TKLS 10-Q Quarterly Report June 30, 2010

TRUTANKLESS, INC.

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10-Q 1 acbr-10q.htm acbr-10q.htm

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 June 30, 2010

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-149804

ALCANTARA BRANDS CORPORATION

(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)

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 August 8, 2010, was 18,736,348 shares.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

ALCANTARA BRANDS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2010			2009
	(unaudited)			(audited)
ASSETS

Current assets:
Cash	$	874		$	988
Prepaid expenses		-			3,500
Prepaid inventory - related party		7,000			-
Prepaid stock compensation		257,500			-
Other receivables		14,000			14,000
Total current assets		279,374			18,488

Other assets:
Security deposits		1,550			1,550
Total other assets		1,550			1,550

Total assets	$	280,924		$	20,038

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable		94,439			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		128			-
Total current liabilities		120,905			69,052

Long term liabilities:
Notes payable - related party		12,000			-
Total long term liabilities		12,000			-

Total liabilities		132,905			69,052

Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding
as of June 30, 2010 and December 31, 2009		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 18,736,348 and 14,838,015 shares issued and outstanding
as of June 30, 2010 and December 31, 2009, respectively		18,736			14,838
Additional paid-in capital		1,166,582			270,749
Subscriptions (receivable)		-			(500	)
Subscriptions payable		-			80,000
(Deficit) accumulated during development stage		(1,037,299	)		(414,101	)
Total stockholders' deficit		148,019			(49,014	)

Total liabilities and stockholders' deficit	$	280,924		$	20,038

See Accompanying Notes to Financial Statements.

ALCANTARA BRANDS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)


													Inception
													(March 7, 2008
	For the three months ended						For the six months ended						to
	June 30,						June 30,						June 30,
	2010			2009			2010			2009			2010

Revenue	$	-		$	-		$	-		$	-		$	-

Operating expenses:
General and administrative		249			4,728			8,822			5,398			28,002
Product development - related party		-			113,201			39,576			204,685			336,014
Professional fees		181,332			22,289			574,672			35,089			673,155

Total operating expenses		181,581			140,218			623,070			245,172			1,037,171

Other expenses:
Interest expense - related party		(111	)		-			(128	)		-			(128	)

Total other expenses		(111	)		-			(128	)		-			(128	)

Net loss	$	(181,692	)	$	(140,218	)	$	(623,198	)	$	(245,172	)	$	(1,037,299	)


Weighted average number of common shares		15,930,377			14,000,000			15,503,236			14,000,000
outstanding - basic

Net loss per common share - basic	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.02	)

See Accompanying Notes to Financial Statements.

ALCANTARA BRANDS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
							Inception
							(March 7, 2008)
	For the six months ended						to
	June 30,						June 30,
	2010			2009			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(623,198	)	$	(245,172	)	$	(1,037,299	)
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		207,500			-			207,500
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses		3,500			-			-
(Increase) decrease in prepaid inventory - related party		7,000			-			(7,000	)
(Increase) in other receivables		(14,000	)		-			(14,000	)
(Increase) in security deposits		-			-			(1,550	)
Increase (decrease) in accounts payable		49,525			(5,566	)		94,439
Increase in accounts payable - related party		-			15,512			343
Increase in deferred revenue		-			-			14,235
Increase in accrued interest payable - related party		128			-			128

Net cash used in operating activities		(61,369	)		(235,226	)		(425,028	)

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		14,200			9,400			23,760
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		61,255			224,932			425,902

NET CHANGE IN CASH		(114	)		(10,294	)		874

CASH AT BEGINNING OF PERIOD		988			10,533			-

CASH AT END OF PERIOD	$	874		$	239		$	874

SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

Non-cash activities:
Shares issued for services	$	465,000		$	-		$	475,000
Warrants issued for services	$	308,176		$	-		$	308,176
Amortization of prepaid stock compensation	$	207,500		$	-		$	207,500

See Accompanying Notes to Financial Statements.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The 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 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.

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.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 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.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings 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 earnings 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 Alcantara Brands, Inc. (Nevada Corporation), and its wholly-owned subsidiary Woodmans Lumber and Millworks Peru (Nevada Corporation). All significant inter-company balances and transactions have been eliminated. Alcantara Brands, Inc. (Nevada Corporation) and Woodmans Lumber and Millworks Peru (Nevada Corporation) will be collectively referred herein to as the “Company”.

