10-Q 1 form10q.htm QUARTERLY REPORT FOR PERIOD ENDED AUGUST 31, 2010 Nature's Call Brands Inc.: Form 10-Q - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended August 31, 2010

[  ]   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: 333-163077

NATURE’S CALL BRANDS INC.
(Exact Name of Registrant as Specified in its Charter)

Nevada 27-1269503
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
   
346 Lazard Avenue, Mount Royal, Quebec, Canada H3R 1P3
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number including area code: (514) 337-5252

     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 [  ]

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

     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 [   ]  Smaller reporting company [x]

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

Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class Outstanding as of October 12, 2010
Common Stock, $.001 par value 9,050,000

NATURE’S CALL BRANDS INC.

TABLE OF CONTENTS

  Page
PART I - FINANCIAL INFORMATION  
   
Item 1. Financial Statements F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4. Controls and Procedures 16
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings 16
Item 1A. Risk Factors 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 17
Item 6. Exhibits 17
SIGNATURES 17

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

Financial Statements-  
   Balance Sheets as of August 31, 2010, and November 30, 2009 F-2
   Statements of Operations for the Three and Nine Months Ended August 31, 2010, and 2009 and Cumulative from Inception F-3
   Statements of Cash Flows for the Nine Months Ended August 31, 2010, and 2009 and Cumulative from Inception F-4
Notes to Financial Statements August 31, 2010, and 2009 F-5

F-1


NATURE'S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (NOTE 2)
AS OF AUGUST 31, 2010, AND NOVEMBER 30, 2009
(Unaudited)

ASSETS            
    August 31,     November 30,  
    2010     2009  
Current Assets:            
       Cash $  39   $  620  
       Accounts receivable   -     1,510  
                   Total current assets   39     2,130  
Total Assets $  39   $  2,130  
             
LIABILITIES AND STOCKHOLDER'S ( DEFICIT)            
Current Liabilities:            
       Accounts payable and accrued liabilities $  12,756   $  22,570  
       Due to related parties   7,643     2,689  
       Loan payable - related party   9,800     -  
                   Total current liabilities   30,199     25,259  
                   Total liabilities   30,199     25,259  
Commitments and Contingencies            
Stockholders' (Deficit):            
       Common stock, par value $0.001 per share, 75,000,000 shares authorized;
             9,050,000 and 6,000,000 shares issued and outstanding
             in 2010, and 2009, respectively 		 

9,050 		   

6,000 		 
       Additional paid in capital   27,450     -  
       (Deficit) accumulated during the development stage   (66,660 )   (29,129 )
                   Total stockholders' (deficit)   (30,160 )   (23,129 )
Total Liabilities and Stockholder's (Deficit) $  39   $  2,130  

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

F-2


NATURE'S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (NOTE 2)
FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2010, AND 2009,
AND CUMULATIVE FROM INCEPTION (DECEMBER 3, 2007)
THROUGH AUGUST 31, 2010
(Unaudited)

                            Cumulative From Inception  
    Three Months Ended August 31,     Nine Months Ended August 31,      
    2010     2009     2010     2009      
                               
Revenues, net $  -   $  7,000   $  -   $  7,000   $  11,254  
Cost of Revenues   -     5,300     -     5,300     8,186  
Gross Profit   -     1,700     -     1,700     3,068  
Expenses:                              
       Accounting and audit fees   2,000     3,000     8,700     3,000     22,200  
       Transfer agent fees   1,058     -     12,886     -     12,886  
       Legal fees   -     -     7,000     -     11,088  
       Consulting   1,500     2,700     2,250     2,700     7,450  
       Other miscellaneous   160     549     3,599     586     7,075  
       Travel   -     551     928     784     5,364  
       Rent   562     226     1,680     226     2,402  
       Legal - Organization costs   -     -     -     -     775  
             Total general and administrative expenses   5,280     7,026     37,043     7,296     69,240  
(Loss) from Operations   (5,280 )   (5,326 )   (37,043 )   (5,596 )   (66,172 )
Other (Expense)                              
     Interest (expense)   (152 )   -     (454 )   -     (454 )
     Other (expense)   (34 )   -     (34 )   -     (34 )
               Total other (expenses)   (186 )   -     (488 )   -     (488 )
Provision for Income Taxes   -     -     -     -     -  
Net (Loss) $  (5,466 ) $  (5,326 ) $  (37,531 ) $  (5,596 ) $  (66,660 )
(Loss) Per Common Share:                              
     (Loss) per common share - Basic and Diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.01 )      
Weighted Average Number of Common Shares Outstanding - Basic and Diluted   7,927,372     1,826,087     9,050,000     613,139      

