Item 1. Business.
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Overview
Sealand Natural Resources Inc. f/k/a Vitas Group, Inc. (the “Company”, “We” or “Us”) was organized as a corporation under the laws of Nevada on May 23, 2011 to engage in the development and sale of all-natural, organic food and beverage products. Sealand is a new product research and development company that manufactures, markets, and sells new-age beverages, natural and organic medicinal raw materials, nutriceutical supplements and health food.
On February 15, 2013 (the “Closing Date”), the Company entered into and closed a Merger Agreement (the “Agreement”) with Sealand Natural Resources Inc. (“Sealand”) pursuant to which Sealand was merged with and into the Company (the “Merger”) in accordance with Nevada General Corporation Law (“NGCL”). In connection with the Merger, every fifty (50) shares of Sealand were converted into one validly issued share of the Company. Additionally, the Company changed its name from “Vitas Group Inc.” to “Sealand Natural Resources Inc.” (the “Name Change”). On the Closing Date, the Company filed the Articles of Merger with the State of Nevada notifying them of the Merger and the Name Change. The Company notified the Financial Industry Regulatory Authority (“FINRA”) of its Name Change, and it was declared effective in the market by FINRA.
As a result of the issuance of the shares of common stock pursuant to the Merger Agreement, Lars Poulsen and Greg May reduced their direct ownership in the Company from 83.19% to 61.7% immediately following the acquisition.
In connection with the closing of the Merger Agreement, Messrs. Poulsen and May, Vitas’ principal shareholders, agreed to each cancel 650,000 shares of the common stock that they owned in Vitas, 1,300,000 shares in the aggregate, and to issue 1,200,000 shares (fifty shares of Sealand was converted into 1 validly issued share of Vitas) to shareholders of Sealand, who acquired a majority interest in Vitas in February 2013 for the purpose of the Merger. Additionally, the existing Officers and Directors from Vitas remained as Directors and Officers.
Vitas’ Directors and shareholders approved the Merger Agreement and the transactions contemplated thereby. Simultaneously, the directors and shareholders of Sealand also approved the Merger Agreement and the transactions contemplated thereby.
As a result of the Merger Agreement, Vitas acquired the operations of Sealand, the business and operations of which now constitutes its primary business and operations.
Business Overview
Sealand Natural Resources Inc. f/k/a Vitas Group, Inc (the “Company”, “We”, or “Us”) is a research and new product development company that manufactures, markets and sells “new age functional beverages”, organic nutriceuticals, health supplements, organic raw materials and health food worldwide with the goal of delivering beneficial health effects to those who enjoy our 100% natural and organic products. Our mission is to become a leader in this category and we see the future as a growing market segment which fits our mission.
The Company’s initial focus is the “alternative” beverage category, which combines non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored, unflavored and enhanced) with “new age” beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. According to the Beverage Marketing Corporation, domestic U.S. wholesale sales in 2013 for the “alternative” beverage category of the market are estimated at approximately $36.18 billion, representing an increase of approximately 5.2% over the estimated domestic U.S. wholesale sales in 2012 of approximately $34.4 billion. Additionally, the Company has other products in development to add to the Company’s product sales pipeline. We believe that one of the keys to success in the beverage industry is differentiation, making our brands research proven and visually distinctive from other beverages on the shelves of retailers.
Our Products
At the core of the Sealand Natural Resources product line is the harvested raw materials from the Birch tree and other natural and organic harvested compounds.
Sealand Birk
Sealand Birk is harvested directly from the Birch tree in early spring and provides a refreshing, slightly sweet, beverage. The juice can be enjoyed as the natural taste or mixed with other natural flavors from elderflower, raspberry, blueberry, and ginger & lime.
How is it tapped?
Sealand Birch tree juice collection is done by tying a bottle to the tree, drilling a hole into its trunk and leading the juice to the bottle by a plastic tube. A small Birch (trunk diameter about 15 cm) can produce up to 5 liters of juice per day; a larger tree (diameter 30 cm) up to 15 liters per day. The collection of the Birch tree juice is done in strictly controlled forest environments in order to avoid damage to the trees.
Timing
Birch tree juice has to be collected in early spring, typically between the first thaws and the start of bud development. From around the beginning of April to the middle of May, the Birch trees "pump" nourishment stored in the roots during the last summer up into the buds. There is only a short period where the juice is full of this "stored health and energy" and very well tasting - when the leaves blossom the juice gets bitter.
The Birch Tree
We believe that Birch tree juice has many positive medicinal benefits due to its wide range of nutritional ingredients. These ingredients may contribute to the creation of a healthy diet
The Birch tree is considered the "Nephritic Tree" and the "Tree of Life". The presence of Potassium in large quantities is believed to be vital to the cellular process of the buds for growth. ,
Other Products
BIRCHIA
Birch juice with added chia seeds
Sealand Living
The following products are available under the Sealand Living label: ANEW Omega Sport, ANEW Omega Focus, ANEW Omega Premium. ANEW Mobility, ANEW Nutripeptin. These products contain various beneficial ingredients, including: omega fish oils, nutripeptin, shark cartilage powder, fish bone powder, and omega 3 polyunsaturated fatty acids.
Our Growth Strategy
The company will strategically launch our new products in our product pipeline to our existing customer base along with expanding our reach into other mainstream and niche markets domestically and internationally.
Our Services
We currently generate our revenue through direct sales, wholesale and retail sales/distribution and licensing.
Our Customers
Our customers and consumers are integral to our success. Our customer base consists of specialty retailers, Co Op stores, health and science related companies, and major chain stores, as well as the individual consumer. We also have contracted international distributors. We anticipate our customer base to continue to grow however, if we are unable to maintain good relationships with our existing customers, our business could be adversely affected.
Sales and Marketing
Our executive management team is also actively involved in business development and in managing our key client relationships. We have relationships with established broker dealers and representatives that interact with our customers. Our distributors are regarded as the best in the business and we currently are attending trade shows and contracting with major distributors internationally.
Research and Development
Because of the nature of our business, we continuously research the impact of the Birch Tree on human health and the beneficial effects of other natural ingredients that may benefit the human body. This provides us with the ability to improve our products and compete with other business competitors.
