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EX-32.2 - CERTIFICATION - DINO ENERGY Corpex322.htm
EX-32.1 - CERTIFICATION - DINO ENERGY Corpex321.htm
EX-31.2 - CERTIFICATION - DINO ENERGY Corpex312.htm
EX-31.1 - CERTIFICATION - DINO ENERGY Corpex311.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2013

        | | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period from _________________ to __________________

Commission File Number 333-178199

_______________________________________________

DINO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

______________________________________________

Nevada

 

Not Applicable

(State or other jurisdiction of  

 

(IRS Employer  

incorporation or organization)  

 

Identification No.)  

 

 

 

 

 

 

Unit 7, 833 – 1st Ave. NW

Calgary, AB T2N 0A4 Canada

 

N/A

_____________________________

(Address of principal executive offices)  

 

(zip code)  

Registrant‘s telephone number, including area code:

(403) 229-2351

_____________________________________________


Securities registered under Section 12(b) of the Exchange Act:


None.

 

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.0001 par value per share

(Title of Class)

Indicate by check mark if registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act. |  | Yes   | X | No.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  |  | Yes   | X | No.

 

-i-

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 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. | X | Yes   |  | No.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]

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.  (Check one):

Large accelerated filer [  ]

Accelerated filer [  ]

Non-accelerated filer [  ]

Smaller reporting company [ X ]

(Do not check if a smaller reporting company)

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

|  | Yes   | X | No.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second quarter. Note: If determining whether a particular person or entity is an affiliate cannot be made without involving an unreasonable effort and expense, the aggregate market value of the common equity held by non-affiliates may be calculated on the basis of reasonable assumptions, if the assumptions are set forth in this form.

7,116,000 common shares @ $.05* = $355,800

*Average of bid and ask closing prices on April 30, 2013.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes |  | No. |  |

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

173,716,000 common shares issued and outstanding as of January 31, 2014

DOCUMENTS INCORPORATED BY REFERENCE:

None.

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Dino Energy Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Dino Energy Corporation’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Dino Energy Corporation. Although Dino Energy Corporation believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Dino Energy Corporation  or any other person that the objectives and plans of Dino Energy Corporation will be achieved.

 

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TABLE OF CONTENTS


 

PART I

Page

Item 1.

Business

3

   

Item 1A.

Risk Factors

7

   

Item 1B.

Unresolved Staff Comments

7

   

Item 2.

Properties

7

   

Item 3

Legal Proceedings

7

   

Item 4.

Mine Safety Disclosures

7

 

PART II

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

7

   

Item 6.

Selected Financial Data

9

   

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9

   

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

11

   

Item 8.

Financial Statements and Supplementary Data

11

 

Report of Independent Registered Public Accounting Firm

11

 

Consolidated Balance Sheets

12

 

Consolidated Statements of Operations

13

 

Consolidated Statements of Stockholders’ Deficiency

14

 

Consolidated Statements of Cash Flows

15

 

Notes to the Consolidated Financial Statements

16

   

Item 9.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

24

   

Item 9A.

Controls and Procedures

24

   

 


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Item 9B.

Other Information

25

 

PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance

25

   

Item 11.

Executive Compensation

28

   

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

29

   

Item 13.

Certain Relationships and Related Transactions, and Director Independence

31

   

Item 14.

Principal Accounting Fees and Services

31

   

Item 15.

Exhibits, Financial Statement Schedules

32

 

Signatures

32

 

 

 

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PART I

ITEM 1.  

BUSINESS.

Gysan Holdings Inc. (“Gysan Holdings”) was incorporated in the State of Nevada on March 11, 2011. Gysan Holdings acquired 100 percent interest of Gysan Enterprises Ltd. on June 13, 2011.  Gysan Holdings operates solely as a holding company.  

On April 12, 2012, the shareholders of Dino Energy Corporation acquired the majority ownership in Gysan Holdings in exchange for all the outstanding common stock of Gysan Holdings.  That transaction was accounted for as a reverse merger. As a result of these transactions, the Company is now the corporate parent of Dino Energy Investments, Ltd., a British Virgin Island corporation and Gysan Enterprises, Ltd., an Alberta Canada corporation.

