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EXCEL - IDEA: XBRL DOCUMENT - il2m INTERNATIONAL CORP. | Financial_Report.xls |
EX-31.1 - CERTIFICATION - il2m INTERNATIONAL CORP. | f10q0813ex31i_dynamicnutra.htm |
EX-32.1 - CERTIFICATION - il2m INTERNATIONAL CORP. | f10q0813ex32i_dynamicnutra.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2013
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 333-176587
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada
|
27-3492854
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
4263 Oceanside Boulevard
Oceanside, California
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92056
|
|
(Address of principal executive offices)
|
(Zip Code)
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(619) 354-7972
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o (Do not check if a smaller reporting company)
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Smaller reporting company x
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
As of November 12, 2013, there were 7,115,000 shares of Common Stock, par value $0.0001 per share, outstanding.
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
August 31, 2013
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1.
|
Financial Statements
|
F-1
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
1
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
3
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Item 4.
|
Controls and Procedures
|
3
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PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
4
|
Item 1A.
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Risk Factors
|
4
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
4
|
Item 3.
|
Defaults Upon Senior Securities
|
4
|
Item 4.
|
Mine Safety Disclosure
|
4
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Item 5.
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Other Information
|
4
|
Item 6.
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Exhibits
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4
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SIGNATURES
|
5
|
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE
|
F-1
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CONDENSED BALANCE SHEETS AS OF AUGUST 31, 2013 (UNAUDITED) AND AS OF MAY 31, 2013
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PAGE
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F-2
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CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2013 AND 2012, AND FOR THE PERIOD FROM JUNE 8, 2010 (INCEPTION) TO AUGUST 31, 2013 (UNAUDITED)
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PAGE
|
F-3
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CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD FROM JUNE 8, 2010 (INCEPTION) TO AUGUST 31, 2013 (UNAUDITED)
|
PAGE
|
F-4
|
CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED AUGUST 31, 2013 AND 2012 , AND FOR THE PERIOD FROM JUNE 8, 2010 (INCEPTION) TO AUGUST 31, 2013 (UNAUDITED)
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PAGES
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F-5 - F-12
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NOTES CONDENSED TO FINANCIAL STATEMENTS (UNAUDITED)
|
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Dynamic Nutra Enterprises Holdings, Inc
|
||||
(A Development Stage Company)
|
||||
Condensed Balance Sheets
|
||||
August 31, 2013
|
May 31, 2013
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$ | - | $ | 50,036 | ||||
Loan receivable
|
300 | 300 | ||||||
Prepaid expense
|
1,305 | - | ||||||
Total Current Assets
|
1,605 | 50,336 | ||||||
Property and equipment, net
|
455 | - | ||||||
Other Assets:
|
||||||||
Prepaid expense
|
2,389 | - | ||||||
Debt Issue Cost, net
|
7,433 | 9,141 | ||||||
Total Other Assets
|
9,822 | 9,141 | ||||||
Total Assets
|
$ | 11,882 | $ | 59,477 | ||||
Liabilities and Stockholders' Deficit
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 26,730 | $ | 41,422 | ||||
Accounts payable - related party
|
6,000 | - | ||||||
Note payable
|
100 | 100 | ||||||
Total Current Liabilities
|
32,830 | 41,522 | ||||||
Long Term Liabilities:
|
||||||||
Note Payable - Convertible
|
52,500 | 52,500 | ||||||
Total Liabilities
|
85,330 | 94,022 | ||||||
Commitments and Contingencies (See Note 8)
|
||||||||
Stockholders' Deficit:
|