Since the beginning of our operation in 2011, we have striven to work on developing our products to contain healthy ingredients, while maintaining a desirable flavor. Sealand integrates critical scientific and medical competencies in understanding nature's processes with context to traditional uses and focus on three core areas: exploration/discovery, characterization of health benefits, and the ability to scale up for commercial use. The initial core products derived from the elements of the birch forests of the Taiga is one example of success that has been peer reviewed by and developed in part with support from the European Community through the Seventh Framework Programme of the European Union (the FP7). Document FP7 call: KBBE2007-1-2-06. The FP& is a funding programme created by the European Union to support and encourage research and technological development in Europe. The FP7 has conducted specific research in conjunction with our Chief Executive Officer toward commercializing the birch forest in the northern European region. The EU FP7 information is a harvest viability report with testing data related to birch forest raw materials.
Additionally, we continuously develop our website to connect consumers and interested companies to Sealand products.
Competition
The market for natural organic beverages and products is highly competitive. We face competitors that differ within individual categories in our territories. Moreover, competition exists not only within the organic beverage markets, but also between the organic and non-organic markets.
The most important competitive factors impacting our business include advertising and marketing, product offerings that meet consumer preferences and trends, new product and package innovations, pricing, and cost inputs. Other competitive factors include supply chain (procurement, manufacturing, and distribution) and sales methods, merchandising productivity, customer service, trade and community relationships, and the management of sales and promotional activities. We believe that our most favorable competitive factor is the unique product line we have developed and the consumer and customer goodwill associated with our brand portfolio. We approach our competition head on and have made every effort to develop a product line that we feel has staying power in the marketplace with an emphasis on growth.
Our Competitive Strengths
We believe that the following strengths contribute to our success and differentiate us from our competitors:
·The Company has developed over time a proprietary process which allows our core raw materials and products to be recognized as an interesting new product in the industry
·Making our brands research proven; and
·Creating visually distinctive beverages from others on the shelves of retailers.
Raw Materials and Other Supplies
The Company has negotiated with bottling facilities and entered into contractual relationships with principal terms standard in the industry. The Company has entered into an exclusive supply contract with Sealand DK , Finland, which spans 20 years with supply chain minimums and control over 60 acres of forest in Finland . Additionally, the Company has an agreement in Denmark to bottle its products.
The Company has organized a supply chain that is within close proximity to the birch harvest of raw materials for efficiency and cost savings. The agreements with these various distributors have initial terms of up to twenty years, which may be renewed thereafter for additional terms ranging from one to five years. Such agreements remain in effect for their then current term as long as our products are being distributed, but may be terminated by either party upon written notice. We are generally entitled to terminate such agreements at anytime without cause upon payment of a termination fee.
Our distribution, bottling and co-packing arrangements are generally of short duration or are terminable upon our request. The Company also contracts harvesting of raw materials and associated distribution. The contract agreements with various relationships to the Company are generally a minimum of one year, which may be renewed thereafter for additional terms ranging from one, five, or fifteen years.
Intellectual Property
We have recognized the material impact on how to protect our intellectual property. Our intellectual property consists of our copyrighted website content, proprietary core raw material processes, and social media pages on Facebook. We intend to file a patent for our core raw material processes, however, we are still in the process of completing our application. The term BIRK is not a viable trademark. The “Sealand Birk” brand name, which has nearly 3 years in the marketplace throughout Denmark and the U.S., is one of our trade names that is used in labeling our products.
Trademarks
The Company intends to file applications to protect all of the Company’s trademarks and currently is the holder of two live trademarks. Birchia (85856815) and VitaBirk (85869058). The registration is valid as long as you timely file all post registration maintenance documents. You must file a “Declaration of Use under Section 8” between the fifth and sixth year following registration. In addition, you must file a combined “Declaration of Use and Application for Renewal under Sections 8 and 9” between the ninth and tenth year after registration, and every 10 years thereafter. If these documents are not timely filed, your registration will be cancelled and cannot be revived or reinstated.
Domain Names
Sealand owns three (3) domain names, which are sealandbirk.com, sealandnaturalresources.com and sealandnr.com.
Governmental Approval and Regulation
The production, distribution and sale in the United States of many of our products is subject to the Federal Food, Drug and Cosmetic Act, the Dietary Supplement Health and Education Act of 1994, the Occupational Safety and Health Act, various environmental statutes and various other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, labeling, recycling and ingredients of such products.
Measures have been enacted in various localities and states that require that a deposit be charged for certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other deposit, recycling or product stewardship proposals have been introduced in certain states and localities and in Congress, and we anticipate that similar legislation or regulations may be proposed in the future at the local, state and federal levels, both in the United States and elsewhere. Any such legislative or regulatory changes may have a negative impact on our sales, operating costs and gross margins.
Our facilities in the United States are subject to federal, state and local environmental laws and regulations. Compliance with these provisions has not had, and we do not expect such compliance to have, any material adverse effect upon our capital expenditures, net income or competitive position.
We are not aware of any incidences or circumstances where we are out of compliance with any governmental regulations.
The term BIRK is not a viable trademark. The “Sealand Birk” brand name, which has nearly 2 years in the marketplace throughout Denmark and the U.S., is one of our trade names that is used in labeling our products.
Employees
As of September 10, 2014, we have no full-time employees. Our officers, Lars Poulsen, Greg May, and Steve Matteson all contribute approximately forty hours per week on Company matters.
Corporate Information
Our principal executive offices are located at 50 W Liberty St. 880 Reno Nevada 89501. Our telephone number at this address is 800-688-0501.
Item 1A.
Item 1A. Risk Factors.
Not applicable to smaller reporting companies.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not applicable to smaller reporting companies.
Item 2.
Item 2. Properties.
Our principal executive offices are located at 50 W. Liberty St. 880 Reno Nevada 89501. We rent this office space and mailbox for $50 per month.
The Company has a month to month commercial lease for office and warehouse space at 1722 South Coast Highway, Oceanside, California 92054 for approximately $3,000 per month. This lease is listed as Exhibit 10.2 Additionally, the Company has a month to month lease for office space at Tuborg DK-2900, Hellerup, Denmark. The Company has arrangements with a number of logistical warehousing facilities throughout the USA and will expand these relationship throughout strategic locations based on distribution demands. The following lists those strategic locations:
Auburn Distribution Center
22 30th Street NE
Auburn, WA 98002
Moreno Valley Distribution Center
22150 Golden Crest Drive
Moreno Valley, CA 92553
York Distribution Center
225 Cross Farm Lane
York, PA 17406
Aurora Distribution Center
15965 East 32nd Avenue
Aurora, CO 80011
Lancaster Distribution Center
2100 Danieldale Road
Lancaster, TX 75134
Item 3.
