ITEM 1. BUSINESS.
We are a start-up, internet-based eCommerce company that has been offering and selling a new natural energy and health drink called Active UpLift® in two different flavors and also, an energy spray called All-Day Energy Spray®. We have other products that we have also developed but to date, we have lacked the advertising capital to introduce them to the public and market them in a significant or meaningful way. Having said this, starting in October of 2012, after the end of the third quarter, we began marketing on our updated website, www.upliftnutrition.com, a new product called “Tonify,” which is a raspberry keytone chewing gum designed to burn fat. We also began marketing a product called “XMint,” a male enhancement chewing gum.
This now being 2013, we are no longer be offering our formerly principal products Active UpLift® or All-Day Energy Spray® for sale on a retail basis or through our primary website, www.upliftnutrition.com. What we have in inventory essentially expired at December end 2012 and, at this time, we have no plans to mix more of either product, though we are trying to sell what we have remaining through our website.
Of the three websites that were active at the end of the second quarter, only one is currently active. The two that have been de-activated or shut down are www.upliftenergy.com and www.alldayenergyspray. www. The upliftnutrition.com website has been completely rebuilt and is active. At one time, we had a website www.EpiGaia.com but because we have held off in marketing that product, that website is no longer functional.
During the last quarter, we completely revamped and updated our principal website, www.upliftnutrition.com. It now solicits the purchase of the two new products we are distributing mentioned above called Tonify and XMint. We hope to have success with the 2 new products we began distributing in October on our revamped and updated website, www.upliftnutrition.com. In this regard, in November 2012 we entered into an exclusive representation letter agreement with Tonify and X-Mint’s manufacturer, Healthy Life Nutraceutics, Inc. (“Healthy Life”), out of Deerfield, Illinois, to “distribute” these 2 products in a specific market segment, specifically, the View For Pay or Pay For Click or similar market throughout the United States and worldwide where not prohibited by law. As a distributor, we are obligated to have a customer base who has subscribed to our promotions and advertising. This market does NOT include seller channels or portals such as Ebay, Amazon, Google Shopping or similar search engine optimization channels, and online stores such as Drugstore.com, Vitacoast.com or similar channels. This letter agreement may be terminated by Healthy Life on 60 days’ written notice, with or without cause. Healthy Life determines the prices at which we are able to offer and sell their products.
While we have made several significant contacts in the retail food business over the last few years, we have been unable to seriously launch Active UpLift® or All-Day Energy Spray® in any national convenience or other large food chain stores for want of advertising capital. This is the biggest problem we have faced during the last two fiscal years and the biggest problem we currently face.
Our new green tea drink is fully developed but is not currently being marketed. Our other new “super juice” drink, EpiGaia™ is also not being marketed at present, all for want of advertising capital.
Unless and until we can generate substantial advertising capital in some fashion, our ability to remain in business in our current form through the next year or longer may be in doubt.
Current Status of the Company
We are not presently involved in any bankruptcy or insolvency proceeding of any kind and none of our officers and directors has been involved, directly or indirectly, in any bankruptcy or similar proceeding. Neither we nor any officer or director is involved in any pending litigation, nor is any litigation involving us or any officer or director threatened.
We have no subsidiaries or properties other than the products we have developed and on which we have obtained various intellectual property protections. We also have products that we are not currently marketing or not aggressively marketing.
We are not involved in any joint venture with any other party. Other than the money we have been advanced by Uplift Holdings, our principal shareholder, and a 2008 license agreement we have with its principal relative to a product we aren’t currently marketing, we are not currently involved in any contract with any other person or entity, including any marketing or consulting agreements. We are, however, continuing to look at whether we can enter into any advertising, marketing and vendor distribution agreements with various retailers and on what terms. This is something that we are doing on an on-going basis in the ordinary course of our business.
As set forth in our balance sheet in Part F/S below, as of December 31, 2012, we had $- 0 - in cash and approximately $736 worth of product inventory. All previously held inventory has been written off due to obsolescence and also, due to our current and recent efforts to focus on distributing Tonify and X-Mint as described above.
We maintain executive offices or facilities at the office of our Chairman of the Board located at 252 West Cottage Avenue, Sandy, Utah 84070. We do not pay rent for these office facilities because their use is only nominal.
We do maintain a products liability insurance policy.
For and as of our year end, December 31, 2012, we had revenues of $133. We had zero dollars in deferred revenue representing sales for which the right of return has not been determined or expired. For and as of our fiscal year end, we did not have any retail grocery store chain sales with Ralphs, Albertsons, and Harmons. We believe that our retail sales during all of 2012 were not as substantial as we would have wanted simply because, as disclosed elsewhere herein, we lack sufficient advertising capital. Management cannot predict whether we will ever be profitable even though there is admittedly a large market for the two new products we distributing or retailing through our single website, namely, Tonify and XMint.
As of December 31, 2012, we had a net working capital deficiency of $31,320. At the same time, we currently have a financial commitment for day-to-day operations through our majority shareholder, Uplift Holdings. This commitment does NOT include providing the advertising capital necessary to become featured in large retain food chain stores. Such a commitment would involve several thousands of dollars. Uplift Holdings’ commitment is to provide us with sufficient working capital over at least the next year as necessary to continue to be “current” in our reporting obligations with the U.S. Securities and Exchange Commission (SEC). This commitment may be less than one year if a determination is made during that period that our business plan cannot be successful. We consider its generous commitment to keep us current in our reporting obligations for at least the next year a legal obligation, as does Uplift Holdings, even though we have no written agreement with it to this effect. We do not have a written agreement with Uplift Holdings to this effect because we believe that it has enough shares at this time and if we were to do so, such an agreement might require giving Uplift Holdings additional shares in the event that we default on our obligation to it, something that neither of us believes is necessary to provide for at this time. If Uplift Holdings decides not to advance us additional funds for lack of its own capital and resources and yet our business prospects look positive or favorable, we may consider raising money by selling our common stock on a private placement basis. Additional thought and consideration has been given to this prospect at this time but we have nothing to report in this regard. If such occurs, existing shareholders would likely be substantially diluted.
Even though we have two new products we are distributing and retailing through our website and for which we believe there is an enormous market, because of the start-up nature of our offering these two particular products, there exists substantial doubt regarding our ability to continue as a going concern. See Part F/S below. No assurance can be given that we will become successful or that we will generate enough capital from sales of these two new products to continue to finance necessary advertising campaigns, let alone undertake new advertising campaigns such as advertising in food magazines or in a variety of health food and nutrition venues. In this regard, reference is made to our "Plan of Operation" section below.
Our stock transfer agent is Fidelity Transfer Company located at 8915 South 700 East, Suite 102, Sandy, Utah 84070, phone number 801-562-1300; fax number 801-233-0589.
As of the date of this document, we have approximately 1,240 shareholders of record. Fidelity Transfer Company has been our transfer agent since our initial public offering back in the 1950’s. We have but one class of stock issued and outstanding, that being common capital voting stock having a par value of $0.001 per share. As a result of a 1 for 20 reverse split that FINRA approved in December 2011 and, as of the date of this document, we have a total of 13,692,597 common capital shares issued and outstanding of which 100,000,000 common shares are
authorized. Effective November 21, 2011, the Secretary of State of the State of Nevada accepted an amendment to our Articles authorizing the issuance of as many as 10 million preferred shares, having a par value of $0.001 per share, the same as our common stock. No such shares have been issued. The rights and preferences relating to such preferred shares are subject to the discretion of our Board of Directors and the parameters are set forth in a Certificate of Designation filed with the State of Nevada on November 21, 2011. This was disclosed in a 14C Information Statement we filed on the SEC’s Edgar database in November 2011 and which was also mailed out to our stockholders.
In the November 21, 2011 amendments to our Articles, we also amended our Articles to allow our Board of Directors, if they so desire, to adopt or craft an employee stock option or other benefit plan in their discretion, a plan or program that would not require further shareholder approval. Reference is made to our filings with the State of Nevada which are available on the Secretary of State of Nevada’s website.
Of the 13,692,597 common shares currently issued and outstanding, our current slate of officers and directors own and hold or control, directly and indirectly, a total of 12,320,000 shares. This figure represents 90% percent of our total number of issued common shares. See Item 12 of Part III below.
Principal Products or Services Now Offered and Their Markets.
As stated above, in October 2012, we began marketing on our updated website, www.upliftnutrition.com, a new product called “Tonify,” which is a raspberry keytone chewing gum designed to burn fat. We also began marketing a second product called “X-Mint,” a male enhancement chewing gum.
We believe that the overall nutritional market has exploded in size as the “yuppie” generation (the 50’s and 60’s) have begun to age into their 50’s. This generation or Americans has been and are still today, very resistant to normal aging. Billions of dollars have been spent on nutrient and age delaying products that will help keep the population looking and, especially feeling, young and being as fit as possible. Thusly, the overweight and male enhancement markets have grown substantially in size over recent years as well. Billions of retail dollars are now being spent annually by both males and females on the newest and most advanced youth enhancement products available. We feel that Tonify and X-Mint are just two products that fill this niche.
Government Regulation and Need for Governmental Approval of Principal Products or Services.
Because we do not sell a product that makes any particular cure claim, our products are exempt from direct regulation by the federal Food and Drug Administration. We have modified our website to remove any “assumed” claims of any product that we cannot prove.
We do not make any disease claims and therefore we are in compliance with FDA and FTC “truth in advertising” laws. http://www.ftc.gov/bcp/conline/pubs/buspubs/dietsupp.shtm). Also our label follows FDA guidelines (http://vm.cfsan.fda.gov/~dms/supplmnt.html). Other than state and federal securities laws and possible internet fraud or consumer fraud statutes that various states have enacted, we are not aware of any particular state or federal regulations that affect or impact our business.