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

F-3


NATURE'S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (NOTE 2)
FOR THE NINE MONTHS ENDED AUGUST 31, 2010, AND 2009
AND CUMULATIVE FROM INCEPTION (DECEMBER 3, 2007)
THROUGH AUGUST 31, 2010
(Unaudited)

                Cumulative From Inception  
    Nine Months Ended August 31,      
    2010     2009      
Operating Activities:                  
       Net (loss) $  (37,531 ) $  (5,596 ) $  (66,660 )
       Adjustments to reconcile net (loss) to net cash (used in) operating activities:            
             Changes in Current Assets and Liabilities-            
                       Accounts receivable   1,510
  -
  -
                       Accounts payable and accrued liabilities   (9,814 )   9,327     12,756  
Net Cash (Used in) Provided by Operating Activities   (45,835 )   3,731     (53,904 )
Investing Activities:                  
       Purchases of property and equipment   -     -     -  
Net Cash (Used in) Investing Activities   -     -     -  
Financing Activities:                  
       Proceeds from the issuance of common stock   30,500     5,000     36,500  
       Due to related parties   4,954     2,889     7,643  
       Proceeds from related party loan   9,800     -     9,800  
Net Cash Provided by Financing Activities   45,254     7,889     53,943  
Net Increase (Decrease) in Cash   (581 )   11,620     39  
Cash - Beginning of Period   620     283     -  
Cash - End of Period $  39   $  11,903   $  39  
Supplemental Disclosure of Cash Flow Information:                  
       Cash paid during the period for:                  
                 Interest $  -   $  -   $  -  
                   
                 Income taxes $  -   $  -   $  -  

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

F-4


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

1. Summary of Significant Accounting Policies

   Basis of Presentation and Organization

Nature’s Call Brands Inc. (the “Company” or “Nature’s Call Brands”) is a Nevada corporation in the development stage and has minimal operations. The Company was incorporated under the laws of the State of Nevada on December 3, 2007. The business plan of the Company is to sell and distribute water treatment systems for residential and commercial use.

   Unaudited Financial Statements

The accompanying financial statements of Nature’s Call Brands as of August 31, 2010, and November 30, 2009, and for the three and nine months ended August 31, 2010, and 2009, and cumulative from inception, are unaudited. However, in the opinion of management, the financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of August 31, 2010, and November 30, 2009, and the results of its operations and its cash flows for the nine months ended August 31, 2010, and 2009 and cumulative from inception. These results are not necessarily indicative of the results expected for the fiscal year ending November 30, 2010. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States of America. Refer to the Company’s audited financial statements as of November 30, 2009, filed with the SEC for additional information, including significant accounting policies.

   Cash and Cash Equivalents

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

   Revenue Recognition

The Company is in the development stage and has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by its customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net revenues are comprised of gross revenues less expected returns, trade discounts, and customer allowances that include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. These incentive costs are recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.

F-5


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

Loss per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the relevant period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three and nine months ended August 31, 2010, and 2009.

   Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. Nature’s Call Brands establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

   Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts Nature’s Call Brands could realize in a current market exchange. As of August 31, 2010, and November 30, 2009, the carrying value of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.

F-6


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

   Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

   Impairment of Long-lived Assets

Capital assets are reviewed for impairment in accordance with FASB ASC 360, Property, Plant, and Equipment, which was adopted effective January 1, 2002. Under FASB ASC 360, these assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. An impairment charge is recognized for the amount, if any, when the carrying value of the asset exceeds the fair value. For the three and nine months ended August 31, 2010, and 2009, and cumulative from inception, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

   Advertising and Promotion

The Company expenses all advertising and promotion costs as incurred. The Company did not incur advertising and promotion costs during the three and nine months ended August 31, 2010, and 2009.

   Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

   Estimates

The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.

F-7


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

2.    Development Stage Activities and Going Concern

The Company is in the development stage and has minimal operations. The business plan of the Company is to sell and distribute water treatment systems for residential and commercial use. During the period from December 3, 2007 through August 31, 2010, the Company was organized and incorporated, conducted a capital formation activity to raise $36,500 through the issuance of 9,050,000 shares of common stock, and realized minimal revenues. The Company intends to conduct additional capital formation activities through the issuance of its common stock and to further conduct its operations.

While management of the Company believes that the Company will be successful in its planned operating activities under its business plan and capital formation activities, there can be no assurance that it will be successful in the sale and distribution of water treatment systems for residential and commercial use or the formation of sufficient capital such that it will generate adequate revenues to earn a profit or sustain its operations.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United State of America which contemplate continuation of the Company as a going concern. The Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of August 31, 2010, and November 30, 2009, the Company had a working capital deficiency of $30,160 and $23,129, respectively. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern.

3.    Capital Stock

The total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of $0.001 per share and no other class of shares is authorized.

During the year ended November 30, 2009, the Company issued 6,000,000 shares of common stock at $0.001 per share to its Directors for total proceeds of $6,000. 1,000,000 of these shares pertain to subscribed stock for which $1,000 was paid during the period ended November 30, 2008.

On March 2, 2010, the Company’s Registration Statement on the Form S-1/A filed with the Securities and Exchange Commission was declared effective. During the six months ended May 31, 2010, the Company has sold 3,050,000 common shares at $0.010 per share for total proceeds of $30,500 pursuant to this Registration Statement.

F-8


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

As of August 31, 2010, the Company had not issued any shares nor granted any stock options under share-based compensation transactions.

4.    Income Taxes

The provision (benefit) for income taxes for the nine months ended August 31, 2010 and 2009, were as follows (assuming a 15 percent effective tax rate):

The Company had deferred income tax assets as of August 31, 2010, and 2009 as follows:

As of August 31, 2010, the Company had approximately $66,660 in tax loss carry forwards that can be utilized in future periods to reduce taxable income, and begin to expire in the year 2027.

The Company provided a valuation allowance equal to the deferred income tax assets for the nine months ended August 31, 2010, and 2009, because it is not presently known whether future taxable income will be sufficient to utilize the loss carry forwards.

F-9


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

5.    Related Party Transactions

During the period, the then President and the Chief Financial Officer of the Company provided management services to the Company. During the nine months ended August 31, 2010, management services of $2,250 (November 30, 2009 - $0) were charged to operations.

During the period, a Director of the Company provided consulting services to the Company. During the nine months ended August 31, 2010, consulting services of $2,250 (November 30, 2009 - $0) were charged to operations.

As of August 31, 2010, the Company owed to Directors of the Company $7,643 (November 30, 2009 -$2,689) for management and consulting services provided to the Company. Such amounts are unsecured, non-interest bearing and have no terms for repayment. This amount has since August 31, 2010 been forgiven and is no longer due.

During the nine month period ended August 31, 2010, a then Director of the Company provided a $15,000 loan to the Company. The loan is payable on demand, is unsecured, bears interest at a rate of 5.65% per annum and is due on or after January 22, 2011. The Company repaid a portion of the loan in the third quarter of 2010 resulting in a remaining principal balance owing of $9,800 together with $454 of accrued and unpaid interest. The total indebtedness of $10,254 is reflected as a related party loan payable on the balance sheet as at August 31, 2010. This amount has since August 31, 2010 been forgiven and is no longer due.

6.    Recent Accounting Pronouncements

On May 22, 2009, the FASB issued FASB Statement No. 164, (FASB ASC 958) “Not-for-Profit Entities: Mergers and Acquisitions”. SFAS No. 164 (FASB ASC 958) is intended to improve the relevance, representational faithfulness and comparability of the information that a not-for-profit entity provides in its financial reports about a combination with one or more other not-for-profit entities, businesses, or nonprofit activities. To accomplish that, this Statement establishes principles and requirements for how a not-for-profit entity:

  a.