 

On March 13, 2013, the Company filed a definitive information statement, Schedule 14C, as a part of its annual meeting. The information statement indicates that Company received written consents in lieu of a meeting from stockholders representing a majority of our outstanding shares of voting stock approving the following actions:


1)

Approval of an amendment to our Articles of Incorporation to change our name to Dino Energy Corporation

2)

Approval of an amendment of our Articles of Incorporation to increase the number of our authorized common shares and preferred shares.

3)

Approval of the election of Directors, namely Eric D. Lawson, Vanleo Y. W. Fung, Solomon Auyeung and Trent Sittler, with Eric D. Lawson to be the President and CEO and Vanleo Y. W. Fung to be the CFO, Treasurer and Secretary.

4)

To approve the ratification of MNP LLP as our independent auditors.

 

On July 10, 2013, the Gysan Holdings, Inc. completed its name change to Dino Energy Corporation (The “Company”).

 

As of November 1, 2013, the Company has wound up its wholly-owned subsidiary, Dino Energy Investments, Ltd. All assets and liabilities of the subsidiary have been assumed by the Company.

Overview of Operating Subsidiary

Gysan Enterprises Ltd. (“Gysan”) began its operations in November, 2009 by providing support services to an auction company.  Later in 2010, Gysan began independently selling and marketing various types of floor coverings, namely, hardwood and engineered floor coverings, at the retail level to homeowners and at the wholesale level to business owners and custom builders located in Calgary, Alberta, Canada and the surrounding areas.

Location and Facilities

The Company office is located at Suite 2806, 505 6th Street SW, Calgary, Alberta, Canada T2P 1X5.

PRODUCTS

Gysan specializes in high quality, commercial grade floorings, such as the following:

Solid Hardwood Flooring

Solid hardwood flooring is a natural wood flooring that is renowned for its elegance and beauty. Milled from a solid piece of lumber, solid hardwood offers a variety of grain patterns, natural color variations, and the authenticity of a natural material. It is suitable for installation in any room above grade where moisture is maintained at a minimal level. Due to its natural composition, solid hardwood flooring can be sanded and refinished multiple times, adding to its appeal and longevity. When properly maintained, the beauty of a solid hardwood floor will enhance with age. It is considered a valuable investment as it is one of the few floor covering that adds value to an existing property.

 

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Gysan offers a large variety of hardwood floorings, including: Scandinavian maple, Brazilian and black walnut, honey oak, and other exotic hardwood floorings.

Engineered Hardwood Flooring

Engineered wood flooring is a high-quality, affordable alternative to hardwood flooring. It is designed to provide greater stability for use in places where hardwood flooring might not be suitable due to exposure to significant changes in temperature or moisture. Engineered wood flooring is typically constructed in three layers – the top layer is comprised of real hardwood, the middle section often of softwood or plywood, and a supporting base layer of solid wood. Due to this unique structural composition, engineered wood flooring can be specifically tailored to suit situations where conditions would be unsuitable for solid wood flooring, such as in a conservatory or in conjunction with an under floor heating system.

Because engineered wood flooring uses real wood as the top layer, the user can benefit from the same, extensive selection of wood species and finishes available to solid hardwood flooring. In addition, the hardwood veneer can also be sanded and refinished once or twice for maintenance or aesthetic purposes. Engineered wood flooring offers the added flexibility in installation where it can be stapled, glued, or floated over concrete or wood subfloor. Due to its synthetic makeup, engineered wood flooring provides a more cost effective way of utilizing available timber. It is a greener wood flooring alternative that helps to conserve expensive, prized and exotic types of wood.

Gysan’s selection of engineered wood flooring includes maple and oak engineered floating hardwood flooring among many others.  This type of flooring works great over concrete.

Laminate Flooring

Laminate flooring is a highly versatile and durable synthetic alternative to solid hardwood and engineered wood flooring. It is composed of multiple layers of synthetic materials fused together under extreme pressure to create a similar looking finished product to that of natural wood, stone, or tile. Most laminate floorings consist of four basic elements – a bottom layer and a highly dense fiberboard core, topped with a high resolution photographic image of natural wood or stone, and finished off with a clear, durable coating of melamine resin for added strength and protection.

