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 September 30, 2010

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 333-149804
 
BOLLENTE COMPANIES INC.

(Exact name of registrant as specified in its charter)

Nevada
 
26-2137574
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

Gainey Center II
   
8501 North Scottsdale Road, Suite 165
   
Scottsdale, Arizona
 
85253-2740
(Address of principal executive offices)
 
(Zip Code)

(480) 275-7572

(Registrant’s telephone number, including area code)

ALCANTARA BRANDS CORPORATION
(Former name, former address and former fiscal year, if changed since last report)

Copies of Communication to:
Stoecklein Law Group
Emerald Plaza
402 West Broadway
Suite 690
San Diego, CA 92101
(619) 704-1310
Fax (619) 704-0556

Indicate by check mark whether the issuer (1) 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨      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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer   ¨
Accelerated filer   ¨
   
Non-accelerated filer   ¨ (Do not check if a smaller reporting company)
Smaller reporting company   x

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

The number of shares of Common Stock, $0.001 par value, outstanding on November 19, 2010, was 374,729 shares.
 

 
 

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BOLLENTE COMPANIES, INC. (FORMERLY ALCANTARA BRANDS CORPORATION)
 
(A DEVELOPMENT STAGE COMPANY)
 
CONSOLIDATED BALANCE SHEETS
 
             
   
September 30,
   
December 31,
 
   
2010
   
2009
 
   
(unaudited)
   
(audited)
 
ASSETS
           
             
Current assets:
           
Cash
  $ 53     $ 988  
Prepaid expenses
    -       3,500  
Prepaid inventory - related party
    7,000       -  
Prepaid stock compensation
    88,333       -  
Other receivables, net of allowance
    -       14,000  
Total current assets
    95,386       18,488  
                 
Other assets:
               
Security deposits
    -       1,550  
Total other assets
    -       1,550  
                 
Total assets
  $ 95,386     $ 20,038  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
Current liabilities:
               
Accounts payable
    96,858       44,914  
Accounts payable - related party
    343       343  
Deferred revenue
    14,235       14,235  
Notes payable - related party
    11,760       9,560  
Accrued interest payable - related party
    357       -  
Total current liabilities
    123,553       69,052  
                 
Long term liabilities:
               
Line of credit - related party
    16,000       -  
Total long term liabilities
    16,000       -  
                 
Total liabilities
    139,553       69,052  
                 
Stockholders' deficit:
               
Preferred stock, $0.001 par value, 10,000,000 shares
               
authorized, no shares issued and outstanding
               
as of September 30, 2010 and December 31, 2009
    -       -  
Common stock, $0.001 par value, 100,000,000 shares
               
authorized, 374,729 and 296,762 shares issued and outstanding
               
as of September 30, 2010 and December 31, 2009, respectively
    375       297  
Additional paid-in capital
    1,184,943       285,290  
Subscriptions receivable
    -       (500 )
Common stock payable
    15,000       80,000  
Deficit accumulated during development stage
    (1,244,485 )     (414,101 )
Total stockholders' deficit
    (44,167 )     (49,014 )
                 
Total liabilities and stockholders' deficit
  $ 95,386     $ 20,038  
See Accompanying Notes to Financial Statements.

 
1

 


BOLLENTE COMPANIES, INC. (FORMERLY ALCANTARA BRANDS CORPORATION)
 
(A DEVELOPMENT STAGE COMPANY)
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(unaudited)
 
                               
                               
                           
(Inception)
 
                           
March 7, 2008
 
   
For the three months ended
   
For the nine months ended
   
to
 
   
September 30,
   
September 30,
   
September 30,
 
   
2010
   
2009
   
2010
   
2009
   
2010
 
                               
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses:
                                       
General and administrative
    15,622       (290 )     24,444       5,108       43,624  
Product development - related party
    -       2,396       39,576       207,081       336,014  
Professional fees
    191,335       9,184       766,007       44,273       864,490  
                                         
