ITEM 1. BUSINESS.
Overview
Homie Recipes, Inc. was incorporated in the State of Nevada as a for-profit company on June 22, 2012 and established June 30 as its fiscal year end.
HOMIE is a startup company that intends to stream videos and written recipes through a website. Our goal is to stream free recipes for ‘special’ homemade cuisines and food items. We intend to have recipes that are personal and have special meaning, on our website. What makes a recipe ‘special’ is the personal history or tradition behind it, for example, cookies made by someone’s mother on Christmas Eve, or a special pasta sauce prepared by their Grandmother made every Sunday when they were growing up, etc.
We plan on having an introductory segment for our videos, where a person will tell their story behind the recipe, explaining why they love it so much. After the introduction, we will have the ‘mothers’, ‘grandmothers’ or whomever the cook is, to prepare the recipe and food presentation. The last part of our videos will show the cook eating and enjoying the food.
We intend to allow users to upload their own videos, following our program format (introduction, recipe preparation, food presentation and tasting). All videos will be edited for time and content and will be subject to approval before it goes public on our website. We intend to generate revenue through the sale of advertisement to be placed throughout our website and in the videos.
We have been unable to raise additional funds to implement our operations, and we do not believe that we currently have sufficient resources to do so without additional funding. As a result of the current difficult economic environment and our lack of funding to implement our business plan, our Board of Directors has continued to analyze strategic alternatives available to our Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.
Our Board believes that it must consider all viable strategic alternatives that are in the best interests of our shareholders. Such strategic alternatives include a merger, acquisition, share exchange, asset purchase, or similar transaction in which our present management will no longer be in control of our Company and our business operations will be replaced by that of our transaction partner. We believe we would be an attractive candidate for such a business combination due to the perceived benefits of being a publicly registered company, thereby providing a transaction partner access to the public marketplace to raise capital.
On December 10, 2013, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Synergy Merger Sub, Inc. (“Merger Sub”), and Synergy Strips Corp. (“Synergy”) pursuant to which the Merger Sub would merge with and into Synergy, with Synergy as the surviving entity. The Merger Agreement was subsequently terminated on February 12, 2014 upon the mutual agreement of the parties thereto.
We have had preliminary discussions with other potential business combination partners, but have not signed a definitive agreement to engage in a strategic transaction as of the period covered by this Annual Report on Form 10-K. Any such business combination and the selection of a partner for such a business combination involves certain risks, including analyzing and selecting a business partner that is compatible to engage in a transaction with us or has business operations that are or will prove to be profitable. In the event we select a partner for a strategic transaction and sign a definitive agreement to consummate such a transaction, we will report this event on a Form 8-K to be filed with the Securities and Exchange Commission. If we are unable to locate a suitable business combination partner and are otherwise unable to raise additional funding, we will likely be forced to cease business operations.
Plan of Operation
The Company has not yet generated any revenue from its operations. As of the fiscal year ended June 30, 2015, we had no cash on hand. We incurred operating expenses in the amount of $40,343 during the fiscal year ended June 30, 2015. These operating expenses were comprised mainly of professional fees.
We are exclusively dependent upon the success of future equity financings. Therefore, the failure thereof would result in need to seek capital from other resources such as debt financing, which may not even be available to the Company. However, if such financing were available, because we are a early-stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing. If the Company cannot raise additional proceeds via a private placement of its common stock or secure debt financing, it would be required to cease business operations. As a result, investors would lose all of their investment.
After we have raised enough funds to start this plan of operations, we plan to accomplish the following phases:
Estimated time for completion of each phase of our Plan of Operations
Phase 1 - Website development
Month 1 to 6
Phase 2 - Finding advertising clients
Month 6 to 12
Phase 3 - Marketing
Month 9 to 12
Total
12 months
First phase: Website development
After we acquire the initial necessary funds, we plan on fully developing our website (www.homierecipes.com), which is currently under construction. Our plan is to create a user-friendly website that will include written and video instructions for the creation of the recipe videos which the Company will be able to edit and approve before they go public on our website. We intend to run several tests to ensure the functionality of the website.
We plan on hiring third party web developers to finalize our website. The president will be responsible for hiring such third party personnel. The president and the secretary will be responsible for editing and selecting the recipes and videos uploaded by our cooks.
We intend to allocate between $3,000 and $35,000 for our tests and website costs, depending on availability of funds.
Second Phase: Finding advertising clients
After we have fully developed our website, we will search for advertising clients. We intend to try and secure contracts with companies that will pay us to place advertisement in our website and videos. We will search for cooking and food related companies, such as: groceries stores, appliances stores and fabricators, specific food companies, etc.
We expect to allocate between $1,000 and $15,000 to cover costs related to finding advertising clients, depending on the availability of funds. These costs will be used for travel costs, meals and other expenses in connection with meeting with prospective clients. We intend to focus on large international companies, but we may focus only on local business, depending on the funds available.
Third Phase: Marketing
In order to have a profitable business, we will need to have as many clients who will pay for advertisements as possible. To attract clients, we’ll need to have as many users as we can, including users that will upload new recipes and users that will visit our website to see those recipes.
For our marketing campaign, we plan to have a presence in social medias such as: Twitter and Facebook. If finances allow, we plan on placing advertisements in specialized magazines, restaurants and websites and ultimately, TV commercials. Our goal is to make our website mainstream. Our president will be responsible for our marketing campaign.
