ITEM 1.
DESCRIPTION OF BUSINESS
General
Occidental Development Group, Inc. (“ODG”, the “Company”, “we”, “us”) was incorporated in the State of Nevada in 1998. The Company provides services and support to the legal marijuana industry through subsidiaries and joint ventures. Services span the industry sector and include: agricultural land and commercial space for lease to marijuana horticulturalists, staffing and payroll services for the MMJ industry - connecting employers with the right talent to grow their business, and technology App’s connecting B2B, MMJ to the end consumer. Historically, the Company operated in the green building sector offering control and automation technology for single and multi unit new construction and existing buildings.
The market opportunities for the Company’s control and automation services and products steadily declined over the past several years due in part to the slowdown in new and construction and renovation activity plus the advent of plug and play automation technology which eroded the Company's intellectual property, reduced the need for specialized technical support and reduced project margins.
Over several quarters the Company actively evaluated and pursued opportunities to expand its business activities vertically within the Company’s historical green building, home automation and energy conservation sectors and horizontally within the construction and renovation sectors. During FY 2012 the Company began planning the shift and expansion of its activities to development and design build services targeting energy efficient housing and multi-strata property renovation and development. Early in the planning process it became clear that significant restructuring would be required in order for the Company to attract the working capital financing required to support expansion.
Initial stages of restructuring were completed during FY 2012. On October 31, 2011 the Company’s board of directors approved a Consent Resolution amending the Company’s Articles of Incorporation to affect a one for one hundred and fifty reverse split of the Company’s common stock, and adjustment of the Company’s authorized capital to eight hundred million common shares and five million preferred shares. The proposed amendments were approved by a majority of shareholders on November 1, 2011. The Company filed a preliminary Schedule 14C Information Statement outlining proposed amendments to the Company’s Articles of Incorporation on November 9, 2011 and a definitive Schedule 14C Information Statement on November 25, 2011. The Company set November 25, 2011 as the record date for notification to shareholders. The Company filed the amended Articles of Incorporation with the Nevada Secretary of State on December 12, 2011, with an effective posting date of December 22, 2012. The reverse split was approved for trading purposes by the Financial Industry Regulatory Authority [FINRA] on January 18, 2012.
Through FY 2013 the Company actively pursued design build and renovation opportunities within the British Columbia and Greater Vancouver markets and solicited project financing from commercial lenders and private equity. The Company structured a joint venture proposal with a prominent First Nations forestry company targeting housing needs within First Nations communities and undertook an extensive evaluation of renovation opportunities within the Greater Vancouver condominium market. The Company also responded to an invitation to provide engineering project management services, in concert with First Nations communities, to the early stage LNG development underway in British Columbia. During this period, the Company scaled back its project and marketing efforts within the Company’s traditional home automation sector in favor of pursuing property development opportunities.
Through this process it became apparent that the Company’s financial resources were not sufficient to support available diversification opportunities and that further balance sheet and equity restructuring would
be required in order to attract and qualify for project financing support and equity funding sufficient to grow the business. Management reached this conclusion concurrent with the close of FY 2013.
Beginning in June 2013 the Company undertook further restructuring and on June 25, 2013 Murat Erbatur resigned as director and COO and on June 26, 2013 the Board of Directors appointed Mr. Ian Gilbey as director. Mr. Gilbey had previously been a consultant to the Company providing re-structuring and merger acquisition support. In June the Company moved its head office to Beverly Hills California to better focus on the US market. On July 17, 2013, the Board of Directors authorized a merger with the Company’s wholly-owned subsidiary, Occidental Development Group Inc., and in the merger, the name of the company was changed to Occidental Development Group Inc. On July 17, 2013, the Board also approved the filing with the Secretary of State of Nevada a Certificate of Change that effected a 1:10 reverse split in our outstanding common stock and a reduction of our authorized common stock in the same 1:10 ratio, from 800,000,000 shares to 80,000,000 shares. Both of these corporate actions were permitted to be taken by the Company’s Board of Directors without stockholder approval under Nevada NRS 92A.180 (for the merger with the subsidiary and name change) and NRS 78.207 (for the change in authorized and outstanding stock).
The changes of the Company’s name to Occidental Development Group, Inc. and the 1:10 reverse split, with the concurrent reduction of our authorized common stock in the same ratio and the change in the Company’s trading symbol to OXDG, were approved by FINRA and became effective for trading purposes on August 19, 2013.
During the quarter ended August 31, 2013 the Company continued to plan for the complete phase out of its activities in the home automation sector and negotiations were initiated for the acquisition of Ball Park Investments LLC ("BallPark"), a Florida real estate development company. The Company's board of directors considered the acquisition of Ballpark a key step in establishing strategic relationships with debt and equity providers.
Effective September 1, 2013, the Company disposed of its subsidiary MCM Technologies Inc. ("MCM") by sale to a previous related party, Murat Erbatur, the Company's former COO, for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($342,880) to additional paid in capital. Early in the second quarter management completed the acquisition of BallPark. The acquisition of BallPark was done without consideration and did not contribute any assets or result in any liabilities. As a direct result of the Ballpark acquisition and subsequent negotiations for funding, the Company was introduced to and approached by Integrity Aviation and Leasing LLC ("Integrity"), a Texas based company active in the domestic airline industry and specializing in leasing jet aero engines. In preliminary discussions, Integrity disclosed that it had assets in excess of $5 million and long-term lease revenues. On November 22, 2013 the management of Occidental and Integrity executed a binding Letter of Intent outlining terms for the acquisition of Integrity by Occidental. On January 14, 2014 the Company's Board of Directors approved the binding Letter of Intent for the acquisition of Integrity and initiated a due diligence process to, among other things, verify and quantify the assets, liabilities and obligations of Integrity. On January 16, 2014 the Company's Board of Directors approved a consent motion for shareholder approval to increase the Company's authorized common share capital from 80,000,000 shares to 800,000,000 and on the same day received approval from a majority of shareholders.
Effective March 1, 2014, the Company disposed of its remaining Canadian subsidiary by sale to a third party for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($711,990) to additional paid in capital. On March 12, 2014 the Company executed a non binding Memorandum of Understanding with Arrivair LLC ("Arrivair"), an aircraft trading and leasing company based in Florida. Arrivair is active in the sales and leasing of commercial passenger and cargo aircraft and aircraft components to airlines and entrepreneurs worldwide. Under the terms of the MOU the parties agreed to cooperatively pursue the purchase of aircraft and critical aircraft parts for trading, re-sale and leasing.
The timing of this initiative dovetailed to the upswing in the global airline market and industry shift to off balance sheet financing of operations and flight critical capital equipment. After several months of pursuing financing for potential aircraft purchase and lease opportunities the Board of Directors concluded that the
Company needed to significantly strengthen its balance sheet to support activity in this capital intensive sector.
Collateral to the Company's effort to develop activity in the aircraft sector, in September 2014 the Company was introduced to and on October 1, 2014 the Company executed a binding Letter of Intent with Eagle Financial Diamond Group, Inc. ("Eagle") an established Florida company active in the consumer and wholesale diamond trade. The binding Agreement defined the terms under which Occidental would acquire Eagle. In January 2015, the Company was advised by the principal of Eagle that Eagle no longer wished to pursue the buyout. As a result the Board is considering the option to pursue a claim of damages.
On April 27, 2015 the Company executed a binding Letter of Intent with 420 International Corp. ("420"), a California company active in the legal marijuana sector. The Letter of Intent outlines an all share transaction in which Occidental acquires 100 percent of the outstanding shares of 420. Under terms of the Agreement, the principal shareholders of Occidental transfer a portion of their current shareholdings to the seller in exchange for Occidental receiving 100 percent of the outstanding shares of 420. The share transfer is currently underway and Occidental, through 420, is actively engaged in the legal marijuana business.
The Company maintains its corporate office in Beverly Hills California. Income for the period ended May 31, 2013 was derived from the Company's historical activities. The Company’s year-end is May 31.
Employees
As of May 31, 2014, we had a staff of two consisting of the Company President and the Company COO.
ITEM 1A
ITEM 1A
RISK FACTORS
Readers should carefully consider the risks and uncertainties described below before deciding whether to invest in shares of our common stock.
Our failure to successfully address the risks and uncertainties described below could have a material adverse effect on our business, financial condition and/or results of operations, and the price of our common stock may decline and investors may lose all or part of their investment. There is no assurance that we will successfully address these risks or other unknown risks that may affect our business.
Risks Relating to our Company
Our independent auditor has issued an audit opinion which includes a statement describing our going concern status. Our financial status creates a doubt whether we will continue as a going concern.
As described in Note 2 of our accompanying financial statements, our limited revenues and our lack of any guaranteed sources of future capital create substantial doubt as to our ability to continue as a going concern. The Company had a working capital deficit of ($1,298,482) at May 31, 2014 and a consolidated net loss of $(584,750) for the twelve months then ended. If the Company does not raise a sufficient amount of capital, it may not have the ability to remain in business until such time, if ever, when it becomes profitable.
Although the Company has continued to restructure its balance sheet and operations, the Company’s operating income is not yet adequate to offset the Company’s aggregate overhead expenses. To rectify this shortfall, on an operating basis the Company needs to find further ways to reduce overhead expenses and increase its operating revenue sufficient to offset the Company’s overhead expense. There is no assurance that the Company will be able to do so.
Until such time as the Company becomes sustainable profitable it will be necessary to raise additional capital to support operations. There is no assurance that the Company will be able to raise the required capital under terms acceptable to management, or on a schedule and in amounts required to support continued operations if at all. Our failure to achieve or maintain profitability could negatively impact the value of our stock.
We have not operated profitably and have a limited operating history that you can use to evaluate us; therefore, we may not survive if we meet some of the problems, expenses, difficulties, complications and delays frequently encountered by a company in the early stages of shifting its business activities.
We have a limited operating history on which to base an evaluation of our current business and prospects. Potential investors must consider our business and prospects in light of the risks and difficulties frequently encountered by companies in the early stages of shifting activities to include new areas of business. These risks and difficulties include, but are not limited to, lack of sufficient customer base, revenue, cash flow and working capital for marketing, inventory for re-sale and leasing and sub-contracting. We cannot be certain that our business strategy will be successful or that we will successfully address these and other risks. Our failure to address and mitigate these risks could harm our ability to operate profitably.