Determines whether a combination is a merger or an acquisition.

  b.

Applies the carryover method in accounting for a merger.

  c.

Applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer.

  d.

Determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger or an acquisition.

This Statement also improves the information a not-for-profit entity provides about goodwill and other intangible assets after an acquisition by amending FASB Statement No. 142, Goodwill and Other Intangible Assets, to make it fully applicable to not-for-profit entities.

F-10


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

SFAS No. 164 (FASB ASC 958) is effective for mergers occurring on or after December 15, 2009 and acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. Early application is prohibited. The management of Nature’s Call Brands did not expect the adoption of this pronouncement to have material impact on its financial statements.

On May 28, 2009, the FASB issued FASB Statement No. 165, (FASB ASC 855) “Subsequent Events”. SFAS No. 165 (FASB ASC 855) establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, Statement 165 (FASB ASC 855) provides:

  1.

The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements.

  2.

The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements.

  3.

The disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

In accordance with this Statement, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The adoption of this pronouncement did not have material impact on its financial statements.

In June 2009, the FASB issued FASB Statement No. 166, (FASB ASC 860) “Accounting for Transfers of Financial Assets- an amendment of FASB Statement No, 140”. SFAS No. 166 (FASB ASC 860) is a revision to SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities” and will require more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures.

This statement is effective for financial asset transfers occurring after the beginning of an entity's first fiscal year that begins after November 15, 2009. The adoption of this pronouncement did not have material impact on its financial statements.

In June 2009, the FASB issued FASB Statement No. 167, (FASB ASC 810) "Amendments to FASB Interpretation No. 46(R)". SFAS No. 167 (FASB ASC 810) amends certain requirements of FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities” and changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance.

F-11


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

This statement is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The adoption of this pronouncement did not have material impact on its financial statements.

In June 2009, the FASB issued FASB Statement No. 168, (FASB ASC 105) "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162". SFAS No. 168 (FASB ASC 105) establishes the FASB Accounting Standards Codification (the "Codification") to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (“GAAP”). The Codification did not change GAAP but reorganizes the literature.

SFAS No. 168 (FASB ASC 105) is effective for interim and annual periods ending after September 15, 2009. The adoption of this pronouncement did not have material impact on its financial statements.

7. Subsequent Events

Pursuant to the terms of an Affiliate Stock Purchase Agreement dated September 3, 2010, between Messrs. Robbie Manis with Andrian Burenta, Inga Cebanu and Pavel Krykov, Mr. Robbie Manis purchased 6,000,000 shares of common stock of the Company for an aggregate price of $60,000. The impact of this transaction resulted in a change of control of the Company.

Effective September 3, 2010, Andrian Burenta resigned as the President and Chief Executive Officer and Inga Cebanu resigned as the Secretary, Treasurer and Chief Financial Officer. Also, effective September 3, 2010, Mr. Manis was appointed as the President, Treasurer, Secretary, Chief Executive Officer, Chief Financial Officer and to the Company’s Board of Directors, which increased the current Board of Directors to four members.

On September 15, 2010, Messrs. Andrian Burenta, Inga Cebanu, and Pavel Krykov resigned from the Company’s Board of Directors. The resignations were not the result of any disagreement between each of Andrian Burenta, Inga Cebanu and Pavel Krykov and the Company’s policies or procedures. Mr. Robbie Manis is now the sole Director and Officer of the Company.

In conjunction with the afore-mentioned transactions, the former Directors agreed to forgive all outstanding loans and fees payable to them by the Company as at September 3, 2010. The amount of loans and fees forgiven was $17,443.

On October 1, 2010, an unrelated third party loaned the Company $150,000. The loan was provided for working capital purposes, and is unsecured, bears interest at 5 percent (5%) per annum, compounded on a monthly basis, with principal and interest due September 30, 2011. The loan also has an option to renew.

