SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-K





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





For the fiscal year ended January 31, 2011


OR





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





For the transition period from ____________ to ____________





Commission File No.:000-53889





BAILEY FRANCES CORPORATION


(Exact name of Registrant as specified in its charter)





Nevada

27-1805157(State or other jurisdiction of

incorporation or organization)

(I.R.S Employer Identification Number)





2743 Sandalwood Avenue


Henderson, NV 89074


(Address of principal executive offices)





(702) 478-6841


(Registrant’s telephone number, including area code)





Securities registered under Section 12(b) of the Exchange Act: None





Securities registered under Section 12(g) of the Exchange Act:


Common Stock, $0.001 par value per share





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ̈    No  x





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No    ̈





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.





Large accelerated filer   ̈      Accelerated filer   ̈       Non-accelerated filer   ̈      Smaller reporting company  x





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





State the aggregate market value of the voting and non-voting common equity held by non-affiliates. None.









TABLE OF CONTENTS




PART I

PageItem 1.
Business
1Item 1A.
Risk Factors
2Item 1B.
Unresolved Staff Comments
2Item 2.
Properties
2Item 3.
Legal Proceedings
2Item 4.
(Removed and Reserved)
2PART IIItem 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities
2Item 6.
Selected Financial Data
3Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
3Item 8.
Financial Statements And Supplementary Data
F-Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
6Item 9A.
Controls and Procedures
6Item 9B.
Other Information
6PART IIIItem 10.
Directors, Executive Officers and Corporate Governance
7Item 11.
Executive Compensation
8Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
8Item 13.
Certain Relationships and Related Transactions, and Director Independence
9Item 14.
Principal Accountant Fees and Services
9PART IVItem 15.
Exhibits, Financial Statement Schedules
10SIGNATURES
11




i





CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION





This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.





We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.





These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.





Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.





CERTAIN TERMS USED IN THIS REPORT





When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Bailey Frances Corporation.  “SEC” refers to the Securities and Exchange Commission.





ii





PART I





Item 1.
Business.





Company Overview





We are a development stage company and were incorporated in Nevada on January 29, 2010, with an objective to acquire, or merge with, an operating business.  We were formed to provide a method for a foreign or domestic private company to become a reporting (“public”) company whose securities are qualified for trading in the United States secondary market.





We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and, to a lesser extent that desires to employ the Company’s funds in its business. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business (“Business Combination”) rather than immediate, short-term earnings. We do not anticipate that we will restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company.





Based on our proposed business activities, we are a “blank check” company. The SEC defines such a company as “a development stage company” that has no specific business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and is issued “penny stock” as defined in Rule 3a51-1 under the Exchange Act. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in its securities, either debt or equity, until the Company concludes a business combination.





Since inception we have been attempting to locate and negotiate with a business entity for the combination of that target company with us. We are seeking a combination in the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.





On June 30, 2010, Richard Anslow and Gregg Jaclin, our former stockholders, entered into a stock purchase agreement with Erik Mark Levine and Laurence Jay Levine.  Pursuant to the agreement, Messrs. Anslow and Jaclin transferred an aggregate of 100,000 shares of our common stock to Erik Mark Levine and Laurence Jay Levine and, in exchange, Erik Mark Levine and Laurence Jay Levine paid an aggregate of $40,000 to Messrs. Anslow and Jaclin (the “Transaction”).  The shares of common stock sold by Messrs. Anslow and Jaclin in the Transaction represented all of our outstanding shares of common stock.  As a result of the Transaction, Erik Mark Levine and Laurence Jay Levine acquired 60% and 40%, respectively, of our then outstanding shares of common stock.  Accordingly, the Transaction resulted in a change in control of the Company.





On June 30, 2010, Mr. Anslow resigned as our President and member of the Board of Directors and Erik Mark Levine was appointed as the Chairman of our Board of Directors, President and Chief Executive Officer.





On August 10, 2010, by a resolution of the Board of Directors, the Company changed its name from AJ Acquisition Corp. IV, Inc. to Bailey Frances Corporation.