Recent pronouncements

In July 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-20 (ASU 2010-20), Receivables (Topic 310): Foreign Currency Issues: Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. For public entities, the disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effecting for interim and annual reporting periods beginning on or after December 15, 2010. The Company does not expect the provisions of ASU 2010-20 to have a material effect on the financial position, results of operations or cash flows of the Company.

In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-18 (ASU 2010-18), Receivables (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool That Is Accounted for as a Single Asset-a consensus of the FASB Emerging Task Force. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted. The Company does not expect the provisions of ASU 2010-18 to have a material effect on the financial position, results of operations or cash flows of the Company.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent pronouncements (continued)

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. The Company does not expect the provisions of ASU 2010-17 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-15 (ASU 2010-15), Financial Services-Insurance (Topic 944): How Investments held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments-a consensus of the FASB Emerging Issues Task Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption. The Company does not expect the provisions of ASU 2010-15 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. The Company does not expect the provisions of ASU 2010-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-12 (ASU 2010-12), Income Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts. After consultation with the FASB, the SEC stated that it “would not object to a registrant incorporating the effects of the Health Care and Education Reconciliation Act of 2010 when accounting for the Patient Protection and Affordable Care Act”. The Company does not expect the provisions of ASU 2010-12 to have a material effect on the financial position, results of operations or cash flows of the Company.

In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent pronouncements (continued)

adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.

In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. This amendment addresses both the interaction of the requirements of this Topic with the SEC’s reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events (paragraph 855-10-50-4). All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The Company does not expect the provisions of ASU 2010-09 to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE 2 – GOING CONCERN

The accompanying 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 June 30, 2010 of ($1,037,299). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.

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 has not completed this transaction and this agreement was terminated. During May 2010, the Company returned $40,000 to the unrelated third party.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 3 – DUE FROM RELATED PARTY (CONTINUED)

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 June 30, 2010, the balance is $0.

NOTE 4 –NOTES PAYABLE – RELATED PARTY

Notes payable consists of the following at:

	June 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

	June 30, 2010	December 31, 2009
Line of credit for up to $150,000, from a shareholder, unsecured, 5% interest, due December 2011	$ 12,000	-

Notes Payable – Long-Term	$ 12,000	$ -

Interest expense for the six months ended June 30, 2010 and 2009 was $128 and $0, respectively.

NOTE 5 – 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.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

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 125,000 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 500,000 shares of common stock. The shares are valued at $195,000 which is the fair value of the common stock as of the date of the agreement. The Company has recorded the shares issued as prepaid stock compensation of $195,000 which will be expensed over a six month period. During the six months ended June 30, 2010, the Company recorded $162,500 to consulting expense resulting in a remaining prepaid stock compensation balance of $32,500 at June 30, 2010

On March 12, 2010, the Company received cash of $18,000 from an investor for the purchase of 90,000 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 50,000 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 598,333 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.

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 750,000 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.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

On June 9, 2010, the Company agreed to issue 1,000,000 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 1,000,000 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 June 30, 2010, there have been no other issuances of common stock.

NOTE 6 – WARRANTS

On March 3, 2010, the Company executed a legal services retainer and issued 1,000,000 warrants with a cashless exercise. The warrants expire on March 2, 2013 and have an exercise price of $0.31. 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 June 30, 2010 and changes during the three months ended on that date:

	Number Of Warrants	Weighted-Average Exercise Price
Outstanding at January 1, 2010	-	$ 0.00
Granted	1,000,000	$ 0.31
Exercised	-	$ 0.00
Cancelled	-	$ 0.00
Outstanding at June 30, 2010	1,000,000	$ 0.31
Warrants exercisable at June 30, 2010	1,000,000	$ 0.31

The following tables summarize information about stock warrants outstanding and exercisable at June 30, 2010:

	STOCK WARRANTS OUTSTANDING AND EXERCISABLE
Exercise Price	Number of Warrants Outstanding	Weighted-Average Remaining Contractual Life in Years	Weighted- Average Exercise Price
$ 0.31	1,000,000	2.67	$ 0.31
	1,000,000	2.67	$ 0.31

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 7 – 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. As of June 30, 2010, the Company had $1,550 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 is $250,000 per year and will 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 will receive a signing bonus of $50,000 and 1,000,000 shares of common stock. Mr. Alcantara will be eligible for employee incentive plan which will be based on gross sales and acquisitions. The Company also granted 1,000,000 stock options with an exercise price of $0.31 per share and will expire on March 2, 2015. The options will vest 500,000 options at the start of employment, and 100,000 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 has 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 50,000 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 expires on September 22, 2010. On April 26, 2010, the shares were issued. The Company recorded $7,500 in consulting fees expense during the six months ended June 30, 2010.