[page8002.gif]

 

Much like engineered wood flooring, laminate flooring can be installed below grade and over in-floor radiant heating systems due to its stable and robust composition. The protective top layer of laminate floors is extremely durable and is resistant to moisture, staining, fading, and regular wear and tear. It is a highly cost-effective flooring solution that maintains a close resemblance to natural wood and stone flooring, and is available in a wide selection of colors and finishes. Laminate floorings can be installed as a floating floor over many types of subfloors making installation a simple and time-efficient task. It is an eco-friendly flooring solution for environmentally conscious users as its construction requires significantly less use of natural wood and stone material.

 

Gysan offers an extensive selection of high-end laminate floorings in a variety of colors.

 

 

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Competitive Comparison

 

Gysan strives to provide high value products and outstanding service to consumers.  There are several key factors that we believe are a competitive advantage.  Those factors are as follows:

 

·

Gysan employs a unique, cost-effective distribution channel that transfers the bargaining power to consumers by allowing them to determine a price suitable to their needs.

·

Gysan’s flexible structure and management enhances the Company’s sensitivity to existing trends and allows the Company to deliver the latest products on the market in a timely manner.

·

Gysan has established a network of contacts and associates both locally and overseas, which specialize in products sourcing and inspection. This ensures the floorings delivered by the Company are of a high standard and quality.

·

Existing working relationships with suppliers and manufacturers allow management to gain in-depth information on the Company’s product line. This translates to better service and the ability for Gysan to represent and carry the products at lower costs.

 

Sourcing

 

We source our products based upon expected market demand directly from local manufacturers and overseas from Chinese suppliers. We have no long term contracts with our suppliers, but instead we rely on short term contracts consisting of individual purchase orders.  (See “Risk Factors”).  Gysan will work closely with suppliers in order to ensure a constant level of inventory is available on site for immediate shipment.

 

One of the Company’s most important competitive advantages is our ability to maintain effective working relationships with flooring suppliers and manufacturers. We plan to further develop these relationships in order to maintain a high level of quality in product and service delivery.  Our management has been effective in developing a network of contacts that will assist in the sourcing and selection of products.

 

INDUSTRY INDICATORS

Residential

Since most wood flooring is installed in residential buildings, future demand will be dependent upon the volume of new home construction, sales of existing homes, and home renovations.  In light of the recent recession and its affect on residential construction, we would expect demand for floor covering to improve as residential home sales improve.

Residential Remodeling

The $44 billion renovation industry accounts for roughly 40 percent of the housing investment in Canada1. In 2009, over $25.8 billion was spent on renovations across 10 major Canadian cities with 50 percent of the households having renovated their home. According to Canada Mortgage and Housing Corporation, 73 percent of the households completed some form of alteration and improvement of their home with an average of $12,100 spent on home renovations2.

Calgary’s renovation market is among the highest in Canada. In 2009, the average cost of renovations in Calgary was $13,087, and 48 percent of Calgary households undertook renovations. The incidence of alterations and improvements was also highest in Calgary, with 80 percent of renovating households undertaking this type of renovation3.

 

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Renovation spending is expected to be less conducive in 2012 due to moderating home sales and prices, a leveling off in home ownership rates, high household debt loads, (eventual) rising interest rates and more stringent mortgage financing rules. The regulatory changes are anticipated to make it tougher for consumers to use their property to access financing.

Non-Residential

The commercial market is largely independent of the residential market. It is associated with non-residential construction spending and office and retail vacancy rates.

New Construction

In spite of the slowdown in residential development, investment in non-residential construction in Canada rose 1.7 percent to $10.5 billion in the fourth quarter of 2010 from the previous quarter and 5.7 percent from the previous year4. If construction of commercial space continues to improve the demand for floor coverings should improve also.

Competitive Analysis

The wood flooring industry is highly competitive as the product is largely perceived as a commodity. Demand for wood flooring is predominately influenced by the cyclical nature of the residential real estate market in construction, sales and remodeling. Rivalry among retailers, wholesalers, and other competing flooring products defines the competitive landscape of the industry.