Applicability and Impact of Sales Taxes
With respect to the collection of sales taxes, we were informed by the Utah State Tax Commission that because we maintain an office in Utah (even though we are a Nevada corporation), we must collect sales taxes from all Utah residents who buy our product. We have obtained a Utah sales tax number for this purpose. Because we are a Nevada corporation, we are also considered to maintain an office in Nevada. This means that we must also pay sales taxes for Nevada residents who buy our product. We have applied for and received a Nevada sales tax number for this purpose. Both states require filing quarterly sales tax returns. Because we do not maintain an office in any jurisdiction other than Utah and Nevada, we are not, to our knowledge, required to collect sales taxes in or for any other jurisdiction. According to the Utah State Tax Commission, persons who buy our product outside of the State of Utah are supposed to pay a "use tax" to their own respective state taxing authority. Collecting sales or use taxes outside of the States of Utah and Nevada are therefore not our responsibility. Were we to open an office in another state, we would be required to collect sales taxes from purchasers of our product who reside in that state. At present, we only maintain an office in the State of Utah and technically, Nevada. We will thus pay sales taxes in those two states to the extent we have purchasers of our product in those states.
The extent to which the manufacturer of Tonify and X-Mint maintains a retail or other substantial presence in another state, we would likely have to charge sales or use taxes to persons who purchase from our website in those particular states.
Competition and Marketing Data and Information.
UpLift has entered into an exclusive representation letter agreement with the manufacturer that allow us to, not only sell product on our website(s), but exclusively market through “Closed Network Social Media” advertising websites as well. This gives us an advantage over other marketers of the product though things are too new to be able to quantify that advantage at this point. As time goes on, we will be able to provide more marketing data and information in this regards. Tonify and X-Mint’s manufacturer has other distributors who offer the two products for sale through retailers, dealers and their website
Sources and Availability of Raw Materials and Names of Principal Suppliers.
Not applicable because we obtain product directly from the manufacturer and, at the same time, we maintain sufficient inventory on hand to satisfy orders. We also ship product directly that is purchased through the “Closed Network Social Media” sites because the orders are fulfilled through our website.
Dependence on One or a Few Major Customers.
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts.
Though we have a registered federal trademark or trade name of the two phrases Active Uplift® and All Day Energy Spray®, both of which represent product that we own, we are not marketing these products at the present time. The intellectual property protection that we therefore have on these products is no longer relevant to our current sales efforts and current business activities.
We have no intellectual property protection or rights with respect to the 2 new products we are retailing on and through our website, namely, Tonify and X-Mint.
We currently have no franchises, concessions, royalty agreements or labor contracts. As disclosed in earlier Edgar filings, we currently have one license agreement. In 2009, we entered into a license agreement with one of our directors to market a new product, the formula for which was separately and independently developed by him. Such product is a “super juice” drink, which we unveiled 2 years ago and have named EpiGaia™. We are not currently marketing this product for want of advertising funds and therefore, our plans with respect thereto are “on hold.” This license agreement involves nominal consideration to this director as a result of his insider status and also because of his potential conflict of interest in this regard.
With regard to our new product, EpiGaia™, we are including the “TM” or trademark designation next to the name EpiGaia™ in that, on May 7, 2009, we applied, through intellectual property counsel, for a federal trademark and trade name with the U.S. Patent and Trademark office in Washington, D.C. In addition to applying for a federal trademark and trade relative to the name “EpiGaia,” on the same date we also applied for a trade name and trademark for the names “Epigenic Health” and “Epigenic Wellness.” These three (3) applications are identified by Serial Nos.77/.731,844, 77/731,917 and 77/731,888, respectively. We intend to use the TM designation in connection with our use of any of these marks. These three federal trademark applications are currently pending. We have no way of knowing, at the present time if our applications will be granted, or, if they or any of them are, when that might occur. All Day Energy Spray®, on which we have a registered federal trademark, uses a proprietary, natural energy formula called XYTINE™ and on which we previously filed for a federal trademark or trade name with the U.S. Patent and Trademark Office. See also Item 2 of this Part immediately below titled “PROPERTIES.”
Research and Development Costs during the Last Two Fiscal Years.
During the years ended December 31, 2012 and December 31, 2011, we expended no money towards research and development.
Costs and Effects of Compliance with Environmental Laws.
None; not applicable.
Reports to Shareholders.
None.
Employees
While we do have a non-compete agreement with our officer and director, Jessica Stone Rampton, the fact is that we have no employees and do not anticipate having to hire any other than possibly for part time clerical help or in the event that sales increase or take off, an event that does not appear particularly likely to occur. Accordingly, we have no immediate plans to retain employees until such time as our business plans warrant or justify the expense. We may find it necessary to periodically hire part-time clerical help on an as-needed basis though we have no plans to do so at this time.
Facilities
We are now using as our principal place of business the office address of our Chairman of the Board and principal stockholder, Mr. Hall, located in Sandy, Utah, a suburb of Salt Lake City, Utah. We have no written agreement and pay no rent for the use of this facility. Even if we had the capital, because we are a start-up eCommerce and retail business, we have no current need or plans to secure commercial office space from which to conduct our business. We also use the warehouse facilities owned by one of our directors to store our materials and inventory. This is also at no cost to us at the current time.
Additional Information.
For more detailed information on our business and business plans, reference is made to ITEM 7 below titled “MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS.”
We are subject to the information reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, we file reports and other information with the Commission. Reports and other information filed by the issuer with the Commission can be inspected and copied at the Commission's Public Reference Library in the Commission's own building located at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the Commission at prescribed rates. An interested person may also obtain information about the operation of the Public Reference Room by calling the Commission at 1-800- SEC-0330. Inasmuch as we are an electronic filer, and the Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission, an interested person may access this material electronically by means of the Commission's home page on the Internet at www.sec.gov.com. To facilitate such access for an interested person, our CIK number is 0001390705.
ITEM 1A.
ITEM 1A. RISK FACTORS.
Not applicable to smaller reporting companies.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None; not applicable.
ITEM 2.
ITEM 2. PROPERTIES.
We own all right, title and interest in and to our two health and energy products Active UpLift® and All Day Energy Spray®, none of which we are marketing at the present time. Other than as set forth in our license agreement with one of our directors, we own all right, title and interest in and to our “super juice” EpiGaia™, a product that we are not currently marketing. Finally, we own all right title and interest in and to our “Green Tea Diet” drink that we are also refraining from marketing at the present time.
As set forth in the section above titled “Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration,” we have a federal trade name and trademark on the phrase Active UpLift® which we obtained in 2008. During our 2009 fiscal year, we received notice from our intellectual property attorneys that our application with the U.S. Patent and Trademark Office for a trade name and trademark on the phrase All Day Energy Spray® had issued and is now registered. This has enabled us to put the small “r” with a circle around it next to the name of both of these products, something that we have routinely done on all of our shipping packages and boxes used in interstate commerce.
We have contemplated filing with the U.S. Patent and Trademark Office for a federal chemical patent on our Active UpLift® formula but have not as yet done so. Based on our lack of advertising capital, however, it is unlikely that we will do so.
We have no proprietary interest in the two products we are currently marketing on our website at the present time, namely, Tonify and X-Mint.
Executive Offices
During our 2012 fiscal year, our executive offices were re-located to 252 West Cottage Avenue, Sandy, Utah 84070. Our telephone number is 801-566-1079 and our fax number is 801-568-9111. This is also the business office address of Chairman of the Board and principal shareholder. We pay no rent for the use of this address or facility. We do not believe that we will need to maintain any other or additional office at any time or in the foreseeable future in order to carry out our plan of operations described in this document. This is because our business is primarily “on-line,” meaning that the current facilities are adequate to meet our needs until something occurs which requires either more or different office space. We do not foresee that in the foreseeable future.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
There are presently no pending legal proceedings to which the Company or any officer, director or major stockholder is a party or to which us or our products are subject and, to the best of our knowledge, information and belief, no such actions against us are contemplated or threatened.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES.
None; not applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
As per information obtained from the OTCBB, the price and trading activity in our stock for each quarter of fiscal 2012 and 2011 is set forth below. The reader should note that our 1 for 20 reverse split went into effect in the last quarter of 2011 and this obviously affected the market price of our stock.
\
OTC Bulletin Board ®
Quarterly Trade and Quote Summary Report
UPNT - UPLIFT NUTRITION INC
Year Ending December 2012
OTC Bulletin Board ®
Quarterly Trade and Quote Summary Report
UPNT - UPLIFT NUTRITION INC
Year Ending December 2011
NOTE: THE INFORMATION ABOVE WAS COMPILED WITH CARE FROM SOURCES BELIEVED TO BE RELIABLE BUT NEITHER PINK SHEETS, LLC, NOR THE OTC BULLETIN BOARD CAN GUARANTEE THE ACCURACY OF OR WARRANTEY OF THIS INFORMATION’S USE FOR ANY PURPOSE.
NOTE : PRICES INDICATED ABOVE HAVE NOT BEEN ADJUSTED FOR STOCK DIVIDENDS OR SPLITS.
NOTE: THE ABOVE BID AND ASK QUOTATIONS REPRESENT PRICES BETWEEN DEALERS AND DO NOT INCLUDE RETAIL MARKUP, MARKDOWN OR COMMISSION. FURTHERMORE, THEY DO NOT REPRESENT ACTUAL TRANSACTIONS.