We plan on investing between $2,000 and $30,000 for our marketing campaign, depending on the availability of funds.
Office supplies, Stationery, Telephones, Internet
We intend to allocate between $150 and $1,150 to cover these costs, at the president’s discretion, depending on the availability of funds.
After successfully completing the above described phases, we believe we will start generating revenue.
Our business office is located at 112 North Curry Street, Carson City, Nevada, 89703; our telephone number is (775) 321-8225 and our fax number is (775) 546-9905. Our United States and registered statutory office is located at 112 North Curry Street, Carson City, Nevada, 89703, telephone number (775) 882-1013.
The Company intends to focus its business in the United States of America.
Market Opportunity
The Company believes that our website may attract a wide range of users, including food lovers, cooks and people in the food industry who enjoy good food.
Food is a basic necessity for people, but it can also provide and create special moments and occasions. We believe that there are a greater number of people who prefer homemade food. We also believe that the internet is accessible to the mass population worldwide. Our website will be devoted to users that will be looking to share and learn new food recipes from different cultures. For this reason, we believe that it will be possible to find clients from the food industry to advertise on our website.
Description of our Services
We plan on having an introductory segment for our videos, where a person will tell the story behind their recipe and explain why their dish is special and unique. After the introduction, we will have the ‘mothers’, ‘grandmothers’ or whomever the cook is, to prepare the recipe and food presentation. The last part of our videos will show the participant eating and enjoying the food.
We intend to allow users to upload their own videos, following our program format (introduction, recipe preparation, food presentation and tasting). All videos will be edited for time and content and will be subject to approval before it goes public on our website. We intend to generate revenue through the sale of advertisement to be placed throughout our website and in our videos.
We need funds to fully develop our website, for our marketing campaign (our goal is to make our website mainstream) and to find advertising clients (food related companies).
We expect to start generating revenues after we are able to fully develop our website, and after we search for advertising clients, according to our Plan of Operation.
Competitive Advantages
The Company is unaware of any existing website exclusively dedicated to the free uploading and viewing of homemade food recipes.
Our Company has yet to enter the market and has no presence in the food preparation industry thus far. In order to enter into the market, we have to be able to successfully implement its plan of operation.
We believe that our business model is innovative, and once we are able to start our business there will be no, or few, direct competitors, as we have no knowledge of any other service similar to the one we intend to offer.
We will be competing against bigger and established website companies and TV shows that stream cooking recipes. Our strategy is to offer an innovative, personal and appealing way to stream homemade recipes where everyone will be able to add their own recipes to our website.
Marketing
For our marketing campaign, we intend to fully develop our under construction website (www.homierecipes.com). The website shall be developed with more or less features, depending on the availability of funds. We intend to hire a third party website developer to finish construction of our website.
In order to have a profitable business, we will need to have as many clients who will pay for advertisements as possible. To attract clients, we’ll need to have as many users as we can, including users that will upload new recipes and users that will visit our website to see those recipes.
We also plan to have a presence in social media such as: Twitter and Facebook. If finances allow, we plan on placing advertisements in specialized magazines, restaurants and food related websites and ultimately, TV commercials. Our goal is to make our website mainstream. Our president will be responsible for our marketing campaign.
We plan on investing between $2,000 and $30,000 for our marketing campaign.
We have not yet contacted or secured any kind of agreement and/or contract with any third parties.
Intellectual Property
We intend, in due course, subject to legal advice, to apply for trademark protection and/or copyright protection of our future intellectual property and products in the United States and other jurisdictions.
We intend to aggressively assert our rights trademark and copyright laws to protect our future intellectual property, including product design, concepts and recognized trademarks. These rights are protected through the acquisition of trademark registrations, the maintenance of copyrights, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.
While there can be no assurance that registered trademarks and copyrights will protect our proprietary information, we intend to assert our future intellectual property rights against any infringer. Although any assertion of our rights can result in a substantial cost to, and diversion of effort by, our Company, management believes that the protection of our future intellectual property rights is a key component of our operating strategy.
Regulatory Matters
We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations of the homemade recipes industry. However, we still need to verify certifications and possible government approvals needed to execute our business. We are subject to the laws and regulations of those jurisdictions in which we plan to sell our services, which are generally applicable to business operations, such as business licensing requirements, income taxes and payroll taxes. In general, the development and operation of our business is not subject to special regulatory and/or supervisory requirements.
Employees and Employment Agreements
The Company has no permanent staff other than its sole executive officer and sole director, Mr. Jose Mari C. Chin, who is the President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer. Our sole executive officer and sole director is employed elsewhere but has the flexibility to work on the Company’s matters up to eight (8) hours per week.
There are no employment agreements in existence. The Company presently does not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, the Company may adopt such plans in the future. Management does not plan to hire additional employees at this time. Our sole officer and director will be responsible for the initial servicing. Once the Company begins building its Internet website, it will hire an independent consultant to build the site. The Company also intends to hire sales representatives initially on a commission only basis to keep administrative overhead to a minimum.
ITEM 1A.
ITEM 1A. RISK FACTORS.