||||||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding
|
- | - | ||||||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 7,115,000 and 7,090,000 shares issued and outstanding, respectively
|
712 | 709 | ||||||
Additional paid-in capital
|
255,990 | 253,493 | ||||||
Deficit accumulated during the development stage
|
(330,150 | ) | (288,747 | ) | ||||
Total Stockholders' Deficit
|
(73,448 | ) | (34,545 | ) | ||||
Total Liabilities and Stockholders' Deficit
|
$ | 11,882 | $ | 59,477 |
See accompanying notes to condensed unaudited financial statements
F-1
Dynamic Nutra Enterprises Holdings, Inc
|
|||||
(A Development Stage Company)
|
|||||
Condensed Statements of Operations
|
|||||
(Unaudited)
|
For the Three Months Ended
|
For the period
from
June 8, 2010
(Inception) to
|
|||||||||||
August 31,
2013
|
August 31,
2012
|
August 31,
2013
|
||||||||||
Revenues
|
$ | - | $ | - | $ | 1,878 | ||||||
Operating Expenses
|
||||||||||||
Consulting expense
|
12,611 | 15,000 | 155,551 | |||||||||
Professional expense
|
16,411 | 12,213 | 106,030 | |||||||||
Officers compensation
|
- | - | 4,900 | |||||||||
Advertising expense
|
- | - | 6,170 | |||||||||
In kind contribution of services
|
- | 1,690 | 13,520 | |||||||||
General and administrative
|
10,278 | 11,159 | 41,851 | |||||||||
Impairment loss from website development
|
- | - | 1,580 | |||||||||
Total Operating Expenses
|
39,300 | 40,062 | 329,602 | |||||||||
Loss from Operations
|
(39,300 | ) | (40,062 | ) | (327,724 | ) | ||||||
Other Expense
|
||||||||||||
Interest expense
|
(2,103 | ) | - | (2,426 | ) | |||||||
Total Other Expense
|
(2,103 | ) | - | (2,426 | ) | |||||||
Net loss
|
$ | (41,403 | ) | $ | (40,062 | ) | $ | (330,150 | ) | |||
Net loss per share - basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||
Weighted average number of shares outstanding during the period - basic and diluted
|
7,112,011 | 7,040,000 |
See accompanying notes to condensed unaudited financial statements
F-2
Dynamic Nutra Enterprises Holdings, Inc.
|
(A Development Stage Company)
|
Condensed Statement of Changes in Stockholders' Equity (Deficit)
|
For the Period From June 8, 2010 (Inception) to August 31, 2013
|
(Unaudited)
|
Preferred Stock
$.0001 Par Value |
Common stock
$0.0001 Par Value |
Additional
Paid-in
|
Deficit
accumulated
during the
development
|
Total
Stockholder's
Equity
|
||||||||||||||||||||||||
Shares | Amount | Shares |
Amount
|
Capital | stage | (Deficit) | ||||||||||||||||||||||
Balance June 8, 2010
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||||
Common Stock issued at par to Founder for cash and services
|
-
|
-
|
5,000,000
|
500
|
-
|
-
|
500
|
|||||||||||||||||||||
Common stock issued through private placement memorandum for cash ($0.10)
|
-
|
-
|
2,040,000
|
204
|
203,796
|
-
|
204,000
|
|||||||||||||||||||||
Blue Sky Fees
|
-
|
-
|
-
|
-
|
(12,175
|
)
|
-
|
(12,175
|
)
|
|||||||||||||||||||
Net loss for the period from June 8, 2010 (inception) to May 31, 2011
|
-
|
-
|
-
|
-
|
-
|
(39,640
|
)
|
(39,640
|
)
|
|||||||||||||||||||
Balance, May 31, 2011
|
-
|
-
|
7,040,000
|
704
|
191,621
|
(39,640
|
)
|
152,685
|
||||||||||||||||||||
In kind contribution of services
|
-
|
-
|
-
|
-
|
6,760
|
-
|
6,760
|
|||||||||||||||||||||
Net loss for the year ended May 31, 2012
|
-
|
-
|
-
|
-
|
-
|
(136,560
|
)
|
(136,560
|
)
|
|||||||||||||||||||
Balalnce, May 31, 2012
|
-
|
-
|
7,040,000
|
704
|
198,381
|
(176,200
|
)
|
22,885
|
||||||||||||||||||||
In kind contribution of services
|
-
|
-
|
-
|
-
|
6,760
|
-
|
6,760
|
|||||||||||||||||||||
Expenses paid by shareholder on Company's behalf
|
-
|
-
|
-
|
-
|
43,357
|
-
|
43,357
|
|||||||||||||||||||||
Stock issued for services
|
-
|
-
|
50,000
|
5
|
4,995
|
-
|
5,000
|
|||||||||||||||||||||
Net loss for the year ended May 31, 2013
|
-
|
-
|
-
|
-
|
-
|
(112,547
|
)
|
(112,547
|
)
|
|||||||||||||||||||
Balalnce, May 31, 2013
|
-
|
-
|
7,090,000
|
709
|
253,493
|
(288,747
|
)
|
(34,545
|
)
|
|||||||||||||||||||
Stock issued for services
|
-
|
-
|
25,000
|
3
|
2,497
|
-
|
2,500
|
|||||||||||||||||||||
Net loss for the three months ended August 31, 2013
|
-
|
-
|
-
|
-
|
-
|
(41,403
|
)
|
(41,403
|
)
|
|||||||||||||||||||
Balance, August 31, 2013
|
-
|
$
|
-
|
7,115,000
|
$
|
712
|
$
|
255,990
|
$
|
(330,150
|
)
|
$
|
(73,448
|
)
|
See accompanying notes to condensed unaudited financial statements
F-3
Dynamic Nutra Enterprises Holdings, Inc
|
||||||||||||