As of our year end and as of the date of this annual report, there are a total of 13,692,597 shares issued and outstanding. This figure takes into consideration the 1 for 20 reverse split that FINRA allowed us to effectuate on December 9, 2011. For more information on who owns our stock and what stock may trade without restriction, see Item 12 of Part III below titled “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.”
As stated above, we currently have no outstanding warrants, options, incentive stock option or employee compensation plans of any kind or nature. As disclosed above, however, our Board of Directors now has the power and authority under our Amended Articles filed in November 2011 to craft an incentive stock option or employee compensation plan if it so desires without further shareholder approval. At the same time, and though there are currently no plans to do so, no assurance can be given that such derivative securities will not be issued in the future, particularly if there is a good business reason to do so. We do have convertible notes outstanding that can be converted into common stock.
Having obtained an OTCBB symbol several years ago, there are, and have been, NO plans, proposals, arrangements or understandings with any person, including any securities broker-dealer or anyone associated with a broker-dealer, concerning the development of a trading market in our common capital stock on the OTCBB. Moreover, we have had NO discussions with anyone, to date, in this regard.
Holders
According to our stock transfer agent, Fidelity Transfer Company, as of the date of this annual report, there are approximately 1,240 holders of record of our common capital stock.
Dividends and Dividend Policy
Our Board of Directors has NOT declared or paid cash dividends or made distributions in the past and we do not anticipate that we will pay cash dividends or make distributions to shareholders in the foreseeable future. We currently intend to retain and invest future earnings, if any, to finance our operations.
The holders of our common stock are entitled to receive such lawful dividends as may be declared by the Board of Directors. As of this date, no such dividends have been declared and based on our current need for advertising capital; management does not believe it likely that dividends will be declared in the near or distant future. The payment of any future dividends will depend upon, among other things, future earnings, capital requirements, our financial condition and general business conditions. As a result, there can be no assurance that any dividends on common stock will be paid in the future. We also have no redemption or sinking fund provisions applicable to any shares of common stock.
Description of Securities
Our authorized capital stock consists of 100,000,000 shares of common capital stock, $0.001 par value, of which 13,692,597 shares were issued and outstanding as of our fiscal year-end, December 31, 2012, and also, as of the date of this Report. As also disclosed above, as a result of the November 2011 amendments to our Nevada Articles, our capital stock also consists of an additional 10 million preferred shares which we authorized, having a par value of $0.001 per share, of which none are currently issued or outstanding, the preferences and rights concerning which have not as yet been determined by our Board of Directors. See Exhibit 3.2 hereto.
As of our December 31, 2012, year-end, including the date of this Annual Report, there are NO options, warrants, stock appreciation rights, or other rights of a similar nature outstanding which currently obligate us to issue any additional common stock to anyone. Our common stock is considered a "penny stock" because it meets, or would meet, if and when it trades, one or more of the definitions in Commission Rule 3a51-1 of the Exchange Act. These include but are not limited to the following: (i) the stock trades at a price less than five dollars ($5.00) per share; (ii) it is NOT traded on a "recognized" national exchange; (iii) it is NOT quoted on the FINRA’s automated quotation system (NASDAQ), or even if so, has a price less than five dollars ($5.00) per share; OR (iv) is issued by a company with net tangible assets less than $2,000,000, if in business more than three years continuously, or $5,000,000, if in business less than a continuous three years, or with average revenues of less than $6,000,000 for the past three years. The principal result or effect of being designated a "penny stock" is that securities broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated there under by the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. These rules may have the effect of reducing the level of trading activity in the secondary market, if and when one develops.
Potential investors in our common stock are urged to obtain and read such disclosures carefully before purchasing any shares that are deemed to be "penny stock." Moreover, Commission Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker- dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Pursuant to the Penny Stock Reform Act of 1990, broker- dealers are further obligated to provide customers with monthly account statements.
Compliance with the foregoing requirements may make it more difficult for investors in our stock to not only buy but to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.
We are informed that the Financial Industry Regulatory Authority (FINRA) issued certain rules or regulations in early 2009 relative to depositing physical certificates in a brokerage account, among other things. We are not familiar with these new rules or regulations as they do not affect us directly but we would encourage a shareholder or interested person to contact his or her stock brokerage firm to determine if these new rules and regulations affect such person.
Common Capital Stock
The holders of our common stock are entitled to one (1) vote per share on all matters submitted to a vote of the shareholders. In addition, such holders are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available for such purpose. In the event of dissolution, liquidation or winding-up, the holders of common stock are entitled to share ratably in all assets remaining after satisfaction of all our liabilities, subject, of course, to the prior distribution rights of any preferred stock that may be outstanding at that time. The holders of common stock do not have cumulative voting rights or preemptive or other rights to acquire or subscribe for additional, unissued or treasury shares, which means that the holders of more than 50% of such outstanding shares voting at an election of directors can elect all the directors on the board of directors if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the directors.
Because the rights and preferences to our newly authorized preferred shares have not been designated, we can make no representations at the present time as to whether they will involve or represent more than one (1) common share vote per preferred share, for example, on matters to be acted upon.
Preemptive Rights, Cumulative Voting and Control
Under Nevada law, if a corporation does not expressly allow, in its Articles, for preemptive rights, no such rights are authorized. When we re-incorporated in Nevada, our Articles did not expressly provide for any such rights. That is to say, no shareholder has the right to acquire stock from us on any set of terms before that same stock is offered to another person. This is the definition of "preemptive rights." In addition, as set forth in the previous paragraph, cumulative voting in electing directors is similarly not authorized by our Articles of Incorporation. Accordingly, the holder(s) of a majority of our outstanding shares, present in person or by proxy, will be able to elect all of directors at a meeting called for such purpose.
Liquidation Rights
In the event of liquidation, dissolution or a winding up of us or our affairs, holders of common stock would be entitled to receive pro rata all of our remaining assets that are available and distributable to the shareholders after first satisfying claims of creditors and anyone else having rights that are superior to those of the common stockholders.
Securities Authorized for Issuance under Equity Compensation Plans.
We have NOT authorized any securities for issuance under any equity or other compensation plans of any type or nature, inasmuch as we have NOT adopted any such incentive or compensation plans and have no intention, at present, to do so.
Recent Sales of Unregistered Securities.
On September 30, 2012, we allowed Uplift Holdings to convert $77,220 worth of debt on our balance sheet in early September in exchange for the issuance, to our majority shareholder, of 7,720,000 common capital “restricted” shares. As further explained in our last Form 10-Q, we also issued 1,200,000 “restricted” shares to 3 Directors for past services rendered. These stock issuances resulted in a total of 13,692,597 shares currently issued and outstanding.
The foregoing stock issuances were made in reliance on the Section 4(2) or non-public offering exemption from federal securities registration and the corollary private placement or similar exemption under applicable state law.
Use of Proceeds of Registered Securities.
None; not applicable.
Purchases of Equity Securities by Us and Affiliated Purchasers.
The Company did NOT purchase any of its own securities during the 2012 fiscal year.
As disclosed in the subheading above titled Recent Sales of Unregistered Securities, our majority shareholder did acquire common stock, namely, equity securities, during the 2012 fiscal year; however, such equity securities were acquired in exchange for cancellation of portions of convertible notes held by it and were not purchased or acquired for cash. See our Edgar filings.
Stock Transfer Agent
Fidelity Transfer Company ("Fidelity") is our stock transfer agent and has served as such since our initial public offering in the mid 1950's. Fidelity is located at 8915 South 700 East, Suite 102, Sandy, Utah 84070, phone number 801-562-1300, fax number 801-233-0589.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
Responding to this item is not required for smaller reporting companies.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS.
Our principal business plan up to and through the end of the third quarter had been to promote, market and sell our energy spray All Day Energy Spray® through the active websites we have mentioned throughout this document but after September 30, in October, management modified our marketing strategy, rebuilt our www.upliftnutrition.com website, and entered into a marketing agreement to sell two new products called “Tonify” and “X-Mint” through our updated website. Because of our change in direction, in early October, we shut down our two other major websites, namely, www.alldayenergyspray.com and upliftenergy.com so we could concentrate all of our marketing and sales efforts on our one principal website.
As a result of winding down our marketing efforts with respect to Active UpLift® and All Day Energy Spray®, we had, and will have, less than anticipated sales and gross revenue on these two products through the end of the 2012 year.
We eliminated $77,220 in debt on our balance sheet during the quarter through the exercise of outstanding convertible notes in favor of our majority shareholder. We believe that retiring such debt makes us more suitable or attractive to an equity or other investor.
In addition to the foregoing, we look forward to marketing Tonify and X-Mint, two new products we just started marketing in mid October, all as disclosed in Part II, Item 5 below. See our website, www.upliftnutrition.com.
Our Websites.
During the quarter, we started the redesign of our principal UpLift website. We also shut down or discontinued our former websites, www.epigaia.com, www.alldayenergyspray.com, and www.upliftenergy.com in favor of just the one website. During the quarter, we spent an enormous amount of time and energy revamping and modernizing www.upliftnutrition.com and strongly encourage any investor or interested person to visit them.
Inventory.
We no longer carry any inventory of Active UpLift® and All Day Energy Spray®. We do maintain limited inventory of Tonify and X-Mint.
As of December 31, 2012, we had 91 packets of Tonify and 41 packets of X-Mint in inventory.
We are NOT Dependent on One Supplier for Our Potential Success.
With regard to Tonify and X-Mint, we are not dependent on any one supplier for our ability to receive and inventory product.
Our Business Plan over the Remainder of the Year.