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 750,000 shares of common stock upon execution of the agreement valued at $75,000. Additionally, the Company agreed to a fixed quarterly fee of 250,000 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 750,000 shares. The Company recorded $12,500 in consulting fees expense during the six months ended June 30, 2010.

ALCANTARA BRANDS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 7 – AGREEMENTS (CONTINUED)

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 1,000,000 shares of common stock upon execution of the agreement valued at $100,000. The agreement expires on December 8, 2010. On June 25, 2010, the Company issued 1,000,000 shares. The Company recorded $16,667 in consulting fees expense during the six months ended June 30, 2010.

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 1,000,000 shares of common stock upon execution of the agreement valued at $80,000. The agreement expires on December 16, 2010. On June 25, 2010, the Company issued 1,000,000 shares. The Company recorded $8,333 in consulting fees expense during the six months ended June 30, 2010.

NOTE 8 – RELATED PARTY TRANSACTIONS

As of June 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 six months ended June 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 9 – SUBSEQUENT EVENTS

On August 10, 2010, the Company received $2,500 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.

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”, “Alcantara”, “the Company”, and similar terms refer to Alcantara Brands Corporation unless otherwise expressly stated or the context otherwise requires.

OVERVIEW AND OUTLOOK

Alcantara Brands 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 June 30, 2010, we have not generated any revenues and have incurred a net loss of $1,037,299. 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.

On February 9, 2010, we executed a consulting agreement with an unrelated third party to provide us with business consulting services. The term of the agreement is for six (6) months from the date of February 9, 2010. Pursuant to the agreement we agreed to issue 500,000 shares of our restricted common stock as compensation for the services. The shares were issued on February 18, 2010.

On March 22, 2010, we executed an investment banking agreement with an unrelated third party to assist the Company with obtaining equity financing. We agreed to issue 50,000 shares of common stock upon execution of the agreement. Additionally, we 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 expires on September 22, 2010. The shares were issued on April 26, 2010.

On May 12, 2010, Mr. Carlos Alcantara gave the Company notice of his resignation from his position as a member of the Board of Directors, President and as Chief Executive Officer of the Company, and Ms. Shanda Alcantara gave the Company notice of her resignation from her position as a member of the Board of Directors, Secretary and as Treasurer of the Company, which resignations were accepted by the Company on May 12, 2010.

Prior to the resignations of Mr. Carlos Alcantara and Ms. Shanda Alcantara, the Board of Directors appointed Mr. Robertson James Orr to serve as the Registrant’s President, Secretary, Treasurer and sole Director of the Company.

As the result in change of management and change of direction in the company, the Company has changed its principal address to the following: Gainey Center II, 8501 N. Scottsdale Rd., Suite 165, Scottsdale, AZ 85253-2740, effective as of May 12, 2010.

On May 12, 2010, concurrent with the resignation of Mr. and Mrs. Alcantara, the Board reviewed the viability of spinning off its wholly owned subsidiary, Alcantara Resources Inc. (formerly American Foods International, Inc.), which was formed in March of 2010, has generated no revenues as of the date of this filing. As a result of the replacement of the board of directors on May 12, 2010, management has made a decision to pursue the spin off. It is anticipated that the spin-off will occur with the issuance and subsequent registration of shares to ACBRs shareholders, with a record date yet to be established.

On June 3, 2010, we executed a consulting and financial advisory agreement with an entity to assist the Company with financial and management consulting services. W agreed to issue 750,000 shares of common stock upon execution of the agreement. Additionally, we agreed to a fixed quarterly fee of 250,000 shares of common stock which will be due on July 1, 2010 and October 1, 2010. The agreement expires on December 2, 2010. The 750,000 shares were issued on June 25, 2010.