The wood flooring industry in Calgary, Alberta is highly fragmented, consisting of over 100 retailers, mostly small, family-owned businesses that cater to the local market. Approximately 70 percent of the wood flooring strips sold in North America is distributed by ten large retail chains5.

In addition to direct competition from individual retailers, large home center retail chains such as Home Depot, Rona, and Lowe’s, with over 1,000 stores across North America that carry floor coverings, are increasingly gaining market share. Other franchise chains, such as Flooring Canada and Carpet One, have also established a presence in the region with their aggressive online marketing campaign.

Oil and Gas Exploration and Production

Dino Energy Investment, Ltd (“Dino”) was a wholly-owned subsidiary of the Company and it is in the business of oil exploration and production. Dino has subsequently been wound up and its operations assumed by the Company.

On July 20, 2012, Dino entered into an exploration rights acquisition agreement (the “Exploration Agreement”) with First Nation Group in Alberta, Canada (the “First Nation”) for the exploration, development and production of hydrocarbon resources on and under the First Nation’s reserve lands.  The Exploration Agreement includes a number of conditions precedent including a deposit of $50,000 required for the negotiation, preparation and execution of the Agreement and any additional agreements.

The Exploration Agreement was amended and ultimately expired on July 1, 2013.  The management of Dino has decided against further pursuit of the project.  As a result, expenses of $210,196 in relation to the Exploration Agreement have been written off during the year.

The Company is actively pursuing other oil and gas producing properties.

______________________________________________________________

1 “A recent survey indicated renovation intentions for 2011,” Calgary Herald, January 20, 2011.

2 Canada Mortgage and Housing Corporation, “Renovation and home purchase report,” March 2010, p. 2

3 Canada Mortgage and Housing Corporation, “Renovation and home purchase detailed tables - Calgary,” March 2010, p. 8 & 10

4 Statistics Canada, Non-residential building construction investment, Ottawa, Ont., 2011

5 Patrick Lavoie, Jean-François Bouffard, Pierre Banchet. “Wood flooring trends,” Woodworking, vol. 24, 2 (Mar/Apr 2010).

 

 

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ITEM 1A.  RISK FACTORS.

 

Not Applicable as a smaller reporting company.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. PROPERTIES.

 

We do not own any real property for use in our operations or otherwise, instead we utilize the homes of our Directors for office space.

We use our facilities to house our corporate headquarters and operations and believe our facilities are suitable for such purpose.   We believe that these facilities will be adequate for the foreseeable future.

The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities or interests in, persons primarily engaged in real estate activities.

 

ITEM 3.  LEGAL PROCEEDINGS.

We may be subject to litigation from time to time as a result of our normal business operations. Presently, there are no material pending legal proceedings to which we are a party or as to which any of our property is subject, and no such proceedings are known to be threatened or contemplated against us.

 

ITEM 4.  MINE SAFETY DISCLOSURES.

 

Not Applicable.

PART II

 

ITEM 5.  MARKET FOR REGISTRANT‘S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

 

(a)

MARKET INFORMATION. Our common shares are quoted for trading on the OTC Bulletin Board under the symbol “DINO”.

 

 

-7-


National Association of Securities Dealers OTC Bulletin Board*

Quarter End

High

Low

July 31, 2012

0.05

0.00

October 31, 2012

0.75

0.25

January 31, 2013

0.05

0.05

April 30, 2013

0.05

0.05

July 31, 2013

0.05

0.05

October 31, 2013

0.15

0.05

*

Over-the-counter market quotations reflects high and low bid quotations and inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.

Our transfer agent and registrar for our common stock is Action Stock Transfer Corp. Their address is 2469 E. Fort Union Boulevard, Suite 214, Salt Lake City, Utah 84121. Their telephone number is 801-274-1088. Their fax number is 801-274-1099.

(b)

HOLDERS. As of January 31, 2014, we had approximately 52 shareholders of record who held 173,716,000 shares of the Company‘s common stock.

