**U.S. Securities and Exchange Commission**

**Washington, D.C. 20549**

 

**FORM - 10QSB**

 

[ X ]*           *QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF  THE SECURITIESAND EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2005

 

or

 

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

 

For the transition period from _____________________

Commission File No. 

 

**Brownsville Company**

---------------------------------------------

(Name of small business issuer in its charter)

 

| **Nevada**               | **N/A**                              |
|--------------------------|--------------------------------------|
| (State of Incorporation) | (I.R.S. Employer Identification No.) |

 

**23227 Dogwood Avenue, Maple Ridge, British Columbia, CanadaV2X 4S4**

---------------------------------------------------------------------------------------------------------

(Address of principal executive offices)

 

**604-267-0888**

----------------------------------

(Registrant's telephone number, including area code)

 

-------------------------

(Former name, address and fiscal year, if changed since lastreport)

Check whether the issuer (1) filed all reports required to befiled by Section 13 or 15 (d) of the Exchange Act during the past 12 months (orfor 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 is a shell company(as defined by Rule 12b-2 of the Exchange Act).     Yes [  ]  No [  x  ]

The number of shares of the registrant's common stock, par value$0.001 per share, outstanding as of December 31, 2005 was 10,720,000.

Transitional Small Business Disclosure Format (Check One): Yes [   ]  No [ x ] 

 

1

 

  Brownsville Company

Table of Contents

 

Part I - FINANCIAL INFORMATION

Item 1.    Financial Statements (Unaudited)

               Balance Sheet as of December 31, 2005 (Unaudited)..................................................................................................................4

> 
      Statement of Operations for three months endedDecember 31, 2005 (Unaudited)................................................................................................................................................................................................5

       Statement of CashFlows for three months endedDecember 31, 2005 (Unaudited)................................................................................................................................................................................................6

               Notes to FinancialStatements..........................................................................................................................................................7

Item 2.    Management's Discussion and Analysisor Plan ofOperations...................................................................................................13

Item 3.    Controls andProcedures..................................................................................................................................................................15

Part II - OTHERINFORMATION.......................................................................................................................................................................17

 

2

Part I - FINANCIAL INFORMATION

**BROWNSVILLE COMPANY**

**(A Nevada Corporation)**

**Balance Sheet**

**December 31, 2005**

**(With Comparative Figures at September 30, 2005)**

**(Expressed in US Dollars)**

 

** **December 31****September 31** **2005****2005**
**ASSETS****Current Assets**  
Cash (Note 2(e))
$4,166$8,455
Inventory
			8,250			8,000
Accounts Receivable 
			45			1,636**Total Current Assets**12,46118,081   
**Fixed Assets (Note 2(g))**
 -			Equipment, at cost			20,000			20,000			Less: accumulated depreciation			(4,500)			(4,000) 15,50016,000**Total Assets****$27,961****$34,081**   
**LIABILITIES & STOCKHOLDERS' EQUITY**Current Liabilities  
Accounts Payable and Accrued Liabilities
			13,625			11,696
Loans from related party
			9,000			9,000Total			Current Liabilities			22,625			20,696   
**SHAREHOLDER'S EQUITY**Capital Stock  			Authorized:  			75,000,000 common shares at $0.001 par value  			Issued and fully paid  			10,720,000 common shares at par value			10,720			10,720			Additional paid in capital			21,780			21,780			Share subscriptions receivable 			-			Obligation to issue 250,000 common shares for assets acquired (Note			7,8)			25,000			25,000			Deficit, accumulated during the exploration stage			(52,164)			(44,115)**Stockholders' Equity****5,336****13,385****Total Shareholder's Equity****$27,961****$34,081**   
Going Concern:
 Note 1 
Subsequent Event:
 Note 8 **Approved on Behalf of the Board**  **"Xuxin Shao"****Director and Chief      Executive Officer**  **"Chen Shao Hui", Director and Chief      		Financial Officer**  
 