Item 3. Legal Proceedings.
We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.
Item 4.
Item 4. Mine Safety Disclosures.
Not Applicable.
PART II
Item 5.
Item 5. Market For Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is quoted on the OTCBB and OTCQB under the symbol “SLNR.” The OTCBB and OTCQB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. An OTCQB equity security generally is any equity that is not listed or traded on a national securities exchange.
Price Range of Common Stock
The following table shows, for the periods indicated, the high and low bid prices per share of our common stock as reported by the OTCBB and OTCQB quotation service. These bid prices represent prices quoted by broker-dealers on the OTCQB quotation service. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions. Our common stock was not quoted prior to October 9, 2012.
Approximate Number of Equity Security Holders
As of September 10, 2014, there were approximately 102 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.
Dividends
Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
Securities Authorized for Issuance under Equity Compensation Plans
2014 Equity Incentive Award Plan
On March 31, 2014, with the written consent of a majority of our stockholders, our Board of Directors adopted the Company’s 2014 Equity Incentive Award Plan (the “Incentive Plan”) The Incentive Plan gives us the ability to grant stock options, restricted stock, stock appreciation rights (SARs), and other stock-based awards (collectively, “Awards”) to employees or consultants of the Company or of any subsidiary of the Company and to non-employee members of our Board of Directors. Our Board of Directors believes that adoption of the Incentive Plan is in the best interests of our company and our stockholders because the ability to grant stock options and make other stock-based awards under the Incentive Plan is an important factor in attracting, stimulating and retaining qualified and distinguished personnel with proven ability and vision to serve as employees, officers, consultants or members of the Board of Directors of our company and our subsidiaries, and to chart our course towards continued growth and financial success. Therefore, our Board of Directors believes the Incentive Plan will be a key component of our compensation program.
On April 1, 2014, 1,500 shares of our common stock were granted under the Incentive Plan to an employee who is not an executive offer pursuant to his employment agreement with the Company.
As of May 31, 2014, 398,500 shares of our common stock reserved for grants under the Incentive Plan remained available for future grants under the Incentive Plan.
Recent Sales of Unregistered Securities
The below issuances of shares were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.
Common Stock
On June 3, 2013, the Company issued 52,625 shares to Northstar to settle an open accounts payable. The value of these shares is $210,500.
During the month of July 2013, the Company issued 12,500 shares of common stock for $50,000 cash.
During the month of August 2013, the Company issued 47,500 shares of common stock for $190,000 cash.
During the month of September 2013, the Company issued 130,000 shares of common stock for $520,000.
During September 2013, the Company issued 1,500 shares pursuant to a consulting agreement and recognized stock based compensation expense of $13,875.
During October 2013, the Company issued 4,500 shares pursuant to a consulting agreement and recognized stock based compensation expense of $34,380.
As of November 30, 2013, the Company has not issued the shares to be issued pursuant to the service agreements with two individuals. The Company has recorded a stock subscription of $68,760 for the 9,000 shares that have not been issued.
On December 1, 2013 the Company issued 51,000 shares of stock to Michael Larkin for consultancy services and recognized $538,949 in expense.
During the month of December 2013, the Company issued 94,500 shares of common stock for $567,000 cash.
During the month of January 2014, the Company issued 3,000 shares pursuant to a consulting agreement and recognized stock based compensation expense of $35,250.
The Company received $550,000 in cash but has not issued the shares of stock. This amount has been recorded as a stock subscription as of February 28, 2014. These 83,340 shares were issued in May 2014.
On March 31, 2014, the Company recorded stock based compensation expense for three key individuals. The Company recorded an expense of $71,940 but did not issue the 6,000 shares. The Company has recorded these shares as a stock subscription payable.
During the month of April 2014, the Company received cash of $810,000 for shares of common stock. These shares have not been issued and the amounts have been recorded as a stock subscription payable.
On April 1, 2014, the Company issued 1,500 shares of stock shares pursuant to a service agreement with one individual. The Company recognized $17,985 in stock based compensation expense.
On April 12, 2014, the Company issued 3,250 shares of common stock for professional services rendered. The Company recorded an expense of $39,975.
During the month of April 2014, the Company issued 800 shares of common stock that was purchased in February 2012 but never issued.
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.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Fiscal Year Ended May 31, 2014 Compared To Fiscal Year Ended May 31, 2013.
Our net loss for the fiscal year ended May 31, 2014 was $2,613,285 compared to a net loss of $647,258 for the fiscal year ended May 31, 2013. During fiscal year ended May 31, 2014, the Company generated revenue of $565,630, as compared to $285,896 for fiscal 2013. Revenue increase was attributable to establishing new sales contracts with new vendors, both domestic and international, and creating an online sales order system for customers to directly order product.
During the fiscal year ended May 31, 2014, we incurred general and administrative expenses of $2,529,180 compared to $827,561 incurred for the fiscal year ended May 31, 2013. Expenses increased primarily due to: a) increased scale and scope of business operations; b) greater emphasis on marketing and advertising efforts, and: c) professional and related fees largely due to consultant contracts and the ongoing costs of regulatory filings.
Specifically, our legal and professional expenses, both cash and stock, for the fiscal year ended May 31, 2014 were $1,445,851, as compared to $366,054 for the fiscal year ended May 31, 2013. The reasons for the increase were: 1) increased compliance and regulatory expense of being a public company; and 2) increased distribution presence and the hiring of professionals in the beverage industry as well as other consultants.
The weighted average number of shares outstanding was 2,351,113 for the fiscal year ended May 31, 2014 compared to 2,105,000 for the fiscal year ended May 31, 2013.
LIQUIDITY AND CAPITAL RESOURCES
FISCAL YEAR ENDED MAY 31, 2014
As of May 31, 2014, our current assets were $1,498,784 and our total liabilities were $407,198. As of May 31, 2014, current assets were comprised of $810,433 in cash, $530,637 of receivables, $109,628 of inventory, and $48,086 in prepaid expenses. As of May 31, 2014, total liabilities were comprised of $49,198 in accounts payable and accrued taxes, $108,000 of notes payable, and $250,000 of accounts receivable holdback liability.
