deliver professional service. .8. Our recruiting efforts will be to attract and contract with professionals such as engineers, lawyers, and accountants outside of our company. We will also recruit prospective employees and professionals to work within our company. Employees, however, will only be hired as workload demands. As such we cannot say at this time how many, if any, will be hired during the next twelve months. Our marketing objective will be to solicit clients outside and to a lesser extent inside of Canada. Our marketing may include the use of newspapers and the internet. We will consider trade journals, various print mediums such as brochures, and some travel to meet prospective clients. We will change our website as may be necessary. Capital Resources and Primary Investing Activities: We do not anticipate any major investing activities in the next twelve months. Neither do we expect any major purchases or sales of plant and equipment. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part II, "Item 6. Risk Factors" in our Annual Report on Form 10-K for the period ended December 31, 2010, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results. .9. ITEM 3.QUANTITATIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISKS Our Company's financial instruments are not materially impacted by changes in interest rates. ITEM 4. CONTROLS AND PROCEDURES Management's Report on Internal Control over Financial Reporting. Our Internal control over financial reporting is a process that, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, was designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our trustees; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that our controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As management, it is our responsibility to establish and maintain adequate internal control over financial reporting. As of September 30, 2011, under the supervision and with the participation of our management, including our Chief Executive Officer, we evaluated the effectiveness of our internal control over financial reporting using criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on our evaluation, we concluded that the Company maintained effective internal control over financial reporting as of September 30, 2011, based on criteria established in the Internal Control -Integrated Framework issued by the COSO. This quarterly report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this quarterly report. Evaluation of disclosure controls and procedures. As of September 30, 2011, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the date of filing this quarterly report applicable for the period covered by this report. Changes in internal controls. During the period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. .10. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULT UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS (a) Exhibits Exhibit 31.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. 31.2 Certification of the Chief 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 Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SIGNATURES 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 on the dates indicated:

.11.

Border Management, Inc. 10-Q