We may change our business plan.
Based on the results of our efforts to develop our current operating concept, we are re-evaluating our business plan and our board of directors may determine that it is in the best interests of the shareholders to change our business plan through vertical diversification within the Company’s current business sector and/or horizontal diversification into related sectors. Any such expansion of operations will entail risks, and such actions may involve specific operational activities which may negatively affect the profitability of the Company. Consequently, shareholders must assume the risk that (i) such expansion may ultimately involve expenditures of funds beyond the resources available to the Company at that time, and (ii) management of such expanded operations may divert management’s attention and resources away from its existing operations, all of which factors may have a material adverse effect on the Company’s present and prospective business activities. In addition, we may need to bring in new investors or raise additional capital, all of which could result in dilution of current shareholders. There is no guarantee that our efforts to diversify will be successful.
We require additional funds to achieve our current business strategy and our inability to obtain additional financing would inhibit our ability to expand or even maintain our business operations.
We need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy and capitalize on available opportunities. This financing may not be available when needed. Even if this financing is available, it may be on terms that we deem unacceptable or are materially adverse to shareholder interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our inability to obtain financing would inhibit our ability to implement our development strategy, and as a result, could require us or diminish or suspend our development strategy and possibly cease our operations. If we are unable to obtain financing on reasonable terms, we could be forced to delay, scale back or eliminate planned expansion and or introduction of new products and services. In addition, such inability to obtain financing on reasonable terms could have a negative effect on our business, operating results, or financial condition to such extent that we are forced to restructure, file for bankruptcy, sell assets or cease operations.
We currently have outstanding debt that is convertible into shares of our common stock at below market pricing resulting in significant dilution to our current stockholders.
At May 31, 2014 we had a total of $802,112 in debt and accrued interest that is convertible into shares of our common stock at discounts ranging from 0% to 42% of the market price. The conversion of all of this debt could result in significant dilution to our stockholders.
We rely heavily on our management, and the loss of their services could materially and adversely affect our business.
The Company’s business is significantly dependent on the Company’s management team and Board of Directors. The unscheduled loss of these individuals would have a material adverse effect on the Company.
Market events and conditions, including disruptions in the U.S. and international credit markets and other financial systems and the deterioration of the U.S. and global economic conditions, could, among other things, impede access to capital or increase the cost of capital, which would have an adverse effect on our ability to fund our working capital and other capital requirements.
Notwithstanding various actions by the U.S. and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions remain fragile and there is resulting volatility in world stock markets. In addition, general economic indicators have been mixed to weak. These include consumer sentiment, unemployment and economic growth and uncertainty about corporate earnings. Recent quarters have seen improvement in the US economy and increased positive consumer sentiment. However the overall situation remains fragile and could, among other things, continue to make it difficult for us to obtain working capital, or increase our cost of obtaining capital for our operations. Our access to additional capital and project financing may not be available on terms acceptable to us or at all.
The Company’s operating results may vary and may not support ongoing development of the business
The Company’s operating results may fluctuate significantly from period to period as a result of a variety of factors including but not limited to: purchasing patterns of customers, competitive pricing and margins, debt service and principal reduction payments, and general economic conditions. There is no assurance that the Company will be successful in marketing its products and services or that the revenues from the sale of such products and services will be sufficient to offset costs and support ongoing development of the business.
Unanticipated Obstacles to Execution of the Business Plan
The Company’s business plans may change significantly. Many of the Company’s potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Management believes that the Company’s goals and strategies are achievable in light of current economic conditions and regulatory environments with the skills, background, and knowledge of the Company’s principals and advisors. Management reserves the right to make significant modifications to the Company’s stated strategies depending on current and anticipated future events.
Our success in the future may depend on our ability to establish and maintain strategic alliances, and any failure on our part to establish and maintain such relationships would adversely affect our market penetration and revenue growth.
We may be required to establish strategic relationships with third parties in both domestic and international markets. Our ability to establish strategic relationships will depend on a number of factors, many of which are outside our control. We can provide no assurance that we will be able to establish and maintain strategic relationships in the future.
In addition, any strategic relationships that we establish, will subject us to a number of risks, including risks associated with sharing and potentially losing control over committed assets and financial resources, technical information and know-how, loss of control of operations that are material to our business. Moreover, strategic alliances may be expensive to implement and subject us to the risk that the third party will not perform its obligations under the relationship, which may subject us to losses over which we have no control or expensive termination arrangements. As a result, even if our strategic alliances with third parties are successful, our business may be adversely affected by our exposure to a number of factors that are outside of our control.
Risks Related to Our Common Shares
Dividend Record
We have no dividend record. We have not paid dividends on our common shares since incorporation and do not anticipate doing so in the foreseeable future.
The trading market for our common stock is limited.
We are quoted on the OTC Markets Group’s OTCQB Over-the-Counter Bulletin Board under the trading symbol “OXDG”. The OTCQB is regarded as a junior trading venue. This may result in limited shareholder interest and hence lower prices for our common stock than might otherwise be obtained.
The market price of our common stock may fluctuate significantly.
The market price of our common shares may fluctuate significantly in response to factors, some of which are beyond our control, such as:
·
the announcement of new products or product enhancements by us or our competitors,
·
developments concerning intellectual property rights and regulatory approvals,
·
quarterly variations in our and our competitors’ results of operations,
·
changes in earnings estimates or recommendations by securities analysts,
·
developments in our industry, and
·
general economic and market conditions, and other factors, including factors unrelated to our own operating performance.
Further, the stock market in general has recently experienced price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of our common shares, which could cause a decline in the value of our common shares. You should also be aware that price volatility might be worse if the trading volume of our common shares is low.
Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.
Our stock is a penny stock. Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system), in companies continuously in existence for at least three years with net tangible assets of less than $2,000,000. Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities.
These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission (see above for discussions of penny stock rules), the FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
ITEM 1B
ITEM 1B
UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2.
ITEM 2.
PROPERTIES
We maintain our statutory registered agent’s office in Reno, Nevada and our principal executive office is located at 256 Robertson Blvd, Beverly Hills California 90211. We currently do not have office leases or rental cost for the office space utilized by the Company.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
We are not currently involved in any litigation, nor do we know of any threatened litigation against us that would have a material effect on our financial condition.
ITEM 4.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5.
ITEM 5.
MARKET FOR THE REGISTRANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Common Stock is currently quoted in the OTC Markets Group’s OTCQB Over-the-Counter Bulletin Board market as a "penny stock" under the symbol OXDG. The following sets forth the range of high and low closing share price information for the quarterly periods indicated of our last two fiscal years as reported by the National Quotation Bureau:
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information with respect to our common stock issued and available to be issued under outstanding options, warrants and rights as of May 31, 2014.
A
B
C
Number of securities
Weighted-average
Number of securities
to be issued upon
exercise price of
remaining available
exercise of outstanding
outstanding
for future issuance
options, warrants
options, warrants
under equity
and rights
and rights
compensation plans
Plan category
Equity compensation plans
NA
NA
NA
approved by security holders
Equity compensation plans not
NA
NA
approved by security holders
Total
NA
NA
2007 OPTION PLAN
The 2007 Option Plan was adopted by the board with 200,000 shares reserved. The Plan is administered by the Board of Directors of the Company. Subject to the express limitations of the Plan, the Board has authority in its discretion to determine the eligible persons to whom, and the time or times at which, restricted stock awards may be granted, the number of shares subject to each award, the time or times at which an award will become vested, the performance criteria, business or performance goals or other conditions of an award, and all other terms of the award. The Board also has discretionary authority to interpret the Plan, to make all factual determinations under the Plan, and to make all other determinations necessary or advisable for Plan administration. The Board may prescribe, amend, and rescind rules and regulations relating to the Plan. All interpretations, determinations, and actions by the Board are final, conclusive, and binding upon all parties.
HOLDERS
As of June 4, 2015, the number of holders of record of shares of common stock, excluding the number of beneficial owners, whose securities are held in street name, was approximately 168.
DIVIDEND POLICY
We do not anticipate paying any cash dividends on our common stock in the foreseeable future because we intend to retain any positive earnings to finance the expansion of our business. Thereafter, declaration of dividends will be determined by the Board of Directors in light of conditions then existing, including without limitation our financial condition, capital requirements and business condition.
RECENT SALES OF UNREGISTERED SECURITIES
The following table sets for the information with respect to all securities of the Company sold in its fiscal years ended May 31, 2012, 2013 and 2014, and subscription amounts of outstanding debentures, without registration of the securities under the Securities Act of 1933. The securities so sold are believed by the Company to be exempt from registration under either Regulation S or Rule 506 under the Securities Act of 1933.
If we indicate in the following table that we relied on Section 4(2) of the Securities Act, we relied on the following factors in determining the availability of the exemption: (a) the issuance was an isolated private transaction by us which did not involve a public offering; (b) there were only a very limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the stock; (d) the stock was not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offerees and us.
If we indicate in the following table that we relied on Regulation S, (a) the subscriber was neither a U.S. person nor acquiring the shares for the account or benefit of any U.S. person, (b) the subscriber agreed not to offer or sell the shares (including any pre-arrangement for a purchase by a U.S. person or other person in the U.S.) directly or indirectly, in the United States or to any natural person who is a resident of the United States or to any other U.S. person as defined in Regulation S unless registered under the Securities Act and all applicable state laws or an exemption from the registration requirements of the Securities Act and similar state laws is available, (c) the subscriber made his, her or its subscription from the subscriber's residence or offices at an address outside of the U.S. and (d) the subscriber or the subscriber's advisor has such knowledge and experience in financial and business matters that the subscriber is capable of evaluating the merits and risks of, and protecting his interests in connection with an investment in the Company.
If we indicate in the following table that we relied on Regulation D, we relied upon Rule 506 and (a) the subscriber was an Accredited Investor (as defined in Regulation D), (b) the subscriber invested in the Company for his own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (c) the subscriber agreed not to sell or otherwise transfer the purchased shares unless they
are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (d) the subscriber represented that he had knowledge and experience in financial and business matters such that he is capable of evaluating the merits and risks of an investment in the Company, (e) the subscriber had access to all documents, records, and books of the Company pertaining to the investment and was provided the opportunity ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which the Company possessed or was able to acquire without unreasonable effort and expense, and (f) the subscriber had no need for the liquidity in his investment in the Company and could afford the complete loss of the investment.