F-12


NATURE’S CALL BRANDS INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010, AND 2009
(Unaudited)

On October 4, 2010, the Company entered into a Letter of Intent with Yale Resources Ltd. (“Yale”), whereby Yale has agreed to grant the Company an option to acquire a 70 percent interest in its wholly owned Los Amoles property (the “Property”) located in the municipality of Villa Hidalgo, Sonora State, Mexico, subject to the entering into of a definitive agreement. The Property, under the terms of the definitive agreement, will be the subject of exploration and development activities related to production of gold and silver. To exercise the option, the Company will be required to pay cash to Yale, issue shares of common stock to Yale and fund exploration and development expenditures on the property as follows:

  (a)

pay the non-refundable amount of $25,000 within 48 hours of signing the Letter of Intent;

     
  (b)

pay an additional $25,000 and issue 200,000 shares of common stock on signing of a definitive agreement;

     
  (c)

on or before the date which is six months after the signing of the definitive agreement, the Company will issue an additional 200,000 shares of common stock;

     
  (d)

on or before the date which is twelve months after the signing of the definitive agreement, the Company will issue an additional 200,000 shares of common stock and fund expenditures aggregating $200,000 on the property;

     
  (e)

on or before the date which is twenty-four months after the signing of the definitive agreement, the Company will issue an additional 200,000 shares of common stock and fund expenditures aggregating $300,000 on the property; and

     
  (f)

on or before the date which is thirty-six months after the signing of the definitive agreement, the Company will issue an additional 200,000 shares of common stock and fund expenditures aggregating $400,000 on the property.

Given the change in control of the Company and the entry into the Letter of Intent described above, the business plan of the Company, subsequent to August 31, 2010, has been changed from the sale and distribution of water treatment systems for residential and commercial use, to the exploration and development of mineral resources, with emphasis on gold and silver.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Associated Risks.

The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q.

Plan of Operation

Nature’s Call Brands Inc. was formed as a corporation pursuant to the laws of the State of Nevada on December 3, 2007. Our plan was to become a wholesaler of water filtration systems manufactured in North America for sale and distribution in the emerging markets of Russia and other Eastern European countries. Once Mr. Manis became our sole officer, we started reconsidering our plans for development of our business.

We are a development stage company and have limited active business operations and no significant assets. We have limited revenues and have incurred losses since our inception on December 3, 2007. The Company to date has funded its initial operations through the issuance of 9,050,000 shares of capital stock for the net proceeds of $36,500 and revenue from sales of $11,254. Due to the uncertainty of our ability to generate sufficient revenues from our operating activities and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, in their report on our financial statements for the period from inception (December 3, 2007) to November 30, 2009, our registered independent auditors included additional comments indicating concerns about our ability to continue as a going concern. Our audited financial statements for the years ended November 30, 2009 and 2008, filed with the United States Securities and Exchange Commission contain additional note disclosures describing the circumstances that led to this disclosure by our registered independent auditors. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On October 4, 2010, we entered into a Letter of Intent with Yale Resources Ltd., whereby Yale has agreed to grant us an option to acquire a 70% interest in its wholly owned Los Amoles property located in the municipality of Villa Hidalgo, Sonora State, Mexico, subject to the entering into of a definitive agreement. To exercise the option, we will be required to pay cash to Yale, issue shares of common stock to Yale and fund exploration and development expenditures on the property as follows:

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-pay the non-refundable amount of $25,000 within 48 hours of signing the Letter of Intent;
-pay an additional $25,000 and issue 200,000 shares of common stock on signing of a definitive agreement;
-on or before the date which is six months after the signing of the definitive agreement, we will issue an additional 200,000 shares of common stock;
-on or before the date which is twelve months after the signing of the definitive agreement, we will issue an additional 200,000 shares of common stock and fund expenditures aggregating $200,000 on the property;
-on or before the date which is twenty-four months after the signing of the definitive agreement, we will issue an additional 200,000 shares of common stock and fund expenditures aggregating $300,000 on the property; and
-on or before the date which is thirty-six months after the signing of the definitive agreement, we will issue an additional 200,000 shares of common stock and fund expenditures aggregating $400,000 on the property.

Results of Operations

For the nine months ended August 31, 2010 compared to the nine months ended August 31, 2009

We have not generated any revenues during the nine months ended August 31, 2010, and 2009.