(A Development Stage Company)
|
||||||||||||
Condensed Statements of Cash Flows
Unaudited
|
||||||||||||
For the Three Months Ended
|
For the period
from
June 8, 2010
(Inception) to
|
|||||||||||
August 31,
2013
|
August 31,
2012
|
August 31,
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net Loss
|
$ | (41,403 | ) | $ | (40,062 | ) | $ | (330,150 | ) | |||
Adjustments to reconcile net loss to cash used in operating activities:
|
||||||||||||
Amortization/Depreciation Expense
|
13 | 152 | 1,433 | |||||||||
Debt issue costs
|
1,708 | - | 1,971 | |||||||||
Stock issued for services
|
- | - | 500 | |||||||||
Stock issued for services - related party
|
2,500 | - | 7,500 | |||||||||
In kind contribution of services
|
- | 1,690 | 13,520 | |||||||||
Impairment loss on website development
|
- | - | 1,580 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) in prepaid expenses
|
(3,694 | ) | - | (3,694 | ) | |||||||
(Decrease) Increase in accounts payable and accrued expenses
|
(8,692 | ) | 20,740 | 32,730 | ||||||||
Net Cash Used In Operating Activities
|
(49,568 | ) | (17,480 | ) | (274,610 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Payments for property and equipment
|
(468 | ) | - | (3,468 | ) | |||||||
Loan receivable
|
- | - | (300 | ) | ||||||||
Net Cash Used in Investing Activities
|
(468 | ) | - | (3,768 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from note payable
|
- | - | 100 | |||||||||
Proceeds from convertible note, net of debt issue costs
|
- | - | 43,096 | |||||||||
Proceeds from issuance of common stock
|
- | - | 191,825 | |||||||||
Expenses paid by former shareholder
|
- | - | 43,357 | |||||||||
Net Cash Provided By Financing Activities
|
- | - | 278,378 | |||||||||
Net Decrease in Cash and Cash Equivalents
|
(50,036 | ) | (17,480 | ) | - | |||||||
Cash and Cash Equivalents - Beginning of Period
|
50,036 | 22,803 | - | |||||||||
Cash and Cash Equivalents - End of Period
|
$ | - | $ | 5,323 | $ | - | ||||||
SUPPLEMENTARY CASH FLOW INFORMATION:
|
||||||||||||
Cash Paid During the Period for:
|
||||||||||||
Taxes
|
$ | - | $ | - | $ | - | ||||||
Interest
|
$ | - | $ | - | $ | - |
See accompanying notes to condensed unaudited financial statements
F-4
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
NOTE 1
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
|
(A) Basis of Presentation
The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.
Dynamic Nutra Enterprises Holdings, Inc. (a development stage company) (the "Company") (“DNE”) was incorporated under the laws of the State of Nevada on June 8, 2010 to manufacture and market a brewer’s yeast product called Beta Glucan™ that can eliminate acne for a majority of people who use it as a dietary supplement. In addition, DNE plans to partner with a network marketing organization to sell the highly successful Xango™ nutraceutical product line.
Activities during the development stage include developing the business plan and raising capital.
(B) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated lives of depreciable assets, valuation of deferred tax assets, valuation of in-kind contribution of services and impairment of website development.
(C) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At August 31, 2013 and May 31, 2013, the Company had no cash equivalents.
F-5
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
(D) Website Development Costs
The Company has adopted the provisions of FASB Accounting Standards Codification No. 350 Intangible-Goodwills and Other. Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated five year life of the asset. During the year ended May 31, 2011, the Company incurred $3,000 in website development costs.
During the year ended May 31, 2013, the Company determined that the website was fully impaired and recognized an impairment of $1,580.
(E) Loss Per Share
In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There are no common stock equivalents outstanding and therefore a separate computation of diluted loss per share is not presented.
(F) Advertising Expense
Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $0, $0, $6,170 for the three months ended August 31, 2013 and 2012 and the period from June 8, 2010 (inception) to August 31, 2013, respectively.
(G) Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
(H) Business Segments
The Company operates in one segment and therefore segment information is not presented.