Total operating expenses
    206,957       11,290       830,027       256,462       1,244,128  
                                         
Other expenses:
                                       
Interest expense - related party
    (229 )     -       (357 )     -       (357 )
                                         
Total other expenses
    (229 )     -       (357 )     -       (357 )
                                         
Net loss
  $ (207,186 )   $ (11,290 )   $ (830,384 )   $ (256,462 )   $ (1,244,485 )
                                         
                                         
Weighted average number of common shares
    374,729       280,000       331,858       280,000          
outstanding - basic
                                       
                                         
Net loss per common share - basic
  $ (0.55 )   $ (0.04 )   $ (2.50 )   $ (0.92 )        

See Accompanying Notes to Financial Statements.

 
2

 

BOLLENTE COMPANIES, INC. (FORMERLY ALCANTARA BRANDS CORPORATION)
 
(A DEVELOPMENT STAGE COMPANY)
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(unaudited)
 
                   
               
(Inception)
 
               
March 7, 2008
 
   
For the nine months ended
   
to
 
   
September 30,
   
September 30,
 
   
2010
   
2009
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (830,384 )   $ (256,462 )   $ (1,244,485 )
Adjustments to reconcile net loss
                       
to net cash used in operating activities:
                       
Shares issued for services
    -       -       10,000  
Warrants issued for services
    308,176       -       308,176  
Amortization of prepaid stock compensation
    376,667       -       376,667  
Changes in operating assets and liabilities:
                       
Decrease in prepaid expenses
    3,500       -       -  
(Increase) in prepaid inventory - related party
    (7,000 )     -       (7,000 )
(Increase) decrease in other receivables
    14,000       (14,000 )     -  
Decrease in security deposits
    1,550       -       -  
Increase (decrease) in accounts payable
    51,944       (2,566 )     96,858  
Increase in accounts payable - related party
    -       23,616       343  
Increase in deferred revenue
    -       14,235       14,235  
Increase in accrued interest payable - related party
    357       -       357  
      Shares payable for services
    15,000       -       15,000  
                         
Net cash used in operating activities
    (66,190 )     (235,177 )     (429,849 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Payments for due from related party
    (40,000 )     -       (40,000 )
Repayments from due from related party
    40,000       -       40,000  
                         
Net cash used in financing activities
    -       -       -  
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Proceeds from notes payable - related party
    18,200       9,400       27,760  
Proceeds from sale of common stock, net of offering costs
    43,500       214,532       395,032  
Donated capital
    3,555       1,000       7,110  
                         
Net cash provided by financing activities
    65,255       224,932       429,902  
                         
NET CHANGE IN CASH
    (935 )     (10,245 )     53  
                         
CASH AT BEGINNING OF YEAR
    988       10,533       -  
                         
CASH AT END OF YEAR
  $ 53     $ 288     $ 53  
                         
SUPPLEMENTAL INFORMATION:
                       
Interest paid
  $ -     $ -     $ -  
Income taxes paid
  $ -     $ -     $ -  
                         
Non-cash activities:
                       
Shares issued for services
  $ -     $ -     $ 10,000  
Warrants issued for services
  $ 308,176     $ -     $ 308,176  
Amortization of prepaid stock compensation
  $ 376,667     $ -     $ 376,667  
Shares payable for services
  $ 15,000     $ -     $ 15,000  
 
See Accompanying Notes to Financial Statements.

 
3

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation
The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
 
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2009 and notes thereto included in the Company’s 10-K filed on May 12, 2010. The Company follows the same accounting policies in the preparation of interim reports.
 
Results of operations for the interim period are not indicative of annual results.

Organization
On September 23, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies Inc.

Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Stock-based compensation
The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.


 
4

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-based compensation (Continued)
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached in FASB ASC 505-10.  Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.  The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-10.

Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Principles of consolidation
The consolidated financial statements include the accounts of Bollente Companies Inc., formerly Alcantara Brands Corporation (Nevada Corporation), and its wholly-owned subsidiary Woodmans Lumber and Millworks Peru (Nevada Corporation).  All significant inter-company balances and transactions have been eliminated.  Bollente Companies Inc. (Nevada Corporation) and Woodmans Lumber and Millworks Peru (Nevada Corporation) will be collectively referred herein to as the “Company”.

Recent pronouncements
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements.  This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Early adoption is permitted.  The Company does not expect the provisions of ASU 2010-06 to have a material effect on the consolidated financial position, results of operations or cash flows of the Company.

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (March 7, 2008) through the period ended September 30, 2010 of ($1,244,485). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.
 

 
5

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 – GOING CONCERN (CONTINUED)

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 3 – DUE FROM RELATED PARTY

On March 12, 2010, the Company agreed to purchase 5.625 kilos of gold for an unrelated third party in exchange for cash of $40,000 and 866,667 shares of common stock valued at $260,000 based on the fair value of the common stock.  As of April 28, 2010, the Company had not completed this transaction and this agreement was terminated.  During May 2010, the Company returned $40,000 to the unrelated third party.

In March 2010, The Company advanced $40,000 to First Mining Company S.A.C. (“FMC”) in anticipation of the purchase of 5.625 kilos of gold.  Since the transaction was not completed during the three months ended March 31, 2010, the $40,000 was recorded as due from related party.  During May 2010, the Company received a repayment of $40,000 from FMC.  As of September 30, 2010, the balance is $0.

NOTE 4 – DEFERRED REVENUE

During the year ended December 31, 2009, the Company received a deposit of $14,235 from an unrelated third party related to the sale of lumber.  As of June 30, 2010, the Company has not delivered the lumber is considered unearned revenue.

On March 1, 2010, the Company agreed to sell 107.32 oz of gold to an unrelated third party in exchange for cash of $40,000.  Since the transaction was not completed during the three months ended March 31, 2010, the $40,000 was recorded as deferred revenue.  As of April 28, 2010, the Company settled with the unrelated third party and agreed to return the $40,000 in cash no later than April 30, 2010.  During May 2010, the Company returned $40,000 to the unrelated third party and reduced the amount in deferred revenue by $40,000.

NOTE 5 –NOTES PAYABLE AND LINE OF CREDIT– RELATED PARTY

Notes payable consists of the following at:
   
September 30,
2010
   
December 31,
2009
 
Note payable to an entity owned and controlled by an officer and director of the Company, unsecured, 0% interest, due upon demand
  $ 9,400     $ 9,400  
                 
Note payable to an officer, director and shareholder, unsecured, 0% interest, due upon demand
    160       160  
                 
Note payable to an entity owned and controlled by an officer and director of the Company, unsecured, 10% interest, due July 2010
    800       -  
                 
Note payable to an entity owned and controlled by an officer and director of the Company, unsecured, 10% interest, due August 2010
    1,400       -  
                 
Notes Payable – Current
  $ 11,760     $ 9,560  


 
6

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 –NOTES PAYABLE AND LINE OF CREDIT– RELATED PARTY (CONTINUED)

Line of credit consists of the following at:
   
September 30,
2010
   
December 31,
2009
 
Line of credit for up to $150,000, from a shareholder, unsecured, 5% interest, due December 2011
  $ 16,000       -  
                 
Line of credit – Long-Term
  $ 16,000     $ -  

Interest expense for the nine months ended September 30, 2010 and 2009 was $357 and $0, respectively.  Interest expense for the three months ended September 30, 2010 and 2009 was $229 and $0, respectively.

NOTE 6 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.

On May 11, 2009, the Company effected a 10-for-1 forward stock split of its $0.001 par value common stock.

On October 8, 2010, the Company effected a 1-for-50 reverse stock split of its $0.001 par value common stock.

All shares and per share amounts have been retroactively restated to reflect the split discussed above.

Common Stock

On February 5, 2010 and March 9, 2010, the Company received cash totaling $25,000 from an investor for the purchase of 2,500 shares of common stock.  On May 5, 2010, the shares were issued.