Perceived Benefits





There are certain perceived benefits to being a reporting company with a class of publicly-traded securities. These are commonly thought to include the following:





·
the ability to use registered securities to make acquisitions of assets or businesses;


·
increased visibility in the financial community;


·
the facilitation of borrowing from financial institutions;


·
improved trading efficiency;


·
stockholder liquidity;


·
greater ease in subsequently raising capital;


·
compensation of key employees through stock options for which there may be


·
enhanced corporate image;


·
a presence in the United States capital market.




1




Potential Target Companies





A business entity, if any, which may be interested in a business combination with us may include the following:





·
a company for which a primary purpose of becoming public is the use of its securities for the acquisition of assets or businesses;


·
a company which is unable to find an underwriter of its securities or is unable to find an underwriter of securities on terms acceptable to it;


·
a company which wishes to become public with less dilution of its common stock than would occur upon an underwriting;


·
a company which believes that it will be able to obtain investment capital on more favorable terms after it has become public;


·
a foreign company which may wish an initial entry into the United States securities market;


·
a special situation company, such as a company seeking a public market to satisfy redemption requirements under a qualified Employee Stock Option Plan;


·
a company seeking one or more of the other perceived benefits of becoming a public company.





A business combination with a target company normally involves the transfer to the target company of the majority of our issued and outstanding common stock, and the substitution by the target company of its own management and board of directors.





Employees





We have no full time employees. Our president has agreed to allocate a portion of her time to the activities of the Company, without compensation. The president anticipates that our business plan can be implemented by her devoting no more than 10 hours per month to the business affairs of the Company and, consequently, conflicts of interest may arise with respect to the limited time commitment by such officer.





Item 1A.
Risk Factors.





Smaller reporting companies are not required to provide the information required by this item.





Item 1B.
Unresolved Staff Comments.





None.





Item 2.
Properties.





We have no properties and at this time have no agreements to acquire any properties. We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until we complete an acquisition or merger.




Item 3.
Legal Proceedings.





We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.





Item 4.
(Removed and Reserved).





PART II





Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.





No established public trading market exists for the Company’s common stock. There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of the Company’s common stock.





Common Stock





Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.001 per share.  The Common Stock is not listed on a publicly-traded market.  As of May 1, 2011, there were two stockholders of record holding an aggregate of 100,000 shares of common stock.





Preferred Stock





Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $.001 per share.  As of May 1, 2011, there were no shares of preferred stock issued and outstanding.




2




Dividends





To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.





Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.





Securities Authorized for Issuance Under Equity Compensation Plans





We presently do not have any equity based or other long-term incentive programs. In the future, we may adopt and establish an equity-based or other long-term incentive plan if it is in the best interest of the Company and our stockholders to do so.





Item 6.
Selected Financial Data.





Smaller reporting companies are not required to provide the information required by this item.





Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.





The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.





Recent Developments





On June 30, 2010, Richard Anslow and Gregg Jaclin, our former stockholders, entered into a stock purchase agreement with Erik Mark Levine and Laurence Jay Levine.  Pursuant to the agreement, Messrs. Anslow and Jaclin transferred an aggregate of 100,000 shares of our common stock to Erik Mark Levine and Laurence Jay Levine and, in exchange, Erik Mark Levine and Laurence Jay Levine paid an aggregate of $40,000 to Messrs. Anslow and Jaclin.  The shares of common stock sold by Messrs. Anslow and Jaclin in the Transaction represented all of our then outstanding shares of common stock.  As a result of the Transaction, Erik Mark Levine and Laurence Jay Levine acquired 60% and 40%, respectively, of our then outstanding shares of common stock.  Accordingly, the Transaction resulted in a change in control of the Company.





On June 30, 2010, Mr. Anslow resigned as our President and member of the Board of Directors and Erik Mark Levine was appointed as the Chairman of our Board of Directors, President and Chief Executive Officer.





On August 10, 2010, by a resolution of the Board of Directors, the Company changed its name from AJ Acquisition Corp. IV, Inc. to Bailey Frances Corporation.