F-6
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
(I) Revenue Recognition
The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company recognizes revenue from commissions earned upon the purchase of nutraceutical products by its network members monthly as commissions are earned. The rate of commissions earned is based on the total monthly sales volume and ranges between 5-10% of net sales.
The Company will recognize revenue from the sale of Beta Glucan net of any sales discounts and incentives at the time the price is fixed and determinable, the products are shipped and the collections are reasonably assured. The Company will recognize any promotional products, samples or incentives as cost of goods sold following the guidance of ASC 605-50-25. The Company will include shipping revenue in gross sales and includes the cost of shipping in cost of goods sold.
(J) Concentration of Credit Risk
The Company at times has cash in banks in excess of FDIC insurance limits. The Company had no cash in excess of FDIC insurance limits at August 31, 2013.
For the year ended May 31, 2013, 100% of sales were from one customer. From inception, 100% of sales were from one customer.
(K) Fair Value of Financial Instruments
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
●
|
Level 1 – quoted market prices in active markets for identical assets or liabilities.
|
●
|
Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
●
|
Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
At August 31, 2013, the Company has no instruments that require additional disclosure.
F-7
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
(L) Debt Issue Costs
Debt issue costs in connection with raising funds through the issuance of convertible note are amortized over the life of the convertible note.
(M) Recent Accounting Pronouncements
Recent accounting pronouncements issued by FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, did not, or are not believed by management, to have a material impact on the Company’s present or future financial statements.
NOTE 2
|
EQUIPMENT AND WEBSITE DEVELOPMENT COSTS
|
August 31, 2013
|
May 31, 2013
|
|||||||
Website development costs
|
$ | 1,420 | $ | 1,420 | ||||
Computer Equipment
|
468 | - | ||||||
Accumulated amortization/ depreciation
|
(1,433 | ) | (1,420 | ) | ||||
Total
|
$ | 455 | $ | - |
Depreciation and amortization expense was $13, $152, $1,433 for the three months ended August 31, 2013 and 2012 and the period from June 8, 2010 (inception) to August 31, 2013, respectively.
During the year ended May 31, 2013, the Company determined that the website was fully impaired and recognized an impairment of $1,580.
NOTE 3
|
LOAN RECEIVABLE
|
During the year ended May 31, 2013, the Company loaned $300 to a former related party. The loan is non-interest bearing and due on demand.
F-8
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
NOTE 4
|
DEBT ISSUE COSTS
|
During the year ended May 31, 2013, the Company paid debt issue costs totaling $9,404.
The following is a summary of the Company’s debt issue costs:
Debt issue costs as of May 31, 2013
|
$ | 9,404 | ||
Amortization of debt issue costs as of May 31, 2013
|
(263 | ) | ||
Debt issue costs – net as of May 31, 2013
|
9,141 | |||
Amortization of debt issue costs as of August 31, 2013
|
(1,708 | ) | ||
Debt issue costs – net as of August 31, 2013
|
$ | 7,433 |
NOTE 5
|
CONVERTIBLE NOTE |
On May 17, 2013 the Company issued a convertible promissory note in the amount of $52,500. The note was bearing an interest at a rate of 3% per annum and is due on September 30, 2014. The note can be converted into 50,000 shares of Preferred Stock of the Company prior to maturity date or in the event of change of control prior to the repayment in full. As of August 31, 2013, the Company has accrued interest of $456.
NOTE 6
|
NOTE PAYABLE |
On May 14, 2014 the Company received $100 from an unrelated party. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand.
NOTE 7
|
STOCKHOLDERS’ EQUITY
|
(A) Preferred Stock
The Company’s Articles of Incorporation authorize 10,000,000 shares of preferred stock with a par value of $.0001 with rights and preferences to be determined by the Board of Directors.
(B) Common Stock Issued for Cash and Services
For the three months ended August 31, 2013, the Company issued 25,000 shares of common stock to its Director for services with a fair value of $2,500 ($0.10 per share) (See Note 8 and 9).
F-9
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
For the year ended May 31, 2013, the Company issued 50,000 shares of common stock to its President for services with a fair value of $5,000 ($0.10 per share) (See Note 8 and 9).
For the period ended May 31, 2011, the Company issued 2,040,000 shares of common stock for $204,000 ($0.10/share) and paid direct offering cost of $12,175. The Company also issued 5,000,000 shares of common stock to its founder for $100 in cash and services with a fair value of $400 ($0.0001 per share) (See Note 9).