Number of
Shares
Purchase or
Purchased or
Expiration
Exercise Price
Purchasable
Date (WTS) or
Date of
Type of
(USD
Upon Exercise
Due date
Name
Issue
Security1
Per Share)
or Conversion2
(DEB)
Exemption
Private Investors
1/12
CS
0.30
1,170,100
S, 506
Private Investors
6/12
CS
0.30
30,000
Private Investors
12/12
CS
0.08
2,462,267
S, 506
Private Investors
3/13-5/13
CS
0.06
580,834
S, 506
Private Investors
9/13
CS
0.01
50,193,334
S, 506
Private Investors
10/13-2/14
CS
0.02
24,981,107
S, 506
Private Investor
2/02
DEB
$35,000
2/08
S
Private Investors
11/05-2/06
DEB
$555,000
2/14
Private Investors
5/06
DEB
$50,000
6/09
Private Investor
2/08
DEB
$460,000
6/13
S
Private Investor
6/08
DEB
$326,773
6/13
S
Private Investors
9/12
DEB
$42,500
6/13
Private Investor
12/12
DEB
$32,500
9/13
Private Investor
4/13
DEB
$42,500
12/13
(1)
CS - Common Stock, WAR - Warrant, DEB - Debenture;
(2)
(2) DEB dollar amount convertible
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
Not applicable.
ITEM 7
ITEM 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
This annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: "believe", "expect", "estimate", "anticipate", "intend", "project" and similar expressions or words which, by their nature, refer to future events.
In some cases, you can also identify forward-looking statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
RESULTS OF OPERATIONS
Overview
Occidental Development Group, Inc. (“ODG”, the “Company”, “we”, “us”) was incorporated in the State of Nevada in 1998. The Company operates in legal marijuana sector. Historically, the Company operated in the green building sector offering control and automation technology for single and multi unit new construction and existing buildings.
The market opportunities for the Company’s control and automation services and products steadily declined over the past several years due in part to the slowdown in new and construction and renovation activity plus the advent of plug and play automation technology which eroded the Company's intellectual property, reduced the need for specialized technical support and reduced project margins.
Over several quarters the Company actively evaluated and pursued opportunities to expand its business activities vertically within the Company’s historical green building, home automation and energy conservation sectors and horizontally within the construction and renovation sectors. During FY 2012 the Company began planning the shift and expansion of its activities to development and design build services targeting energy efficient housing and multi-strata property renovation and development. Early in the planning process it became clear that significant restructuring would be required in order for the Company to attract the working capital financing required to support expansion.
Initial stages of restructuring were completed during FY 2012. On October 31, 2011 the Company’s board of directors approved a Consent Resolution amending the Company’s Articles of Incorporation to affect a one for one hundred and fifty reverse split of the Company’s common stock, and adjustment of the Company’s authorized capital to eight hundred million common shares and five million preferred shares. The proposed amendments were approved by a majority of shareholders on November 1, 2011. The Company filed a preliminary Schedule 14C Information Statement outlining proposed amendments to the Company’s Articles of Incorporation on November 9, 2011 and a definitive Schedule 14C Information Statement on November 25, 2011. The Company set November 25, 2011 as the record date for notification to shareholders. The Company filed the amended Articles of Incorporation with the Nevada Secretary of State on December 12, 2011, with an effective posting date of December 22, 2012. The reverse split was approved for trading purposes by the Financial Industry Regulatory Authority [FINRA] on January 18, 2012.
Through FY 2013 the Company actively pursued design build and renovation opportunities within the British Columbia and Greater Vancouver markets and solicited project financing from commercial lenders and private equity. The Company structured a joint venture proposal with a prominent First Nations forestry company targeting housing needs within First Nations communities and undertook an extensive evaluation of renovation opportunities within the Greater Vancouver condominium market. The Company also responded to an invitation to provide engineering project management services, in concert with First Nations communities, to the early stage LNG development underway in British Columbia. During this period, the Company scaled back its project and marketing efforts within the Company’s traditional home automation sector in favor of pursuing property development opportunities.
Through this process it became apparent that the Company’s financial resources were not sufficient to support available diversification opportunities and that further balance sheet and equity restructuring would
be required in order to attract and qualify for project financing support and equity funding sufficient to grow the business. Management reached this conclusion concurrent with the close of FY 2013.
Beginning in June 2013 the Company undertook further restructuring and on June 25, 2013 Murat Erbatur resigned as director and COO and on June 26, 2013 the Board of Directors appointed Mr. Ian Gilbey as director. Mr. Gilbey had previously been a consultant to the Company providing re-structuring and merger acquisition support. In June the Company moved its head office to Beverly Hills California to better focus on the US market. On July 17, 2013, the Board of Directors authorized a merger with the Company’s wholly-owned subsidiary, Occidental Development Group Inc., and in the merger, the name of the company was changed to Occidental Development Group Inc. On July 17, 2013, the Board also approved the filing with the Secretary of State of Nevada a Certificate of Change that effected a 1:10 reverse split in our outstanding common stock and a reduction of our authorized common stock in the same 1:10 ratio, from 800,000,000 shares to 80,000,000 shares. Both of these corporate actions were permitted to be taken by the Company’s Board of Directors without stockholder approval under Nevada NRS 92A.180 (for the merger with the subsidiary and name change) and NRS 78.207 (for the change in authorized and outstanding stock).
The changes of the Company’s name to Occidental Development Group, Inc. and the 1:10 reverse split, with the concurrent reduction of our authorized common stock in the same ratio and the change in the Company’s trading symbol to OXDG, were approved by FINRA and became effective for trading purposes on August 19, 2013.
During the quarter ended August 31, 2013 the Company continued to plan for the complete phase out of its activities in the home automation sector and negotiations were initiated for the acquisition of Ball Park Investments LLC ("BallPark"), a Florida real estate development company. The Company's board of directors considered the acquisition of Ballpark a key step in establishing strategic relationships with debt and equity providers.
Effective September 1, 2013, the Company disposed of its subsidiary MCM Technologies Inc. ("MCM") by sale to a previous related party, Murat Erbatur, the Company's former COO, for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($342,880) to additional paid in capital. Early in the second quarter management completed the acquisition of BallPark. The acquisition of BallPark was done without consideration and did not contribute any assets or result in any liabilities. As a direct result of the Ballpark acquisition and subsequent negotiations for funding, the Company was introduced to and approached by Integrity Aviation and Leasing LLC ("Integrity"), a Texas based company active in the domestic airline industry and specializing in leasing jet aero engines. In preliminary discussions, Integrity disclosed that it had assets in excess of $5 million and long-term lease revenues. On November 22, 2013 the management of Occidental and Integrity executed a binding Letter of Intent outlining terms for the acquisition of Integrity by Occidental. On January 14, 2014 the Company's Board of Directors approved the binding Letter of Intent for the acquisition of Integrity and initiated a due diligence process to, among other things, verify and quantify the assets, liabilities and obligations of Integrity. On January 16, 2014 the Company's Board of Directors approved a consent motion for shareholder approval to increase the Company's authorized common share capital from 80,000,000 shares to 800,000,000 and on the same day received approval from a majority of shareholders.
Effective March 1, 2014, the Company disposed of its remaining Canadian subsidiary by sale to a third party for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($711,990) to additional paid in capital. On March 12, 2014 the Company executed a non binding Memorandum of Understanding with Arrivair LLC ("Arrivair"), an aircraft trading and leasing company based in Florida. Arrivair is active in the sales and leasing of commercial passenger and cargo aircraft and aircraft components to airlines and entrepreneurs worldwide. Under the terms of the MOU the parties agreed to cooperatively pursue the purchase of aircraft and critical aircraft parts for trading, re-sale and leasing.
The timing of this initiative dovetailed to the upswing in the global airline market and industry shift to off balance sheet financing of operations and flight critical capital equipment. After several months of pursuing financing for potential aircraft purchase and lease opportunities the Board of Directors concluded that the
Company needed to significantly strengthen its balance sheet to support activity in this capital intensive sector.
Collateral to the Company's effort to develop activity in the aircraft sector, in September 2014 the Company was introduced to and on October 1, 2014 the Company executed a binding Letter of Intent with Eagle Financial Diamond Group, Inc. ("Eagle") an established Florida company active in the consumer and wholesale diamond trade. The binding Agreement defined the terms under which Occidental would acquire Eagle. In January 2015, the Company was advised by the principal of Eagle that Eagle no longer wished to pursue the buyout. As a result the Board is considering the option to pursue a claim of damages.
On April 27, 2015 the Company executed a binding Letter of Intent with 420 International Corp. ("420"), a California company active in the legal marijuana sector. The Letter of Intent outlines an all share transaction in which Occidental acquires 100 percent of the outstanding shares of 420. Under terms of the Agreement, the principal shareholders of Occidental transfer a portion of their current shareholdings to the seller in exchange for Occidental receiving 100 percent of the outstanding shares of 420. The share transfer is currently underway and Occidental, through 420, is actively engaged in the legal marijuana business.
Results from ongoing operations reported for the years ending May 31, 2014 and 2013 relate to the Company's corporate activities including restructuring, establishing strategic relationships, compliance and reporting. Results from discontinued operations reported for the years ending May 31, 2014 and 2013 relate to sales of home automation and energy efficiency products and services and phase-out and disposal of assets and liabilities associated with these activities.
Foreign currency translation
The Company's former subsidiaries MCM Integrated Technologies, Ltd. and Cardinal Points Trading, Corp. both used the Canadian Dollar as their functional currency. Transactions denominated in currencies other than the entity’s functional currency are translated into the entity’s functional currency at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized in the statement of income for the period.
On consolidation, the results of operations and cash flows whose functional currency is other than the US dollar are translated into US dollars at the average exchange rate for the period and their assets and liabilities are translated into US dollars at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized within other comprehensive income as a separate component of shareholders’ equity. In the event that such an operation is sold, the cumulative currency translation differences that are attributable to the operation are reclassified to income.