On February 9, 2010, the Company executed a consulting agreement for an initial period of six months with automatically renewed six month terms.  The compensation for this agreement was 10,000 shares of common stock valued at $195,000.  On February 18, 2010, the shares were issued.

On March 12, 2010, the Company received cash of $18,000 from an investor for the purchase of 1,800 shares of common stock.  On May 5, 2010, the shares were issued.

During the three months ended March 31, 2010, an officer, director and shareholder of the Company paid for expenses totaling $3,555 on behalf of the Company.  The officer does not expect to be repaid for these expenses and have been recorded to additional paid in capital.
 
On April 26, 2010, the Company issued 1,000 shares of common stock for consulting services totaling $15,000 to be performed over a period of six months.  The shares were valued according to the fair value of the common stock.

During the three months ended June 30, 2010, the Company issued a total of 11,967 shares of common stock for cash received during the year ended December 31, 2009 and the three months ended March 31, 2010.  The Company recorded the transaction as a reduction of subscriptions payable of $123,000.

 
7

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 – STOCKHOLDERS’ EQUITY (CONTINUED)

During the three months ended June 30, 2010, the Company received $500 from an investor and reduced the balance of subscriptions receivable.

On June 3, 2010, the Company agreed to issue 15,000 shares of common stock for consulting services totaling $75,000 to be performed over a period of six months.  The shares were valued according to the fair value of the common stock.  On June 25, 2010, the shares were issued.

On June 9, 2010, the Company agreed to issue 20,000 shares of common stock for consulting services totaling $100,000 to be performed over a period of six months.  The shares were valued according to the fair value of the common stock.  On June 25, 2010, the shares were issued.
On June 9, 2010, the Company agreed to issue 20,000 shares of common stock for consulting services totaling $80,000 to be performed over a period of six months.  The shares were valued according to the fair value of the common stock.  On June 25, 2010, the shares were issued.

As of September 30, 2010, there have been no other issuances of common stock.

NOTE 7 – WARRANTS

On March 3, 2010, the Company executed a legal services retainer and issued 20,000 warrants with a cashless exercise.  The warrants expire on March 2, 2013 and have an exercise price of $15.50.  The Company recorded the fair value of these warrants of $308,176 using the Black Scholes model.  The Company used the following assumptions: stock price of $0.31, an exercise price of $0.31, expected term of 18 months (using the simplified method), volatility of 449%, and discount rate of 1.34%.

The following is a summary of the status of all of the Company’s stock warrants as of September 30, 2010 and changes during the nine months ended on that date:

   
Number
Of Warrants
   
Weighted-Average
Exercise Price
 
Outstanding at January 1, 2010
    -     $ 0.00  
Granted
    20,000     $ 15.50  
Exercised
    -     $ 0.00  
Cancelled
    -     $ 0.00  
Outstanding at September 30, 2010
    20,000     $ 15.50  
Warrants exercisable at September 30, 2010
    20,000     $ 15.50  

The following table summarizes information about stock warrants outstanding and exercisable at September 30, 2010:

 
8

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 – WARRANTS (CONTINUED)

   
STOCK WARRANTS OUTSTANDING AND EXERCISABLE
 
 
 
Exercise Price
 
 
Number of
Warrants
Outstanding
 
Weighted-Average
Remaining
Contractual
Life in Years
 
 
Weighted-
Average
Exercise Price
$ 15.50
 
20,000
 
2.42
 
$ 15.50
   
20,000
 
2.42
 
$ 15.50

NOTE 8 – AGREEMENTS

Lease Agreement

On March 1, 2009, the Company executed a three month lease for an executive office located at 3753 Howard Hughes Parkway, Suite 200, Las Vegas, NV and is subject to automatic renewals.  The monthly rent for this office is currently $1,550.  During the three months ended September 30, 2010, the Company wrote off the security deposit because they have ended their short-term lease.  As of September 30, 2010, the Company had $0 in refundable security deposits related to this lease.