As a result of the recession and people tightening their belts and not spending as much money, we have had a difficult time generating sales for Active UpLift® and All Day Energy Spray. As a result, and as stated above, we have decided to suspend all advertising on those two products and cease selling them by the end of 2012. And, starting this October, as disclosed elsewhere herein, we have added 2 new products to sell as a broker. To accomplish this, we have completely updated and expanded our existing website, and have shut down the other two websites leaving www.upliftnutrition.com as the only website available for advertising, marketing and sales. Through our updated website, we will continue to offer our Active Uplift® and All Day Energy Spray products, until the end of 2012, on a “try it free” promotional effort to anyone who wants the product. All the person needs to do is pay for the shipping charges.
We hope that our new marketing efforts related to Tonify and X-Mint will be successful but this remains to be seen
Because we are no longer marketing our principal energy drink products and we have embarked on marketing two entirely new products, we do not believe that comparing cost of goods sold for 2012 to 2011 is particularly relevant or meaningful. .
Our marketing expenses for the year ended December 31, 2012 were $1,360 compared to $2,781 for the year ended December 31, 2011. For the year ended December 31, 2012, marketing expenses consisted of $0 in advertising costs and $369 in product used in demonstrations, free samples, and giveaways in connection with sponsorship of events. We also incurred $991 for marketing on our website during the fiscal year.
Consulting and professional fees were $65,057 for the year ended December 31, 2012 compared to $50,319 during the year ended December 31, 2011. No major change was expected in professional fees as we will continue to have audits and reviews of the financial statements.
General and administrative expenses were $11,892 for the year ended December 31, 2012 compared to $10,846 for the year ended December 31, 2011. The decrease is mainly the result of decreased sales and operations and our efforts to wind down the marketing of our energy drinks.
Liquidity and Capital Requirements
As of our fiscal year ended December 31, 2012, we had $- 0 - in cash. What we have in our checking or bank account at any given time is insignificant inasmuch as our working capital has historically been provided by our majority shareholder. Though we are accruing 8% interest per annum on the amounts provided by our majority shareholder, these advances do not require interest payments at the present time and, unless or until we become profitable, we do not believe that it likely that our agreement with our majority shareholder, Uplift Holdings, would be modified to require such. Uplift Holdings’ loans are considered or designated by us as "advances" inasmuch as they do not require that we pay interest payments unless demand is made to do so. While we accrue interest or keep track of what it is, at present, we have no way of paying any interest payments to Uplift Holdings. As of December 31, 2012 and given the debt during the last 2 fiscal years that we converted to common stock, we have accrued $227 in interest due and owing to Uplift Holdings. In the event we modify our oral agreement in the future with Uplift Holdings so that we are required to pay interest, we do not believe it would have any material impact on us or our liquidity because both we and Uplift Holdings would not agree to such a modification unless we were profitable and could afford to make such interest payments.
We hope to be able to satisfy our cash requirements for at least the next 12 months in that our majority shareholder has committed itself to advancing what funds are necessary for us to satisfy all of our cash requirements and otherwise keep us current in our 1934 Exchange Act reporting obligations for at least the ensuing year. Our majority
shareholder lacks the capital and resources to fund advertising campaign, particularly given that we have come to realize how expensive such an endeavor really is.
We believe that a year period is consistent with the disclosure in our PLAN OF OPERATION described below in that we believe that within 1 year, we should be able to successfully carry out our business plan if we can find sufficient advertising capital on acceptable terms. If a determination is made by management within the next year that we will NOT be successful and that our business plan is or will be a failure for reasons which we can only imagine, our majority shareholder will likely elect not to advance us any more funds. See the section titled "PLAN OF OPERATION" below. Having said this, we are unable to guarantee that at the expiration of one year from now, and assuming that our business plan is NOT by then successful, that our majority shareholder will continue to advance us sufficient money to allow us to continue in our reporting obligations. We do not mean to imply, however, that our majority shareholder will NOT continue to advance us funds beyond the next year, particularly if it appears that we will indeed be able to successfully carry out our business plan if we continue beyond the year. If our majority shareholder does not desire to loan or advance us sufficient funds to continue for the simple reason that the prospects of our business plan look bleak, we may be required to look at other business opportunities, the form of which we cannot predict at this time, as to do so would be highly speculative on our part. It is possible, however, that we would consider a private placement of our shares, the form of which we also cannot predict at this time.
As disclosed in Item 5 above titled Recent Sales of Unregistered Securities, on September 30, 2012, we allowed Uplift Holdings to convert $77,220 worth of debt on our balance sheet in early September in exchange for the issuance, to our majority shareholder, of 7,720,000 common capital “restricted” shares. As further explained in our last Form 10-Q, we also issued 1,200,000 “restricted” shares to three (3) directors for past services rendered. These stock issuances resulted in a total of 13,692,597 shares currently issued and outstanding. We believe that eliminating debt on our balance sheet has significantly cleaned up our balance sheet in our opinion. While conversions of our debt securities to common stock during previous fiscal years have removed several hundreds of thousands of dollars of debt from our balance sheet, issuing such shares has nonetheless caused existing shareholders to be substantially diluted.
Our Budget over the Next 12 Months
Due to our lack of working capital necessary to generate a serious and aggressive advertising campaign, we are unable to devise or project an advertising budget for 2013. Assuming that we do not obtain sufficient working capital during the year to embark on an extensive advertising campaign, what capital we have or what advances we will obtain from our majority shareholder will be used, during 2013, to keep us current in our reporting obligations and to pay attorneys, accountants and auditors.
For information on the cost of manufacturing and packaging our product, reference is made to our PLAN OF OPERATION section below.
Contingency Planning.
Any funding for emergencies is anticipated to be advanced by our majority shareholder, assuming that it has the available funds to do so.
Off-Balance Sheet Arrangements.
None; not applicable.
Effect of Current Economic Conditions.
Obviously, current economic conditions, including the recent hikes in the price of oil, are hurting all businesses, not to mention retail outlets and retail sales overall. Most Americans are not spending money today like they have in the past. Since much of the effects of the current recession have only become apparent in the last two years, we are not in a position at this time to predict the recession’s effects on our overall business plan and plan of operation, not to mention 2013 sales. No retail company that we know of is making any such predictions. We suspect that sales in 2013 will be slower than they might otherwise be, simply because that is what is happening to everyone else.
It is also our belief that Tonify and X-Mint are considered ‘boutique’ products that will sell well as long as the economy does well and the public has extra expendable income. Although we are experiencing some sales, the current recession may likely have a negative effect on future sales. We also believe that the particular market for Tonify and X-Mint is considered an ‘impulse’ market.
PLAN OF OPERATION
As stated in Items 1 and the beginning of Item 7 above, our principal business plan up to and through the end of the quarter had been to promote, market and sell our energy spray All Day Energy Spray® through the active websites we have mentioned throughout this document but after September 30, in October, management modified our marketing strategy, rebuilt our www.upliftnutrition.com website, and entered into a marketing agreement to sell two new products called “Tonify” and “X-Mint” through our updated website. Because of our change in direction, in early October, we shut down our two other major websites, namely, www.alldayenergyspray.com and upliftenergy.com so we could concentrate all of our marketing and sales efforts on our one principal website.
Shipping of Our Two New Products.
Both Tonify and X-Mint are packaged in DVD-sized containers which are light weight and inexpensive to ship through the US Postal Service or one of the private shipping services. We pass this cost on to the customer.
Inventory
As of December 31, 2012, all previously held drink inventory was written off due to obsolescence and because of the change in product line and distribution. Approximately $12,524 in raw materials and $9,686 in finished goods were written off as an inventory adjustment and are included in cost of sales on our Statement of Operations. As stated in the beginning of Item 1 above, we have phased out the sale of Active UpLift®, and All Day Energy Spray®. We do not intend to mix any more of these products. What is on hand and in inventory we will sell on-line until the viability of the product fully expires
Our Current On-Line Marketing/Advertising Strategy
As disclosed above, we are changing directions here starting in 2013 and have decided to concentrate our marketing efforts on Tonify and X-Mint. In this regard, we are concentrating our new and current marketing efforts on keeping our current revamped website updated and fully functional. Through these efforts, we have started a marketing effort on various popular and more significant search engines.
In order for our Internet/eCommerce business to succeed, we additionally plan, among those things mentioned above, and on an on-going basis, to:
-- make significant investments in our Internet/eCommerce business, including upgrading our website as it becomes necessary
-- get other food and nutrition websites to link to ours
-- significantly increase online traffic and sales volume in every way we can
-- attract and retain a loyal base of frequent visitors to our website who will give us feedback about our product
-- expand the products and services offered on our website
-- respond to competitive developments and maintain our distinct brand identity
-- form and maintain relationships with strategic partners, particularly retail food stores and outlets
-- provide quality customer service
-- continue to develop and upgrade our services and technologies
We Intend to Pursue Additional Marketing Ideas and Avenues on an On-Going Basis.
Marketing ideas that have not as yet been implemented by us for want of capital but which we intend to seriously consider and which are designed to additionally promote us and our website:
1) through reciprocal links with other websites;
(2) through advertising on other health and nutrition websites;
(3) through ads placed in various health and nutrition food magazines such as Healing Lifestyles & Spas, Shape, Prevention, and Woman’s Day;
(4) through the attendance at health and nutrition tradeshows and expos across the country;
(5) through contacting and then supplying retail food stores across the country, including health food stores, with our product, either on consignment basis or, on a high volume discounted basis for which they will pay us in advance; and
(6) through the giving of product demonstrations in store locations and even malls.