Plan of Operation





We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.  We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





During the next twelve months, we intend to actively seek out and investigate possible business opportunities with the intent to acquire or merge with one or more business ventures. If this happens, management will follow the procedures outlined in Item 1 above. Because the Company has limited funds, it may be necessary for the sole officer and director to either advance funds to the Company or to accrue expenses until such time as a successful business consolidation can be made. The Company will not be able to make it a condition that the target company must repay funds advanced by its officers and directors. Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible.





The Company does not intend to use any employees, with the possible exception of part-time clerical assistance on an as-needed basis. Outside advisors or consultants will be used only if they can be obtained for minimal cost or on a deferred payment basis. Management is convinced that it will be able to operate in this manner and to continue its search for business opportunities during the next twelve months




3




We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury or with additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.





During the next 12 months we anticipate incurring costs related to filing of Exchange Act reports, and consummating an acquisition.





We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors.





We are in the development stage and have negative working capital, negative stockholders’ equity and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting its efforts to locating merger candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.





We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.





Our officers and directors have not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.





Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.





We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.





On August 10, 2010, by a resolution of the Board of Directors, the Company changed its name to Bailey Frances Corporation. The financial statements give effect to such name change.





Results of Operation





We did not have any operating income from inception through January 31, 2010. From inception through the year ended January 31, 2011, we recognized a net loss of $7,295. Expenses for the year were comprised of costs mainly associated with legal, accounting and office expenses.




Liquidity and Capital Resources





At January 31, 2011, we had cash of $0. Therefore we have limited capital resources and will rely upon the issuance of common stock and additional capital contributions from stockholders to fund administrative expenses pending acquisition of an operating company. In the event such efforts are unsuccessful, contingent plans have been arranged to provide that our current director is to fund required future filings under the 1934 Act, and existing stockholders have expressed an interest in additional funding if necessary to continue as a going concern.




4




We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. As reflected in the accompanying financial statements, we are in the development stage with limited operations. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.





Due to the fact that the Company has limited funds, it may be necessary for the sole officer and director to either advance funds to the Company or to accrue expenses until such time as a successful business consolidation can be made. The Company will not make it a condition that the target company must repay funds advanced by its officers and directors. Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible. However, if the Company engages outside advisors or consultants in its search for business opportunities, it may be necessary for the Company to attempt to raise additional funds. As of the date hereof, the Company has not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital. In the event the Company does need to raise capital most likely the only method available to the Company would be the private sale of its securities. Because of the nature of the Company as a development stage company, it is unlikely that it could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender. There can be no assurance that the Company will able to obtain additional funding when and if needed, or that such funding, if available, can be obtained on terms acceptable to the Company.





Critical Accounting Policies





Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.





Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.





Off Balance Sheet Arrangements





None.





Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.





Smaller reporting companies are not required to provide the information required by this item.




5


Item 8.
Financial Statements and Supplementary Data.





BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 
 (A Development Stage Company)
 
 January 31, 2011 and 2010
 
 Index to Financial Statements
 
  
  
 
 Contents
Page(s)Report of Independent Registered Public Accounting Firm
F-1Balance Sheets at January 31, 2011 and 2010
F-2Statement of Operations for the Fiscal Year Ended January 31, 2011, for the period from January 29, 2010 (inception) through January 31, 2010 and for the period from January 29, 2010 (inception) through January 31, 2011
F-3Statement of Stockholders’ Equity (Deficit) for the period from January 29, 2010 (inception) through January 31, 2011
F-4Statements of Cash Flows for the Fiscal Year Ended January 31, 2011, for the period from January 29, 2010 (inception)through January 31, 2010 and for the period from January 29, 2010 (inception) through January 31, 2011
F-5Notes to the Financial Statements
F-6
  F-
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the Board of Directors and Stockholders of
 Bailey Frances Corporation
 (Formerly AJ Acquisition Corp. IV, Inc.)
 (A development stage company)
 Henderson, Nevada
 