General and administrative expenses for the nine-month period ended August 31, 2010, were $37,531 compared to $5,596 for the period ended August 31, 2009. The increase was primarily attributable to increases in professional of $12,700, management fees of $1,800, transfer agent fees of $12,886 as well as an increase of $4,611 in other general and administrative expenses.

The Company did not record an income tax benefit for a pre-tax loss from continuing operations for the current year period because a deferred tax asset that is associated with this benefit is totally reserved for as the Company does not have a sufficient history of income to conclude that it is more likely than not that the Company will be able to realize all of its tax benefits in the near future, and therefore a valuation allowance was established in the full value of the deferred tax asset.

Liquidity and Capital Resources

We have incurred $66,660 in operating losses since inception. As of August 31, 2010, we had $39 in cash compared to $620 at November 30, 2009. As of August 31, 2010, we had a working capital deficiency of $30,160, compared to a working capital deficiency of $23,129 as of November 30, 2009.

Net cash used in operating activities for the nine months ended August 31, 2010 was $45,835, compared with net cash used of $3,731 for the prior year period. The majority of the increase in net cash used was due to an increase in operating losses due to higher operating expenses. No cash was used in investing activities during the nine months ended August 31, 2010 and 2009.

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Net cash provided by financing activities for the nine months ended August 31, 2010 was $45,254, compared to net cash provided by financing activities in the prior year period of $7,889. On March 2, 2010, the Company’s Registration Statement on the Form S-1/A filed with the Securities and Exchange Commission was declared effective. During the nine months ended August 31, 2010, the Company has sold 3,050,000 common shares at $0.010 per share for total proceeds of $30,500 pursuant to this Registration Statement

In addition, $14,754 cash provided by financing activities during the nine months ended August 31, 2010, consisted of loans from related parties:

  a)

During the nine month period ended August 31, 2010, a director of the Company provided a $15,000 loan to the Company. The loan is payable on demand, is unsecured, bears interest at a rate of 5.65% per annum and is due on or after January 22, 2011. The Company repaid a portion of the loan in the third quarter of 2010 resulting in a remaining principal balance owing of $9,800 together with $454 of accrued and unpaid interest.

     
  b)

The former President and the Chief Financial Officer of the Company provided management services to the Company. During the nine months ended August 31, 2010 management services of $4,500 (November 30, 2009- $1,500) were charged to operations.

The Company must raise additional funds or achieve profitable operations in order to continue as going concern. We may not be successful in our efforts to raise additional funds. Even if we are able to raise additional funds through the sale of our securities or through the issuance of debt securities, or loans from our directors or financial institutions our cash needs could be greater than anticipated in which case we could be forced to raise additional capital. At the present time, we have no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to us on commercially acceptable terms or at all. These conditions raise substantial doubt as to our ability to continue as a going concern, which may make it more difficult for us to raise additional capital when needed. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.

Recent Accounting Pronouncements

See Note 6 to the Financial Statements.

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Off Balance Sheet Arrangements

None.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4.    CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation 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 and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.

PART II – OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

Currently we are not involved in any pending litigation or legal proceeding.

ITEM 1A.  RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    (REMOVED AND RESERVED)

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No. Description
   
3.1 Articles of Incorporation (i)
3.2 Bylaws (i)
31.1 Section 302 Certification of Chief Executive Officer*
31.2 Section 302 Certification of Chief Financial Officer *
32.1 Section 906 Certification of Chief Executive Officer *
32.2 Section 906 Certification of Chief Financial Officer *

*filed herewith
(i) Incorporated by reference to the Form S-1 registration statement filed on November 13, 2009.

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.

October 12, 2010

  NATURE’S CALL BRANDS INC.
     
  By: /s/ Robbie Manis
    Robbie Manis
    President, Chief Executive Officer (Principal
    Executive Officer) and Director

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In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of Nature’s Call Brands Inc. and in the capacities and on the dates indicated.

SIGNATURES   TITLE   DATE
         
/s/ Robbie Manis   President, CEO, Treasurer,   October 12, 2010
    CFO, Principal Accounting    
    Officer, Principal Financial    
    Officer and Director    
Robbie Manis        

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