Obligation of Our Principal Shareholder to Finance Us in Our Reporting Obligations Over at least the Next Year
As stated elsewhere in this document, our principal shareholder, Uplift Holdings, intends to provide us with sufficient funding, over at least the next year, to keep us current in our SEC reporting obligations. This does NOT include advancing us the funds necessary to embark on a national advertising campaign. The only caveat with regard to this commitment is if it is determined by us and our majority shareholder within the next year that our business plan will NOT work and cannot succeed. If that occurs, and we can make no prediction about whether it will occur or not, our majority shareholder will likely elect to cease further funding us. We have NOT entered into any formal, written agreement with Uplift Holdings that contractually binds or obligates it, in writing, to fund us for the next year, though we consider this commitment on its part to be a legal obligation upon which we and our shareholders have, up until now, been able to rely. Having said this, we will nonetheless be required to continue to evaluate our business plan. At the expiration of one year, or earlier, and assuming that we have not been able to obtain the needed capital to expend on advertising, management will have to re-evaluate our overall plans, intentions and strategies and, in particular, Uplift Holdings will then have to evaluate whether, and to what extent, it wants to continue to fund our continued existence as a fully reporting company. For our fiscal year ended December 31, 2012, Uplift Holdings advanced us a total of approximately $13,700. This figure is disclosed as stockholder advances on our balance sheet contained in Part F/S below as a liability, along with previous debt owed to Uplift Holdings. See our financial statements in Item 8 below.
ITEM 7A.
ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No response to this item is required for smaller reporting companies.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTRY DATA.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 2012
UPLIFT NUTRITION, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
CONTENTS
PAGE
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements of Stockholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements
25 - 32
Morrill & Associates, LLC
Certified Public Accountants
1448 North 2000 West, Suite 3
Clinton, Utah 84015
801-820-6233 Phone; 801-820-6628 Fax
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Uplift Nutrition, Inc. (A Development Stage Company)
Sandy, Utah
We have audited the accompanying balance sheets of Uplift Nutrition, Inc. (a development stage company) as of December 31, 2012 and 2011 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from inception on March 5, 2005 through December 31, 2012. 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 audit 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 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Uplift Nutrition, Inc. (a development stage company) as of December 31, 2012 and 2011 and the results of its operations and cash flows for the years ended December 31, 2012 and 2011 and for the period from inception on March 5, 2005 through December 31, 2012 in conformity with generally accepted accounting principles 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 2 to the financial statements, the Company is in the development stage, and has not yet established a consistent source of revenue to cover its operating costs, has negative working capital, and has had operating loss since inception. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 2 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Morrill & Associates
Morrill & Associates
Clinton, Utah 84015
April 3, 2013
UPLIFT NUTRITION, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
The accompanying notes are an integral part of these financial statements.
UPLIFT NUTRITION, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
UPLIFT NUTRITION, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 1 - Summary of Significant Accounting Policies
Business and Basis of Presentation
Uplift Nutrition, Inc. (“the Company”), a Nevada corporation, is engaged in the business of manufacturing and distributing a nutritional supplement drink mix. The Company’s operations are based in Salt Lake City, Utah. The Company has not generated significant revenue from planned principal operations and is considered a development stage company as defined in FASB ASC 915-10. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.
On June 2, 2006, the Company completed an acquisition with Nu Mineral Health, LLC (“NMH”), a Wyoming limited liability company organized on March 7, 2005 and engaged in the nutritional supplement and nutrition business. The acquisition was effected by the Company issuing 20,000,000 common stock shares to acquire all of the membership interests, accompanying assets and intellectual property of NMH. The merger was accounted for as a recapitalization of NMH with NMH being the accounting survivor and the operating entity. The accompanying financial statements reflect the operations of NMH, for all periods presented and the equity has been restated to reflect the 20,000,000 common stock shares issued in the recapitalization as though the common stock shares had been issued at the inception of NMH. The results of operations from June 2, 2006 of Uplift Nutrition, Inc. have been included in the accompanying financial statements.
Company’s Equity Ownership
During 2006, Uplift Holdings, LLC acquired 18,000,000 common shares of the Company from the former members of NMH making Uplift Holdings, LLC approximately a 74% owner of the Company.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Inventory
Inventory is carried at the lower of cost or market, as determined on the first-in, first-out method and is periodically evaluated for obsolescence.
Receivables
Accounts Receivable generally consists of trade receivables arising in the normal course of business. The Company establishes an allowance for doubtful accounts that reflects the Company’s best estimate of probable losses inherent in the accounts receivable balances. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available information. The balance of accounts receivable at December 31, 2012 and 2011 was $-0- .
Website Costs
The Company has adopted the provisions of FASB ASC 350. Costs incurred in the planning stage of a website are expensed while costs incurred in the development stage are capitalized and amortized over the estimated three-year life of the asset.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 1 - Summary of significant Accounting Policies [Continued]
Intangible Assets
Intangible assets consist of indefinite-life intangible assets which include trademarks. The Company accounts for indefinite-life intangible assets in accordance with FASB ASC 350 and accordingly tests these assets at least annually for impairment.
Revenue Recognition
The Company recognizes revenue when rights and risk of ownership have passed to the customer, when there is persuasive evidence of an arrangement, product has been shipped or delivered to the customer, the right of return has expired, the price and terms are finalized, and collection of the resulting receivable is reasonably assured. Products are shipped FOB shipping point at which time title passes to the customer.
The Company records revenue net of sales discounts, including coupons, sales incentives, and volume discounts. The Company accounts for product coupon incentives the later of 1) the date at which the related revenue is recognized or 2) the date at which the sales incentive is offered. Coupons are recorded as a discount in revenue. Total discounts for the years ended December 31, 2012 and 2011 were $-0-.
Advertising Cost
Cost incurred in connection with advertising and marketing of the Company’s products are expensed as incurred. Such costs amounted to $1,360 and $2,781 for the years ended December 31, 2012 and 2011, respectively.
Research and Development Cost
The Company expenses research and development costs for the development of new products as incurred. Such costs for the years ended December 31, 2012 and 2011 were $-0-.
Income Taxes
Prior to June 2, 2006, in lieu of corporate income taxes, the members of NMH were taxed on or allocated their proportionate share of the Company’s taxable income/loss. Therefore, no deferred tax assets or liabilities, income tax payable or current and deferred tax expense or benefit for federal income taxes have been included in the financial statements for the period prior to June 2, 2006. The Company accounts for income taxes in accordance with FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (Fin48)).” This statement requires an asset and liability approach for accounting for income taxes.
Loss Per Share
The Company calculates loss per share in accordance with FASB ASC 260. Basic earnings/loss per common share are based on the weighted average number of common shares outstanding during each period. Diluted earnings per common share are based on weighted average number of common shares outstanding during the period plus potentially dilutive common shares from common stock equivalents. The Company has no common stock equivalents for all periods presented.
Fair Value of Financial Instruments
On January 1, 2008, the Company adopted FASB ASC 820-10-50, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
-
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 1 - Summary of significant Accounting Policies [Continued]
Fair Value of Financial Instruments
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.
Accounting Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period’s presentation. The effect of these reclassifications had no impact on net losses, total assets, total liabilities, or stockholder’s deficit.
Note 2 - Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has sustained losses of $1,526,905 from March 7, 2005 (inception) through December 31, 2012 including a loss of $104,424 for the year ended December 31, 2012. The Company has recognized minimal revenue during its developmental stage (from March 7, 2005 (inception) through December 31, 2012), which raises substantial doubt about the Company’s ability to continue as a going concern.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its current obligations on a continuing basis, to obtain financing, to acquire additional capital from investors, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company needs to obtain capital, either long-term debt or equity to continue the implementation of its overall business plan. The Company plans on pursuing the additional capital necessary to continue its overall business plan.
Note 3 - Related Party Transactions
An officer/director has advanced a total of $ -0- net of repayments to the Company at December 31, 2012 and 2011, respectively. The advances are unsecured, accrue interest at an annual rate of 8% and are payable on demand. As of December 31, 2012 and 2011, the Company has recorded accrued interest totaling $-0- due to the officer/director. During the years ended December 31, 2012 and 2011, the Company recorded interest expense of $-0- for these advances. During the year ended December 31, 2010, advances of $8,500 and accrued interest of $1,664 was converted into 9,250 shares of common stock of the Company.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 3 - Related Party Transactions (continued)
Uplift Holdings, LLC, a majority shareholder, has advanced a total of $13,700 and $25,700 to the Company at December 31, 2012 and 2011, respectively. The advances are unsecured, accrue interest at an annual rate of 8% and are payable on demand. As of December 31, 2012 and 2011, the Company has recorded accrued interest totaling approximately $227 and $1,826, respectively due to the shareholder. During the years ended December 31, 2012 and 2011, the Company recorded interest expense of $3,946 and $20,775 respectively for these advances and with no interest payments. During the year ended December 31, 2012, advances of $71,675 and accrued interest of $5,545 was converted into 7,720,000 shares of common stock of the Company. During the year ended December 31, 2011, advances of $181,974 and accrued interest of $128,026 was converted into 2,500,000 shares of common stock of the Company.
Note 4 - Inventory
Inventory consists of the following:
December 31, 2012
December 31, 2011
Raw materials and supplies
$ -
$ 12,524
Finished goods
9,763
Total inventory
$ 736
$ 22,287
As of December 31, 2012, old inventories totaling $22,210 was written off due to obsolescence.