You should carefully consider the risks described below together with all of the other information included in our public filings before making an investment decision with regard to our securities. The statements contained in or incorporated into this document that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following events described in these risk factors actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
RISKS ASSOCIATED WITH OUR FINANCIAL CONDITION
Our auditor has issued a going concern opinion regarding our Company, there is an increased risk associated with an investment in our company
We have earned no revenue since our inception, which makes it difficult to evaluate whether we will operate profitably. We have incurred cumulative net losses of $172,648 since June 22, 2012 (date of inception). We have not attained profitable operations and are dependent upon obtaining financing or generating revenue from operations to continue operations for the next twelve months. As of June 30, 2015, we had cash in the amount of $Nil. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is an increased risk that you could lose the entire amount of your investment in our company.
If we do not obtain adequate financing, our business will fail, resulting in the complete loss of your investment
If we are not successful in earning revenues once we have started our services activities, we may require additional financing to sustain business operations. Currently, we do not have any arrangements for financing and can provide no assurance to investors that we will be able to obtain financing when required. Obtaining additional financing would be subject to a number of factors, including the company’s ability to attract customers and clients. These factors may have an effect on the timing, amount, terms or conditions of additional financing and make such additional financing unavailable to us. No assurance can be given that the company will obtain access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business strategies, will be available on acceptable terms. The inability of the company to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of its operations and upon its financial conditions.
RISKS RELATED TO INVESTING IN OUR COMPANY
We lack an operating history and there is no assurance our future operations will result in profitable revenues, which could result in suspension or end of our operations
We were incorporated on June 22, 2012 and we have not realized any revenues. We have very little operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to attract customers and to generate revenues through the sale of advertisements.
Based upon our current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
Because we are small and do not have much capital, our marketing campaign may not be enough to attract sufficient clients to operate profitably. If we do not make a profit, we may have to suspend or cease operations
Due to the fact we are small and do not have much capital, we must limit our marketing activities and may not be able to make our product and services known to potential customers. Because we will be limiting our marketing activities, we may not be able to attract enough customers to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations.
Uncertainty exists as to whether the Company will have sufficient funds to carry out its business strategy thereby making an investment in the company extremely speculative
The Company will likely be required to raise substantial additional funds. The Company’s forecast of the period of time through which its financial resources will be adequate to support its future operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors, including those described in these Risk Factors and elsewhere in this Annual Report on Form 10-K.
The Company may require additional cash to implement its business strategies, including cash for (i) payment of increased operating expenses and (ii) further implementation of those business strategies. Such additional capital may be raised through public or private financings, as well as borrowings and/or other resources. To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution to the Company’s stockholders. If adequate funds are not available, the Company may be not be able to begin operations or to obtain funds through entering into arrangements with collaborative partners or others that may require it to relinquish rights to certain of its technologies or product candidates that the Company would not otherwise relinquish. No assurance can be given, however, that the Company will have access to the capital markets in the future, or that financing will be available on acceptable terms to satisfy the cash requirements of the Company to implement its business strategies. The inability of the Company to access the capital markets or obtain acceptable financing could have a material adverse effect on its future operations and financial conditions.
RISKS ASSOCIATED WITH MANAGEMENT AND CONTROL PERSONS
If we are unable to successfully manage growth, our operations could be adversely affected
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial condition and to recruit, train and manage sales personnel. There can be no absolute assurance that management will be able to manage growth effectively.
As the Company’s sole officer and director has other outside business activities, he may not be in a position to devote a majority of his time to the company, which may result in periodic interruptions or business failure
Mr. Jose Mari C. Chin, our sole officer and director, has other business interests and currently devotes approximately eight (8) hours per week to our operations. Our operations may be sporadic and occur at times which are not convenient to Mr. Chin, which may result in periodic interruptions or suspensions of our business plan. If the demands of the Company’s business require the full business time of our sole officer and director, he is prepared to adjust his timetable to devote more time to the Company’s business. However, he may not be able to devote sufficient time to the management of the company’s business, which may result in periodic interruptions in implementing the Company’s plans in a timely manner. Such delays could have a significant negative effect on the success of the business.
Since our sole officer and director resides in the Philippines, shareholders may have difficulties enforcing their legal rights under United States securities laws
Even though we are a Nevada corporation, our management’s residence is in the Philippines. His ability to travel to the United States depends on his availability of time, resources, a valid passport and visa. Although it may be difficult to obtain in personam jurisdiction, our sole officer and director is still subject to his obligations as an officer and director of a Nevada corporation and the federal securities laws applicable to officers and directors or US entities.
There can be no assurance that the CEO would be able to attend any event in person on a timely matter or at all.
Because our management is inexperienced in operating the Company’s business, our business plan may fail
Our management does not have any specific training in running a food preparation business through the website. With no direct training or experience in the website activity, our management may not be fully aware of many of the specific requirements related to working within this area. As a result, our management may lack certain skills that are advantageous in managing our Company. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to management’s lack of experience in this business.
Our sole officer and director has no prior experience managing a public company
Our sole officer and director, Mr. Chin, has never worked for or managed a public company before. Mr. Chin has no experience in accounting, however, the Company has hired a third party bookkeeping firm to maintain our books and records and prepare our financial statements. There are a lot of responsibilities that comes with managing a public company. Mr. Chin’s inexperience could affect our Company negatively.
RISKS RELATED TO THE COMPANY’S MARKET AND STRATEGY
We may not be able to find suitable clients and close partnerships required for our business to work
Our dependence on hiring the appropriate third parties to perform essential services could result in a materially adverse effect on the Company’s potential future operations and, consequently, on the Company’s business, operating results and financial condition. Further, such third party contractors have no fiduciary duty to our shareholders and may not perform these services as expected. The capacity of certain third parties for these services may be limited for economic or other reasons and it may be harmful to the Company’s business.