During the period June 1, 2013 through March 1, 2014 (the date of disposal of the Company's last Canadian subsidiary), the US dollar to Canadian Dollar exchange rate has varied from a low of 0.8945 on January 31, 2014 to a high of 0.9835 on June 18, 2013. The closing exchange rate was 0.900 and the average exchange rate over the period ended March 01, 2014 was 0.9487 resulting in a foreign currency translation loss ($1,551) for the period ended May 31, 2014.
Comparison of the Years Ended May 31, 2014 and May 31, 2013
During the quarter ended November 30, 2013 the Company disposed of its home automation business and during the quarter ended May 31, 2014 the Company disposed of its remaining Canadian subsidiary. As a result of the dispositions of the Company's Canadian subsidiaries historical revenues and expenses associated with these activities were re-classified to discontinued operations and were reported as such on the Company's Consolidated Statements of Operations and Comprehensive Loss. Accordingly, for the reporting periods ended May 31, 2014 and 2013 the Company reported $0 current and comparative historical revenue, cost of revenue and gross profit associated with continuing operations.
Operating expenses associated with ongoing operations for the year ended May 31, 2014, were 515,676 versus $413,049 for the same period in the prior year. The increase in operating expenses reflects increased consulting and professional fees.
The Company recorded an operating loss from continuing operations of ($515,676) for the year ended May 31, 2014 compared to an operating loss of ($413,049) for the same period in the prior year. This represents a year-on-year 25% increase in operating loss.
Total other expenses for the year ended May 31, 2014 were $96,836 compared to $134,087 for the comparable period in the prior year. The 28% year-on-year decrease reflects the net of decreased amortization expenses associated with beneficial conversion and fee discounts, increased interest expenses and a gain on disposal of assets.
The net loss from continuing operations for the year ended May 31, 2014 was ($612,512) compared to a net loss of ($547,136) for the comparable period in the prior year, a 12% increase in the year-on-year net loss from continuing operations.
During the year ended May 31, 2014 the Company recorded a gain from its discontinued operations of $27,762 compared to a net loss of $73,558 for the comparable period in the prior year.
The consolidated net loss for the year ended May 31, 2014 was ($584,750) compared to ($620,694) for the comparable period in the prior year. A comprehensive loss of ($693,492) was realized due as a result of foreign currency translation and adjustments to paid in capital resulting from disposal activities compared to a gain of $1,372 in the comparable period of the prior year. The resulting comprehensive loss for the period ending May 31, 2014 was ($1,278,242) compared to ($619,322) for the corresponding period in the prior year, an increase of 106%.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
As of May 31, 2014, our principal sources of liquidity included cash and cash equivalents, and loans from related parties. At May 31, 2014, cash and cash equivalents totaled $1,719 compared to $19,342 at May 31, 2013.
Our business continues in transition and our liquidity must be considered in light of the risks, expenses and difficulties frequently encountered by companies in our stage of re-development. The risk factors and other information included in this Annual Report should be carefully considered. However, the risks and uncertainties described in this Annual Report are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations, financial condition, operating results, and cash flows.
Internal and External Sources of Capital
For the year ending May 31, 2014 the Company realized a loss on operations of ($612,512) and a net loss of ($584,750). As of May 31, 2014 the Company had a working capital deficit of $1,298,482 and limited assets to sell in order to create short or long term liquidity. Therefore, we are dependent on external sources for funding until such time as the Company develops positive net cash flow to maintain liquidity. Until such time as we have positive cash flow on a sustained basis, the dependence on external capital will remain. There are no guarantees that we will be able to raise external capital in sufficient amounts or on terms acceptable to us.
Investing Activities
During the year ending May 31, 2014 the Company disposed of two vehicles. The Company realized a loss of $640 on one vehicle and a gain of $4,416 on the other vehicle for a net gain of $3,776.
Financing Activities
Since inception, we financed operations through proceeds from the issuance of equity and debt securities and loans from shareholders and others. To date, we raised approximately $14.4 million from the sale of common stock and as at May 31, 2014 we have interest bearing and due on demand borrowings of approximately $583 thousand from investors and shareholders. Funds from these sources were used as working capital to fund the development of the Company.
The Company executed a securities purchase agreement dated as of December 7, 2005 (the "Purchase Agreement") with certain accredited investors under which we agreed to sell to these investors our convertible Debentures due three years from the final Closing Date under the Purchase Agreement in the aggregate principal amount of up to $600,000 bearing interest at the rate of 6% per annum and convertible into restricted shares of our Common Stock at a conversion price for each share of Common Stock equal to 75% of the lowest closing bid price per share (as reported by Bloomberg, LP) of our Common Stock for the fifteen trading days immediately preceding the date of conversion. At any time, the total number of shares held by each debenture holder is not to exceed 4.99% of the issued and outstanding shares. At the close of the offering the company the company completed the sale of an aggregate of $555,000 in Debentures under the Purchase Agreement which resulted in net proceeds of $424,850. In February 2011 the debenture holders extended the maturity date of the debentures to February 28, 2014. In 2006 the Company secured additional debenture financing from an accredited investor in the amount of $50,000 under terms similar to the December 7, 2005 purchase agreement.
The Company executed a series of three securities purchase agreements, dated September 6, 2012, December 5, 2012 and April 25, 2013, with a certain accredited investor under which we agreed to sell to the investor convertible Debentures due 8 months from the Closing Dates under the Purchase Agreements in the aggregate principal amount of $117,500, bearing interest at the rate of 8% per annum and convertible into restricted shares of our Common Stock at a conversion price for each share of Common Stock equal to 58% of the lowest closing bid price per share (as reported by Bloomberg, LP) of our Common Stock for the ten trading days immediately preceding the date of conversion. At any time, the total number of shares held by the debenture holder is not to exceed 4.99% of the issued and outstanding shares.
For the fiscal year ended May 31, 2014 the balance sheet value of the Company’s loan and debenture principal, accrued interest and related party accrued liabilities decreases by $770,996.
FUTURE PLAN OF OPERATIONS
Over several quarters the Company actively evaluated and pursued opportunities to expand and shift its business activities. Early in the planning process it became clear that significant restructuring would be required in order for the Company to attract the working capital and investment financing required to support growth.
Through FY 2013 the Company scaled back its project and marketing efforts within the Company’s traditional BC based home automation sector and in FY 2014 disposed of its Canadian assets and liabilities in favor of pursuing opportunities in the US market.
The Company’s board of directors believe that the acquisition of 420 International Corp. will overcome limitations the Company has historically faced raising both funds to support growth and the investment required to achieve market potential. Going forward over the coming 24 months, Occidental plans to focus on the opportunities available in legal marijuana sector, utilize and build on existing relationships and work to substantially increase the Company's revenue.
Cash flow from ongoing activities and the availability of investment from related and third parties are estimated to be sufficient to sustain the Company’s planned activities through to the end of the 2015 fiscal year.
OFF BALANCE-SHEET ARRANGEMENTS
During the year ended May 31, 2014 the Company did not engage in any off-balance sheet arrangements as defined in Item 303(a) of the SEC's Regulation S-K.
ITEM 7A
ITEM 7A
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The Company's outstanding loans and debentures are either at zero interest or at fixed interest over the term of the loan or debenture. Accordingly, the Company has no exposure to market risk for changes in interest rates.
Foreign Currency Exchange Risks
The Company has ceased operations in Canada and has no assets or liabilities in Canadian dollars and limited transactions using the Canadian Dollar as a functional currency. Each financial period, all assets, and liabilities recorded in Canadian dollars are translated into U.S. Dollars, our reporting currency, using the closing rate method.
There are principally two types of foreign exchange risk: transaction risks and translation risks. Transaction risks may impact the results of operations and translation risks may impact comprehensive income. These are discussed more fully below.
Transaction risks
Transactions in currencies other than the US dollar (the Company's functional currency) are translated at either an average exchange rate used for the reporting period in which the transaction took place (to approximate to the exchange rate at the date of transactions for that period) or in some cases the rate in effect at the date of the transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is settled or translated, are recognized in the consolidated statements of operations as foreign exchange transaction gains and losses. This exposes us to foreign currency exchange rate risk in the Statement of Operations. The change in exposure from period to period is related to the change in the balance of the bank accounts based on timing of event receipts and payments. For the year ended May 31, 2014, the Company did not purchase goods valued in US dollars for sale in Canadian dollars and was not subject to transaction risk.
Translation risks
The financial statements recorded in foreign currency are translated into U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated at period-end exchange rates while revenue, expenses and cash flows are translated at reporting period weighted average exchange rates. Adjustments resulting from these translations are accumulated and reported as the principal component of other comprehensive loss in stockholders’ equity.
Fluctuation in exchange rates resulted in a year-to-date foreign currency translation loss of ($1,551) on May 31, 2014. For the comparable period in the prior year, the foreign currency translation gain was $1,372.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OCCIDENTAL DEVELOPMENT GROUP, INC.. AND SUBSIDIARIES
BEVERLY HILLS CALIFORNIA
We have audited the accompanying consolidated balance sheets of Occidental Development Group, Inc. and Subsidiaries as of May 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive loss, stockholders' (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Occidental Development Group, Inc. and Subsidiaries as of May 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ M&K CPAS, PLLC
June 4, 2015
Houston, TX
www.mkacpas.com
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Occidental Development Group, Inc. (“ODG”, the “Company”, “we”, “us”) was incorporated in the State of Nevada in 1998. Occidental Development Group, Inc. (“ODG”, the “Company”, “we”, “us”) was incorporated in the State of Nevada in 1998. The Company provides services and support to the legal marijuana industry through subsidiaries and joint ventures.
Historically, the Company operated in the green building sector offering control and automation technology for single and multi unit new construction and existing buildings. This activity was pursued through its wholly owned Canadian subsidiaries. During the year ended May 31, 2014 the Company discontinued its activities in the green building sector and disposed of all assets liabilities and obligations related to the sector. Future impact on operations is expected to be de minimis as of May 31, 2014.
Results from ongoing operations reported for the years ending May 31, 2014 and 2013 relate to the Company's corporate activities including restructuring, establishing strategic relationships, compliance and reporting. Results from discontinued operations reported for the years ending May 31, 2014 and 2013 relate to sales of home automation and energy efficiency products and services and phase-out and disposal of assets and liabilities associated with these activities.