Note 5 - Intangible Assets
Intangible assets consist of Trademark application costs totaling $6,593 for the years ended December 31, 2012 and 2011 relating to nutritional supplements sold under the Active Uplift™ label. These intangibles are amortized on a straight line basis over their estimated useful life of 10 years. Accumulated amortization at December 31, 2012 and 2011 was $3,973 and $3,033, respectively.
Note 6 - Website Development Costs
Website development costs consisted of the following at December 31:
Life
Website development costs
3Years
$ 27,639
$ 27,639
Less-Accumulated Depreciation
(27,639)
(27,639)
Net website development costs
$ -
$ -
Amortization expense amounted to $940 and $6,125 for the years ended December 31, 2012 and 2011, respectively.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 7 - Income Taxes
The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10. FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
At December 31, 2012 the Company had net operating loss carryforwards of approximately $518,221 that may be offset against future taxable income through 2032. No tax benefits have been reported in the financial statements, because the potential tax benefits of the net operating loss carry forwards are offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in the future.
Net deferred tax assets consist of the following components as of December 31, 2012 and 2011:
Deferred tax assets:
NOL Carryover
$ 518,221
$ 482,717
Valuation allowance
(518,221)
(482,717)
Net deferred tax asset
$ -
$ -
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended December 31, 2012 and 2011 due to the following:
Current Federal Tax
$ -
$ -
Current State Tax
-
-
Change in NOL Benefit
35,504
35,963
Valuation allowance
(35,504)
(35,963)
$ -
$ -
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 7 - Income Taxes (Continued)
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
At December 31, 2012, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2012 and 2011, the Company had no accrued interest or penalties related to uncertain tax positions.
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2012, 2011 and 2010.
Note 8 - Loss Per Share
The following data shows the amounts used in computing loss per share and the effect on income and the weighted average number of shares of potential dilutive common stock for the years ended December 31,
Net loss (numerator)
$(104,424)
$(105,774)
Weighted average shares outstanding (denominator)
7,648,444
3,217,803
Basic and fully diluted net loss per share amount
$ (0.01)
$ (0.03)
For the years ended December 31, 2012 and 2011, the Company had no potentially dilutive common stock equivalents issued.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 9 - Stockholders’ Equity
As of December 31, 2012 and 2011, the Company had 13,692,597 and 4,772,597, respectively in common shares issued and outstanding and an additional 329,501 shares held by the Transfer Agent in reserve to satisfy shares issued through a lost instrument bond, should the holder of an outstanding certificate for stock in the original merger submit his shares in trade for shares in Uplift Nutrition, Inc.
In December 2011 the Company effected a 1 for 20 reverse stock split with respect to all common stock outstanding. All references to shares issued and outstanding in the financial statements have been retroactively restated to reflect the effects of the reverse stock split.
In September 2012 the Company issued 7,720,000 shares of common stock in satisfaction of stockholder advances in the amount of $71,675 and associated accrued interest in the amount of $5,545 or $0.01 per share.
In September 2012 the Company issued 1,200,000 shares of common stock for services valued at $12,000 or $0.01 per share.
In August 2011 the Company issued 2,500,000 shares of common stock in satisfaction of stockholder advances in the amount of $181,974 and associated accrued interest in the amount of $128,026 or $0.124 per share.
In December 2010 the Company issued 875,000 shares of common stock in satisfaction of stockholder advances in the amount of $350,000 or $0.40 per share.
In September 2010 the Company issued 159,250 shares of common stock in satisfaction of stockholder advances in the amount of $158,500 and associated accrued interest in the amount of $1,664 or $1.00 per share.
During 2009 the Company issued 27,500 shares of common stock for services valued at $247,500 or $9.00 per share.
During 2007 the Company issued 2,500 shares of common stock for services valued at $20,000 or $8.00 per share.
During 2006, the Company issued 66,250 shares of common stock for services valued at $278,250 or $4.20 per share, of which 51,250 shares were issued to officers/directors of the Company.
In June 2006 the Company issued 142,097 shares of common stock as part of a stock offering.
Member’s Contribution - Prior to NHM being acquired by Uplift Nutrition, Inc., the members contributed $10,511 and $31,930 during 2006 and 2005, respectively.
Note 10 - Commitments and Contingencies
Additional Unrecorded Common Stock Certificates - As a result of shareholders holding stock certificates that did not appear on the Company’s current shareholder list, the Company issued 9 common shares, which have been included in the 142,097 shares accounted for as issued in the stock offering transaction. While the Company has no reason to believe that any additional unrecorded certificates exist, the Company believes it is in the best interest of the shareholders to disclose the possible commitment. Should any additional unrecorded shares be turned in, the Company will perform the necessary procedures to validate the new shareholder’s claim prior to issuing the shares.
Note 11 - Recent Accounting Pronouncements
We have reviewed accounting pronouncements issued during the past two years and have adopted any that are applicable to our company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the years ended December 31, 2012 and 2011.
UPLIFT NUTRITION, INC.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2012 and 2011
Note 12 - Subsequent Events
We have evaluated events occurring after the date of our accompanying balance sheets through the date the financial statement were filed. We did not identify any material subsequent events requiring adjustment to our financial statements.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2012, these disclosure controls and procedures were ineffective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There have been no material changes in internal control over financial reporting that occurred during the fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting. Based on our evaluation, management concluded that our internal control over financial reporting was ineffective for both of our fiscal years ended December 31, 2012 and December 31, 2011, in which there was no material weakness. A material weakness in internal control over financial reporting is defined by the Public Company Accounting Oversight Board’s Audit Standard No. 5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation requirements by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. 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.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Executive Officers and Directors.
Our current directors, officers and “control persons” are as follows:
Name
Age
Position
Gary C. Lewis
President, Chief Executive Officer, Director, Chief Financial Officer
Bruce Miller
Vice President and Director
Jessica Stone Rampton
Secretary/Treasurer, Chief Science Officer and Director
Edward H. Hall, Sr.
Indirect majority stockholder and Chairman of the Board
GARY C. LEWIS, Chairman of the Board, President, CEO and Chief Financial Officer. Mr. Lewis has more than 15 years of experience in the organization of public and private corporations. During the last ten (10) years, Mr. Lewis has been a director and the managing consultant of HER Consulting Company, Inc., a Utah-based company specializing in assisting start-up companies with their initial organization, funding and direction. During the last five years, Mr. Lewis has also owned and operated his own light commercial and new home building construction business called PC Construction, Inc. This company also does residential remodeling. Since 1999, Mr. Lewis founded and has since that time acted as Managing Trustee of The Children and the Earth, Inc., a 501(c)(3) nonprofit charity dedicated to helping at risk and underprivileged children. Between 1983 and 1987, Mr. Lewis served on the board of directors and as president of a publicly held oil and gas exploration company known as Arabic Oil. This company later went into the medical business and became known as Omega Technologies, Inc. Mr. Lewis’s past experience also includes many years of management and marketing experience for companies in the minerals exploration, high tech development, residential and commercial construction, and steel fabrication fields. In 1970, Mr. Lewis received an A.A. or Associates degree from Weber State College located in Ogden, Utah. Mr. Lewis also served as the president and chairman of the board of Bionovo, Inc.(NasdaqCM:BNVI), a “fully reporting” company, when it was known as Lighten Up Enterprises International, Inc., a nutritional cookbook development and marketing company. As a result of his involvement with Lighten Up Enterprises, Mr. Lewis brings significant knowledge, experience and background related to the health food and nutrition industry to the Company.
JESSICA STONE RAMPTON, Director, Chief Science Officer and Secretary/Treasurer. Ms. Rampton currently works as the office manager of her husband’s company, Rampton Photography, a photography business located in Syracuse, Utah. From 2005 until 2006, Ms. Rampton and her husband formed Nu Mineral Health, LLC, the company whose assets we purchased in June 2006. From 1999 through 2004, Ms. Rampton was employed as an Associate Scientist in the Department of Molecular Oncology with Ligand Pharmaceuticals in San Diego, California. While there, among other things, she developed cell biology, molecular biology and immunohistochemistry protocols. She also ran the company’s histology lab. After graduating cum laude from the University of Washington in Seattle, WA, with a Bachelor of Science degree in cell and molecular biology in 1998 and until 1999, she was employed as a Research Assistant with the Department of Biochemistry and Radiology, University of Washington. In 1996, Ms. Rampton became a member of the Association of Women in Science. Ms. Rampton, in her present position with the Company, will oversee new product research and development, product improvements, and market research. She has substantial experience in molecular biology, biochemistry, cell biology and drug discovery. She has also published articles involving cancer research. Her strengths include research, critical analysis, communication and the ability to independently design, execute and analyze experiments while working cohesively within a team environment. In 2005, Ms. Rampton had the vision of making nutrition easier to obtain and more effective and therefore, she and her husband formed Nu Mineral Health. We believe that she brings a great deal of knowledge and expertise to the Company.
BRUCE MILLER, Director and Vice President. Since October of 2007, Mr. Miller had acted as our principal marketing consultant. Mr. Miller worked in the food marketing business for more than 32 years. In 1967, he started
out working for Richardson’s Market in Ogden, Utah. In 1969, Smiths Food and Drug in Salt Lake City hired Mr. Miller. He started as a stock clerk working his way up to Store Manager wherein he managed Smith’s stores in Weber and Davis counties. In 1981, Mr. Miller was promoted to Service Deli Director where he was in charge of development of the deli program for the Smith’s stores in the entire Western Division. Mr. Miller was then promoted to Vice President of Sales and Merchandising in 1990 for the Southwest Division based in Phoenix, Arizona. During this time, Smiths merged with Kroger, Inc. where Mr. Miller continued to work as Vice President of Sales and Merchandizing until retiring in 1999. In the past seven years, Mr. Miller has owned and operated his own business.