On June 9, 2010, we executed a consulting agreement with a related party to assist the Company with business consulting services. We agreed to issue 1,000,000 shares of common stock upon execution of the agreement. The agreement expires on December 8, 2010. The 1,000,000 shares were issued on June 25, 2010.

On June 17, 2010, we executed a consulting agreement with an entity to assist the Company with business consulting services. We agreed to issue 1,000,000 shares of common stock upon execution of the agreement. The agreement expires on December 16, 2010. The 1,000,000 shares were issued on June 25, 2010.

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 June 30, 2010, we have not generated revenues.

Expenses

Operating expenses totaled $181,581 during the three months ended June 30, 2010 as compared to $140,218 in the prior year. In the three month period ended June 30, 2010, our expenses primarily consisted of professional fees of $181,581.

Professional fees increased $181,332 from the three months ended June 30, 2009 to the three months ended June 30, 2010. This increase was due to an increase in stock-based consulting fees of $142,500, accounting fees of $10,000, legal fees of $28,674 and transfer agent fees of $156. 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.

General and administrative fees decreased $4,479 from the three months ended June 30, 2009 to the three months ended June 30, 2010. This decrease was due to a change in management in the period ended June 30, 2010. Significant areas that current management has cut back on are rent, travel, meals and entertainment.

Professional fees increased $539,583 from the six months ended June 30, 2009 to the six months ended June 30, 2010. This increase was due to an increase in legal fees of $355,985, consulting fees of $207,500, accounting fees of $10,000, and transfer agent fees of $1,186. The increase in consulting fees was primarily due to amortization of the stock based compensation. Of the increase, $308,173 was related to an issuance of 1,000,000 warrants issued for legal services. 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.

General and administrative fees increased $3,424 from the six months ended June 30, 2009 to the six months ended June 30, 2010. This increase was primarily an increased rent expense.

Liquidity and Capital Resources

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

	June 30, 2010	December 31, 2009	Increase / (Decrease)
	June 30, 2010	December 31, 2009	$	%

Current Assets	$279,374	$18,488	$260,886	1,411%

Current Liabilities	120,905	69,052	51,853	75%

Working Capital (deficit)	$158,469	$(50,564)	$209,033	413%

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.

As of June 30, 2010, our cash balance was $874.

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. Subsequently, on August 10, 2010, we received $2,500 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. 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.

Recent pronouncement

Item 3. Quantitative and Qualitative Disclosure About Market Risk

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

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 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.

On April 26, 2010, we issued 50,000 shares of common stock for consulting services totaling $15,000 to be performed over a period of six months.

During the three months ended June 30, 2010, we issued a total of 598,333 shares of common stock for cash received during the year ended December 31, 2009 and the three months ended March 31, 2010.

On June 25, 2010, we issued a total of 2,750,000 shares of common stock for consulting services totaling $255,000 to be performed over a period of six months.

We believe that the issuance and sale of the above shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares were sold directly by us and did not involve a public offering or general solicitation. The recipients of the shares were afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipients, immediately prior to the sale of the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investments. The recipients had the opportunity to speak with our management on several occasions prior to their investment decision. There were no commissions paid on the issuance and sale of the shares.

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 June 30, 2010.

Item 3. Defaults Upon Senior Securities.

None.

I tem 5. Other Information.

None.

Item 6. Exhibits.

			Incorporated by reference
Exhibit Number	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
31	Certification pursuant to Section 302 of the Sarbanes-Oxley Act	X
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act	X

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.

ALCANTARA BRANDS CORPORATION

(Registrant)

By: /S/ Robertson J. Orr

Robertson J. Orr, President

(On behalf of the registrant and as

principal financial officer)

Date: August 23, 2010

TABLE OF CONTENTS

Part I Financial Information Item 1. Financial Statements Note 1 Summary Of Significant Accounting Policies Note 1 Summary Of Significant Accounting Policies (continued)Note 2 Going Concern Note 3 Due From Related Party Note 3 Due From Related Party (continued)Note 4 Notes Payable Related Party Note 5 Stockholders Equity Note 5 Stockholders Equity (continued)Note 6 Warrants Note 7 Agreements Note 7 Agreements (continued)Note 8 Related Party Transactions Note 9 Subsequent Events Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosure About Market Risk Item 4T. Controls and Procedures Part Ii--other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 6. Exhibits

TKLS 10-Q Quarter ended June 30, 2010