ITEM 1. BUSINESS.
General
The Company was incorporated in Nevada in June 1999.
Between September 2000 and August 2014 the Company was in the business of selling nutritional and personal care products.
On August 25, 2014, the Company transferred all of its assets to Naprodis, Inc., a Colorado corporation (“Colorado Naprodis”). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company’s liabilities. Colorado Naprodis is controlled by Paul Petit, who was the Company’s president prior to August 25, 2014.
In connection with the assignment of the Company’s assets to Colorado Naprodis:
●
Paul Petit, Jean-Phillipe Petit, Alain Petit and Kelly Thompson resigned as officers and/or directors of the Company.
●
Paul Petit agreed to the cancellation of 1,175,000 shares of his common stock. These shares were returned to treasury and cancelled.
●
S.A.R.L. Naprodis, which is controlled by Alain Petit, sold 1,788,000 shares of the Company’s common stock to the Company for a nominal consideration. The shares sold to the Company were returned to treasury and cancelled.
●
The following persons were appointed as officers and directors of the Company:
Daniel Allen
President, Chief Executive Officer and a Director
Chase Zeman
Secretary, Treasurer and a Director
New Business
As a result of the disposal of the Company’s old business, the Company now plans to provide a suite of services to marijuana growers and dispensaries.
Marijuana cultivation and distribution has become a viable business market with several avenues and opportunities for new products and services. Due to the uncertainty surrounding the regulatory structure of the marijuana industry, many suppliers of products and services are hesitant to build relationships with marijuana dispensaries and growers. In an effort to rectify this problem, the Company plans to develop a centralized platform for the distribution of marijuana products and services.
Initially the Company plans to provide the following to licensed dispensaries and growers:
●
An LED lighting system that requires 70% less energy than current systems and offers prism based lighting spectrums to provide a software controlled lighting system.
●
cartridges and pen constructs that allow licensed dispensaries to distribute e-marijuana cigarette products
●
protection and security
●
assistance with regulatory compliance
●
employment, background checks and other human resource services
●
advertising and marketing
●
capital and related financial services.
In order to provide these products and services, the Company plans to enter into partnership, joint venture and sales distribution agreements with unrelated parties who are already providing, or have indicated their capability to provide, these products and services.
As of December 31, 2014 the Company had not entered into agreements with any person relating to these products or services.
The Company’s ability to provide capital to the marijuana industry will be dependent upon the Company’s ability to raise capital through the public or private sale of its securities.
Employees
As of December 15, 2014 the Company did not have any full time or part time employees.
ITEM 1A.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY.
None.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURE.
Not applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Since August 19, 2013 the Company’s common stock has been listed on the OTC Bulletin Board under the symbol “NAPO”. However, since that date the Company’s common stock has not traded.
As of December 31, 2014, the Company had 15,201,600 outstanding shares of common stock and approximately 30 shareholders of record. The Company does not have any outstanding options, warrants or other arrangements providing for the issuance of additional shares of its capital stock.
Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Board of Directors. The Board of Directors is not obligated to declare a dividend. No dividends have ever been declared and the Company does not anticipate or intend upon paying dividends for the foreseeable future.
The Company’s Articles of Incorporation authorizes the Board of Directors to issue up to 10,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow the directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by management.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
General
The Company was incorporated in Nevada in June 1999.
Between September 2000 and August 2014 the Company was in the business of selling nutritional and personal care products.
On August 25, 2014 the Company sold all of its assets to a private corporation controlled by the Company’s former president. Accordingly, a comparison of the Company’s operating results for the year ended August 31, 2014 and its financial condition as of August 31, 2014 with all prior periods would not be meaningful.
During the twelve months ending August 31, 2015 the Company estimates it will need approximately $500,000 to implement its business plan. Other than the foregoing, the Company does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on sales, revenues or income from continuing operations, or liquidity and capital resources.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See the financial statements and accompanying notes included with this report.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of the Company’s management, including its Principal Executive and Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to the Company’s management, including the Company’s Principal Executive and Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, management concluded that, as of August 31, 2014, the Company’s disclosure controls and procedures were effective.
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of the Company’s Principal Executive and Financial Officer and implemented by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s Principal Executive and the Financial Officer evaluated the effectiveness of the Company’s internal control over financial reporting as of August 31, 2014 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework. Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of those controls.
Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of August 31, 2014 due to the following (i) insufficient documentation of transactions and retention of appropriate documentation to support reported transactions, (ii) lack of formal review process that resulted in adjustments related to accounts payable and stockholders’ equity, and (iii) lack of segregation of duties over financial transactions and processes.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting that occurred during the three months ended August 31, 2014 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
None.
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Daniel Allen was appointed as one of our officers and directors on August 25, 2014. Mr. Allen has been a consultant in the areas of banking and financing for Blue Line Protection Group, Inc. since May 2014. Between April 2013 and March 2014 Mr. Allen served as the Regional Vice President of Sunflower Bank in Longmont, Colorado. Between June 2001 and April 2013, Mr. Allen was the Chairman and Chief Executive Officer of Mile High Banks in Longmont, Colorado. Mr. Allen holds a Bachelor of Science in Management and Finance from the University of Utah.
Chase Zeman was appointed as one of our officers and directors on August 25, 2014. Mr. Zeman has been a Field Improvement Specialist at RGIS, LLC since October 2013. Prior to that time, Mr. Zeman was a District Manager at RGIS, LLC (December 2012 and October 2013) and an Area Manager/District Manager for RGIS (October 2009 and December 2012). RGIS, LLC provides management and inventory control for large retail stores and grocery chains. Between March 2008 and October 2009 Mr. Zeman was a Store Manager at Game Crazy, a video game retailer. Mr. Zeman holds a Bachelors’ degree in Philosophy from the University of Boulder.
Directors serve for one-year terms and are elected annually by stockholders. Executive officers are appointed by and serve at the pleasure of the board of directors.
Directors are elected to hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. Executive officers are elected by the Board of Directors and hold office until resignation or removal by the Board of Directors.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth in summary form the compensation received by the Company’s Chief Executive Officers during the two years ended August 31, 2014. None of the Company’s officers have ever received in excess of $100,000 in compensation during any fiscal year.
(1)
Mr. Allen and Mr. Zeman were appointed officers of the Company on August 25, 2014.
The Company does not have any consulting or employment agreements with any officers or directors.
Stock Options. The Company has not granted any stock options as of the date of this report. In the future, the Company may grant stock options to officers, directors, employees or consultants.
Long-Term Incentive Plans. The Company does not provide officers or employees with pension, stock appreciation rights, long-term incentive or other plans and has no intention of implementing any of these plans for the foreseeable future.
Employee Pension, Profit Sharing or other Retirement Plans. The Company does not have a defined benefit, pension plan, profit sharing or other retirement plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. Directors do not receive any compensation pursuant to any standard arrangement for their services as directors. Although the Company’s bylaws permit it to pay directors for attending meetings, the Company does not compensate directors for attending meetings.
Compensation Committee/Interlocks/Participation. The Company does not have a compensation committee. The Company’s Board of Directors acts as the Company’s compensation committee. During the year ended August 31, 2014, all of the Company’s directors participated in deliberations concerning executive officer compensation.
During the year ended August 31, 2014, no director of the Company was also an executive officer of another entity, which had an executive officer of the Company serving as a director of such entity or as a member of the compensation committee of such entity.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows the ownership of the Company’s common stock as of December 31, 2014 by each shareholder known by it to be the beneficial owner of more than 5% of our outstanding shares of common stock, each director and executive officer and all directors and executive officers as a group. Except as otherwise indicated, each shareholder has sole voting and investment power with respect to the shares they beneficially own.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During 2014 the Company sold shares of its common stock to the persons, on the dates, in the amounts, and for the consideration shown below:
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Malone Bailey LLP served as the Company’s independent registered public accountant for the years ended August 31, 2014 and 2013.
The following table shows the aggregate fees billed by Malone Bailey LLP to the Company for the period shown.
Audit fees represent amounts invoiced for professional services rendered for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Form 10-Q reports. Prior to contracting with Malone Bailey LLP to render audit or non-audit services, each engagement was approved by the Company’s directors.
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
*
Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form S-1 (File #333-122009)
REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
To the Board of Directors
Naprodis, Inc.