EDWARD H. HALL, SR., Chairman of the Board. Since June of 2008, Mr. Hall has acted as our Chairman of the Board. Mr. Hall is also the manager of and the only member of UPLIFT HOLDINGS, LLC, (“Uplift Holdings”), a Nevada limited liability company formed in 2006 for the purpose of financing us and also, owning and holding shares of Uplift Nutrition. Mr. Hall is a resident of Salt Lake City, Utah. He is currently in the insurance business and has been for some-30 years. Mr. Hall owns an insurance agency in Salt Lake City known as The Edward Hall Agency and which also goes by the dba “EHA Marketing.” Uplift Holdings acquired its 18 million restricted shares of the Company from the Ramptons, namely, the former owners of Nu Mineral Health, on or about June 30, 2006, for $17,000 in cash. Mr. Hall, through funding to be provided by Uplift Holdings, is willing to finance our obligation to be current in our reporting obligations to the SEC for at least the next year, provided that during that period, our business plan has every potential or prospect for success. This agreement is not in writing. Mr. Hall has never been an officer of or served on the board of directors of any other reporting public company. In addition to shares of our Company that Mr. Hall owns indirectly through Uplift Holdings, Mr. Hall also owns or controls additional common shares that were acquired or obtained by him through open market purchases. Because of Mr. Hall’s control of Uplift Holdings, these shares are deemed “control” shares and, for reporting purposes, are aggregated with Uplift Holdings’.
None of our officers or directors devotes his or her full time to the management of the Company. Since all three individuals have full-time jobs, each estimates that they will devote between 1% and 10% of their time to the Company and its affairs. We believes that this may be as many as 5 hours per week on the part of each officer and director. Obviously, much of this will depend on how the Company’s future business and sales unfold. Ms. Rampton’s efforts will concentrate on product development. Mr. Lewis’s efforts will concentrate on the business end of the Company such as marketing and sales. All three will be directly involved and give their input into the periodic reports we will be filing with the Commission.
None of our officers and directors, not to mention our majority shareholder, has been involved, directly or indirectly, in any bankruptcy or insolvency proceeding of any kind. None is currently involved in any litigation nor has any been involved in any litigation that would have a bearing on any such person's fitness or other ability to act and serve as a director or officer of the Company.
We deny that any person other than our officers or directors or our major shareholder identified above "controls", or has the power to "control," us as contemplated in the "control person" provisions of both state and federal securities laws and as the word "control" is further defined in Rule 405. We may engage consultants or advertising experts in the future but to the extent we do, such persons will likely NOT have an ability to "control" us or our decisions, either directly or indirectly. Further, if we enter into any consulting agreement with any consultant or expert, including an "endorser" of our product, such agreement will provide that to the extent the consultant ever acquires a direct or indirect interest of 5% or more of our issued and outstanding securities, the consultant or endorser will so notify us and otherwise undertake whatever reporting obligation is required of him or her.
Board Meetings and Committees
During the 2012 fiscal year and through the present, we have conducted nearly all of our Board Meetings by telephone conference call. Some of these Board Meetings have been formalized into written consent minutes and some have simply been advisory in nature, followed up by written consent or other minutes.
As set forth in our Nevada Articles of Incorporation and Bylaws, copies of which are attached to our Form 10-SB registration statement as Exs. 3.1(iii) and 3.2, respectively, all directors hold office until the next annual meeting of stockholders or until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. Though we have not compensated any director for his or her service on the board of directors or any committee, directors are entitled to be reimbursed for expenses incurred for attendance at meetings
of the board of directors and any committee of the board of directors. Due to our current lack of capital resources, our current directors will likely defer his, her or their expenses and any compensation due and owing them, if any, until such time as we can generate retained earnings, if we can, from the sale of our new products or any others we take on. As of the date of this document, our officers and directors have NOT accrued any expenses in their capacities as officers and directors other than their time. As further set forth in our Articles and Bylaws, officers are appointed annually by the Board of Directors and each executive officer serves at the discretion or will of the Board of Directors. We currently have no standing committees and presently have no reason that we are aware of to create any.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities and Exchange Act of 1934 requires officers, directors, and persons who own more than ten percent (10%) of the issuer's common stock to file initial reports of beneficial ownership and to report changes in such ownership with the Commission and the NASD. These persons are also required to furnish the Company with copies of all Section 16(a) forms they file. These requirements commenced when the Company's Form 10-SB registration statement became effective. Therefore, as of the date of this Annual Report on Form 10-K, these persons have been subject to the requirements of Section 16(a). Uplift Nutrition has informed these individuals, including our majority shareholder, of their obligations under Section 16(a) and all are otherwise aware of them. Further, we have set up a procedure whereby periodically we will endeavor to (i) notify these persons or other future directors, officers, affiliates or "control persons" of their Section 16(a) obligations; (ii) review the copies of Forms 3, 4, and 5 that these persons will need to file with the Commission; (iii) request written representations from them that no other filings or disclosures were required or necessary; and (iv) make a determination that the pertinent officers, directors and principal shareholders have complied with all applicable Section 16(a) requirements during the fiscal year.
Director and Officer Liability Limitations.
Our Articles of Incorporation and Bylaws, both of which were exhibits to our original registration statement on Form 10-SB, limit the personal liability of directors, officers and our shareholders to the full extent allowed by Nevada law. This is a risk factor that an investor or potential investor should consider because it means that a disgruntled or injured investor's remedies may not be as significant or meaningful as might otherwise be the case in the absence of these statutory and common law protections.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
During 2012 and 2011, none of our officers or directors received any stock as bonuses, for compensation, or for any other reason. See the Summary Compensation Table immediately below:
SUMMARY COMPENSATION TABLE
Name and Principal Position
(a)
Year
(b)
Salary
($)
(c)
Bonus
($)
(d)
Stock Awards
($)
(e)
Option Awards
($)
(f)
Non-Equity Incentive Plan Compensation
($)
(g)
Nonqualified Deferred Compensation
($)
(h)
All Other Compensation
($)
(i)
Total
Earnings
($)
(j)
Jessica Stone Rampton, Sec/Treas. CSO, director
12/31/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
12/31/2007
200,000
Edward H. Hall, Chairman of the Board since June 2008
12/31/2012
12/31/2011
12/31/2010
12/31/2009
Gary C. Lewis President, CEO, CFO and Director
12/31/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
12/31/2007
800,000
Bruce Miller, Vice President and Director
12/31/2012
12/31/2011
12/31/2010
200,000
We have NOT adopted a bonus, stock option, profit sharing, or deferred compensation plan of any sort for the benefit of our employees, officers or directors. This, however, does not mean that we will not do so in the future, given that we are now authorized by our Amended Articles to do so without further shareholder approval. See Exhibit 3.2 hereto, reference to such Amendment. Further, we have not entered into an employment agreement of any kind with any of our directors or officers or any other persons and no such agreements are anticipated in the immediate or near future.
Absence of Management Employment and Other Compensation Agreements
We do not at this time pay any of our officers any salary. We do not provide any other benefits to our officers. We do not have any written agreements with any of our officers and directors other than Ms. Jessica Rampton who, because she and her husband sold us certain assets we now have, would otherwise have been in a position to potentially compete with us. For this reason, Ms. Rampton and her husband each executed a standard non-compete and non-disclosure agreement. See Exhibit 10.1 to our Form 10-SB registration statement.
Each of our officers and directors may engage in other businesses, either individually or through partnerships, limited liability companies, or corporations in which they have an interest, hold an office or serve on boards of directors. All officers and directors have, or will have, other business interests to which they devote their time. Because each of our officers have other full-time employment, each will probably devote no more than between 1% and 10% of their time to us and our affairs. We believe that this will amount to approximately 5 to 10 hours per week depending upon what is going on with our business and affairs.
Other Key Advisors and Consultants
We have access to several outside professional firms that can counsel us and provide important advice during our development stage. The terms of engagement of these firms will be determined from time to time as their services may be required.
Remuneration and Compensation of Directors
Our current officers and directors do NOT receive any compensation, but may receive compensation for their services to be determined in the future. As stated above, all directors are entitled reimbursement for out-of-pocket expenses incurred by them in behalf, or for the direct benefit, of the Company.
There are no standard arrangements pursuant to which our directors are compensated for any services provided as director, including services for committee participation or for special assignments. Three of our four directors received 1,200,000 “restricted” shares as compensation for services rendered for the year ended December 31, 2012.
Absence of Key Man Life Insurance
We do not own life insurance covering the death of any officer, director or key employee. Based on our lack of capital and the existence of other, capital-driven priorities, it is highly doubtful that we would spend money towards key man life insurance, even if we had sufficient cash on hand for this purpose, which we currently lack.
Indemnification of Our Officers and Directors
Nevada corporate law in general and applicable provisions of our existing Bylaws, authorize us to indemnify any director, officer, agent and/or employee against certain liabilities and to the full extent allowed under Nevada law. Further, we may purchase and maintain insurance on behalf of any such persons whether or not we would have the power to indemnify such person against the liability insured against. Indemnifying and/or insuring officers and directors from the increasing liabilities and risks to which such individuals are exposed as a result of their corporate acts and omissions could result in substantial expenditures by Uplift, while preventing or barring any recovery from such individuals for the possible losses incurred by the Company as a result of their actions. Even assuming that we could afford it, we have no plans to obtain any officer or director (D&O) liability insurance.