See Accompanying Notes

 

**BROWNSVILLE COMPANY**

**(A Nevada Corporation)**

**Statement of Operations**

**(Expressed in US Dollars)**

**(Unaudited - Prepared by Management)**

    

 
       
       
       
**Inception**
 
       
       
       
**Date of**
 
**Three Months**
**Three Months**
**For the Fiscal**
**December 2,**
 
**Ended**
**Ended**
**Period Ended**
**2003 to**
 
**December 31**
**December 31**
**September 30**
**September 30**       **2005****2004****2005****2004**                                   **Sales**      $14,782      $16,477      $69,506      $61,436**Cost of Goods Sold**                            
Beginning Inventory
      8,000      7,191      5,000      -
Purchase
      10,686      9,762      44,113      44,807
Ending Inventory
      8,250      5,000      8,000      5,000       
10,436      11,953      41,113      39,807**Gross Profit**      4,346      4,523      28,393      21,629**Selling expenses**      1,109      1,236      3,776      9,523**Lease Expenses**      1,183      1,318      5,561      -             2,055      1,969      19,056      12,106
        
       
       
       
**General and Administrative      Expenses**
       
       
       
             Administrative Expenses      -      -      14      -      Audit Fee      -      -      10,815      1,500      Bank Charges and Interest      104      23      193      75      Professional Fees      1,628      10,025      27,545      8,220      Management Fees      4,872      -      -      4,000      Rent      3,000      3,000      14,000      -      Depreciation Expense      500      500      2,000      2,000             10,104      13,548      54,566      15,795                                   
**Net Profit (Loss) for the Period**      (8,049)      (11,578)      (35,511)      (3,689)
 
       
       
       
 
**Net Profit (Loss) Per Common Share**
$(0.00)
       
       
 
Basic and diluted
                                                               
**Weighted Average Number of Shares Outstanding**
       9,302,901
 
 
 
Basic and diluted 
       
 
       
       
 
       
 
 
 
See Accompany Notes

 

 

**BROWNSVILLE COMPANY**

**(A Nevada Corporation)**

**Statement of Cash Flows**

**(Expressed in US Dollars)**

**(Unaudited - Prepared by Management)**

 
     
     
          
 
     
     
**For the**
**Inception Date of**
 
**Three Months****Three Months****Fiscal Period****December 2,**
 
**Ended****Ended****Ended****2003 to**
 
**December 31****December 31****September 30****September 30**
 
**2005**
**200****4****2005****2004**
**Cash Provided by (Used for)**
     
     
     
     
**Operating Activities**
     
     
     
     
    Net Profit (Loss) for the period    $(8,049)    $(11,578)    $(35,511)    $(8,604)    Items not requiring use of cash                    
Depreciation Expense
    500    500    2,000    2,000    Changes in non-cash working capital items                    
		Accounts Receivable    1,591    (4,161)    5,555    (7,191)
Inventory
    (250)    2,191    (3,000)    -
    Accounts Payable and Accrued     1,930    -    10,196    1,500
**Cash used for operating activities**    (4,279)    (13,048)    (20,760)    (12,295)
                         
**Financing Activities**                    
    Capital Stock subscribed     -    7,000    6,000    26,500        Loans from Related Parties    -    -    9,000    -
    Share Subscriptions Receivable    -    -    1,000    (1,000)
**Cash provided by financing activities**    -    7,000    16,000    25,500
                         
    Cash increase (decrease) during the period    (4,279)    (6,048)    (4,760)    13,205
    Cash, beginning of period    8,445    13,205    13,205    -                         
    Cash, end of period     $4,166    7,158    8,445    13,205
                             Supplementary Disclosure of Non-cash Transactions                    
Share issued for Inventory
                   $5,000
Share issued		for Fixed Assets                   $20,000
See accompanying notes

 

**BROWNSVILLE COMPANY**

**Notes to Financial Statements**

**For the Three Months Ended 31 December, 2005**

**(UNAUDITED)**

Note 1.           BUSINESS OPERATIONS

Brownsville Company ("the Company") received it's Corporate Charter on September4, 2003 from the Secretary of State of the State of Nevada, U.S.A. The inceptiondate of the Company is December 2, 2003. The Company operates a boat launch andconvenient store. 