The Company may not be able to market its products via the internet and lose market share as a result
The Internet has changed traditional marketing patterns in a wide variety of industries. The significance of personal computer usage may lead to entirely new methods of marketing and sales of services and products. The Company may not be able to keep pace with the rate of change in its markets brought about by the Internet and may need to move towards traditional non-electronic sales, marketing and distribution.
Because we have no operations to date, there is no guarantee that our business will succeed
The success of our business depends on a number of factors, including, proper marketing, public and clients’ acceptance and proper development of our website. Our revenue will be generated from the sale of advertisements, after we raise enough funds from this offering to implement our plan of operations. Because we have not yet raised any funds, contacted possible clients and we have not developed our website yet, there is absolutely no guarantee that our business will succeed.
Because we are not established, our services and name have little, if any, name recognition, we may be prevented from generating revenues, which will reduce the value of your investment
Because we are a new Company with new services and we have not conducted advertising, there is little or no recognition of our name. As a result, consumers may search services other than ours that are well-known or familiar to them and we may be unable to generate sufficient revenues to meet our expenses or meet our business plan objectives, which will reduce the value of your investment.
The Company may be unable to make necessary arrangements at acceptable cost
Because we are a small business, with limited assets, we are not able to assume significant additional costs to operate. If we are unable to make any necessary change in the company structure, conduct the proper negotiations with the clients or are faced with circumstances that are beyond our ability and knowledge to afford, we may have to suspend operations or cease them entirely which could result in a total loss of your investment.
If new competitors enter the market and emulate our business model, our sales and profitability may be negatively materially impacted
There is no assurance that there will not be future competition from other companies that could potentially enter the market and try to emulate our business model. This could result in a decrease in revenue, reduced operating margins and a loss of market share for us at a later date. To remain competitive in both revenue and access to resources and capital, we may be required to make substantial investments in our website, advertising, and marketing activities. As a result of any of these factors, there could be a materially adverse effect on our sales and profitability.
If there are events or circumstances affecting the reliability and security of the Internet, access to our website and/or the ability to safeguard confidential information could be impaired causing a negative effect on the financial results of our business operations
Despite the implementation of security measures, our web site infrastructure may be vulnerable to computer viruses, hacking, or similar disruptive problems caused by members, other Internet users, other connected Internet sites, and the interconnecting telecommunications networks. Such problems caused by third-parties could lead to interruptions, delays or cessation of service to our customers. Inappropriate use of the Internet by third-parties could also potentially jeopardize the security of confidential information stored in our computer system, which may deter individuals from becoming customers. Such inappropriate use of the Internet includes attempting to gain unauthorized access to information or systems, which is commonly known as “cracking” or “hacking.” Although we intend to implement security measures, such measures have been circumvented in the past, and there can be no assurance that any measures we implement would not be circumvented in future. Dealing with problems caused by computer viruses or other inappropriate uses or security breaches may require interruptions, delays or cessation of service to our customers, which could have a materially adverse effect on our business, financial condition and results of operations.
Because of the Company’s dependence on computer and telecommunications infrastructure and computer software, any systems disruptions or operating malfunctions would affect the Company’s costs of doing business and could cause the business to fail
The Company’s success will be dependent in large part on computer systems that deliver its content and the networks that connect those computer systems, especially the e-commerce connections that will allow the Company to collect revenues for the services it provides. Moreover, computer and telecommunication technologies are evolving rapidly and are characterized by short product lifecycles, which may require the Company to anticipate technological developments. There can be no assurance that the Company will be successful in anticipating, managing, or adopting such technological changes on a timely basis or that it will have the resources available to invest in new technologies. In addition, the Company’s business is highly dependent on its computer and telecommunications equipment and software systems, the temporary or permanent loss of which, resulting from physical damage or operating malfunction, could have a materially adverse effect on the its business. Operating malfunctions in the software systems of financial institutions, market makers, and other parties may also have an adverse effect on the ability of the Company to operate.
Because the majority of the Company’s business will be conducted through the internet, the Company’s success will depend on its ability to continually adjust its services to customer needs
The majority of the Company’s products and services are provided through the Internet. The market for Internet-related products and services is characterized by rapid technological change, changing customer needs, frequent new product introductions, and evolving industry standards. These market characteristics are exacerbated by the emerging nature of this market and the fact that many companies are expected to continually introduce new and innovative products and services. The Company’s success will depend partially on the ability to introduce new content and services continually and on a timely basis and to continue to improve the performance, features, and reliability of its products and services in response to both evolving demands of prospective customers and competitive products.
Because the majority of the Company’s business will be conducted through the internet, the Company’s success will depend on its ability to increase the size of its user base
Increasing the size of the Company’s user base is critical to increasing revenues. If the Company cannot increase the size of its user base, it may not be able to generate additional revenues, which could leave it unable to maintain or increase its business. To increase its user base, the Company must (i) continuously update its content; (ii) increase brand recognition through advertising and syndication; (iii) enhance its technology to improve the functionality of its website; and (iv) offer attractive opportunities to electronic commerce sponsors and users. If the Company does not achieve these objectives to increase its user base, its business could be harmed.
RISKS RELATED TO OUR COMMON STOCK AND OUR STATUS AS A PUBLIC COMPANY
We will be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.