Outstanding Equity Awards at Fiscal Year-End
As stated above and in the Executive Compensation Table in Item 11 above, 3 of our 4 directors were awarded a total of 1,200,000 “restricted” shares for services rendered in 2012.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information, to the best of the Company’s knowledge, as of the date of this document, with respect to each person known to be the owner of more than 5% of common capital stock of the Company, each director and officer, and all executive officers and directors of the Company as a group. As of year end and the date of this document, there are 13,692,597 shares issued and outstanding.
Name of Beneficial Owner
Number of Shares of Common Stock Beneficially* Owned
Percent of Ownership of Common Stock Outstanding
Gary C. Lewis (1)
4423 South 1800 West
Roy, Utah 84067
835,000 (2)
6%
Bruce Miller (3)
4635 S 2950 W
Roy, Utah 84067
204,500
1.5%
Jessica Stone Rampton (4)
2403 West 1700 South
Syracuse, Utah 84075
235,000
1.7%
Edward H. Hall, Sr. (5)
746 Club Oaks Dr.
Sandy, Utah 84070
7,430
0.05%
Uplift Holdings, LLC (6)
252 West Cottage Avenue
Sandy, Utah 84070
11,150,000
81%
Directors, officer and 5% or more holders as a group (4 persons only)
12,431,430
90.7%
------------------------------
* Beneficial ownership is determined in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and generally includes voting or investment power with respect to securities. Shares of common stock issuable upon the exercise of options or warrants currently exercisable, or exercisable or convertible within 60 days, are also deemed outstanding for computing the percentage ownership of the person holding such options or warrants but are not deemed outstanding for computing the percentage ownership of any other person. Nonetheless, the Company has no outstanding stock options, warrants or compensation plans of any kind.
(1) GARY C. LEWIS, President, CEO and Chief Financial Officer, has been an officer and director of us since April 5, 2006. For more information about Mr. Lewis and his background, reference is made to Item 9 above.
(2) The shares represented by this figure are held by, or in the name of, a corporation owned by Mr. Lewis and his wife named HER Consulting, Inc., a Utah corporation. Mr. Lewis and his wife, Pam, are the indirect or beneficial owners of these shares.
(3) BRUCE MILLER, Vice President and a Director, has been an officer and director of us since 2009. For more information about Mr. Miller and his background, reference is made to Item 9 above.
(4) JESSICA RAMPTION, Secretary/Treasurer, Chief Science Officer, and a Director, has served as an officer and director of the Company since April 5, 2006. For more information about Mrs. Rampton and her background, reference is made to Item 9 above. Ms. Rampton’s holdings are held in the name of Rampton Investments, LLC.
(5) EDWARD H. HALL, SR., has served as our Chairman of the Board since June of 2008. The 7,430 shares opposite Mr. Hall’s name in the chart above are deemed “control shares.” Mr. Hall’s individual holdings of 7,430 shares as of our fiscal year end should also be aggregated with those of Uplift Holdings, LLC, whom he controls, both directly and indirectly. Accordingly, if one aggregates all of
his personal holdings and those of Uplift Holdings, Mr. Hall, both directly and indirectly controlled, at year end, 11,157,430 shares or 81% of our total number of issued and outstanding shares.
(6) UPLIFT HOLDINGS, LLC, (“Uplift Holdings”) is a Nevada limited liability company formed in 2006 for the purpose of financing us in a limited fashion and also, owning and holding shares of Uplift Nutrition. Its only member and the person who owns 100% of its outstanding membership interests is Mr. Edward H. Hall, Sr., our current Chairman of the Board and a resident of Salt Lake City, Utah. Mr. Hall is and has been in the insurance business for some-30 years and owns an insurance agency in Salt Lake City called The Edward Hall Agency. Mr. Hall is thus an indirect owner of these Uplift shares held by Uplift Holdings. For more information concerning Mr. Hall, reference is made to Item 10 above, including the footnote immediately above. Uplift Holdings’ ownership interest in us has substantially increased during 2011 as a result of its conversion of our convertible debt owed to it into several million shares of common stock, stock that was reverse spit in December 2011. This conversion was reported in our Form 10-Q for our third quarter ended September 30, 2011. See also the subheading in Item 5 above titled “Recent Sales of Unregistered Securities.”
None of the foregoing persons hold any shares of the Company pursuant to any voting trust or similar agreement.
As of the date of this report, there are no arrangements or agreements with anyone which may result in a change of control of the Company.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
During the fiscal year, and other than allowing our majority shareholder, Uplift Holdings, LLC, and one of our officers to convert certain of their convertible debt into common stock, no transactions occurred during the fiscal year between us and any director or officer or any member of any such person’s immediate family.
As disclosed in earlier Edgar filings, we have a license agreement with one of our directors to market a new product, the formula for which was separately and independently developed by him. Such product is a “super juice” drink, which we unveiled during the previous fiscal year and have named EpiGaia™. We are not currently marketing this product for want of advertising funds and therefore, our plans with respect thereto are “on hold,” all as further disclosed above. This license agreement involves nominal consideration to this director as a result of his insider status and because of his potential conflict of interest in this regard.
As disclosed elsewhere above, our majority stockholder, Uplift Holdings, LLC, has, in the past, agreed to fund us as necessary to implement and carry out our PLAN OF OPERATION above. At present, however, Uplift Holdings has run out of money to advance us in order to carry out necessary advertising campaigns and therefore, our Board of Directors has resolved to look at additional funding opportunities. While we accrue interest on Uplift Holdings’ advances at 8% per annum, these advances do NOT presently require that we pay interest payments. At the same time, even though there is no written agreement in this regard between us and Uplift Holdings, both we and it consider its agreement to advance us money as a legal obligation. If at such time as we would become profitable, if we ever do, we would consider paying Uplift Holdings interest on its advances but only if doing so would have no material impact on our capital resources and liquidity. Having said this, if we became profitable, we plan on spending any earnings on continued advertising campaigns as opposed to spending such money on the payment of interest. Because of Uplift Holdings’ substantial stock ownership interest in us, spending earnings on advertising as opposed to using earnings to pay Uplift Holdings interest would be in its best interest as well.
Like any other corporate officer or director, each director and officer is subject to the doctrine of usurpation of corporate opportunities only insofar as it applies to business transactions in which we have indicated an interest, either through our proposed business plan or by way of an express statement of interest contained in our minutes. If any director or officer is presented in the future with a business opportunity that may conflict with business interests identified by us, such an opportunity must be promptly disclosed to the Board of Directors and otherwise made known to us. In the event that the Board rejects an opportunity so presented, and only in that event, can one of our officers or directors avail him or herself of such opportunity. In spite of these eventualities, every effort will be made to resolve any conflicts that may arise in favor of us and our stockholders. There can be no assurance, however, that these efforts will be successful. As a Nevada corporation, we are obligated, among other things, to comply with the provisions of Nevada law, NRS 78.140 titled "Restrictions on transactions involving interested directors or officers;
compensation of directors." We are not aware of any such conflicts of interest at this time and to be more specific, we are not aware of any opportunity whatsoever that we would reject and that an officer or director or even Uplift Holdings would likely engage in or take advantage of.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Aggregate fees for professional services rendered us by MORRILL & ASSOCIATES, Certified Public Accountants, for the years ended December 31, 2012 and 2011, respectively, are set forth below. The aggregate fees included in the Audit category are fees billed for the year-end audit of our annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the calendar years indicated.
Audit fees for the years ended December 31, 2012 and 2011 were for professional services rendered for the audits of our financial statements, quarterly review of the financial statements included in the Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year- end audit of our financial statements.
Audit-Related Fees as of the years ended December 31, 2012 and 2011 were for the assurance and related services reasonably related to the performance of the audit or review of financial statements and not reported under the caption Audit Fees.
Tax Fees as of the years ended December 31, 2012 and 2011 were for professional services related to tax compliance, tax authority audit support and tax planning.
There were no fees that were classified as All Other Fees as of the years ended December 31, 2012 and 2011.
As we do not have a formal audit committee, the services described above were not approved by the audit committee under the de minimus exception provided by Rule 2-01(c) (7)(i)(C) under Regulation S-X. Further, as we do not have a formal audit committee, we do not have, at this time, audit committee pre- approval policies and procedures.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following Exhibits are filed as a part of this Annual Report on Form 10-K:
Exhibit Number
Description
Sarbanes-Oxley Section 302 Certifications
Sarbanes-Oxley Section 906 Certification
* Summaries of all exhibits contained within this Annual Report are modified in their entirety by reference to the foregoing Exhibits.
The following Exhibits are incorporated by reference as a part of this Annual Report on Form 10-K:
3.1 Articles of Incorporation, which were filed as an exhibit to our November 2, 2007, Form 10-SB registration statement
3.2 Amendments to our Articles of Incorporation filed with and stamped by the State of Nevada on November 21, 2011 and the corollary Nevada Certificate of Amendment, copies of which were filed with last year’s Form 10-K
3.3 Bylaws, which were filed as an exhibit to our November 2, 2007, Form 10-SB registration statement
SIGNATURES
In accordance with the provisions of the Securities and Exchange Act of 1934 and the rules and regulations promulgated thereunder, UPLIFT NUTRITION, INC., has duly caused this Annual Report on Form 10-K for its fiscal year ended December 31, 2012, to be signed on its behalf by the undersigned, thereunto duly authorized.
UPLIFT NUTRITION, INC., Issuer
Date:
March 29, 2013
By:
/s/Gary C. Lewis
Gary C. Lewis
President, Chief Executive Officer and CFO (Principal Accounting and Financial Officer
Date:
March 29, 2013
By:
/s/Edward H. Hall, Sr.
Edward H. Hall, Sr.
Chairman of the Board