Employment Agreement

On March 3, 2010, the Company executed a five year employment agreement with Carlos Alcantara for the position of CEO, President and Member of the board of directors and shall be automatically extended for two additional five year terms.  The base salary was $250,000 per year and would be adjusted annually at the discretion of the board of directors or a 3% increase, whichever is greater.  Upon execution of this agreement, Mr. Alcantara was to receive a signing bonus of $50,000 and 20,000 shares of common stock.  Mr. Alcantara was to be eligible for employee incentive plan which was to be based on gross sales and acquisitions.  The Company also granted 20,000 stock options with an exercise price of 15.50 per share and scheduled to expire on March 2, 2015.  The options were to vest 1,000 options at the start of employment, and 2,000 options on each of the five anniversary dates of this agreement.  In April 2010, the Company and Mr. Alcantara terminated the agreement and both parties agreed to a full release and settlement.  Mr. Alcantara waived his rights to all compensation related to this agreement and will not receive cash, common stock or stock options as part of this employment agreement.

Investment Banking Agreement

On March 22, 2010, the Company executed an investment banking agreement with an unrelated third party to assist the Company with obtaining equity financing.  The Company agreed to issue 1,000 shares of common stock upon execution of the agreement.  Additionally, the Company agreed to a fee payable in cash totaling 10% of the equity financing and warrants in the amount of 10% of the number of shares of common sold of the equity financing.  The agreement expired on September 22, 2010.  On April 26, 2010, the shares were issued.  The Company recorded $15,000 in consulting fees expense during the nine months ended September 30, 2010 and $7,500 in consulting fees expense during the three months ended September 30, 2010.

 
9

 
BOLLENTE COMPANIES INC.
(FORMERLY ALCANTARA BRANDS CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 – AGREEMENTS (CONTINUED)

Consulting Agreements

On June 3, 2010, the Company executed a consulting and financial advisory agreement with an entity to assist the Company with financial and management consulting services.  The Company agreed to issue 15,000 shares of common stock upon execution of the agreement.  Additionally, the Company agreed to a fixed quarterly fee of 5,000 shares of common stock which will be due on July 1, 2010 and October 1, 2010.  The agreement expires on December 2, 2010.  On June 25, 2010, the Company issued 15,000 shares.  The Company recorded $65,000 in consulting fees expense during the nine months ended September 30, 2010 and $52,500 in consulting fees expense during the three months ended September 30, 2010. As of September 30, 2010, $25,000 remains as prepaid stock compensation.  As of September 30, 2010, the Company owes an additional 5,000 shares as part of the fixed quarterly fee which was valued at $15,000 based on the fair value of the common stock.

On June 9, 2010, the Company executed a consulting agreement with a related party to assist the Company with business consulting services.  The Company agreed to issue 20,000 shares of common stock upon execution of the agreement.  The agreement expires on December 8, 2010.  On June 25, 2010, the Company issued 20,000 shares.  The Company recorded $66,667 in consulting fees expense during the nine months ended September 30, 2010 and $50,000 in consulting fees expense during the three months ended September 30, 2010.  As of September 30, 2010, $33,333 remains as prepaid stock compensation.

On June 17, 2010, the Company executed a consulting agreement with an entity to assist the Company with business consulting services.  The Company agreed to issue 20,000 shares of common stock upon execution of the agreement.  The agreement expires on December 16, 2010.  On June 25, 2010, the Company issued 20,000 shares.  The Company recorded $50,000 in consulting fees expense during the nine months ended September 30, 2010 and $41,667 in consulting fees expense during the three months ended September 30, 2010.  As of September 30, 2010, $30,000 remains as prepaid stock compensation.

NOTE 9 – RELATED PARTY TRANSACTIONS

As of September 30, 2010, the Company had accounts payable totaling $343 due to an entity that is owned and controlled by a former officer, director and shareholder of the Company.