Poway, California
We have audited the accompanying consolidated balance sheet of Naprodis, Inc. (“the Company”) as of August 31, 2014 and 2013 and the related statements of operations, changes in stockholders’ equity and cash flows for the years then ended. 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 audit.
We conducted our audits in accordance with 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 misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose 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 amounts 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 audit provides 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 August 31, 2014 and 2013 and the results of its operations and cash flows for the years then ended 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. The Company incurred net losses for the years ended August 31, 2014 and 2013 and had a working capital deficit as of August 31, 2014 and 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MALONEBAILEY, LLP
MALONEBAILEY, LLP
www.malonebailey.com
Houston, Texas
January 16, 2015
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these financial statements
NAPRODIS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND NATURE OF BUSINESS
Nature of Business
Naprodis, Inc. (the “Company”) was incorporated in the state of Nevada on June 4, 1999, and chose August 31 as its fiscal year end. The Company originally operated as a pharmaceutical manufacturer, supplying natural raw materials and natural health care products to the health supplement and beauty product industry.
On August 25, 2014, the Company transferred all of its assets to Naprodis, Inc., a Colorado corporation ("Colorado Naprodis"). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company's liabilities. A former officer and director of the Company personally guaranteed the obligation of Colorado Naprodis regarding the assumption of the Company's liabilities.
As a result of the disposal of the Company's old business, the Company now plans to establish a website that state-licensed marijuana growers and dispensaries can use to buy and sell products from each other. The Company's website will be designed to comply with all state laws and regulations.
Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”)
The financial statements presented include all adjustments consisting of normal recurring accruals and adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the period presented.
Cash and Cash Equivalents
For purposes of the statements of cash flows, cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. As of August 31, 2014 and 2013 there were no cash and cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Level 1:
Quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3:
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
All of the Company’s financial instruments are recorded at fair value due to their term of maturity.
Accounts Receivable
Accounts receivable are presented at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, if needed, an estimate of uncollectible customer balances is made based upon specific account balances that are considered uncollectible. Factors used to establish an allowance include the age of the balance, credit quality, payment history, current credit-worthiness of the customer and current economic trends. There is no allowance for doubtful accounts as of August 31, 2014 and 2013.
Inventories
Inventories are recorded as lower of cost (first in, first out) or market value. When required, a provision is made to reduce excess and obsolete inventory to estimated net value. A periodic inventory system is maintained by 100% count. Inventory at August 31, 2014 and 2013 consisted of raw materials, work in process, and finished goods as follows:
Other Assets
Other assets represent amounts paid under the Company’s office and laboratory space lease.
Property and Equipment
Equipment is stated at cost less accumulated depreciation and depreciated using straight line methods over the estimated useful lives of the related assets ranging from 5 to 10 years.
Equipment:
5 and 7 years (pallet racks 10 years)
Furniture and Fixtures
7 years
Autos, trucks, buses
5 years
Assets costing more than $500 are capitalized. Maintenance and repairs are expensed currently. The cost of normal maintenance and repairs is charged to operations as incurred. Major overhaul that extends the useful life of existing assets is capitalized. When equipment is retired or disposed, the costs and related accumulated depreciation are eliminated and the resulting profit or loss is recognized in income. Expenditures for maintenance and repairs are charged to operations as incurred; additions, renewals and betterments are capitalized.
Impairment of Long-lived Assets
The Company adopted FASB ASC Topic 360: Property Plant and Equipment, sub topic 360-10-35-15: Impairment or Disposal of Long Lived Assets (SFAS 142 and 144). ASC 360-10-35-15 requires recognition of impairment losses on long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. No impairment has been applied to the company’s long lived assets.
Recognition of Revenue
The Company's revenue recognition policies are in compliance with ASC 605-13 (Staff accounting bulletin (SAB) 104). Sales revenue is recognized at the date of completion of services to customers when a formal arrangement exists, the price is fixed or determinable, the delivery of services is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Revenue from wholesale customers is recognized at the time title passes and risk of loss is transferred to the customer, i.e. FOB “freight on board”. Discounts are based on trade terms. E-commerce revenue is recognized upon receipt of payment and shipment to the customer. The Company does not grant price adjustments after a sale is complete. The Company warrants its products sold on the internet with a right of exchange. Returns of unused merchandise are pre-authorized. Sales are presented net of discounts and allowances. The Company accounts for sales taxes by excluding such taxes from revenue and cost of revenue. Components of Revenue:
Cost of Sales
Cost of Goods Sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight in and import costs, as well as changes in reserves for inventory shrinkage and obsolescence. The cost of depreciation is excluded, and is included in general and administrative expense.