(C) In Kind Contribution of Services
For the year ended May 31, 2013, the Officers of the Company contributed services having a fair value of $6,760 (See Note 9).
For the year ended May 31, 2012, the Officers of the Company contributed services having a fair value of $6,760 (See Note 9).
NOTE 8
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COMMITMENTS AND CONTINGENCIES |
On July 19, 2013 the Company entered into a five year joint venture agreement with Pure Energy FX, Inc., for the purpose of conducing marketing and promotion efforts for certain beverage and health products, including a Playboy branded energy drink. The joint venture will conduct business under the name of “Alternative Health Solutions LLC”. According to the agreement the Company agrees to contribute $27,000 to the joint venture over a three months period. Pure Energy FX, Inc agrees to contribute all the marketing services and expertise for use in the joint venture. As of today, the Joint Venture has not been formed and the Company has not contributed any funds under the agreement.
On June 11, 2013, the Company entered into a five year consulting agreement with the Director to receive administrative and other miscellaneous services. The Company is required to pay $2,000 a month and grant 25,000 shares of its common stock, (See Note 7(B) and 9).
On May 24, 2013, the Company entered into a 21 months consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $500 per month from May 24, 2013 until and including August 30, 2013. The consulting fee increases to $2,500 per month from September 1, 2013 until and including February 24, 2015.
On May 8, 2013, the Company entered into a five year consulting agreement with its President to receive administrative and other miscellaneous services. The Company is required to pay $2,000 a month and grant 50,000 shares of its common stock, (See Note 7(B) and 9).
On January 1, 2011, the Company entered into a consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $5,000 a month. The agreement was terminated effective March 31, 2013.
F-10
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
On July 15, 2010, the Company entered into a $10,000 consulting agreement for services to further the business. These services include, but are not limited to the following: identify individuals and groups that may have an interest in learning more about the product offerings and invite these individuals and groups to listen to a presentation and assist the team with follow up. This agreement is to remain in effect unless either party desires to cancel the agreement. No services were rendered as of August 31, 2013.
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.
NOTE 9
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RELATED PARTY TRANSACTIONS |
During the three months ended August 31, 2013, the Company accrued $6,000 for consulting services provided by its President and Director.
For the three months ended August 31, 2013, the Company issued 25,000 shares of common stock to its Director of the Company for services with a fair value of $2,500 ($0.10 per share) (See Note 7(B) and 8).
For the year ended May 31, 2013, the Officers of the Company contributed services having a fair value of $6.760 (See Note 7(C)).
For the year ended May 31, 2013, the Company issued 50,000 shares of common stock to a its President of the Company for services with a fair value of $5,000 ($0.10 per share) (See Note 7(B) and 8).
For the year ended May 31, 2012, the Officers of the Company contributed services having a fair value of $6,760 (See Note 7(C)).
For the period ended May 31, 2011, the Company issued 2,040,000 shares of common stock for $204,000 ($0.10/share) and paid direct offering cost of $12,175. The Company also issued 5,000,000 shares of common stock to its founder for $100 in cash and services with a fair value of $400 ($0.0001 per share) (See Note 7(B)).
The Company paid $4,500 to the Officers of the Company as compensation expense during 2011.
F-11
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2013
NOTE 10
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GOING CONCERN |
As reflected in the accompanying condensed unaudited financial statements, the Company is in the development stage with limited operations, a working capital of $31,225 and stockholders’ deficiency of $73,448 has used cash in operations of $274,610 from inception and has a net loss since inception of $330,150. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
NOTE 11
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SUBSEQUENT EVENT |
On September 24, 2013, we announced that our recently formed subsidiary, Syracusa, LLC, signed a Letter of Intent to form a joint venture with affiliates of San Francisco Bay area property developer for the development of certain tracts of land generally located south of the village of San Felipe Baja Mexico. As of November 12, 2013, the LOI has expired and the parties have agreed to terminate any further negotiations.
F-12
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Limited Operating History
We have not previously demonstrated that we will be able to expand our business. We cannot guarantee that the expansion efforts described in this prospectus will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our renovation services offering.
If the proceeds of our private placement prove to be insufficient to generate additional profits, future financing may not be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
Our independent auditors have issued a going concern opinion that raises substantial doubt about our ability to continue as a going concern. As reflected in the financial statements in this prospectus, we are a development stage company with limited operations. We had a net loss of $330,150 since inception (June 8, 2010) through August 31, 2013.