 We have audited the accompanying balance sheets of Bailey Frances Corporation, (formerly AJ Acquisition Corp. IV, Inc.), (a development stage company) (the “Company”), as of January 31, 2011 and 2010, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the fiscal year ended January 31, 2011, for the period from January 29, 2010 (inception) through January 31, 2010 and for the period from January 29, 2010 (inception) through January 31, 2011.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining on a test basis, evidence supporting the amount and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2011 and 2010, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the fiscal year ended January 31, 2011, for the period from January 29, 2010 (inception) through January 31, 2010 and for the period from January 29, 2010 (inception) through January 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has a deficit accumulated during the development stage at January 31, 2011 and had a net loss and net cash used in operating activities for the fiscal year then ended, respectively with no revenue earned since inception, all of which raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 
 /s/Li & Company, PC
 Li & Company, PC
 
 Skillman, New Jersey
 , 2011
 
 F-1
  BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 
 (A DEVELOPMENT STAGE COMPANY)
 
 BALANCE SHEETS
 
 
 January 31,

2011


January 31,

2010ASSETSCurrent assetsCash

$
-


$
-Total assets

$
-


$
-LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilitiesAccrued expenses

$
545


$
3,000Total current liabilities


545



3,000STOCKHOLDERS’ DEFICITPreferred  stock: $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding


-



-Common stock: $0.001 par value; 100,000,000 shares authorized; 100,000 shares  issued and outstanding


100



100Additional paid-in capital


6,650



900Deficit accumulated during the development stage


(7,295
)


(4,000
)Total stockholders’ deficit


(545
)


(3,000
)Total liabilities and stockholders’ deficit

$
-


$
-
  See accompanying notes to the financial statements
 
 F-2
 
 BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 
 (A DEVELOPMENT STAGE COMPANY)
  STATEMENTS OF OPERATIONS
 
 
 For the

Fiscal Year

Ended

January 31, 2011


For the period

from

January 29, 2010 (Inception)

through

January 31,

2010


For the period

from

January 29, 2010 (Inception)

through

January 31,

2011REVENUE

$
-


$
-


$
-OPERATING EXPENSESProfessional fees


2,295



2,500



4,795Organization expenses


-



500



500General and administrative


1,000



1,000



2,000Loss before income taxes


(3,295
)


(4,000
)


(7,295
)Income tax provision


-



-



-Net loss

$
(3,295
)

$
(4,000
)

$
(7,295
)Net loss per common share – basic and diluted

$
(0.03
)

$
(0.04
)

$
(0.07
)Weighted average number of common shares outstanding – basic and diluted


100,000



100,000



100,000
  See accompanying notes to the financial statements.
 
 F-3
  BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 (A DEVELOPMENT STAGE COMPANY)
 
 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
 For the Period from January 29, 2010 (Inception) through January 31, 2011
 
 Common Stock








TotalShares


Amount


Additional

Paid in

Capital


Accumulated

Deficit


Stockholders'

Equity (Deficit)January 29, 2010 (Inception)


100,000


$
100


$
900


$
-


$
1,000Net loss














(4,000
)


( 4,000
)Balance, January 31, 2010


100,000



100



900



(4,000
)


(3,000
)Contribution to capital










5,750







5,750Net loss














(3,295
)


(3,295
)Balance, January 31, 2011


100,000


$
100


$
6,650


$
(7,295
)

$
(545
)
  See accompanying notes to the financial statements.
 
 F-4
  BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 
 (A DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS OF CASH FLOWS
 
 
 For the

Fiscal Year

Ended

January 31,

2011


For the period

from

January 29, 2010 (Inception)

through

January 31,

2010


For the period

from

January 29, 2010 (Inception)

through

January 31,

2011CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(3,295
)

$
(4,000
)

$
(7,295
)Common stock issued for services


-



1,000



1,000Adjustments to reconcile net loss to net cash used in operating activities:Changes in operating assets and liabilities:Accrued expenses


(2,455
)


3,000



545Net cash used in operating activities


(5,750
)


-



(5,750
)CASH FLOWS FROM FINANCING ACTIVITIESContribution to capital


5,750



-



5,750Net cash provided by financing activities


5,750



-



5,750Net change in cash


-



-



-Cash, beginning of the period


-



-



-Cash, end of the period

$
-


$
-


$
-SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONInterest paid

$
-


$
-


$
-Income taxes paid

$
-


$
-


$
-
 
 See accompanying notes to the financial statements
 
 F-5
  BAILEY FRANCES CORPORATION
 
 (Formerly AJ Acquisition Corp. IV, Inc.)
 