                       Going Concern

These financial statements have been prepared in accordance with generallyaccepted accounting principals in the United States of America applicable to agoing concern which assume that the Company will realize its assets anddischarge its liabilities in the normal course of business. The Company hasincurred losses since inception of $52,164 to December 31, 2005 and might nothave sufficient working capital for the next twelve months. These factors createdoubt as to the ability of the Company to continue as a going concern.Realization values maybe substantially different from the carrying values shownin these financial statements should the Company be unable to continue as agoing concern. Management is in the process of identifying  sources foradditional financing to fund the ongoing development of the Company's business.

 

Note 2.           SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

    (a)    General and Administration Costs
  General and administration costs are written off to operations when incurred. 
    (b)    Accounts Receivable

              Trade accounts receivableare stated at the amount the Company expects to collect. The Company maintainsallowance for doubtful accounts for estimated losses resulting from theinability of its customers to make required payments. Management considers thefollowing factors when determining the collect ability of specific customeraccounts: customer credit-worthiness, past transaction history with customer,current economic industry trends, and changes in customer payment terms. If thefinancial condition of the Company's customer were to deteriorate, adverselyaffecting their ability to make payments, additional allowances would berequired. Based on managements assessment, the Company provides for estimateduncollectible amounts through a charger through earnings and a credit to avaluation allowance. Balances that remain outstanding after the Company has usedreasonable collection efforts are written of through a charge to the valuationallowance and a credit to accounts receivable.     

    (c)    Basis of Presentation          

        These financial statements areprepared  in accordance with the United States of America GenerallyAccepted Accounting Principals (GAAP).

    (d)    Net Loss Per Share        

        Net loss per share is computed bydividing the net loss by the weighted average number of shares outstandingduring the period.

        Computation of basic and dilutedweighted average of shares outstanding for the period ended December 31, 2005 isas follows:

**Basic and Diluted Weighted Average Shares                                                                                            			10,720,000**

**Net Profit (Loss) Per Share- Basic and Diluted                                                                                           				($0.00)**   

    (e)     Cash

      Cash consists of funds on deposit with the Company's banker.   

     (f)    Inventory

          Inventories are stated atthe lower of costs (on the FIFO basis) or market (net realizable value).

    (g)     Property, Plant and Equipment 

           Fixed assets are stated at cost less accumulated depreciation. Depreciation isrecorded at the following rates, based upon the useful life of the assets:

Equipment                                                                       			- 20% annum on a straight-line basis

 
					December 31, 2005					Cost					Accumulated Amortization					Net Book Figure 					Equipment					$20,000					(4,500)$15,500					September 30, 2005   					Equipment					$20,000					(4,000)					$16,000
                         			

    (h)    Foreign Operations and CurrencyTranslation 

            The operatingactivities are in Canada in Canadian Funds as the functional currency in theUnited States Dollars.

    Monetary assets and liabilities are translated at the currentrate of exchange. The weighted average exchange rate for the period is used totranslate revenue, expenses, and gains or losses from the functional currency tothe reporting currency.  Cumulative currency translation adjustments arereported as a separate component of stockholders' equity  and notrecognized in netincome. However, there are no cumulative currency translation adjustment fromthe date of inception to the end of the current period and therefore there areno currency translation adjustments in the statement of stockholders' equity.

Gains or losses on remeasurement on the recording currency are recognized incurrent net income.

Gains or losses from foreign currency translations are recognized in current netincome.

Fixed assets are measured at historical exchange rates that exists at the timeof the transaction.