As of May 31, 2014, our total assets were $1,734,363 comprised of current assets, furniture/equipment of $85,579, and $150,000 of deposits. Stockholders’ deficit decreased from ($151,606) as of May 31, 2013 to a positive $1,327,165 as of May 31, 2014.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the fiscal year ended May 31, 2014, net cash flows used in operating activities was $1,905,985. Net cash flows used in operating activities was $575,057 for the fiscal year ended May 31, 2013. Uncollected accounts receivables may adversely impact liquidity and require the Company to seek additional outside capital to fund operations.
Accounts receivables represented a significant portion of sales as we experienced a delay in receiving payments that was longer than anticipated due to shipping delays, travel time delays, and a longer introduction period to customers. In addition, in limited circumstances, payment terms to a customer may be extended beyond those stated in the contract, in order to assist product success in the market with that customer.
CASH FLOWS FROM FINANCING ACTIVITIES
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended May 31, 2014 net cash provided by financing activities was $2,713,702. For the fiscal year ended May 31, 2013, net cash provided by financing activities was $672,811.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory and raw materials; (ii) developmental expenses associated with a development stage business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Annual Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' report accompanying our May 31, 2014 and May 31, 2013 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data.
SEALAND NATURAL RESOURCES INC.
FORMERLY VITAS GROUP, INC.
(A Development Stage Enterprise)
HARRIS & GILLESPIE CPA’S, PLLC
CERTIFIED PUBLIC ACCOUNTANT’S
3901 STONE WAY N., SUITE 202
SEATTLE, WA 98103
206.547.6050
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Sealand Natural Resources Inc.
We have audited the accompanying balance sheets of Sealand Natural Resources Inc. (A Development Stage Company) as of May 31, 2014 and 2013, and the related statements of operations, stockholders’ deficit and cash flows for the periods then ended and for the period from May 23, 2011 (inception) to May 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sealand Natural Resources Inc. (A Development Stage Company) as of May 31, 2014 and 2013 and the results of its operations and cash flows for the periods then ended and for the period from May 23, 2011 (inception), to May 31, 2014 in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note #2 to the financial statements, the company has had significant operating losses; a working capital deficiency and its need for new capital raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note #2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/ HARRIS & GILLESPIE CPA’S, PLLC
Seattle, Washington
September 9, 2014
SEALAND NATURAL RESOURCES INC.
FORMERLY VITAS GROUP, INC.
(A Development Stage Enterprise)
Balance Sheets
The accompanying notes are an integral part of these statements.
SEALAND NATURAL RESOURCES INC.
FORMERLY VITAS GROUP, INC.
(A Development Stage Enterprise)
Statement of Operations
Audited
The accompanying notes are an integral part of these statements.
SEALAND NATURAL RESOURCES INC.
FORMERLY VITAS GROUP, INC.
(A Development Stage Enterprise)
Statement of Shareholders Equity/(Deficit)
Audited
* Adjusted to post merger shares
The accompanying notes are an integral part of these statements.
SEALAND NATURAL RESOURCES INC.
FORMERLY VITAS GROUP, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
Audited
The accompanying notes are an integral part of these statements.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Note 1 - Summary of Significant Accounting Policies
General Organization and Business
Sealand Natural Resources Inc. (“Sealand ” or the “Company”) is a Nevada corporation in the development stage. The Company was incorporated under the laws of the State of Nevada on May 23, 2011. The Company engages in the manufacture, distribution, sales and marketing of all natural functional beverages, nutriceuticals, health supplements and the harvesting of organic raw materials. The Company integrates critical scientific, environmental and medical competencies in three core areas: exploration/discovery, characterization of health benefits, and the ability to scale up new and natural consumer products for commercial use.
The Company is in the development stage as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 “Development-Stage Entities.”
Basis of presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the year ended May 31, 2014 and 2013 and for the period (inception) from May 23, 2011 through May 31, 2014.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company maintains a cash balance in an interest and non-interest-bearing accounts. At times, cash balances may be in excess of the FDIC Insurance limit. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of May 31, 2014 and 2013.
Property and Equipment
The Company values its investment in property and equipment at cost less accumulated depreciation. Depreciation is computed primarily by the straight line method over the estimated useful lives of the assets ranging from three to five years. As of May 31, 2014 and 2013 the company had recognized total depreciation expense of $8,396 and $2,887, respectively.
Inventory
Inventory is recorded at lower of cost or market; cost is computed on a first-in first-out basis. The inventory consists of imported flavoring , bottle caps, and labels used to produce the Company’s all natural, organic birch tree beverage.
Accounts receivable
Trade receivables are carried at original invoice amount. Management has determined that no allowance for uncollectible accounts is necessary. The allowance for doubtful accounts is based on management estimates of accounts that will not be collected in the future. Receivables past due for more than 90 days are considered delinquent. Management determines uncollectible accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions and by using historical experience applied to an aging of accounts. Recoveries of trade receivables previously written off are recorded when received. Accounts receivables represents a significant portion of sales as we experienced a delay in receiving payments that was longer than anticipated due to travel time delays and modifications that were made to the terms because of these delays.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
On February 20, 2014, the Company entered into a factoring agreement and received $250,000 for certain accounts listed on their accounts receivable. The Company has an obligation to repurchase these shares if the receivable is never collected. Due to this obligation the Company has recorded an accounts receivable holdback liability. The balance of this liability as of May 31, 2014 was $250,000.
Revenue Recognition Policy
Revenue from the sale of goods is recognized when the following conditions are satisfied:
-The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
-The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
-The amount of revenue can be measured reliably;
-It is probable that the economic benefits associated with the transaction will flow to the entity; and
-The costs incurred or to be incurred in respect to the transaction can be measured reliably
The time that all of the conditions listed above are satisfied varies with each vendor depending on the specific terms to which the Company and each vendor agree. The range of terms varies from pre-paid sales to 120 day payment.
Federal income taxes
Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification regarding Accounting for Income Taxes, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred taxes are provided for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.
Net Income Per Share of Common Stock
We have adopted Accounting Standards Codification regarding Earnings per Share, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. We do not have a complex capital structure requiring the computation of diluted earnings per share.