 (A DEVELOPMENT STAGE COMPANY)
 JANUARY 31, 2011 AND 2010
 
 NOTES TO THE FINANCIAL STATEMENTS
 
 Note 1 – Nature of Operations
 
 AJ Acquisition Corp. IV, Inc. (a development stage company) was incorporated in Nevada on January 29, 2010, with an objective to acquire, or merge with, an operating business.   On August 10, 2010, by a resolution of the Board of Directors, the Company changed its name to Bailey Frances Corporation (“Bailey” or the “Company”).
 
 The Company, based on proposed business activities, is a "blank check" company. The Securities and Exchange Commission (“SEC”) defines such a company as “a development stage company” that has no specific business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and is issued ‘penny stock,’ as defined in Rule 3a51-1 under the Securities Exchange Act of 1934. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in its securities, either debt or equity, until the Company concludes a business combination.
 
 The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and, to a lesser extent that desires to employ the Company’s funds in its business. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business (“Business Combination”) rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company.
 
 Note 2 – Significant Accounting Policies
 
 Basis of presentation
 
 The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
 
 Development stage company
 
 The Company is a development stage company as defined by section 810-10-20 of the FASB Accounting Standards Codification. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.  All losses accumulated since inception have been considered as part of the Company’s exploration stage activities.
 
 Use of estimates
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
  F-6
  Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
 
 Fiscal year end
 
 The Company elected January 31 as its fiscal year ending date.
 
 Cash equivalents
 
 The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
 
 Fair value of financial instruments
 
 The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.  Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
 
 Level 1
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.Level 2
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.Level 3
Pricing inputs that are generally observable inputs and not corroborated by market data.
 
 The carrying amounts of the Company’s financial assets and liabilities, such as accrued expenses approximate its fair values because of the short maturity of such instruments.
 
 The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at January 31, 2011 or 2010; no gains or losses are reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the fiscal year ended January 31, 2011 and for the period from January 29, 2010 (inception) through January 31, 2010.
 
 Revenue recognition
 
 The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
  F-7
  Income taxes
 
 The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.
 
 The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25.addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.  Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
 
 Net loss per common share
 
 Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.  Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.  There were no potentially dilutive shares outstanding as of January 31, 2011 or 2010.
 
 Commitment and contingencies
 
 The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
 
 Cash flows reporting
 
 The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
  F-8
  Subsequent events
 
 The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
 
 Recently issued accounting standards
 
 In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements”, which provides amendments to Subtopic 820-10 that require new disclosures as follows:
 
 1.
Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers.2.
Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).
 
 This Update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows:
 
 1.
Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.2.
Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.
 
 This Update also includes conforming amendments to the guidance on employers' disclosures about postretirement benefit plan assets (Subtopic 715-20). The conforming amendments to Subtopic 715-20 change the terminology from major categoriesof assets to classesof assets and provide a cross reference to the guidance in Subtopic 820-10 on how to determine appropriate classes to present fair value disclosures. The new disclosures and clarifications of existing disclosures are 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.
 
 In August 2010, the FASB issued ASU 2010-21, “Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies” (“ASU 2010-21”),was issued to conform the SEC’s reporting requirements to the terminology and provisions in ASC 805, Business Combinations, and in ASC 810-10, Consolidation. ASU No. 2010-21 was issued to reflect SEC Release No. 33-9026, “Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies,” which was effective April 23, 2009. The ASU also proposes additions or modifications to the XBRL taxonomy as a result of the amendments in the update.
 
 In August 2010, the FASB issued ASU 2010-22, “Accounting for Various Topics: Technical Corrections to SEC Paragraphs” (“ASU 2010-22”), which amends various SEC paragraphs based on external comments received and the issuance of SEC Staff Accounting Bulletin (SAB) No. 112, which amends or rescinds portions of certain SAB topics.  The topics affected include reporting of inventories in condensed financial statements for Form 10-Q, debt issue costs in conjunction with a business combination, sales of  stock by subsidiary, gain recognition on sales of business, business combinations prior to an initial public offering, loss contingent and liability assumed in business combination, divestitures, and oil and gas exchange offers.
  F-9
  In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 “Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”).Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited.
 