Depreciation is measured at historical exchange rates that existed at the timethe underlying related asset was acquired. 

  

Note 3:           PENSION AND EMPLOYMENT OPPORTUNITIES

   The Company does not have any liabilities as of December 31, 2005 for pension,post-employment benefits or post-retirement. The Company does not have a pensionplan.    

NOTE 4:         INCOMETAXES

   The Company has lost that total $52,164 for incometax purposes that maybe carried forward to be applied against future taxableincome. The benefit of a potential reduction in future income taxes has not beenrecorded as an asset at December 31, 2005 as it is reduced to nil by a valuationallowance, due to uncertainty of the application of losses. 

    The income tax effect of temporarydifferences compromising the differed tax liabilities on the accompanyingbalance sheets as at December 31, 2005 is a result of the following:

                      Deferred tax assets                                       $12,210

                      Valuation allowance                                      $(12,210)

                      Net deferred tax assets                                $          -     

    A reconciliation between the statutoryfederal income tax rate and the effective income rate of income tax expense forthe quarters ended December 31, 2005 and 2004 is as follows:

                                                                                               2005

                    Statutory federal income tax rate                       -34.0%

                   Valuation allowance                                             34.0%

                   Effective income tax rate                                       0.0%

 

NOTE 5:        FINANCIAL INSTRUMENTS

    The Company's financial instruments consistof cash, accounts receivable, inventory, and accounts payable and accrued. It ismanagements opinion that the Company is not exposed to significant interest,currency or credit risks arising from these financial. The fair value of thesefinancial instruments approximates their carrying values.

NOTE 6:         RELATEDPARTY TRANSACTIONS

    A director, shareholders has loaned $9,000 tothe Company during the period ended June 30, 2005, which is unsecured, noninterest bearing, with no specific terms of repayment.

NOTE 7:        FRASER RIVERMETALS DEPOSIT INC.

    (a)    **Purchase of BusinessAssets**

    On March 31, 2004, the Company entered intoan Purchase Asset Agreement with Fraser River Metals Deposit Inc. The Companyagreed to purchase from Fraser River Metals Deposit Inc. an undivided 100%right, title and interest in and to the following Assets at their fair marketvalue. The consideration received by the seller was the issuance of 250,000shares from treasury of restricted common stock at a price of $0.10 per share.      

                   Equipment                                                   $        20,000

                   Inventory                                                     $          5,000

                   Total Assets                                                $         25,000

    (b)    **Lease Agreement**

**   **On March 31, 2004, the Company enteredinto a Lease Agreement with Fraser River Metals Deposit Inc., for an initialterm of five years commencing on April 1, 2004. The Company has a option torenew the Lease for a further five year period. During the term of the Lease andany renewal term, the Company shall pay to Fraser River Metals Deposit Inc. 8%of the Company's gross sales from the operations conducted on the rentalproperty, payable on a monthly basis in arrears on the 10th business dayfollowing the end of each calendar month. The first such payment shall be due onMay 14, 2004.

                                                                                                                                                                       Nine months ended June 30 2005 

                   Lease Expenses                                                                                                                                           $    3,775                    

NOTE 8:        SUBSEQUENTEVENT

    The Company will issue 250,000 shares ofcommon stock in its capital at a deemed price of $0.10 per share for acquiringthe Assets from Fraser River Metals Deposit Inc. as outlined in Note 7, above. 

                                                                                                                                                                                                                            

Item 2: Management's Discussion and Analysis of FinancialCondition and Results of Operations

 

The followingdiscussion and analysis provides information which management of BrownsvilleCompany (the "Company") believes to be relevant to an assessment and understandingof the Company's results of operations and financial condition. This discussionshould be read together with the Company's financial statements and the notes tofinancial statements, which are included in this report.