The Company’s year-end is May 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Occidental Development Group, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting.
Accounts Receivable
The Company has adopted the policy to record its accounts receivable at net realizable value. Because of the small customer base, direct contact with customers and relatively small number of transactions, the Company has adopted the direct write off method to account for doubtful accounts. The Company estimates bad debt based on management’s ongoing review and assessment of accounts and creation of reserves for the full amount of doubtful accounts. At May 31, 2014 and 2013, there were accounts receivable allowances of NIL.
Advertising and Marketing Expenses
Advertising expenses consist primarily of costs incurred in the design, development, and printing of Company literature and marketing materials. The Company expenses all advertising expenditures as incurred. The Company incurred advertising and marketing expenses of $Nil and $826 for the years ending May 31, 2014 and 2013 respectively.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. At May 31, 2014 and 2013, the Company did not have cash equivalents.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
Commitments and Contingencies
We record estimated commitments for future obligations and estimate contingencies when information is available that indicates that it is probable that an asset has been impaired or a liability has been incurred and the amount can be reasonably estimated. When no accrual is made for a loss contingency because one or both of these conditions are not met, or if an exposure to loss exists in excess of the amount accrued, we disclose such contingencies when there is at least a reasonable possibility that a loss or an additional loss may have been incurred. Determining the likelihood of incurring a liability and estimating the amount of the liability involves significant judgment. If the outcome of the liability is more adverse to us than management currently expects, then we may have to record additional charges in the future. See Note 6 for details on commitments and contingencies.
Comprehensive Income
The Company accounts for Comprehensive Income in accordance with ASC Topic 220. ASC Topic 220 establishes standards for reporting and displaying comprehensive income, its components and accumulated balances. For the year ending May 31, 2014 the Company reported a comprehensive loss of $693,492 resulting from the conversion of Canadian dollar subsidiaries into US dollars. For the year ending May 31, 2014 the accumulated comprehensive loss due to the conversion of Canadian dollar subsidiaries into US dollars was $779,695.
Costs Associated with Exit or Disposal Activities
The Company accounts for exit or disposal activities in accordance with ASC Topic 220, “Accounting for Costs Associated with Exit or Disposal Activities” ASC 220 establishes standards for the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities. There has been no impact on the Company’s financial position or results of operations from adopting ASC 220.
Earnings per Share
The Company has adopted ASC 260 “Earnings Per Share”. Basic loss per share is computed using the weighted average number of common shares outstanding. Diluted net loss per share is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
The following potential common shares have been excluded from the computation of diluted net income per share for the years ended May 31, 2014 and 2013 because their inclusion would have been antidilutive:
For the Year Ended
May 31, 2014
For the Year Ended
May 31, 2013
Outstanding common stock options and warrants
Nil
Nil
Convertible loans
98,630,155
52,520,928
Fair Value of Financial Instruments
On July 1, 2008, the Company adopted Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“Topic 820”). Topic 820 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.
·
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 following table represents our assets and liabilities by level measured at fair value on a recurring basis at May 31, 2014
The following table represents our assets and liabilities by level measured at fair value on a recurring basis at May 31, 2013:
The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.
Software Development Costs
Software development costs include direct costs incurred for internally developed products classified under Other Assets. We account for software development costs in accordance with ASC 350-40. All capitalized software costs are amortized on a straight line basis over an estimated useful life and are reviewed for impairment annually. As of May 31, 2014, all software costs were fully amortized.
Foreign Currency Translation
The Company's subsidiaries MCM Integrated Technologies, Ltd. and Cardinal Points Trading, Corp. both used the Canadian Dollar as their functional currency. Transactions denominated in currencies other than the entity’s functional currency are translated into the entity’s functional currency at the exchange rate ruling on the date of
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized in the statement of income for the period.
On consolidation, the results of operations and cash flows whose functional currency is other than the US dollar are translated into US dollars at the average exchange rate for the period and their assets and liabilities are translated into US dollars at the exchange rate ruling on the balance sheet date. Currency translation differences are recognized within other comprehensive income as a separate component of shareholders’ equity. In the event that such an operation is sold, the cumulative currency translation differences that are attributable to the operation are reclassified to income.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
As shown in the accompanying financial statements, at May 31, 2014 the Company has an accumulated deficit of $16,456,844, and current liabilities in excess of current assets by $1,298,482. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Commencing in September 2013 and continuing through to March 2014 management systematically phased out of all Canadian operations and re-located the Company's offices to Beverly Hills CA. Commencing in Q2 2014 the Company began reporting all home automation activity under the category of discontinued operations. This transition was completed as of May 31, 2014.
Impairment of long-lived assets
We have adopted ASC 350 for the assessment of impairment of goodwill and indefinite life intangibles on an annual basis. The potential impairment of finite life intangibles is assessed whenever events or a change in circumstances indicate the carrying value may not be recoverable. Factors we consider important which could trigger an impairment review include the following:
·
significant underperformance relative to historical or expected projected future operating results;
·
significant changes in the manner of our use of the acquired assets or the strategy for our overall business;
·
significant negative industry or economic trends;
·
significant decline in our stock price for a sustained period of time; and
·
our market capitalization relative to net book value.
When we determine that the carrying value of goodwill and indefinite life intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any potential impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model.
Inventory
The Company has adopted ASC 330: Inventory at May 31, 2014 was Nil and at May 31, 2013 consisted of a variety of home automation equipment. Inventories are recorded using the specific identification method and valued at the lower of recorded cost or market value. The recorded cost of inventory was $Nil at May 31, 2014, and $53,701 at May 31, 2013. Reserves of $Nil at May 31, 2014 and $51,749 at May 31, 2013 were recorded for home automation inventory.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. References herein to the Company include the Company and its subsidiaries, unless the context otherwise requires.
Property and Equipment
Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years (see note 3).
Provision for Taxes
We account for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that we recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.
Accounting guidance now codified as FASB ASC Topic 740-20, “Income Taxes - Intra-period Tax Allocation,” clarifies the accounting for uncertainties in income taxes recognized in accordance with FASB ASC Topic 740-20 by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. FASB ASC Topic 740-20 requires that any liability created for unrecognized tax benefits is disclosed. The application of FASB ASC Topic 740-20 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets. We would recognize interest and penalties related to unrecognized tax benefits in income tax expense.
At May 31, 2014, the Company had net deferred tax asset calculated at an expected rate of 34% of approximately $4,257,000 principally arising from net operating loss carryforwards for income tax purposes. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at May 31, 2014. The significant components of the deferred tax asset at May 31, 2014 and May 31, 2013 were as follows:
May 31,
May 31,
Net operating loss carryforward
$
13,631,839
$
13,076,828
Deferred tax asset - NOL
$
4,634,866
$
4,446,162
Deferred tax asset valuation allowance
$
(4,634,866)
$
(4,446,162)
Net deferred tax asset
$
-
$
-
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
At May 31, 2014, the Company had net operating loss carryforwards of approximately $13,632,000 which expire in the years 2020 through 2032. The change in the allowance account from May 31, 2013 to May 31, 2014 was $188,704.
The components of current income tax expense as of May 31, 2014 and 2013 respectively are as follows:
For the period ended May 31, 2014, other than a reserve of $150,000 for potential federal tax penalties associated with late filing of foreign subsidiary disclosures, the Company did not record any liabilities for uncertain tax positions.
Revenue Recognition
The Company generates revenues designing and installing, integrating and servicing automation solutions and energy use monitoring and conservation systems for commercial and residential new construction and renovation projects. The Company generates revenues in three primary ways: first, the Company offers a complete turnkey solution with products and services to contractors and end users; second, the Company sells only products to its contractors and end users; and third, the Company sells only services to its contractors and end users. Revenue on product sales, service agreements and turnkey contracts is recognized using the completed contract method in accordance with ASC Topic 605 “Revenue Recognition in Financial Statements.”
Use of Estimates
The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. The useful lives of property and equipment for purposes of computing depreciation are three to seven years. The following is a summary of property, equipment, and accumulated depreciation:
Property and Equipment
May 31,
May 31,
Computer hardware and software
$
314,903
$
811,741
Furniture, fixtures, vehicles, leaseholds
-
342,754
Book value of property and equipment
314,903
1,154,495
Less accumulated depreciation
(314,903)
(1,149,256)
Property and equipment - net
$
Nil
$
5,239
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
For the years ended May 31, 2014 and 2013, depreciation expenses were $Nil and $5,098. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.
NOTE 4 - COMMON STOCK
During the year ended May 31, 2013 the Company issued 3,073,101 shares of common stock for conversion of debt valued at $239,471.
During the year ended May 31, 2014 the Company issued 1,264,762 shares of its unregistered common stock for conversion of $14,900 of third party debt principal at a conversion price per share equal to a discount of 42% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion.
During the year ended May 31, 2014 the Company recognized conversion notices for the conversion of $370,600 of third party note and debenture principal and accrued interest into 23,909,678 shares of its unregistered common stock. As of February 28, 2014 the Company issued 20,296,775 shares and recorded the balance of 3,612,903 shares as stock payable. The conversions were at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion.
During the year ended May 31, 2014 the Company issued 33,333,334 shares of its unregistered common stock for conversions of $400,000 of related party debt principal. The conversions were at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion.
During the year ended May 31, 2014 the Company issued 16,666,667 shares of its unregistered common stock in fulfillment of a $200,000 related party stock based compensation agreement at a share price equal to $0.01, fair market value as of August 15, 2013, the effective date of the compensation agreement.
All stock issued, and notices of conversion were in accordance with the terms of the underlying agreements.
NOTE 5 - RELATED PARTIES (NOTES PAYABLE RELATED PARTY)
During the year ended May 31, 2013, the Company converted $122,000 of accrued liabilities, into a new related party debenture in the same amount and re-classified and converted a $30,267 short term non-interest bearing note into a new related party debenture. The debentures bear interest at 6% and mature on June 1, 2014. The debentures are convertible into shares of common stock at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion or at a price of $0.0005 per share whichever is greater. The Company determined that there was no derivative liability or beneficial conversion associated with the new debentures.