As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. Management believes that its internal controls and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules. Management realize there are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management considers to be material weaknesses including those described below:
i)
Lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
ii)
Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as well as subject us to civil or criminal investigations and penalties.
In addition, our independent registered public accounting firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating effectively.
Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s ability to buy and sell our stock.
Our stock is categorized as a “penny stock”. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Our common stock is not listed on any stock exchange and there is no established market for shares of our common stock. Even if a market for our common stock develops, our common stock could be subject to wide fluctuations.
Our common stock is not listed on any stock exchange. Although our common stock is quoted on the OTC Pink marketplace, operated by OTC Market Group, Inc., there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTC Pink. The liquidity and price of our common stock is expected to be more limited than if such securities were quoted or listed on a national exchange. No assurances can be given that an active public trading market for our common stock will develop or be sustained. The trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTC stocks and certain major brokerage firms restrict their brokers from recommending OTC stocks because they are considered speculative, volatile and thinly traded. Lack of liquidity will limit the price at which shareholders may be able to sell our common stock.
The price of such common stock could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors. In addition, the stock market has experienced extreme price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities. Such risks could have an adverse affect on the stock’s future liquidity.
We expect to experience volatility in our stock price, which could negatively affect shareholders’ investments.
The market price for shares of our common stock may be volatile and may fluctuate based upon a number of factors, including, without limitation, business performance, news announcements or changes in general market conditions.
Other factors, in addition to the those risks included in this section, that may have a significant impact on the market price of our common stock include, but are not limited to:
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quality deficiencies in services;
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international developments, such as technology mandates, political developments or changes in economic policies;
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changes in recommendations of securities analysts;
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government regulations, including stock option accounting and tax regulations;
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energy blackouts;
·
acts of terrorism and war;
·
widespread illness;
·
proprietary rights or patent litigation;
·
strategic transactions, such as acquisitions and divestitures; or
·
rumors or allegations regarding our financial disclosures or practices.
In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. If our stock price is volatile, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources.
Shareholders should also be aware that, according to SEC Release No. 34-29093, the market for “penny stock,” such as our common stock, has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the future volatility of our share price.
To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future.
We do not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend to retain all earnings for our operations.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, we are not required to provide the information required by this item.
ITEM 2.
ITEM 2. PROPERTIES.
The Company has shared office services located at 112 North Curry Street, Carson City, Nevada, 89703. The Company does not own or rent any properties.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERSAND ISSUER PURCHASES OF EQUITY SECURITIES.
Market for Registrant’s Common Equity
Our common stock is not listed on any stock exchange. Although our common stock is currently quoted on the OTC Pink marketplace operated by OTC Market Group, Inc. under the symbol “HOMR,” there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTC Pink. Any quotations reflect interdealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Approximate Number of Holders of Common Stock
As of October 5, 2015, there were 15 shareholders of record of our common stock. Such number does not include any shareholders holding shares in nominee or “street name.”
Dividends
We have not declared any cash dividends in the two most recent fiscal years. The declaration of future cash dividends, if any, will be at the discretion of the Board of Directors and will depend on our earnings, if any, capital requirements and financial position, general economic conditions and other pertinent conditions. It is our present intention not to pay any cash dividends in the near future.
Securities Authorized for Issuance Under Equity Compensation Plans
There are no options, warrants or convertible securities outstanding pursuant to an equity compensation plan.
Recent Sales of Unregistered Securities
None.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 7.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the fiscal year ended June 30, 2015. The discussion and analysis that follows should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Overview
Homie Recipes, Inc. was incorporated in the State of Nevada as a for-profit company on June 22, 2012 and established June 30 as its fiscal year end.
We are a startup company that intends to stream videos and written recipes through a website. Our goal is to stream free recipes for ‘special’ homemade cuisines and food items. We intend to have recipes that are personal and have special meaning, on our website. What makes a recipe ‘special’ is the personal history or tradition behind it, for example, cookies made by someone’s mother on Christmas Eve, or a special pasta sauce prepared by their Grandmother made every Sunday when they were growing up, etc.
We plan on having an introductory segment for our videos, where a person will tell their story behind the recipe, explaining why they love it so much. After the introduction, we will have the ‘mothers’, ‘grandmothers’ or whomever the cook is, to prepare the recipe and food presentation. The last part of our videos will show the cook eating and enjoying the food.
We intend to allow users to upload their own videos, following our program format (introduction, recipe preparation, food presentation and tasting). All videos will be edited for time and content and will be subject to approval before it goes public on our website. We intend to generate revenue through the sale of advertisement to be placed throughout our website and in the videos.
We have been unable to raise additional funds to implement our operations, and we do not believe that we currently have sufficient resources to do so without additional funding. As a result of the current difficult economic environment and our lack of funding to implement our business plan, our Board of Directors has continued to analyze strategic alternatives available to our Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.
Our Board believes that it must consider all viable strategic alternatives that are in the best interests of our shareholders. Such strategic alternatives include a merger, acquisition, share exchange, asset purchase, or similar transaction in which our present management will no longer be in control of our Company and our business operations will be replaced by that of our transaction partner. We believe we would be an attractive candidate for such a business combination due to the perceived benefits of being a publicly registered company, thereby providing a transaction partner access to the public marketplace to raise capital.