Concentration of Credit Risk
Credit risk arises from the potential that a counterpart will fail to perform its obligations. The Company is exposed to credit risk related to its accounts receivable and manufacturing risk related to source of raw materials.
Product Purchases and Accounts Payable: the Company purchased approximately 0% and 0% of its products from two companies that are related parties in the fiscal year ended August 31, 2014 and 2013. (See Note 3).
It is management’s opinion that the Company is not exposed to significant credit risk associated with its accounts receivable as at August 31, 2014 and 2013, nor manufacturing risk related to its suppliers.
Loss per share
The Company computes net loss per common share in accordance with FASB ASC 260 (SFAS No. 128 “Earnings per Share” and SAB No. 98). Under the provisions of ASC 260, the basic net loss per common share is computed by dividing the net loss available to common stock outstanding during the period. Net loss per share on a diluted basis is computed by dividing the net loss for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.
The Company has no potentially dilutive securities outstanding as of August 31, 2014 and 2013.
Provision for Income Taxes
The company utilizes FASB ASC 740, “Income Taxes” which requires the 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 determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company generated a deferred tax credit through net operating loss carry forwards. As of August 31, 2014 the Company had federal and state net operating loss carry forwards of approximately $644,000 ($545,000 in 2013) that can be used to offset future taxable income. The carry forwards will begin to expire in 2014 unless utilized in earlier years.
The income tax effect of temporary differences between financial and tax reporting gives rise to the deferred tax asset at August 31, 2014 and 2013 as follows:
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
Going Concern
As shown in the financial statements, the Company incurred a net loss of $280,785 during the year ended August 31, 2014, and as of that date, the Company’s current liabilities exceeded its current assets by $74,824. These factors, as well as the Company having negative cash flow in the fiscal year ended August 31, 2014, create an uncertainty regarding the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 2 - PROPERTY AND EQUIPMENT
Depreciation expense for the year ended August 31, 2013 was $14,564.
NOTE 3 - PAYABLES TO RELATED PARTY
The following payables to companies that are related by common ownership are payable on demand, have no terms of repayment or maturity date and accrue interest at 5% per annum:
NOTE 4 - OFFICER LOANS
Loans from the following officers of the Company are payable on demand, have no terms of repayment or maturity date and accrue interest at 5% per annum:
NOTE 5 - DISPOSAL OF ASSETS
On August 25, 2014, the Company transferred all of its assets to Naprodis, Inc., a Colorado corporation (“Colorado Naprodis”). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company’s liabilities. Colorado Naprodis is controlled by a person who was the Company’s president prior to August 25, 2014.
In connection with the assignment of the Company’s assets to Colorado Naprodis:
●
The Company’s former officers and directors resigned and new management was appointed;
●
The Company’s former president agreed to the cancellation of 1,175,000 shares of his common stock. These shares were returned to treasury and cancelled;
●
A former principal shareholder sold 1,788,000 shares of the Company’s common stock to the Company for a nominal consideration. The shares sold to the Company were returned to treasury and cancelled.
The transaction was assessed according to guidance in ASC 810-10-40, Deconsolidation of a Subsidiary, with a gain or loss recognized as the difference between fair value of any consideration received, and the carrying amount of the group of assets. Since the transaction was between officers and the Company, no gain or loss is recognized and the transaction flows through APIC.
As a result of this transaction, the Company recognized a total of $657,112 related to disposal of operations in APIC.
NOTE 6 - STOCK SUBSCRIPTION PAYABLE
During August 2014, the Company received $63,000 in payment for the issuance by the Company of 5,000,000 shares of common stock. These shares were issued in November 2014.
NOTE 7 - SUBSEQUENT EVENTS
During the three months ended November 30, 2014 the Company sold shares of its common stock to three persons, on the dates, in the amounts, and for the consideration shown below:
(1)
Payment was received in August 2014 and recognized on the balance sheet as a stock subscription payable for the value of shares due to be issued.
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, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.