During the year ended May 31, 2013 the Company converted $103,267 of related party debenture principal and $2,154 of related party debenture interest into 1,405,600 shares of common stock at a share price of $0.10 per share. All conversions were made in accordance with the underlying debt agreement.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
During the year ended May 31, 2013, the balance sheet liability associated with related party loans, debentures and accrued liabilities decreased by $30,196. Related party loans outstanding as of May 31, 2013 totaled $320,036 are uncollateralized and due on demand. The Company paid the Company’s officers $245,848 of loan principal and $27,413 of interest in cash and accrued related party interest of $722. Total outstanding related party debt [principal plus accrued interest] for the periods ended May 31, 2013 was $321,543.
During the year ended May 31, 2014, the Company converted $150,000 of accrued liabilities and $50,000 of short term debt into a new $200,000 related party debenture. The debenture bears interest at 6% and matures on June 1, 2014. The debenture is convertible into shares of common stock at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion or at a price of $0.0005 per share whichever is greater. The Company determined that there was no derivative liability or beneficial conversion associated with the new debenture.
During the twelve months ended May 31, 2014 the Company issued a new related party $75,000 convertible note for professional time expenses. The note is non interest bearing and matures on December 31, 2013. The note is convertible into shares of common stock at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion or at a price of $0.0005 per share whichever is greater. The Company determined that there was no derivative liability or beneficial conversion associated with the new note.
During the twelve months ended May 31, 2014 the Company recorded related party stock based compensation in the amount $200,000 and in full payment issued 16,666,667 shares of restricted common stock of the Company at a share price equal to $0.01, fair market value as of August 15, 2013, the effective date of the compensation agreement. During this same period the Company received conversion notices for $200,000 of related party debentures and $200,000 of related party convertible notes and issued an aggregate of 33,333,334 restricted shares of the Company’s common stock at a conversion price of $0.012 per share.
All stock issued, and notices of conversion were in accordance with the terms of the underlying agreements.
During the twelve months ended May 31, 2014 the Company re-classified $316,750 of related party debt and $14,026 of related party accounts payable to third party.
During the twelve months ended May 31, 2014 the Company disposed of its subsidiary MCM Technologies Inc. ("MCM") by sale to a previous related party, Murat Erbatur, the Company's former COO, for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($342,880) to additional paid in capital.
During the twelve months ended May 31, 2014 the balance sheet liability associated with related party loans, accounts payable, debentures, accrued interest and accrued liabilities decreased by $250,097. The remaining loans totaling $17,652 are uncollateralized and due on demand. The Company paid the Company’s officers $13,797 of loan principal in cash, and accrued related party interest of $3,794. Total outstanding related party debt [principal plus accrued interest] for the period ended May 31, 2014 and May 31, 2013 was respectively $21,446 and $321,543.
The following table summarizes the amounts due to related parties at May 31, 2014:
Related Parties
Principal
Outstanding on
May 31, 2014
Interest
Accrued to
May 31, 2014
Short term notes
$
17,652
$
3,794
Total
$
17,652
$
3,794
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
The following table summarizes the amounts due to related parties at May 31, 2013:
Related Parties
Principal
Outstanding on
May 31, 2013
Interest
Accrued to
May 31, 2013
Short term notes
$
320,036
$
1,507
Total
$
320,036
$
1,507
The following table summarizes the position of notes, and amounts due to related parties at May 31, 2014 and May 31, 2013:
Related Parties
Principal
Outstanding
on May 31,
Interest
Accrued to
May 31,
Principal
Outstanding
on May 31,
Interest
Accrued to
May 31,
Short term notes
$
17,652
3,794
320,036
1,507
Total
$
17,652
3,794
320,036
1,507
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Lease Commitments
For the year ending May 31, 2014 the Company did not have any lease or other long term commitments and management was not aware of any contingencies not already provided for. The Company rents office space on a month-to-month basis. This arrangement is expected to continue for the foreseeable future.
NOTE 7 - THIRD PARTY NOTES AND DEBENTURES PAYABLE
During the 12 months ended May 31, 2013 the Company negotiated a series of three 8% convertible debentures with Asher Enterprises, Inc.
The First Asher Note, principal amount $42,500, due in June 2013, is convertible into shares of the Company’s common stock, at the discretion of the holder, commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 42% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion or $0.00009 per share whichever is greater.
The Company evaluated the First Asher Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Floor Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.03, below the market price on September 6, 2012 of $0.038, resulted in a discount of $42,500 of which $42,294 was amortized during the 12 months ended May 31, 2013.
The Second Asher Note, due in September 2013, is convertible into shares of the Company’s common stock, at the discretion of the holder, commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 42% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion or $0.00009 per share whichever is greater.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
The Company evaluated the Second Asher Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Floor Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.007 below the market price on December 5, 2012 of $0.020 resulted in a discount of $16,226 of which $10,406 was amortized during the 12 months ended May 31, 2013.
The Third Asher Note, due in December 2013, is convertible into shares of the Company’s common stock, at the discretion of the holder, commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 42% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion or $0.00009 per share whichever is greater.
The Company evaluated the Third Asher Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Floor Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.004, below the market price on September 6, 2012 of $0.007, resulted in a discount of $27,765 of which $4,080 was amortized during the 12 months ended May 31, 2013.
Pursuant to the terms of the Asher debentures, and by agreement with Asher, the Company has instructed its stock transfer agent to reserve an agreed upon number of shares of the Company’s common stock to be issued if the debenture is converted. As of May 31, 2013, 3,000,000 shares have been reserved, but are not considered as issued and outstanding.
During the year ended May 31, 2013, the Company converted third party accounts payable of $85,000 and $125,000 to short term non-interest bearing convertible notes due June 2013 and December 31, 2013 respectively. The principal is convertible into shares of common stock at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion or at a price of $0.0005 per share whichever is greater. The Company evaluated the convertible notes and determined that the shares issuable pursuant to the conversion options were determinate due to the Fixed Floor Conversion Price and, as such, do not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount associated with the $85,000 note, resulting from the conversion price of $0.001 below the market price on December 31, 2012 of $0.021, resulted in a discount of $4,250 of which $4,222 was amortized during the 5 months ended May 31, 2013. The $125,000 note was evaluated and it was determined that there was no associated beneficial conversion feature discount.
All outstanding notes and debentures were evaluated for embedded derivatives in accordance with ASC 815 and were found to not include any embedded derivatives.
During the 12 months ended May 31, 2013 the Company converted $9,000 of short term note principal into 30,000 shares of the Company’s common stock and $36,800 of the First Asher Note principal into 580,834 shares of the Company’s common stock. All stock was issued within the terms of the underlying agreements.
During the 12 month period ended May 31, 2013 the Company recorded expenses of $50,201 for accrued interest and $61,002 related to amortization of debenture discounts.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
Third party short term principal outstanding on May 31, 2013 was $393,576, consisting of note principal $237,876 and debenture principal $155,700. Total third party long term principal outstanding on May 31, 2013 consisted of debenture principal of $619,753. Total outstanding third party principal outstanding on May 31, 2013 was $1,013,329.
During the twelve months ended May 31, 2014 the Company re-classified $316,750 of related party debt and $14,026 of related party accounts payable to third party and retired the obligations through the sale of the operation. During this period the Company paid $8,728 of interest associated with these notes in cash.
During the twelve months ended May 31, 2014 the Company converted $14,900 of Asher debenture principal into 1,264,762 shares of the Company’s common stock. The conversion was within the terms of the underlying agreement. During this period the Company exercised its option to repay in cash the balances due on the First and Second Asher Notes. The Company repaid $2,800 of principal, $1,981 of accrued interest and $3,719 of accelerated interest on the First Asher Note and $32,500 of principal, $1,627 of accrued interest and $17,873 of accelerated interest on the Second Asher Note.
During the twelve months ended May 31, 2014 the Company recognized the conversion of a total of $370,600 of third party debenture principal, debenture accrued interest and note principal into 23,909,678 shares of its unregistered common stock. As of May 31, 2014 the Company issued 20,296,775 shares and recorded the balance of 3,612,903 shares as stock payable. The conversions were at a conversion price equal to the lowest closing price per share of the Company’s common stock for the 20 days on which the Company's shares traded immediately preceding the date of conversion. The conversions were within the terms of the underlying agreements.
Total third party principal outstanding on May 31, 2014 was $565,227, consisting of note principal $23,006 and debenture principal $542,221. For the period ended May 31, 2014 all third party debt was short term.
The following tables summarize the outstanding principal and discounts associated with debentures and notes outstanding at May 31, 2013 and May 31, 2014.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
The principal and accrued interest on notes and debentures as of May 31, 2013 and May 31, 2014 are summarized in the following tables:
Notes and Debentures
Principal
Amount at
May 31, 2013
Weighted
Average
Interest Rate
Accrued Interest
May 31, 2013
Third Party Notes
$
237,876
Nil
$
Nil
Third Party Debentures
775,453
6.7%
322,876
Total
$
1,013,329
5.1%
$
322,876
Notes and Debentures
Principal
Amount at
May 31, 2014
Weighted
Average
Interest Rate
Accrued Interest
May 31, 2014
Third Party Notes
$
23,006
N/A
$
Nil
Third Party Debentures
542,221
6.8%
259,891
Total
$
565,227
6.5%
$
259,891
Principal payments on loans and debentures payable in the years ending May 31, 2015 through 2019 are as follows:
Fiscal
Year
Principal
$565,227
-
-
-
-
Total
$565,227
NOTE 8 - DISCONTINUED OPERATIONS
The Company recorded revenues of $49,454 from discontinued operations and a pre-tax net gain of $27,762 for the twelve month period ended May 31, 2014. In the comparable period in the prior year the Company recorded revenue of $33,219 and a pre-tax net loss of ($73,736). The assets and liabilities of MCM and Cardinal Points Trading Corp are segregated in the balance sheet and labeled as held for sale.
NOTE 9 - CHANGES IN PRESENTATION OF COMPARATIVE STATEMENTS
The presentation of certain amounts for previous periods has been reclassified to conform to the presentation adopted for the current period.