On December 10, 2013, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Synergy Merger Sub, Inc. (“Merger Sub”), and Synergy Strips Corp. (“Synergy”) pursuant to which the Merger Sub would merge with and into Synergy, with Synergy as the surviving entity. The Merger Agreement was subsequently terminated on February 12, 2014 upon the mutual agreement of the parties thereto.
We have had preliminary discussions with other potential business combination partners, but have not signed a definitive agreement to engage in a strategic transaction. Any such business combination and the selection of a partner for such a business combination involves certain risks, including analyzing and selecting a business partner that is compatible to engage in a transaction with us or has business operations that are or will prove to be profitable. In the event we select a partner for a strategic transaction and sign a definitive agreement to consummate such a transaction, we will report this event on a Form 8-K to be filed with the Securities and Exchange Commission. If we are unable to locate a suitable business combination partner and are otherwise unable to raise additional funding, we will likely be forced to cease business operations.
Our business office is located at 112 North Curry Street, Carson City, Nevada, 89703; our telephone number is (775) 321-8225 and our fax number is (775) 546-9905. Our United States and registered statutory office is located at 112 North Curry Street, Carson City, Nevada, 89703, telephone number (775) 882-1013.
Critical Accounting Policies and Estimates
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards (“NOLs”). If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
Recently Issued Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Presentation of Financial Statements- Going Concern. The Update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently evaluating the effects of ASU 2014-15 on the consolidated financial statements
Results of Operations
Fiscal Years Ended June 30, 2015 and 2014
During the fiscal year ended June 30, 2015, we had no revenues and expenses totaled $40,343, made up of $40,343 in professional fees. During the fiscal year ended June 30, 2014, we had no revenues and expenses totaled $75,786, made up of $75,786 in professional fees.
Liquidity and Capital Resources
As of June 30, 2015, current assets were $0 and current liabilities were $159,909. Our working capital deficit as of June 30, 2015 was $159,909. As of June 30, 2014, current assets were $0 and current liabilities were $119,566. Our working capital deficit as of June 30, 2014 was $119,566.
Net cash used in operating activities for the fiscal year ended June 30, 2015 was $57,060 as compared to $53,844 for the fiscal year ended June 30, 2014. Net cash provided by financing activities for the fiscal year ended June 30, 2015 was $57,060 as compared to $53,844 for the fiscal year ended June 30, 2014.
On October 15, 2012, a Registration Statement on Form S-1 was declared effective by the SEC, registering 4,000,000 shares of our common stock. We raised $5,250 by sale of our common stock and such offering has been completed.
The Company is evaluating other business opportunities and has access to sufficient funds to complete these evaluations and will announce funding requirements once a decision is reached. These funding requirements will include funds required to execute on our business strategy, including additional working capital commensurate with the operational needs of planned marketing, development and production efforts. We anticipate that we will be able to raise sufficient amounts of working capital through debt or equity offerings as may be required to meet our short-term and long-term obligations. However, changes in operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing in the future.
We have generated no revenue and therefore we may not be able to produce adequate cash flows to support our existing operations. Moreover, the historical and existing capital structure is not adequate to fund our planned growth. We intend to finance our operations in part by issuing additional common stock, warrants and through bridge financing. There can be no assurance that we will be successful in procuring the financing we are seeking. Additionally, there can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures. To meet future objectives, we will need to meet revenue targets and sell additional equity and debt securities, which most likely will result in dilution to current stockholders. We may also seek additional loans where the incurrence of indebtedness would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would restrict our operations.
Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand business operations and could harm our overall business prospects. In addition, we cannot be assured of profitability in the future.
Off-Balance Sheet Arrangements
We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements annexed to this Form 10-K for the years ended June 30, 2015 and 2014 begin on page and have been audited by our independent accountants, GBH CPAs, PC.
HOMIE RECIPES, INC.
AUDITED FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Homie Recipes, Inc.
Carson City, NV
We have audited the accompanying balance sheets of Homie Recipes, Inc. as of June 30, 2015 and 2014 and the related statements of operations, stockholders’ deficit, and cash flows for each of the years then ended. Homie Recipes, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits 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 Homie Recipes, Inc. as of June 30, 2015 and 2014 and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that Homie Recipes, Inc. will continue as a going concern. As discussed in Note 2 to the financial statements, Homie Recipes, Inc. has suffered recurring losses from operations and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ GBH CPAs, PC
GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
October 5, 2015
HOMIE RECIPES, INC.
BALANCE SHEETS
HOMIE RECIPES, INC.
STATEMENTS OF OPERATIONS
HOMIE RECIPES, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
The accompanying notes are an integral part of these financial statements
HOMIE RECIPES, INC.
STATEMENTS OF CASH FLOWS
Homie Recipes, Inc.
Notes to the Financial Statements
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated in the State of Nevada as a for-profit company on June 22, 2012 and established a fiscal yearend of June 30. It is a startup company that intends to stream videos and written recipes through a yet to be developed website. Our goal is to stream free recipes for ‘special’ homemade food. The Company intends to have recipes with a special personal meaning on our website.
The Company has not yet commenced any significant operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company also has suffered recurring losses from operations and has a working capital deficiency. The Company has an accumulated deficit of $172,648. The Company will be dependent upon raising additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company is funding its current operations from advances from related parties. There is no assurance that these related parties will continue to fund the Company’s operating requirements. Currently, the Company has no arrangements for other sources of funds. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.