*Caution aboutForward-Looking Statements*

This management's discussion andanalysis or plan of operation should be read in conjunction with the financialstatements and notes thereto of the Company for the quarter ended December 31,2005. Because of the nature of a relatively new and growing company the reportedresults will not necessarily reflect the future.

This section includes a number offorward-looking statements that reflect our current views with respect to futureevents and financial performance. Forward-looking statements are oftenidentified by words like: believe, expect, estimate, anticipate, intend, projectand similar expressions, or words which, by their nature, refer to futureevents. You should not place undue certainty on these forward-lookingstatements, which apply only as of the date of this prospectus. Theseforward-looking statements are subject to certain risks and uncertainties thatcould cause actual results to differ materially from historical results or ourpredictions.

*Overview*

Brownsville Company ("Brownsville")intends to commence operations as convenience store and a marina/boat launch .Brownsville currently leases the shoreline which contains the marina andconvenience store from Fraser River Metals Deposit Inc. The lease is for a fiveyear period, and the annual rent is 8% of the gross sales from the operationsconducted on the rental property. We have an option to renew the lease for anadditional five year period if we so chose to do so. We entered into the leaseon March 31, 2004.
Results of Operations 
The Company generated sales of $14,782 for the quarter ended December 31,2005 and $69,506 for the fiscal period ended September 30, 2005. As compared tothe quarter ended December 31, 2004, revenues were $16,477. The decrease inrevenues is attributed to a decrease in overall customer traffic to our marinaand convenience store.

Operating expenses, including cost of good sold, for the three month periodended December 31, 2005 and December 31, 2004 were $12,728 and $14,507respectively. 

The Companyexperienced general and administration expenses of $10,104 for the quarter endedDecember 31st, 2005. In the same period of 2004, the Company experienced generaland administrative expenses of $13,548 . The decrease in general andadministration expenses this year is attributed to the decrease in fees paid forprofessional services.

For the quarter endedDecember 31st, 2005, the company experienced a net loss of $8,049 compared to anet loss of $11,578 for the quarter ended December 31st, 2004.
Liquidity and Capital Resources 
During the three month periodended December 31st, 2005, the Company satisfied its working capital needs byusing cash generated from operations and equity from shareholder's initial seedfinancing. As of December 31st, 2005, the Company has cash on hand in the amountof $4,166. Management believes that the current level of cash on hand and theprofit on sales will be sufficient to fund our operations for the next twelvemonth period.
In the event that additional funds are required to maintain operations, ourofficers and directors have agreed to advance us additional capital to allow usto continue operations. We may also be able to maintain loans from ourshareholders, but there are no agreements or understandings in place currently.
 

Item 3. Controls andProcedures

(a)      Evaluationof Disclosure Controls and Procedures.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the ExchangeAct is recorded, processed, summarized and reported, within the time period specified in the Commission's rules and forms. Disclosure controls and procedures include,without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicatedto management, as appropriate, to allow timely decisions regarding required disclosure. Our current principal executive officer, who is also our principal financial officer, evaluated theeffectiveness of our disclosure controls and procedures as of the end of the quarterly period covered by this report pursuant to Rule 15d-15(b) promulgated under the Exchange Act.Based upon that evaluation, our principal executive and financial officer has concluded that our disclosure controls and procedures were effective in alerting management in a timelyfashion to all material information required to be included in our periodic filings with the Commission.

(b)      Changesin Internal Controls.

There were no significant changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) thatoccurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internalcontrols over financial reporting.

 

PART II: OTHER INFORMATION

Items 1, 2, 3, 4 , and 5 are inapplicable.

Item 6: Exhibits

(a)   The following exhibit is filed as part of this report:

       31.1 Certification  of Chief  Executive  Officer and Chief Financial Officer  of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).

         32.1Certification of Chief Financial Officer and Chief Executive Officer of pursuantof Section 1350.

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized. February 10, 2006
 
February 10, 2006/s/ "Xuxin Shao" Mr. Xuxin Shao, President   

**