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
NOTE 10 - DISPOSAL OF SUBSIDIARY
Effective September 1, 2013, the Company disposed of its subsidiary MCM Technologies Inc. ("MCM") by sale to a previous related party, Murat Erbatur, the Company's former COO, for $1.00. Mr. Erbatur resigned as the Company's COO and Director on June 25, 2013. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($342,880) to additional paid in capital.
Item
Balance
Cash
$4,036
Accounts Receivable
$23,255
Prepaid Expenses
$287
Employee Expense Advances
$68
Inventory, Net
$1,893
Total Assets Available for Sale
$29,539
Bank Line of Credit
($46,381)
Accounts Payable
($28,824)
Accrued Liabilities
$602
Loans Payable
($301,854)
Liabilities associated with Assets Available for Sale
($376,457)
Accumulated other Comprehensive Income/Loss
$4,038
Additional Paid In Capital
($342,880)
Effective March 1, 2014, the Company disposed of its subsidiary Cardinal Points Trading Corp by sale to a third party for $1.00. The transaction was accounted for by rolling up assets and liabilities into a one-time adjustment of ($711,990) to additional paid in capital.
Item
Balance
Cash
$100
Total Assets Available for Sale
$100
Accounts Payable
($16,593)
GST Payable
$78
Loans Payable
($689,986)
Liabilities associated with Assets Available for Sale
($706,510)
Accumulated other Comprehensive Income(Loss)
($5,589)
Additional Paid In Capital
($711,990)
NOTE 11- SUBSEQUENT EVENTS
On October 1, 2014 the Company's Board of Directors approved a Letter of Intent with Eagle Financial Diamond Group, Inc. On April 27, 2015 the Company's Board of Directors approved a Letter of Intent with 420 International Corp.
NOTE 12 - NEW ACCOUNTING PRONOUNCEMENTS
In May 2014, the FASB has issued No. 2014-09, Revenues from Contracts with Customers (Topic 606). The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets
OCCIDENTAL DEVELOPMENT GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
that are not in a contract with a customer (for example, assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other, are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact that this ASU will have on its financial statements.
On June 10, 2014, the FASB issued Accounting Standards Update [ASU] 2014-10, entitled Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The guidance in ASU 2014-10 removes all incremental financial reporting requirements from GAAP for development-stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities.
The accounting standards update also removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. ASU 2014-10 is effective for the first annual period beginning after December 15, 2014 the presentation and disclosure requirements in Topic 915 will no longer be required. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has elected early adoption.
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2014-14 on our financial statements and disclosures.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations, or cash flows.
ITEM 9
ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by our management, with the participation of the Chief Executive and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of May 31, 2014. The evaluation concluded that there was a material weakness in our internal control over financial reporting as of May 31, 2014. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the issuer’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness related to the lack of monitoring or review of work performed by our management and lack of segregation of duties. As of May 31, 2014, in the preparation of audited financial statements, footnotes and financial data, all of our financial reporting was carried out solely by our chief financial and accounting officer and we did not have an audit committee to monitor and review the work performed. The lack of segregation of duties resulted from lack of accounting staff with accounting technical expertise necessary for an effective system of internal control. Based on this evaluation the Chief Executive and Principal Financial Officer has concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective for the reasons stated below.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management's Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles.
Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the interim or annual consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness in 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.
Management conducted an evaluation of the design and operation of the Company’s internal control over financial reporting as of May 31, 2014 based on the criteria set forth by the Committee of Sponsor Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework.
Based upon its evaluation, our management concluded that there was a material weakness in our internal control over financial reporting as of May 31, 2014. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the issuer’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness related to the lack of monitoring or review of work performed by our management and lack of segregation of duties. As of May 31, 2014, in the preparation of audited financial statements, footnotes and financial data, all of our financial reporting was carried out solely by our chief financial and accounting officer and we did not have an audit committee to monitor and review the work performed. The lack of segregation of duties resulted from lack of accounting staff with accounting technical expertise necessary for an effective system of internal control.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or 15(d)-15(f)) that occurred during fourth quarter of the period covered by this yearly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
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 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.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION.
Not applicable.
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers and directors and their ages as of June 4, 2015 are as follows:
NAME
AGE
POSITION
Michael F. Holloran
President, CEO and Director
Ian Gilbey
Director
MICHAEL F. HOLLORAN, PRESIDENT AND CEO
Michael Holloran was elected a director and accepted the position of President & CEO of ODG in 2000. He brings to ODG a wealth of senior management experience spanning 40 years, including 22 years with the Beak International Group and long-term involvement spearheading strategic corporate expansion into international markets, primarily within Southeast Asia. He has been senior consultant to several international engineering companies including: Simons International Inc., AMEC Inc., and Klohn Crippen Berger. He has served as advisor to several multi-national companies and held advisory board and committee memberships including the University of Guelph School of Engineering and the Canadian Pulp and Paper Association. He holds a Masters Degree in Chemical and Environmental Engineering from McMaster University, a Bachelor of Science (Honors) degree in Applied Mathematics and Physical Chemistry from the University of Waterloo. and a Management Studies diploma from Sheridan College.
IAN GILBEY, DIRECTOR
Mr. Gilbey, age 46, is an accomplished senior financial consultant with a background that includes over 18 years in the financial markets where he has developed extensive industry relationships in the origination and execution of a broad range of strategic transactions including: handling domestic mergers and acquisitions, raising venture capital, public offerings and the raising of capital for publicly traded, sponsor owned and private corporations. Mr. Gilbey started his financial career in May 1994 as an account executive with Sutro, where he became licensed for both Series 7 and Series 63. In July 1995 he joined The Boston Group, where he was involved in raising capital for initial public offerings (IPO's). In 1997 he developed a team for managing multi-million dollar portfolios in equity funds, bonds and IPO's. In 1997 Mr. Gilbey moved his team to Prudential Securities and in September 2002, Mr. Gilbey joined Noble Capital in Florida, where he was responsible for raising investment capital for managed portfolios by developing network television financial infomercials and radio talk show news programming. In May 2003 he joined Tide Water Capital, a market neutral hedge fund, where he was responsible for the trading desk, raising capital and product review. In 2006 Mr. Gilbey established an independent consultant practice assisting companies achieve their corporate goals including: corporate structuring for public markets, establishing share structures for internal ownership and public equity, and general corporate development. He has worked with company boards, CEO's, legal departments, corporate investor relations and corporate marketing teams. Mr. Gilbey graduated from Thomas Bennett Community College, Crawley, England in 1986 and during 1991 attended Santa Monica Community College, Business Program.
Directors are elected by the stockholders at annual meetings. Between annual meetings vacancies in our board of directors may be filled by the board itself. There are currently two vacancies on our board of directors. Directors hold office until the next annual meeting of stockholders and until their successors are elected and qualified. Officers are appointed by our board of directors and hold office until their successors are appointed and qualified. Neither of our current directors would qualify as “independent” under NASDAQ rules.
Except as disclosed under Item 12, the Registrant knows of no transactions involving the Registrant during the last two years in which our directors had a direct or indirect interest.
None of our executive officers or key employees is related by blood, marriage or adoption to any other director or executive officer.
To our knowledge, there is no arrangement or understanding between any of our officers and any other person pursuant to which the officer was selected to serve as an officer.
Nominating Committee
We do not have a separate Nominating Committee. Our full Board of Directors performs the functions usually designated to a Nominating Committee.
There have been no changes to the procedures by which security holders may recommend nominees to the board of directors.
Audit Committee
We do not have a separate Audit Committee. Our full Board of Directors performs the functions usually designated to an Audit Committee. We do not have an Audit Committee financial expert.
Corporate Code of Conduct
In June 2007 we adopted a Code of Ethics for senior financial management to promote honest and ethical conduct and to deter wrongdoing. This Code applies to our President, Chief Executive Officer and Principal Financial Officer, COO, Directors, and other employees performing similar functions. The obligations of the Code of Ethics supplement, but do not replace, any other code of conduct or ethics policy applicable to our employees generally.
Under the Code of Ethics, all members of the senior financial management shall:
·
Act honestly and ethically in the performance of their duties at our company,
·
Avoid actual or apparent conflicts of interest between personal and professional relationships,
·
Provide full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submits to, the SEC and in other public communications by our company,
·
Comply with rules and regulations of federal, state and local governments and other private and public regulatory agencies that affect the conduct of our business and our financial reporting,
·
Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing the member’s independent judgment to be subordinated,
·
Respect the confidentiality of information acquired in the course of work, except when authorized or legally obtained to disclosure such information,
·
Share knowledge and maintain skills relevant to carrying out the member’s duties within our company,
·
Proactively promote ethical behavior as a responsible partner among peers and colleagues in the work environment and community,
·
Achieve responsible use of and control over all assets and resources of our company entrusted to the member, and Promptly bring to the attention of the Chief Executive Officer any information concerning:
I.
significant deficiencies in the design or operating of internal controls which could adversely to record, process, summarize and report financial date or
II.
any fraud, whether or not material, that involves management or other employees who have a significant role in our financial reporting or internal controls.
We will provide a copy of the Code of to any person without charge, upon request. Requests can be sent to Occidental Development Group, Inc. 256 S. Robertson Blvd, Beverly Hills Ca 90211.
There are no family relationships between any of our executive officers and/or directors.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
We believe that during the fiscal year ended May 31, 2014, Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were satisfied.
Number
Transactions
Known Failures
Of late
Not Timely
To File a
Name and principal position
Reports
Reported
Required Form
Michael F. Holloran, President & CEO and Principal Accounting & Financial Officer
Ian Gilbey, Director
Steven Levenson
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the annual compensation for services in all capacities to us for the years ended May 31, 2014 and 2013:
SUMMARY COMPENSATION TABLE
Name and
Principal
Position
(a)
Year
(b)
Salary
($)
(c)
Bonus
($)
(d)
Stock
Awards
[issued and
pending]
($)
(e)
Option
Awards
($)
(f)
Non-Equity
Incentive
Plan Compensation
($)
(g)
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)
(h)
All Other
Compen-
sation
(s)
(i)
Total
($)
(j)
M Holloran
CEO
$0
$0
$100,000
$0
$0
$0
$0
$150,000
$0
$0
$150,000
$0
$0
$0
$0
$122,000
I Gilbey
Director
$0
$0
$100,000
$0
$0
$0
$0
$125,000
$0
$0
$125,000
$0
$0
$0
$0
$0
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options/SARs were granted in the fiscal year ended May 31, 2014.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
No officer or Director hold or exercised any options in the fiscal year ended May 31, 2014.
LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
We have not awarded any stock options, stock appreciation rights or other form of derivative security or common stock or cash bonuses to our executive officers and directors.
COMPENSATION OF DIRECTORS
The members of our Board of Directors are reimbursed for actual expenses incurred in attending Board meetings.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of September 13, 2013, information concerning the beneficial ownership of the our Common Stock by (i) each person who is known by us to own beneficially more than 5% of our Common Stock, (ii) each of our directors and officers, and (iii) all of our directors and executive officers as a group.
(1)
Beneficial ownership and percentage ownership based on 75,886,165 shares issued and outstanding on June 4, 2015.
Changes in Control
There are no arrangements that may result in a change in control of the Registrant.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Our By-Laws include a provision regarding related party transactions which requires that each participant to such transaction identify all direct and indirect interests to be derived as a result of the Company's entering into the related transaction. A majority of the disinterested members of the board of directors must approve any related party transaction.
Except for the transactions described below, none of our directors, senior officers or principal shareholders, nor any associate or affiliate of the foregoing have any interest, direct or indirect, in any transaction, during the fiscal periods ended May 31, 2013 and 2014, or in any proposed transactions, in which such person had or is to have a direct or indirect material interest.
During the year ended May 31, 2013 the Company’s CEO loaned the Company $38,631, the Company repaid the CEO $109,010 in cash, the Company’s former COO loaned the Company $77,174, the Company repaid the former COO $73,478 in cash and a related party, Tom Simons loaned the Company $30,267. During the year ended May 31, 2013, The Company paid $27,413 in interest to its former COO in cash and accrued $722 in interest due the Company’s CEO.
During the year ended May 31, 2013 $122,000 of accrued liabilities due the Company’s CEO was converted into a debenture bearing interest at a rate of 6% per annum and a $30,267 short term related party note was converted into a debenture bearing interest at a rate of 6% per annum. During the year ended May 31, 2013 the $122,000 debenture due the Company’s CEO was retired as follows: $13,000 cash principal payment, $36,000
principal transferred to short term note, $73,000 principal plus $1,700 accrued interest converted to 996,000 shares of common stock of the Company at $0.05 per share. During the same period the Company converted $30,267 of related party debenture principal and $454 of accrued interest into 409,600 shares of common stock of the Company at $0.05 per share. The conversions were made in accordance with the underlying debt agreements.
During the year ended May 31, 2014 the Company's CEO loaned the Company $91,496, the Company repaid the Company's CEO $7,102 in cash. During the year ended May 31, 2014 the Company consolidated $50,000 of short term loans bearing interest at 6% with $150,000 of accrued liabilities due the Company's CEO into a $200,000 convertible debenture bearing interest at 6% per annum. During the year ended May 31, 2014 the convertible debenture due the Company's CEO was converted to 16,666,667 shares of common stock of the Company at $0.012 per share. The conversions were made in accordance with the underlying debt agreement. During the year ended May 31, 2014 two convertible notes totaling $200,000 payable to Ian Gilbey one of the Company's directors were converted to 16,666,667 shares of common stock of the Company at $0.012 per share. The conversions were made in accordance with the underlying debt agreement. During the year ended May 31, 2014 the Company entered into a performance based compensation agreement with Steven Levenson under which the Company issued 16,666,667 shares of common stock valued at $0.012 per share, fair market value on the date of issuance, the shares to be held in escrow pending satisfaction of the terms of the Agreement.
Director Independence
The Company’s Board of Directors has determined that none of its directors are independent based on the standards for director independence for the NYSE Amex Equities.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1)
Audit related fees for audit Year ended May 31, 2014: $25,000
(2)
Audit related fees for audit Year ended May 31, 2013: $25,000
(3)
All other fees: N/A
(4)
Audit committee pre-approval processes, percentages of services approved by audit committee, percentage of hours spent on audit engagement by persons other than principal accountant’s full time employees: N/A.
PART IV
ITEM 15.
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following financial statements have been filed with this Annual Report on Form 10-K and are presented in Item 8, herein.
1. Report of Independent Registered Public Accounting Firm
2. Consolidated Balance Sheets
3. Consolidated Statements of Operations and Other Comprehensive Loss
4. Consolidated Statements of Cash Flows
5. Condensed Notes to the Consolidated Financial Statements
(b) The following Exhibits are filed by attachment to this Annual Report on Form 10-K:
EXHIBIT NUMBER
DESCRIPTION
31(1)
Certification of Michael F. Holloran Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32(1)
Certification of Michael F. Holloran Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS(1)
XBRL Instance Document
101.SCH(1)
XBRL Taxonomy Extension Schema Document
101.CAL(1)
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(1)
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB(1)
XBRL Taxonomy Extension Label Linkbase Document
101.PRE(1)
XBRL Taxonomy Extension Presentation Linkbase Document
(1)
Filed herewith.
In addition to those Exhibits shown above, the Company incorporates the following Exhibits by reference to the filings set forth below:
EXHIBIT
NUMBER
DESCRIPTION
3.1
Articles of Incorporation
3.1 in Form 10-SB dated Feb 2, 1999
3.11
By-Laws
3.11 in Form 10-SB dated Feb 2, 1999
3.2
Certificate of Amendment
3.2 in Form 10K/A dated August 18, 2010
3.3
Certificate of Merger, filed effective August 19, 2013
3.3 in Form 8-K dated August 21, 2013
3.4
Certificate of Change, filed effective August 19, 2013
3.4 in Form 8-K dated August 21, 2013
4.2
Form of 12% Convertible debenture
4.2 in Form 10-KSB dated Aug 21, 2001
4.3
Form of Stock Purchase Warrant
4.3 in Form 10-KSB dated Aug 21, 2001
4.4
Stock Purchase Agreement, between
4.4 in Form SB-2 dated May 17, 2002
Company and IFG Private Equity LLC
4.5
Commitment Warrant to IFG
4.5 in Form SB-2 dated May 17, 2002
Private Equity LLC
4.6
Registration Rights Agreement, between
4.6 in Form SB-2 dated May 17, 2002
Company and IFG Private Equity LLC
4.7
1998 Directors' & Officers' Stock Option Plan
99.1 in Form S-8 dated Feb 29, 1999
4.8
1999 Stock Option Plan
99.2 in Form S-8 dated Feb 29, 1999
4.9
2001 Stock Option Plan
4.7 in Form S-8 filed November 27, 2001
4.10
2003 Stock Option Plan
4.8 in Form S-8 filed October 25, 2002
4.11
2005 Stock Option Plan
4.8 in Form S-8 filed July 28, 2005
4.12
2006 Stock Option Plan
4.8 in Form S-8 filed April 28, 2006
4.13
2007 Stock Option Plan
4.8 in Form S-8 filed April 13, 2007
10.3
M. Page-Consulting Agreement
10.3 in Form 10-SB dated Feb 2, 1999
10.4
C. Parfitt-Consulting Agreement
10.4 in Form 10-SB dated Feb 2, 1999
10.6
Office lease dated Aug 27, 1998
10.6 in Form 10-SB dated Apr 21, 1999
10.7
Office lease dated Dec 22, 1998
10.7 in Form 10-SB dated Apr 21, 1999
10.8
Wolnosc International-Consulting Agreement
10.8 in Form 10-SB dated Aug 29, 2000
10.9
Office lease dated Jan 1, 2000
10.9 in Form 10-SB dated Aug 29, 2000
10.10
Capital Lease Agreement
10.10 in Form 10-SB dated Aug 29, 2000
10.11
Michael F. Holloran - Consulting Agreement
10.11 in Form 10-KSB dated Aug 21, 2001
10.12
Sublease Agreement of Company's offices dated August 7, 2001
10.12 in Form 10-QSB dated Oct 15, 2001
10.13
Addendum to the Sublease dated August 22, 2001
10.13 in Form 10-QSB dated Oct 15, 2001
10.14
Paul Morford Consulting Agreement
10.14 in Form 10-QSB dated Oct 15,
10.15
8% Secured Convertible Promissory
4.7 in Form 8-K dated January 4,
Note due December 31, 2006
10.16
Securities Purchase Agreement, dated
10.15 in Form 8-K dated January 13,
December 7, 2005, by and among the
Company and the holders of the Company’s
6% Convertible Debentures, with the form
of Debenture attached
10.17
Registration Rights Agreement, dated
10.16 in Form 8-K dated January 13, 2006
December 7, 2005, by and among the
Company and the Holders of the 6%
Convertible Debentures
10.18
Walther-Glas Investment Agreement
10.16 Form 10-KSB/A2 dated July 18, 2008
10.19
Agreement and Plan of Reorganization
10.18 in Form 8-K dated Dec 15, 2006
10.20
Consulting Agreement
10.19 in Form 10-Q dated October 21, 2013
10.21
Consulting Agreement
10.20 in Form 10-Q dated October 21, 2013
10.22
Performance Agreement
10.21 in Form 10-Q dated October 21, 2013
10.23
Agreement and Plan of Reorganization
10.22 in Form 10-Q dated October 21, 2013
10.24
Integrity Aviation and Leasing Agreement
10.23 in Form 10-Q dated January 21, 2014
10.25
MCM Agreement
10.24 in Form 10-Q dated January 21, 2014
10.26
Letter of Intent 420 International
10.20 in Form 8-K dated May 5, 2015
List of Subsidiaries
21 in Form 10-SB dated Aug 29, 2000
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf the undersigned, thereto duly authorized.
Dated: August 24, 2015
Occidental Development Group, Inc.
By: /s/ Michael F. Holloran
________________________
Michael F. Holloran,
President, Chief Executive Officer, Principal Financial and Accounting Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on August 24, 2015.
SIGNATURE CAPACITY
________________________________________________________________________
/s/ Michael F. Holloran
President, Chief Executive Officer, Principal Financial and Accounting Officer and Director
_____________________
Michael F. Holloran
/s/ Ian Gilbey
_____________________
Director
Ian Gilbey