The CEO has committed to advancing certain operating costs of the Company, including legal, audit, transfer agency and filing costs. The Company is currently seeking additional funding though equity offerings or debt financing to support the Company’s business.
Basis of Presentation
These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Income Taxes
The Company follows the liability method of accounting for income taxes. Deferred tax assets and liabilities 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 balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Net Loss per Common Share
Basic net loss per common share includes no dilution and is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive net loss per share reflects the potential dilution of securities that could share in the losses of the Company. In periods when losses are reported, the diluted weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. There were no potentially dilutive securities as of June 30, 2015 and 2014.
Homie Recipes, Inc.
Notes to the Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
Subsequent Events
The Company evaluated subsequent events through the date when financial statements were issued for disclosure consideration.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Presentation of Financial Statements- Going Concern. The Update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently evaluating the effects of ASU 2014-15 on the consolidated financial statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the years ended June 30, 2015 and 2014, the Company received advances of $57,060 and $53,844, respectively, from its CEO to pay for the Company’s expenses. Balances are $154,684 and $97,624 at June 30, 2015 and 2014, respectively. These advances are interest free and due upon demand.
NOTE 4 - CAPITAL STOCK
The Company is authorized to issue 200,000,000 common shares.
The Company has a total of 69,819,980 shares issued and outstanding at June 30, 2015.
NOTE 5 - INCOME TAXES
As of June 30, 2015 and 2014, the Company has a net deferred tax asset comprised primarily of net operating loss carry-forwards of $60,427 and $46,307, respectively. The Company provided a full valuation allowance on the net deferred tax asset because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carryforward period. The net federal operating loss carryforward will expire between 2032 and 2035.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of June 30, 2015 and 2014 are as follows:
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our sole executive officer (who is our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of June 30, 2015 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2015 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, which currently consists of our sole executive officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO - 2013”) and SEC guidance on conducting such assessments. Our management concluded, as of June 30, 2015, that our internal control over financial reporting was not effective. Management realized there were deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.
In performing the above-referenced assessment, management had concluded that as of June 30, 2015, there were deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers to be material weaknesses including those described below:
i)
Lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
ii)
Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
Our management feels the weaknesses identified above have not had any material effect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.
Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Set forth below are our present directors and executive officers. Note that there are no other persons who have been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers. Other than as set forth below, there are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person was selected as a director or an officer.
Name
Age
Position
Mr. Jose Mari C. Chin
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
The Board of Directors is comprised of only one class. All of the directors serve for a term of one year and until their successors are elected at our Annual Shareholders’ Meeting and are qualified, subject to removal by our shareholders. Each executive officer serves, at the pleasure of the Board of Directors, for a term of one year and until his successor is elected at a meeting of the Board of Directors and is qualified.
Our Board of Directors believes that all members of the Board and all executive officers encompass a range of talent, skill, and experience sufficient to provide sound and prudent guidance with respect to our operations and interests. The information below with respect to our directors and executive officers includes each individual’s experience, qualifications, attributes, and skills that led our Board of Directors to the conclusion that he or she should serve as a director and/or executive officer.
Biographies
Set forth below is a brief account of the business experience during the past five years of our sole executive officer and director.
Mr. Jose Mari C. Chin
From May 2007 to the present, Mr. Chin has operated Chin Trading, a company specializing in trading and based in the Philippines. Prior to forming Chin Trading, Mr. Chin was a Business Officer with Allam Inc., a marketing company from May 1999 to October 2007. He previously was an Executive Administrator with Mayapag Corp., a company specializing in trading, from January 1994 to April 1998. Mr. Chin received a Bachelor’s Degree in Commerce from the University of the Zamboanga of the Philippines in 1990. Mr. Chin’s broad business experience with developing companies is expected to provide the Company with helpful insight as to its growth potential and objectives.
Family Relationships
There are no family relationships between or among any of our directors, executive officers and incoming directors or executive officers.
Involvement in Certain Legal Proceedings
No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Committees of the Board
Our Board of Directors held no formal meetings in the prior fiscal year. All proceedings of the Board of Directors were conducted by resolutions consented to in writing by the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada Revised Statutes and the bylaws of our Company, as valid and effective as if they had been passed at a meeting of the directors duly called and held. We do not presently have a policy regarding director attendance at meetings.
We do not currently have a standing nominating or compensation committee of the Board of Directors, or any committee performing similar functions. Our Board of Directors performs the functions of nominating and compensation committees.
Audit Committee
Our Board of Directors has not established a separate audit committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Instead, the entire Board of Directors acts as the audit committee within the meaning of Section 3(a)(58)(B) of the Exchange Act and will continue to do so until such time as a separate audit committee has been established.
Audit Committee Financial Expert
We currently have not designated anyone as an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K as we have not yet created an audit committee of the Board of Directors.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Our officers, directors and beneficial owners of more than 10% of our common stock are not required to file statements of beneficial ownership on SEC Forms 3, 4 and 5 pursuant to Section 16(a) of the Securities Exchange Act of 1934.
Nominations to the Board of Directors
Our directors take a critical role in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the stockholders, diversity, and personal integrity and judgment.
In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.
In carrying out its responsibilities, the Board will consider candidates suggested by stockholders. If a stockholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for candidates to be evaluated by the proposed directors must be sent to the Board of Directors, c/o Homie Recipes, Inc. 112 North Curry Street, Carson City, Nevada, 89703.