During the nine months ended September 30, 2010, the Company had product development expenses totaling $39,576 which were to entities that are owned and controlled by a former officer, director and shareholder of the Company.

NOTE 10 – SUBSEQUENT EVENTS

During October 2010 and November 2010, the Company received a total of $3,810 from a shareholder of the Company as part of a draw on the line of credit.  The Company has a balloon payment of principal and interest due on December 1, 2011 and bears interest at 5% per annum.

On October 8, 2010, the Company effected a 1-for-50 reverse stock split of its $0.001 par value common stock.

 
10

 

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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, among other things, statements regarding:

o  
our ability to diversify our operations;
o  
inability to raise additional financing for working capital;
o  
the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;
o  
our ability to attract key personnel;
o  
our ability to operate profitably;
o  
deterioration in general or regional economic conditions;
o  
changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
o  
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
o  
inability to achieve future sales levels or other operating results;
o  
the inability of management to effectively implement our strategies and business plans;
o  
the unavailability of funds for capital expenditures; and
o  
other risks and uncertainties detailed in this report.

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this quarterly report.  References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “Bollente”, “the Company”, and similar terms refer to Bollente Companies Inc. unless otherwise expressly stated or the context otherwise requires.

Throughout this filing all references to shares have been restated to reflect a One (1) for Fifty (50) reverse stock split enacted on October 22, 2010.


 
11

 

OVERVIEW AND OUTLOOK

Bollente Companies Inc., formerly Alcantara Brands Corporation, is a development stage company, formed to engage in the business of producing and importing resources from Peru, which include a line of flavorings, seasonings, and condiments, in addition to wood products and other Peruvian exports.

Since our inception on March 7, 2008 through September 30, 2010, we have not generated any revenues and have incurred a net loss of $1,244,485. We believe that our ability to commence purchasing and importing products from Peru will generate revenues sufficient to support the limited costs associated with our initial ongoing operations for the next twelve months.  There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flows from product imports will be adequate to maintain our business.  As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements.

On January 25, 2010, we incorporated our wholly-owned subsidiary, Woodmans Lumber and Millworks Peru (“WLMP”) in the state of Nevada. WLMP was formed for the manufacture, distribution and marketing of lumber from Peru.

In September 2010, the Board of Directors and the majority of stockholders approved a one-for-fifty reverse split of our outstanding shares of common stock on October 8, 2010. The par value of our common stock was maintained at the pre-split amount of $0.001. The Consolidated Financial Statements and Notes thereto, including all share and per share data, have been restated as if the stock splits had occurred as of the earliest period presented.  On October 22, 2010, the reverse stock split went effective, making the total number of outstanding shares equal to 374,729.

Going Concern
 
The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern.  The Company may not have a sufficient amount of cash required to pay all of the costs associated with operating and marketing of its products. Management intends to use borrowings and security sales to mitigate the effects of cash flow deficits, however no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.

Results of Operations

Revenues

Since our inception on March 7, 2008 through September 30, 2010, we have not generated any revenues.


 
12

 

Expenses

Operating expenses totaled $206,957 during the three months ended September 30, 2010 as compared to $11,290 in the prior year.  In the three month period ended September 30, 2010, our expenses primarily consisted of professional fees of $176,335.  Operating expenses totaled $830,027 during the nine months ended September 30, 2010 as compared to $256,462 in the prior year.  In the nine month period ended September 30, 2010, our expenses primarily consisted of professional fees of $751,007.

Professional fees increased $182,151 from the three months ended September 30, 2009 to the three months ended September 30, 2010.  This increase was due to an increase in amortization of stock-based consulting fees of $184,167, decrease in accounting fees of $500, decrease in legal fees of $2,010 and increase transfer agent fees of $495.  The increase was primarily due to an increase in amortization of the stock based compensation.  Additionally, accounting fees increased due to the re-audit of 2008 and a change in auditors resulted in a slightly higher cost for our quarterly reviews and annual audits.  Professional fees increased $721,734 from the nine months ended September 30, 2009 to the nine months ended September 30, 2010. This increase was due to an increase in amortization of stock-based consulting fees of $391,667, increase in accounting fees of $7,500, increase in legal fees of $325,886 and decrease of transfer agent fees of $819.  The legal fees increased significantly due to the issuance of 20,000 warrants valued at $308,176.