(c)

DIVIDEND POLICY. We have not declared or paid any cash dividends on our common stock and we do not intend to declare or pay any cash dividend in the foreseeable future.  The payment of dividends, if any, is within the discretion of our Board of Directors and will depend on our earnings, if any, our capital requirements and financial condition and such other factors as our Board of Directors may consider.

(d)

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

None

(e)

RECENT SALE OF UNREGISTERED SECURITIES. The Company has made no sales of unregistered securities in the last year.

 

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ITEM 6.  SELECTED FINANCIAL DATA.

 

Not Applicable.

ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


 

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

This discussion and analysis of our financial condition and results of operations includes “forward-looking” statements that reflect our current views with respect to future events and financial performance. We use words such as “expect,” “anticipate,” “believe,” and “intend” and similar expressions to identify forward-looking statements. You should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties inherent in future events and you should not rely unduly on these forward looking statements. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Reference in the following discussion to “our”, “us” and “we” refer to the operations of Dino Energy Corporation and its subsidiaries (“We”), except where the context otherwise indicates or requires.

The following discussion of our financial condition and results of operations should be read in conjunction with the audited financial statements and the notes to the audited financial statements included in this annual report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

FOR THE YEAR PERIOD ENDED OCTOBER 31, 2013

 

The following discussion should be read in conjunction with the audited financial statements of the Company and the related notes that appear elsewhere in this annual report. The audited financial statements of the Company are stated in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles.

 

FORWARD-LOOKING STATEMENTS

 

The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report on Form 10-K.

 

RESULTS OF OPERATIONS

 

Assets

 

Total assets decreased from $14,113 at October 31, 2012 to $5,585 at October 31, 2013. Total assets consist of current assets. The decrease was primarily due to the decrease in prepaid expenses.

 

Liabilities

 

Total liabilities increased from $68,827 at October 31, 2012 to $486,329 at October 31, 2013. Total liabilities consist of current liabilities. The increase in current liabilities is primarily a result of shareholder advances to the Company for use as working capital.

 

 

 

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Year Ended October 31, 2013 Compared to Year Ended October 31, 2012

 

Revenue

 

The Company had no sales revenue for the year ended October 31, 2013 and 2012.

 

Operating Expenses

 

Operating expenses for the year ended October 31, 2013 were $425,300, comprising of $48,133 in consulting fees, $593 in depreciation, $29,323 in general and administration expenses, $137,055 in professional fees, and $210,196 in project write-off, compared to $56,939 for the year ended October 31, 2012.

 

Net Loss

 

The Company incurred a net loss of $427,769 for the year ended October 31, 2013 compared to a net loss of $56,939 for the year ended October 31, 2012.

 

Cash Flow from Operations

 

The Company generated a negative cash flow of $28,482 from its operations for the year ended October 31, 2013 compared to negative cash flow of $239 for the year ended October 31, 2012.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of October 31, 2013, the Company had a negative working capital of $480,744 compared to a negative working capital of $54,714 as of October 31, 2012.

 

FINANCIAL CONDITION

 

The Company currently anticipates that its available cash resources will not be sufficient to meet its anticipated working capital for at least the next 12 months. Additional capital may need to be raised to fund the operations.

 

If additional funds are raised through further issuances of equity or convertible debt securities, the percentage ownership of current stockholders will be reduced and holders of those new securities may have rights, preferences and privileges senior to those of current shareholders.

 

In addition, the Company may not be able to obtain additional financing on favorable terms, if at all. If adequate funds are not available or are not available on terms favorable to the Company, the business, results of operations and financial condition could be adversely affected.

 

 

 

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GOING CONCERN

 

Note 1 of the Company’s attached financial statement notes that the Company has yet to achieve profitable operations and that it has incurred losses from its inception in the amount of $415,575.  Also, it is noted that the Company expects to incur further losses and thus creates doubts about the ability of the Company to continue as a going concern.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


 

Not Applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

Dino Energy Corporation

Consolidated Financial Statements

For the Year Ended October 31, 2012 and 2013

(Stated in US Dollars)