Convertible Debentures:
Beneficial Conversion Features - If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded as a debt discount pursuant to FASB ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Debt Discount - The Company determines of the convertible debenture should be accounted for as liability or equity under FASB ASC 480, Liabilities - Distinguishing Liabilities from Equity. FASB ASC 480, applies to certain contract involving a company’s own equity, and requires that issuers classify the following freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, Obligations that require or may require repurchase of the issuer’s equity shares by transferring assets (e.g., written put options and forward purchase contracts), and Certain obligations where at inception the monetary value of the obligation is based solely or predominantly on:
-A fixed monetary amount known at inception, for example, a payable settleable with a variable number of the issuer’s equity shares with an issuance date fair value equal to a fixed dollar amount.
-Variations in something other than the fair value of the issuer’s equity shares for example, a financial instrument indexed to the S&P 500 and settleable with a variable number of the issuer’s equity shares, or
-Variations inversely related to changes in fair value of the issuer’s equity shares, for example, a written put that could be net share settled.
Fair value of financial instruments and derivative financial instruments
We have adopted Accounting Standards Codification regarding Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments. The carrying amounts of cash, accounts payable, accrued expenses, and other current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of foreign exchange, commodity price or interest rate market risks.
The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by FASB ASC 815, in certain circumstances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements.
Determination of fair value:
The Company’s financial instruments consist of convertible notes payable. The Company believes all of the financial instruments’ recorded values approximate their fair values because of their nature and respective durations.
The Company complies with the provisions of FASB ASC 820-10, “Fair Values Measurements and Disclosures.” FASB ASC 820-10 relates to financial assets and financial liabilities. FASB ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the Unites States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.
FASB ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consist of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 and Level 2) and the lowest priority to unobservable inputs (Level 3).
Internal Website Development Costs
Under ASC350-50, Website Development Costs, costs and expenses incurred during the planning and operating stages of the Company's website are expensed as incurred. Under ASC 350-50, costs incurred in the website application and infrastructure development stages are capitalized by the Company and amortized to expense over the website's estimated useful life or period of benefit.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives at each balance sheet date. The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed.
Deferred Offering and Acquisition Costs
The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
Development Stage Enterprise
The Company’s financial statements are prepared as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 “Development-Stage Entities” pursuant to the provisions of Topic 26, “Accounting for Development Stage Enterprises,” as it devotes substantially all of its efforts to acquiring and developing functional beverages that will eventually provide sufficient net profits to sustain the Company’s existence. Until such interests are engaged in major commercial production, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the development stage.
Stock Based Compensation
The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.
For non-employee stock-based compensation, we have adopted ASC Topic 505 “Equity-Based Payments to Non-Employees”, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic 718.
Concentration of Credit Risk and Significant Vendor
The Company has no significant off-balance sheet risks related to foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company does maintain its supplier relationship with one vendor. The Company, by policy, routinely assesses the financial strength of this vendor.
Recently Issued Accounting Pronouncements
As of May 31, 2014 and May 31, 2013, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.
Note 2 - Uncertainty, going concern:
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of May 31, 2014, the Company had an accumulated deficit of $3,577,865. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
Note 3 - Restatement:
Quarter Ended August 31, 2013 Restatement:
The financial statements have been revised to correct an error in accounting for the Company’s cash, accounts receivable, inventory, accounts payable and accrued expenses, sales, cost of sales, general and administrative expenses and earnings per share. In accordance with applicable Generally Accepted Accounting Principles (GAAP), the Company calculated and recognized adjustments accordingly.
On October 15, 2013, the Company filed with the SEC its reviewed financial statements for the quarter ended August 31, 2013. Following the discovery of various material errors the Company informed the SEC on January 10, 2014, that these financial statements could not be relied upon, and on January 21, 2014 filed its restated unaudited financial statements for the above mentioned period.
The following table represents the effects of the restated statements as of August 31, 2013.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Quarter Ended February 28, 2014 Restatements:
The financial statements have been revised to correct an error for incorrect accounting on discounted stock issuances, prepaid rent contract, fixed asset reporting error, an omitted foreign bank account and related transactions, and the inclusion of expenses related to a stock option grant and subsequent vesting. The effects of these errors are listed throughout the footnotes to the financial statements and reflected in total below. In accordance with applicable Generally Accepted Accounting Principles (GAAP), the Company calculated and recognized adjustments accordingly.
On April 21, 2014, the Company filed with the SEC its reviewed financial statements for the quarter ended February 28, 2014. Following the discovery of various material errors the Company informed the SEC on July 14, 2014, that these financial statements could not be relied upon, and on July 16, 2014 filed its restated unaudited financial statements for the above mentioned period.
Following the discovery of various material errors the Company informed the SEC on August 11, 2014, that the financial statements for the quarter ended February 28, 2014, as restated, could not be relied upon, and the Company plans on filing its second restated unaudited financial statements for the above mentioned period before September 30, 2014.
The following table represents the effects of the first and second restated statements for the three months ended February 28, 2014.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Note 4 - Related Party Transactions
The Company also incurred period expenses of $43,187 for product development costs for the year ending May 31, 2012. For the year ending May 31, 2013, the Company paid down this related party payable by $23,187. The Company was forgiven this payable and recorded the forgiveness as other income in the period ending August 31, 2013.
The Company had a related party payable of $29,887. This note was cancelled and recorded as forgiveness of debt for the year ended May 31, 2013.
Note 5 - Service Agreements
On June 1, 2011, the Company entered into a Service Agreement with Greg May. The agreement requires the Company to pay Mr. May a sum of $9,800 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. In May of 2013, the Company modified this Service Agreement to include the issuance of 1,500 shares of the Company’s common stock paid out quarterly basis (on an annual basis). The modified agreement was effective January 1, 2013 and the 1,500 shares to be issued on March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, and March 31, 2014 have not been issued but have been accounted for as a stock subscription payable.
On June 1, 2011, the Company entered into a Service Agreement with Lars Poulsen. The agreement requires the Company to pay Mr. Poulsen a sum of $7,500 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. In May of 2013, the Company modified this Service Agreement to include the issuance of 1,500 shares of the Company’s common stock paid out quarterly basis (on an annual basis). The modified agreement was effective January 1, 2013 and the 1,500 shares to be issued on March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, and March 31, 2014 have not been issued but have been accounted for as a stock subscription payable.