 In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.
 
 Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
 
 Note 3 – Going Concern
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $7,295 at January 31, 2011, and had a net loss of $3,295 and net cash used in operating activities of $5,750 for the fiscal year then ended, respectively with no revenues earned since inception.
 
 While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
 
 The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
 Note 4 – Stockholder’ Deficit
 
 Issuance of common shars
 
 The Company was incorporated on January 29, 2010 at which time 100,000 shares of common stock were issued to the Company’s founders at $0.001 per share or $1,000 for services performed.
  F-10
  Contribution to capital
 
 During the fiscal year ended January 31, 2011 the two (2) shareholders of the Company contributed $5,750 for working capital purposes.
 
 Note 5 – Related Party Transaction
 
 Free office space
 
 The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
 
 Note 6 –Income Taxes
 
 Deferred tax assets
 
 At January 31, 2011, the Company had net operating loss (“NOL”) carry–forwards for Federal income    tax purposes of $7,295 that may be offset against future taxable income through 2031.  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $2,480 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $2,480.
 
 Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.  The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization.  The valuation allowance increased approximately $1,120 and $1,360 for the year ended January 31, 2010 and for the period from January 29, 2010 (inception) through January 31, 2010, respectively.
 
 Components of deferred tax assets at January 31, 2011 and 2010 are as follows:
 January 31, 2011


January 31, 2010Net deferred tax assets – Non-current:Expected income tax benefit from NOL carry-forwards

$
2,480


$
1,360Less valuation allowance


(2,480
)


(1,360
)Deferred tax assets, net of valuation allowance

$
-


$
-
  Income taxes in the statements of operations
 
 A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage   of income before income taxes is as follows:
 
 For the

Year Ended January 31, 2011


For the Period from

January 29, 2010

(Inception)

through

January 31,

2010Federal statutory income tax rate


34.0
%


34.0
%Change in valuation allowance on net operating loss carry-forwards


(34.0
)%


(34.0
)%Effective income tax rate


0.0
%


0.0
%
 
 Note 7 – Subsequent Events
 
 The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed.




F-11




Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.





None.





Item 9A.
Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange) as of the end of the period covered by this Report, has concluded, that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, particularly during the period in which this Report was being prepared.





Changes in Internal Control Over Financial Reporting





There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the fourth quarter of our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.





Item 9B.
Other Information.





None.




6




PART III





Item 10.
Directors, Executive Officers and Corporate Governance.





Our directors and officers, as of May 1, 2011, are set forth below.




Name

Age

Positions and Offices HeldErik Levine

29

Chairman, President and Chief Executive Officer




ERIK LEVINE was appointed as the Chairman of the Board of Directors and as our President and Chief Executive Officer on June 30, 2010.  Since 2006, Erik Levine has invested exclusively in the capital markets and served as an activist investor in several Nasdaq and NYSE companies.  From 2002 through 2006, Mr. Levine was a real estate professional in Southern Nevada and Southern California completing over 60 million dollars of transaction volume in residential, commercial, and investment property. Prior to this time, Mr. Levine was a broadcast and print journalist for eight years serving television markets in Atlanta, Miami, Fort Myers, and Las Vegas. Mr. Levine studied economics and communications at Northwestern University and at the University of Florida, College of Business, where he obtained an Honors Finance Degree in 1992.





Employment Agreements





We currently do not have an employment agreement with Mr. Levine.





Certain Legal Proceedings





To the best of our knowledge, none of our directors or executive officers has, during the past ten years:





·
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);


·
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;


·
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;


·
been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;


·
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


·
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.





Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.