Director Nominations
As of June 30, 2015, we did not affect any material changes to the procedures by which our shareholders may recommend nominees to our Board of Directors.
Board Leadership Structure and Role on Risk Oversight
Mr. Jose Mari C. Chin currently serves as our principal executive officer and sole director. We determined this leadership structure was appropriate for us due to our small size and limited operations and resources. The Board of Directors will continue to evaluate our leadership structure and modify as appropriate based on the size, resources and operations of the Company. It is anticipated that the Board of Directors will establish procedures to determine an appropriate role for the Board of Directors in the Company’s risk oversight function.
Compensation Committee Interlocks and Insider Participation
No interlocking relationship exists between our Board of Directors and the Board of Directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.
Code of Ethics
We have not adopted a Code of Ethics.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
General Philosophy
Our Board of Directors is responsible for establishing and administering our executive and director compensation.
Executive Compensation
The following summary compensation table indicates the cash and non-cash compensation earned from the Company during the fiscal years ended June 30, 2015 and 2014 by our current and former executive officers and each of the other two highest paid executives or directors, if any, whose total compensation exceeded $100,000 during those periods.
Summary Compensation Table
Nonqualified
Name and
Non-Equity
Deferred
Principal
Stock
Option
Incentive Plan
Compensation
All Other
Position
Year
Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
Total
Mr. Jose Mari C. Chin
$
-
-
-
-
-
-
-
$
-
President, Chief
$
-
-
-
-
-
-
-
$
-
Executive Officer, Chief Financial Officer, Secretary and Treasurer(1)
$
-
-
-
-
-
-
-
$
-
___________________
(1)
Mr. Jose Mari C. Chin was appointed as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer on April 8, 2013
Other than as noted above, none of our executive officers or directors received, nor do we have any arrangements to pay out, any bonus, stock awards, option awards, non-equity incentive plan compensation, or non-qualified deferred compensation.
Employment Agreements
The Company has not entered into employment agreements with any of its executive officers or directors.
Potential Payments Upon Termination or Change-in-Control
SEC regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of the company. We currently have no employment agreements with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control. As a result, we have omitted this table.
Compensation of Directors
We have no standard arrangement to compensate directors for their services in their capacity as directors. Directors are not paid for meetings attended. However, we intend to review and consider future proposals regarding board compensation. All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.
The following table sets forth compensation paid to our non-executive directors for the fiscal year ended June 30, 2015.
Stock Option Plans - Outstanding Equity Awards at Fiscal Year End
None.
Pension Table
None.
Retirement Plans
We do not offer any annuity, pension, or retirement benefits to be paid to any of our officers, directors, or employees in the event of retirement. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement, or any other termination of employment with our company, or from a change in the control of our Company.
Compensation Committee
We do not have a separate Compensation Committee. Instead, our Board of Directors reviews and approves executive compensation policies and practices, reviews salaries and bonuses for other officers, administers our stock option plans and other benefit plans, if any, and considers other matters.
Risk Management Considerations
We believe that our compensation policies and practices for our employees, including our executive officers, do not create risks that are reasonably likely to have a material adverse effect on our Company.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS.
Security Ownership
The following table sets forth certain information as of October 5, 2015, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our common stock. As of October 5, 2015, there were 69,819,980 shares of common stock outstanding.
To our knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.
Name and Address of
Percentage
Beneficial Owner(1)
Shares Beneficially Owned (1)
Beneficially Owned
Directors and Executive Officers
Mr. Jose Mari C. Chin
President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer
112 North Curry Street, Carson City, Nevada, 89703
Nil
Nil%
5% Holders
Jacyara De Jesus Marques
Rua Cesar Batista, 163 Casa 8,
Sao Paulo-SP, CEP 04312-130, Brazil
39,999,980
57.29%
(1)
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Non-Cumulative Voting
The holders of our shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of Directors, can elect all of the Directors to be elected, if they so choose. In such event, the holders of the remaining shares will not be able to elect any of our Directors.
Transfer Agent
Our transfer agent is Action Stock Transfer, Inc. and is located at 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, UT 84121. Their telephone number is (801) 274-1088.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE.
Related Party Transactions
As at June 30, 2015 an aggregate amount of $154,684 was owed to our Chief Executive Officer, Jose Mari C. Chin. The amount owed does not bear a maturity date and does not accrue interest.
Review, Approval or Ratification of Transactions with Related Persons
We rely on our Board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our Board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our Board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred. If our Board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our Board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.
Director Independence
During the fiscal year ended June 30, 2015, we had no independent directors on our board. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., the NASDAQ National Market, and the Securities and Exchange Commission.
Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table shows the fees paid or accrued by us for the audit and other services provided by GBH CPAs, PC, for the fiscal periods shown.
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements
In the absence of a formal audit committee meeting, the full Board of Directors pre-approves all audit and non-audit services to be performed by GBH CPAs, PC in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal year ended June 30, 2015. The percentage of hours expended on the principal accountant’s engagement to audit the Company’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
PART IV
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this Annual Report:
(a) Financial Statements:
(b) Exhibits:
*Filed Herewith
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.
HOME RECIPES, INC.
(Registrant)
Date: October 14, 2015
By:
/s/ Jose Mari C. Chin
Jose Mari C. Chin
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director (Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures
Title(s)
Date
/s/ Jose Mari C. Chin
President, Chief Executive Officer, Chief
Jose Mari C. Chin
Financial Officer, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
October 14, 2015