On January 1, 2013, the Company entered into a Service Agreement with Steven Matteson. The agreement requires the Company to pay Mr. Matteson a sum of $2,500 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. Additionally, the contract requires 1,500 shares of common stock paid out quarterly (on an annual basis). The 1,500 shares to be issued on March 31, 2013, June 30, 2013 and September 30, 2013 were issued in October 2013. On October 1, 2013, the Company modified this contract. The modified contract now requires the issuance of 3,000 shares of stock a quarter (on an annual basis) and the Company will pay all related taxes on these shares through a payroll deduction. Additionally, this officer can earn an additional 10,000 shares when the Company achieves $2.0 million in net sales, an additional 10,000 shares with the Company achieves $3.0 million in net sales and an additional 10,000 shares when the Company achieves $5.0 million in net sales. On December 31, 2013, the Company issued 1,500 shares of the 3,000 shares to be issued. The remaining 1,500 shares have been accounted for as a stock subscription payable. Additionally, the 3,000 shares to be issued on March 31, 2014 have not been issued and have been added to the stock subscription payable.
On July 2, 2013, the Company entered into a Service Agreement with Peter Kuhn. The agreement is cancellable by either party with written notice of termination. The Contract requires 1,500 shares of common stock paid out quarterly (on an annual basis). Additionally, this officer can earn an additional 5,000 shares when the Company achieves $2.0 million in net sales and an additional 5,000 shares with the Company achieves $3.0 million in net sales. The Shares earned on September 30, 2013 were issued in October 2013, the 1,500 shares were issued on December 31, 2013 and the 1,500 for the quarter ending March 31, 2014 were issued on April 2, 2014.
On March 1, 2014, the Company restructured these service agreements. The Company eliminated the restricted nature of the shares earned and converted those to fully tradable shares.
Note 6 - Common Stock
In 2011, the Company authorized the issuance of 7,048 founder shares at par value. The Company formally issued these shares in 2012.
In 2012, the Company issued 704,796 shares of founder shares at par value. The Company has also recorded a stock subscription receivable of $63,698 for the remaining outstanding balance.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
In 2012, the Company issued 466,357 shares at an average value of $0.314 per share.
On February 13, 2013, the Company consummated a revised merger agreement with Vitas Group, Inc. The majority shareholders purchased 2,500,000 shares of Vitas Group Inc. (a Shell Company), which equates to 83.19% of its outstanding shares. These owners agreed to cancel 1,300,000 shares rather than the original 800,000 of the Vitas Group shares. The shareholders of Sealand Natural Resources received 1 share of Vitas for every 50.00 shares of Sealand stock rather than 28.377 shares based on a cancellation of 800,000 shares per the original agreement. The shareholders of Sealand received 1,200,000 shares of Vitas Group Inc. and the total outstanding shares were 2,105,000.
During the year ended May 31, 2013, the Company received $350,000 for 87,500 shares of common stock. These shares were issued during the 1st fiscal quarter.
The Company has recorded a stock subscription payable on March 31, 2013 for 4,500 shares that are required to be issued per the service agreements listed above. The amount of this subscription is $28,800.
During the period March 1, 2013 through May 31, 2013, the Company issued 60,000 shares for cash at a price of $4.00 per share. The Company received $240,000.
On June 3, 2013, the Company issued 52,625 shares to Northstar to settle an open accounts payable. The value of these shares is $210,500.
During the month of June 2013, the Company issued 87,500 shares of common stock for $350,000 cash.
During the month of July 2013, the Company issued 12,500 shares of common stock for $50,000 cash.
During the month of August 2013, the Company issued 47,500 shares of common stock for $190,000 cash.
During the month of September 2013, the Company issued 130,000 shares of common stock for $520,000.
During September 2013, the Company issued 1,500 shares are part of their consulting agreement and recognized stock based compensation expense of $13,875.
During October 2013, the Company issued 4,500 shares are part of their consulting agreement and recognized stock based compensation expense of $34,380.
As of November 30, 2013, the Company has not issued the shares applicable to the Service Agreements for two individuals. The Company has recorded a stock subscription of $68,760 for the 9,000 shares that have not been issued.
On December 1, 2013 the Company issued 51,000 shares of stock to Michael Larkin for consultancy services and recognized $538,949 in expense.
During the month of December 2013, the Company issued 94,500 shares of common stock for $567,000 cash.
During the month of January 2014, the Company issued 3,000 shares are part of their consulting agreement and recognized stock based compensation expense of $35,250.
The Company received $550,000 in cash but has not issued the shares of stock. This amount has been recorded as a stock subscription as of February 28, 2014. These 83,340 shares were issued in May 2014.
On March 31, 2014, the Company recorded stock based compensation expense for three key individuals. The Company recorded an expense of $71,940 but did not issue the 6,000 shares. The Company has recorded these shares as a stock subscription payable.
During the month of April 2014, the Company received cash of $810,000 for shares of common stock. These shares have not been issued and the amounts have been recorded as a stock subscription payable.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
On April 1, 2014, the Company issued 1,500 shares of stock as part of their service agreements with one key individuals. The Company recognized $17,985 in stock based compensation expense.
On April 12, 2014, the Company issued 3,250 shares of common stock for professional services rendered. The Company recorded an expense of $39,975.
During the month of April 2014, the Company issued 800 shares of common stock that was purchased in February 2012 but never issued.
Note 7 - Income Taxes
The provision (benefit) for income taxes for the years ended May 31, 2014, and 2013, were as follows:
The Company had deferred income tax assets as of May 31, 2013, and 2012, as follows:
The Company provided a valuation allowance equal to the deferred income tax assets for the years ended May 31, 2014, and 2013, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
As of May 31, 2014, and 2013, the Company had approximately $3,577,865 and $937,480, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and will begin to expire in the year 2037.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
Note 8 - Convertible Notes Payable
Larkin Family Trust
In July 2012, the Company received a convertible notes payable in the amount of $10,000. The note carries an 8% rate of interest and can be converted into common stock at a strike price of $10.00 per share (adjusted for post-merger value).
In September 2012, the Company received a convertible notes payable in the amount of $125,000. The note carries an 8% rate of interest and can be converted into common stock at a strike price of $10.00 per share (adjusted for post-merger value).
On November 22, 2013, the Company paid off $25,000 of these notes payable and paid an additional $3,500 of accrued interest.