7





Compliance with Section 16(a) of the Exchange Act





Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership with the SEC. To the Company’s knowledge based on a review of copies of such reports furnished to us, all of the Company’s current directors, executive officers and beneficial owners of more than 10% of our common stock have complied with all Section 16(a) filing requirements with respect to the fiscal year ended January 31, 2011.  However, during the fiscal year ended January 31, 2011 (i) Richard Anslow, our former sole director and officer and a former beneficial owner or more than 10% of our common stock, failed to file a Form 4 to report the sale of 60,000 shares of our common stock pursuant to the Transaction; and (ii) Gregg Jaclin, a former beneficial owner or more than 10% of our common stock, failed to file a Form 4 to report the sale of 40,000 shares of our common stock pursuant to the Transaction.





Code of Ethics





We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.





Board Committees





Our Board of Directors has no separate committees and our Board of Directors acts as the audit committee and the compensation committee.  We do not have an audit committee financial expert serving on our Board of Directors.





Item 11.
Executive Compensation.





Neither our current nor or former officers and directors have received any compensation for services rendered to us, have received compensation from us in the past, and are not accruing any compensation pursuant to any agreement with us.  However, our officers and directors anticipates receiving benefits as a beneficial stockholder of us and, possibly, in other ways.





No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.  We had no options outstanding as of January 31, 2011.





Compensation Committee Interlocks and Insider Participation





Our Board of Directors does not have a compensation committee and the entire Board of Directors performs the functions of a compensation committee.





No member of our Board of Directors has a relationship that would constitute an interlocking relationship with our executive officers or directors or another entity.





Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.





The following table sets forth certain information as of May 1, 2011 with respect to the holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our common stock; (2) each of our directors and named executive officers; and (3) all directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated.  Unless otherwise specified, the address of each of the persons set forth below is in care of the Company.


Name of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of

Common Stock5% or greater holdersLaurence Jay Levine

40,000

40.0%Directors and named executive officersErik Levine

60,000

60.0%All directors and executive officers as a group (1 person)

60,000

60.0%





There are no arrangements which may at a subsequent date result in a change of control of the Company.


8




Item 13.
Certain Relationships and Related Transactions, and Director Independence.





Transactions with Related Persons





We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until we complete an acquisition or merger.





Director Independence





We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination.  NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  The NASDAQ listing rules provide that a director cannot be considered independent if:





·
the director is, or at any time during the past three years was, an employee of the company;


·
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);


·
a family member of the director is, or at any time during the past three years was, an executive officer of the company;


·
the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);


·
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or


·
the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.





Erik Levine is not considered independent because he is an executive officer of the Company.





We do not currently have a separately designated audit, nominating or compensation committee.





Item 14.
Principal Accounting Fees and Services.





Audit Fees





For the Company’s fiscal years ended January 31, 2011 and 2010, we were billed approximately $1,500 and $2,500 for professional services rendered for the audit and review of our financial statements filed with the Securities and Exchange Commission.





Audit-Related Fees





There were no fees for audit related services for the years ended January 31, 2011 and 2010.





Tax Fees





For the Company’s fiscal year ended January 31, 2011 and 2010, we were billed $500 for professional services rendered for tax compliance, tax advice, and tax planning.





All Other Fees





The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal year ended January 31, 2011 and 2010.





Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:





·
approved by our audit committee; or


·
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management.





We do not have an audit committee.  Our entire board of directors pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does not have records of what percentage of the above fees were pre-approved.  However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.




9





PART IV





ITEM 15. Exhibits, Financial Statement Schedules.





(a) The following documents are filed as part of this report:





Financial Statements: See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Report.




Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.





(b) The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.





Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:





·
may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;


·
may apply standards of materiality that differ from those of a reasonable investor; and


·
were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.








Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.





Exhibit Number

Description2.1

Stock Purchase Agreement [incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2010]3.1

Certificate of Incorporation [incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed with the SEC on February 12, 2010]3.2

Bylaws incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed with the SEC on February 12, 2010]31.1

Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act.32.1

Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14(b) of the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002.





10





SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.





Dated: May 12,  2011
BAILEY FRANCES CORPORATIONBy:
/s/ Erik LevineErik LevineChief Executive Officer and Chief Financial Officer





Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





Name

Title
Date/s/ Erik Levine

Chief Executive Officer, Chief Financial Officer and Director
May 12, 2011Erik Levine