General and administrative fees increased $15,912 from the three months ended September 30, 2009 to the three months ended September 30, 2010.  This increase was primarily attributed to an increase in bad debt expense of $14,000 and an increase rent due to a new short term office space lease.  General and administrative fees increased $19,336 from the nine months ended September 30, 2009 to the nine months ended September 30, 2010.  This increase was primarily attributed to an increase in bad debt expense of $14,000 and an increase in rent.

Liquidity and Capital Resources

The following table summarizes total current assets, total current liabilities and working capital at September 30, 2010 compared to December 31, 2009.

 
September 30,
2010
 
December 31,
2009
 
Increase / (Decrease)
$
 
%
               
Current Assets
$95,386
 
$18,488
 
$76,898
 
497%
               
Current Liabilities
123,553
 
69,052
 
54,501
 
79%
               
Working Capital (deficit)
$(28,167)
 
$(50,564)
 
$(22,397)
 
(44%)

Liquidity is a measure of a company’s ability to meet potential cash requirements.  We have historically met our capital requirements through the issuance of stock, by borrowings, and through sales-generated revenue.  In the future, we anticipate we will be able to provide the necessary liquidity we need by the revenues generated from the sales of our products.


 
13

 

As of September 30, 2010, our cash balance was $53.

In May 2010, we received $12,000 from a stockholder of the Company as part of a draw on a line of credit we have with the stockholder.  During the three months ended September 30, 2010, we received an additional $4,000 from the line of credit.  Pursuant to the line of credit we have a balloon payment of principal and interest due on December 1, 2011 and bears interest at 5% per annum.

Since inception, we have financed our cash flow requirements through issuance of common stock and debt financing. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of product sales. Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. In the future we need to generate sufficient revenues from product sales in order to eliminate or reduce the need to sell additional stock or obtain additional loans. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain.  Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop our line of products, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. See Note 1 – Summary of Significant Accounting Policies in our Notes to Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

This item in not applicable as we are currently considered a smaller reporting company.

 
14

 

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods.  As of the end of the period covered by this report, Robertson J. Orr, our President and Principal Accounting Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Orr, our President and Principal Accounting Officer concluded that our disclosure controls and procedures are not effective in timely alerting him to material information required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive officer and principal accounting officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors

Our significant business risks are described in Item 1A to Form 10-K for the year ended December 31, 2009 to which reference is made herein.

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

There were no issuances of securities during the quarter ended September 30, 2010.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities from the time of our inception on March 7, 2008 through the period ended September 30, 2010.


 
15

 

Item 3. Defaults Upon Senior Securities.

None.

I tem 5. Other Information.

Name Change and Reverse Stock Split

On September 23, 2010, the Company filed a Certificate of Amendment pursuant to Nevada Revised Statutes 78.385 and 78.390 with the Nevada Secretary of State changing its name from Alcantara Brands Corporation to Bollente Companies Inc. The name change occurred as a result of a majority of the stockholders executing a consent approving the Board of Directors recommendation to change the Company’s name. A copy of the Certificate of Amendment is attached hereto as Exhibit 3(i)(b).

On October 8, 2010, the Company effectuated a reverse split on the basis of one (1) share of common stock to be issued for every fifty (50) shares issued and outstanding. On September 23, 2010, we filed a Certificate of Change pursuant to Nevada Revised Statute 78.209 with the Nevada Secretary of State reflecting the one-for-fifty reverse stock split. A copy of the Certificate of Change is attached hereto as Exhibit 3(i)(c).

The name change and reverse split was announced on the OTCBB Daily List on October 22, 2010 and took effect at the open of business on October 22, 2010.