In December 2012, the Company received a convertible notes payable in the amount of $100,000. The note carries an 8% rate of interest and can be converted into common stock at a strike price of $12.50 per share (adjusted for post-merger value). On December 1, 2013, the Company re-negotiated this convertible note. The Company renewed the note at $108, 000, which includes accrued interest of $8,000. There is also a conversion factor that allows the holder to convert these shares at $3 per share. The Company has recorded a beneficial conversion feature of $258,840. The balance of this beneficial conversion feature at May 31, 2014 was $130,131.
Amalfi Coast Capital
On September 7, 2013, the Company entered into an agreement with Amalfi Coast Captial, whereby Amalfi will loan the Company the aggregate principal amount up to $108,000, with interest at the rate of eight percent (8%) per annum, until the maturity date of one year.
If the Note is not paid in full with interest on the maturity date, Amalfi has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to $3.00 per share. The Company has recorded a beneficial conversion feature of $70,601. As of February 28, 2014, the Company has recorded $44,886 as interest expense.
SEALAND NATURAL RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
May 31, 2014
On May 9, 2014, the Company fully paid this note for $114,000; which included $108,000 in principal and $6,000 in interest. The Company also recorded a gain on conversion of $41,534.
Note 9 - Consulting Agreement
The Company has entered into an agreement with DASH Advisors, LLC to provide strategic direction and marketing strategy. The Company will pay a monthly retainer of $3,000 per month and grant 51,532 stock options to DASH, exercisable at $6.00 per share until January 1, 2024. The options vest over time at the rate of 4,294 per month, until fully vested.
Note 10 - Joint Venture
On March 1, 2014, the Company entered into a joint venture with KeeSan Family Co, Ltd. The purpose of the joint venture is the development and growth of the Birk brand in Asia. The joint venture is called Sealand Natural Resources Korea Co., Ltd. It calls for the investment of $22,500 for an ownership of 45%. As of May 31, 2014, the Company has not funded this joint venture and there is no activity.
Note 11 - Return of Capital
During the period ending May 31, 2014, the Company reimbursed two investors for monies that were given for stock purchases in 2011 and 2012 that was never issued.
On March 18, 2014, the Company refunded $8,600 and on March 21, 2014, the Company also refunded an additional $18,500. For a total of $27,100.
The Company recorded these transactions as a prior period adjustment.
Note 12 - Service Condition Stock Options
The Company has initiated a stock option agreement with one of its vendors (See Note 9). Compensation costs are recognized on a graded basis.
The fair market value of the stock options is estimated using the Black-Scholes-Merton valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on implied volatilities of the monthly closing prices of the Company’s common stock; the expected term of options granted is based on the SAB 107 simplified method of using the mid-point between the vesting term and the original contractual term; the risk-free interest rate is based on the U.S. Treasury bonds issued with similar life terms to the expected life of the grant; and the expected dividend yield is based on dividend trends. Forfeitures are estimated at the time of the grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate is based on historical experience.
The following key assumptions were used in the valuation model to value stock option grants for the respective period.
Stock option transactions under the Company’s plans for the period ending February 20, 2014 are summarized as follows:
During the year ended May 31, 2014, the Company recorded stock based professional fees of $378,400.
Note 13 - Subsequent Events
On June 10, 2014, the Company issued 800 shares of common stock for a professional services contract.
On June 17, 2014 the Company issued 7,500 shares of common stock for professional services.
One June 19, 2014, the Company issued 9,300 shares of common stock.
On July 1, 2014, the Company issued 1,500 as part of the service agreement they have with key employees.
On July 3, 2014, the Company issued 1,414 shares of common stock.
On July 25, 2014, the Company issued 18,000 shares of common stock for two professional services contracts.
Item 9.
Item 9. Changes In and Disagreements With Accountants On Accounting and Financial Disclosure.
There have been no disagreements with our auditor regarding accounting and financial disclosure.
On April 22, 2014, the audit firm of Thomas J. Harris CPA filed with the PCAOB a Form 4 Succeeding to Registration of Predecessor to change its name to Harris & Gillespie, CPA’s. This is not a change of auditors for the Company.
Item 9A.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Management's Annual Report on Internal Control Over Financial Reporting.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of May 31, 2013. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of May 31, 2014, the Company’s internal control over financial reporting was effective for the purposes for which it is intended.
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 as we are a smaller reporting company and not required to provide the report.
Changes in Internal Controls over Financial Reporting
In the middle of March 2014, during the fourth quarter of the fiscal year ended May 31, 2014, we hired a support staff person in our Denmark office who has assumed responsibility for gathering necessary financial documents to forward to our CFO for reporting. This has materially affected our internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth information about our directors and executive officers as of the date of this Report and following the closing of the Change of Control:
Name
Age
Position
Lars Aarup Poulsen
Chief Executive Officer, President, and Chairman
Greg May
Chief Operating Officer, Vice President, and Director
Steve Matteson
Chief Financial Officer
Lars Aarup Poulsen, has served as the Chief Executive Officer, President, and Director of Sealand Natural Resources and Vitas Group, Inc. since November 6, 2012. Since 2007, Mr. Poulsen has been the CEO and head of sales of Sealand Living A/S. From 2003 to 2007, Mr. Poulsen was the Executive Director of Marketing of DK4 Group Broadcast/Network Station Europe. Mr. Poulsen graduated from Graphic Arts Institute of Denmark. Additionally, Mr. Poulsen graduated from the Copenhagen Business School.
Greg May, has served as the Chief Operating Officer, Vice President, and Director of Sealand Natural Resources and Vitas Group, Inc. since November 6, 2012. Since 1987, Mr. May has been the CEO President of PSP International Inc., a company that manufacturer sporting goods and apparel for domestic and international sales. Mr. May received his Bachelor of Arts in Education from the United States International University.
Steve Matteson, has served as the Chief Financial Officer of Sealand Natural Resources and Vitas Group, Inc. since November 6, 2012. Since 2005, Mr. Matteson has been the President of Twin Tiers Consulting, a firm that provides advisory and investment management services. In 2000, Mr. Matteson co-founded the boutique financial planning firm, Burns Matteson Capital Management, and served as its Chief Operations Officer until 2005. Mr. Matteson received an MBA from the University of Sou`th Carolina, a M.A. in International Business from Vienna University of Economic and Business Administration, and received his Bachelor’s degree in Business Administration from Mansfield University.
Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
●been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
●had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
●been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
●been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
●been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
●been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange Act, our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities and Exchange Commission.
Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we believe that as of the date of this Report, our executive officers, directors and greater than 10 percent beneficial owners have complied on a timely basis with all Section 16(a) filing requirements, with the exception of our officers, directors and greater than 10 percent beneficial owners listed in the table below:
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.
Board Committees
Our Board of Directors has no separate committees and our Board of Directors acts as the audit committee and the compensation committee. We do not have an audit committee financial expert serving on our Board of Directors.
Item 11.
Item 11. Executive Compensation.
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal period from May 31, 2013 to May 31, 2014 and subsequent thereto to the date of this prospectus.
The discussion below sets forth information with respect to the compensation awarded or paid by Sealand to Lars Aarup Poulsen, Greg May, and Steve Matteson with respect to Sealand’s period fiscal year ended May 31, 2013 and 2014. These executive officers are referred to as the “named executive officers” throughout this Report.
(1)In lieu of cash payment, the Company awarded shares of common stock, par value $0.01, valued at the corresponding dollar amount.
On June 1, 2011, the Company entered into a Service Agreement with Greg May. The agreement requires the Company to pay Mr. May a sum of $9,800 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. In May of 2013, the Company modified this Service Agreement to include the issuance of 1,500 shares of the Company’s common stock paid out quarterly basis (on an annual basis). The modified agreement was effective January 1, 2013 and the 1,500 shares to be issued on March 31, 2013, June 30, 2013, September 30, 2013, and December 31, 2013 have not been issued but have been accounted for as a stock subscription payable.
On June 1, 2011, the Company entered into a Service Agreement with Lars Poulsen. The agreement requires the Company to pay Mr. Poulsen a sum of $7,500 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. In May of 2013, the Company modified this Service Agreement to include the issuance of 1,500 shares of the Company’s common stock paid out quarterly basis (on an annual basis). The modified agreement was effective January 1, 2013 and the 1,500 shares to be issued on March 31, 2013, June 30, 2013, September 30, 2013, and December 31, 2013 have not been issued but have been accounted for as a stock subscription payable.
On January 1, 2013, the Company entered into a Service Agreement with Steven Matteson. The agreement requires the Company to pay Mr. Matteson a sum of $2,500 monthly fee plus de-minimus fringe benefits. The agreement is cancellable by either party with written notice of termination. Additionally, the contract requires 1,500 shares of common stock paid out quarterly (on an annual basis). The 1,500 shares to be issued on March 31, 2013, June 30, 2013 and September 30, 2013 were issued in October 2013. On October 1, 2013, the Company modified this contract. The modified contract now requires the issuance of 3,000 shares of stock a quarter (on an annual basis) and the Company will pay all related taxes on these shares through a payroll deduction. On December 31, 2013, the Company issued 1,500 shares of the 3,000 shares to be issued. The remaining 1,500 shares have been accounted for as a stock subscription payable.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding our shares of common stock beneficially owned as of September 10, 2014 for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each named executive officer and director, and (iii) all executive officers and directors as a group. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants or otherwise. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.
For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days as of September 10, 2014. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of the Closing Date is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
Unless otherwise specified, the address of each of the persons set forth below is in care of Sealand Natural Resources Inc. 50 W Liberty St. #880, Reno, Nevada 89501
*Less than 1%.
(1)Based on 2,717,029 shares of common stock issued and outstanding as of September 10, 2014.
(2)This amount includes 258,050 shares of common stock owned by ISAA, LLC. Greg May and Lars Poulsen share voting and investment control over the shares held by ISAA LLC.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Since June 1, 2012, there have been no related party transactions in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years except that: 1) Greg May, our Chief Operating Officer, Vice President, and Director advanced $23,187 to the Company during the year ended May 31, 2012 and advanced $6,700 to the Company during the year ended May 31, 2013. These advancements were pursuant to oral agreements with the Company and to pay for the Company’s product development costs. This note for a total of $29,887 was cancelled and recorded as forgiveness of debt for the year ended May 31, 2013; and 2) Lars Aarup Poulsen, our Chief Executive Officer, President and Chairman, advanced $43,187 for product development costs during the year ended May 31, 2012. These advancements were pursuant to oral agreements with the Company. The Company paid back $23,187 to Mr. Poulsen during the year ended May 31, 2013. The balance of $20,000 was cancelled and recorded as other income during the quarter ended August 31, 2013.
Director Independence
We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
●the director is, or at any time during the past three years was, an employee of the company;
●the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
●a family member of the director is, or at any time during the past three years was, an executive officer of the company;
●the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
●the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
●the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.
Messrs. Lars Poulsen and Greg May are not considered independent because they are executive officers of the Company.
We do not currently have a separately designated audit, nominating or compensation committee.
Item 14.
Item 14. Principal Accountant Fees and Services.
On April 22, 2014, the audit firm of Thomas J. Harris CPA filed with the PCAOB a Form 4 Succeeding to Registration of Predecessor to change its name to Harris & Gillespie, CPA’s. This is not a change of auditors for the Company.
Audit Fees
The aggregate fees billed by Thomas J. Harris CPA, subsequently Harris & Gillespie, CPA’s, for professional services rendered for the audit of the Company’s financial statements for the fiscal year ended May 31, 2014 and for the review of the Company’s financial statements for the periods ended August 31, 2013, November 30, 2013 and February 28, 2014 was $72,479.
Audit Related Fees
Audit related fees for fiscal year ended May 31, 2014were approximately $19,388.
Tax Fees
For the Company’s fiscal years ended May 31, 2014, we were billed $1,000 for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
-approved by our audit committee; or
-entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors.
Part IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
The following exhibits are filed as part of this Annual Report.
Exhibits:
In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.
*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of this annual report or purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
(1)Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on July 15, 2011.
(2)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 22, 2013.
(3)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2013.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SEALAND NATURAL RESOURCES INC.
Date: September 15, 2014 By: /s/ Lars Poulsen
Lars Poulsen
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: September 15, 2014 By: /s/ Lars Poulsen
Lars Poulsen
President, Chief Executive Officer, and Director
(Principal Executive Officer)
Date: September 15, 2014 By: /s/ Steve Matteson
Steve Matteson
Chief Financial Officer
(Principal Financial And Accounting Officer)
Date: September 15, 2014 By: /s/ Greg May
Greg May
Vice President, Chief Operating Officer and Director