Results of Operations for the three months ended August 31, 2013 as compared to the three months ended August 31, 2012
The following table presents the statement of operations for the three months ended August 31, 2013 as compared to the three months ended August 31, 2012. The discussion following the table is based on these results.
For the Three Months Ended
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||||||||
August 31, 2013
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August 31, 2012
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|||||||
Revenues
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$
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-
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$
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-
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||||
Total Operating Expenses
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39,300
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40,062
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||||||
Total Other Expense | 2,103 | - | ||||||
Net loss
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$
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(41,403
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)
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$
|
(40,062
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)
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Net loss per share - basic and diluted
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$
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(0.01
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)
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$
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(0.01
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)
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Total Revenues
For the three months ended August 31, 2013 and 2012, we had no revenues. The company has had difficulty operating its business and generating revenue.
Operating Expenses
Operating expenses for the three months ended August 31, 2013 were $39,300 compared to $40,062 for the three months ended August 31, 2012. For the three months ended August 31, 2013 we incurred consulting fees of $12,611, professional fees totaling $16,411, in kind contribution of services of $0, and general and administrative expenses totaling $10,278. For the three months ended August 31, 2012 our consulting fees totaled $15,000, professional fees were $12,213, in kind contribution of services was $1,690 and general and administrative expenses totaled $11,159. Cash on hand as of August 31, 2013 was $0 compared to $50,036 for the year ended May 31, 2013.
1
Net Loss
Net loss was $41,403 for the three months ended August 31, 2013 compared to $40,062 for the three months ended August 31, 2012. Our net loss since inception (June 8, 2010) through August 31, 2013 was $330,150.
Capital Resources and Liquidity
We raised cash to grow our business through a private placement that was completed on September 20, 2010. If we determine that we need more money to build our business, we will seek alternative sources, like a second private placement of securities or loans from our officers or others. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and are unable to raise it, we will either have to suspend or cease our expansion plans entirely. Other than as described in this registration statement, we have no other financing plans. The company is not generating any revenues and will be attempting to either grow the revenue stream or possibly bring in additional capital.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Going Concern
As reflected in the accompanying condensed unaudited financial statements, the Company is in the development stage with no operations, used cash in operations of $274,610 from inception and has a net loss since inception of $330,150. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through shareholder loans and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
Critical Accounting Policies
Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
Loss Per Share
In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. As of August 31, 2013 and August 31, 2012 there are no common stock equivalents outstanding.
2
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Fair Value of Financial Instruments
The carrying amounts of the Company’s short-term financial instruments, including accounts receivable and accounts payable, approximate fair value due to the relatively short period to maturity for these instruments.
Not required for smaller reporting companies.
Item 4. Controls and Procedures.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of August 31, 2013. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were ineffective at such time to ensure that information required to be disclosed by us in the reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our principal executive officer and principal financial officer also concluded that our disclosure controls, which are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, was inappropriate to allow timely decisions regarding required disclosure.
Additionally, based on management’s assessment, the Company determined that there were material weaknesses in its internal control over financial reporting as of August 31, 2013.
Therefore, our internal controls over financial reporting were not effective as of August 31, 2013 based on the material weaknesses described below:
1.
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We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter ended August 31, 2013. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
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2.
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We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
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Our management determined that these deficiencies constituted material weaknesses.
Changes in Internal Control over Financial Reporting
There were no changes in our system of internal controls over financial reporting during three months ended August 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
3
PART II – OTHER INFORMATION
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Pursuant to the terms of a Consulting Agreement, dated May 8, 2013, Mr. Richard Wheeler was issued 50,000 shares our common stock, par value $0.0001.
Pursuant to the terms of a Consulting Agreement, dated June 11, 2013, Mr. Luke Quinn was issued 25,000 shares of our common stock, par value $0.0001.
The Company relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, for the above issuances.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
Exhibit No.
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Description | |
31.1
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Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1
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Certification of Principal Executive Officer and Principal Financial, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Schema
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101.CAL
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XBRL Taxonomy Calculation Linkbase
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101.DEF
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XBRL Taxonomy Definition Linkbase
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101.LAB
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XBRL Taxonomy Label Linkbase
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101.PRE
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XBRL Taxonomy Presentation Linkbase
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In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
4
Pursuant to the requirements 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.
Date: November 12, 2013
Dynamic Nutra Enterprises Holdings, Inc.
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/s/ Richard Wheeler
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Name: Richard Wheeler
Chief Executive Officer
(Duly Authorized Officer,
Principal Executive Officer
and Principal Financial Officer)
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5