As a result of the name change and reverse split we requested a new CUSIP number: 09767T 100.

Item 6. Exhibits.
 
 
     
Incorporated by reference
Exhibit
Number
Exhibit Description
Filed
herewith
Form
Period
ending
Exhibit
Filing date
3(i)(b)
Certificate of Amendment to Articles of Incorporation
X
       
3(i)(c)
Certificate of Change Pursuant to NRS 78.209
X
       
31
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
X
       
32
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
X
       


 
16

 

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.


BOLLENTE COMPANIES INC.
(Registrant)



By: /S/ Robertson J. Orr                                                                 
      Robertson J. Orr, President
      (On behalf of the registrant and as
       principal financial officer)

Date: November 24, 2010


 
17

 


 
 

 

ROSS MILLER
Secretary of State
204 North Carson Street, Suite 1
Carson City, Nevada 89701-4520
(775) 684-5708

     
Filed in the office of
Ross Miller
Secretary of State
State of Nevada
Document Number
20100716221-72
Certificate of Amendment
(PURSUANT TO NRS 78.385 AND 78.390)
 
Filing Date and Time
9/23/2010 9:45 AM
 
Entity Number
E0148042008-3
         
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 – After Issuance of Stock)

1.  
Name of corporation:
Alcantara Brands Corporation

2.  
The articles have been amended as follows:
Article I-Name
The exact name of this corporation is:
Bollente Companies Inc.
 
 
 
 
 
 
 

3.  
The vote by which the stockholders holding shares in the corporation entitling them to exercise a least a majority of the voting power or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is: 51 %

4.  
Effective date of filing: (optional) 10/5/2010 ______________________________________________

 
5.  
Signature: (required)

X /S/Robertson James Orr                                                                                      
Signature of Officer


 

 
 

 


 
 

 

ROSS MILLER
Secretary of State
204 North Carson Street, Suite 1
Carson City, Nevada 89701-4520
(775) 684-5708

     
Filed in the office of
Ross Miller
Secretary of State
State of Nevada
Document Number
20100716222-83
Certificate of Change Pursuant
to NRS 78.209
 
 
Filing Date and Time
9/23/2010 9:45 AM
 
Entity Number
E0148042008-3
         
Certificate of Change Pursuant to NRS 78.209
 
For Nevada Profit Corporations
 

1.  
Name of corporation:
Alcantara Brands Corporation

2. The board of directors have adopted a resolution pursuant to NRS 78.209 and have obtained any required approval of the stockholders.

3. The current number of authorized shares and the par value, if any, of each class or series, if any, of shares before the change:
100,000,000 common stock, $0.001 par value, 10,000,000 preferred stock, $0.001 par value

4. The number of authorized shares and the par value, if any, of each class or series, if any, of shares after the change:
100,000,000 common stock, $0.001 par value, 10,000,000 preferred stock, $0.001 par value

5. The number of shares of each affected class or series, if any, to be issued after the change in exchange for each issued share of the same class or series:
1 share of common stock for every 50 shares of issued and outstanding shares of common stock

6. The provisions, if any, for the issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby:
Fractional shares, if any, will be rounded up to the next whole share

 7. Effective date of filing: (optional)      October 8, 2010  
       (must not be later than 90 days after the certificate is filed)

 8. Signature: (required)

X /S/Robertson James Orr                                                                                      
Signature of Officer


 
 

 


 
 

 

EXHIBIT 31

CERTIFICATION

I, Robertson J. Orr, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of BOLLENTE COMPANIES INC.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors of the registrant's board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:           November 24, 2010


/S/ Robertson J. Orr
Robertson J. Orr
President and Principal Accounting Officer

EXHIBIT 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bollente Companies Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robertson J. Orr, President and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.  
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.  
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


    /S/ Robertson J. Orr
 
Robertson J. Orr
 
President and
 
Principal Financial Officer
 
November 24, 2010