Report of Independent Registered Public Accounting Firm

To the Board of Directors and the Stockholders of Dino Energy Corporation

We have audited the accompanying consolidated balance sheets of Dino Energy Corporation and its subsidiaries (the “Company”) as of October 31, 2013 and 2012 and the statements of operations, stockholders’ equity and cash flows for the year ended October 31, 2013 and the seven month period ended October 31, 2012.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated 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 an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluation of the overall financial statement presentation.  We believe that our audits provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dino Energy Corporation and its subsidiaries as of October 31, 2013 and 2012 and the results of their operations and their cash flows for the year ended October 31, 2013 and the seven month period ended October 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements refer to above have been prepared assuming the Corporation will continue as a going concern. As discussed in Note 1 to the financial statements, the Corporation had recurring losses and requires additional funds to maintain its planned operations. These factors 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 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Calgary, Canada [pge8003.gif]

Feb 4, 2014


Chartered Accountants

 


[page8005.gif]Suite 1500, 640 – 5th Ave. S.W., Calgary, Alberta  T2P 3G4  Tel: (403) 263-3385  Fax: (403) 269-8450


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Dino Energy Corporation

(Formerly Gysan Holdings Inc.)

CONSOLIDATED BALANCE SHEETS

STATED IN US DOLLARS

(Audited)

      
   

October 31,
2013

 

October 31,
2012

      

ASSETS

Current

   
 

Cash and cash equivalents

 $           2,586

 

 $           1,986

 

Prepaid Expenses

              2,999

 

            12,127

      

Total Assets

 $           5,585

 

 $         14,113

      

LIABILITIES

Current

   
 

Accounts payable

 $       126,560

 

 $         24,108

 

Due to shareholder (Note 4)

          359,769

 

            44,719

      

Total Liabilities

          486,329

 

            68,827

      

STOCKHOLDERS' DEFICIENCY

Capital Stock

   
 

Authorized

   
  

800,000,000 common shares, voting, par value $.0001 each

   
  

200,000,000 preferred shares, par value $.0001 each

   
 

Issued

   
  

173,716,000 and 13,616,000 common shares, respectively

            16,010

 

              2,000

  

13,300,000 preferred shares

              1,330

 

                  -   

Additional paid in capital

            (5,616)

 

                  -   

Accumulated deficit

         (504,887)

 

          (56,939)

Accumulated other comprehensive income

            12,419

 

                225

      

Total Stockholders' Deficiency

         (480,744)

 

          (54,714)

      

Total Liabilities and Stockholders' Equity

 $           5,585

 

 $         14,113


See accompanying notes to financial statements

 

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Dino Energy Corporation

(Formerly Gysan Holdings Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

STATED IN US DOLLARS

 
      
   

Year ended October 31,

Year ended October 31,

   

2013

2012

      
   

Expenses

 

Consulting fees

 $           48,133

 $              1,055

 

Depreciation

 593

 -   

 

General & administration

 29,323

 -   

 

Professional fees

            137,055

               55,884

 

Project write-off

 210,196

 -   

   

 425,300

               56,939

   

Loss from operations

 (425,300)

              (56,939)

   

Other item

 (2,469)

 -   

   

Net loss for the period

 (427,769)

 (56,939)

   

Other comprehensive income

 

Foreign currency adjustment

 12,194

                    225

   

Comprehensive loss

 $       (415,575)

 $           (56,714)

   

Basic and diluted income loss per share

 $           (0.005)

 $             (0.004)

   

Weighted average number of shares outstanding

  86,502,849

  13,616,000

 

 

See accompanying notes to financial statements

 

-13-



Dino Energy Corporation

(Formerly Gysan Holdings Inc.)

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

STATED IN US DOLLARS

 

Capital Stock

Preferred Stock

Additional Paid in Capital

Accumulated Other Comprehen-

sive Income (Loss)

Retained Earnings (Deficit)

Total

 

Shares

Amount

Shares

Amount

Balance, April 12, 2012

$13,616,000

$2,000

-

$    -

$   -

$ -

$        -

$  2,000

 

Net loss for the year ended October 31, 2012

-

-

-

-

-

-

(56,939)

(56,939)

 

Other comprehensive income for the year ended October 31, 2012

-

-

-

-

-

225

-

225

Balance, October 31, 2012

13,616,000

2,000

-

-

-

225

(56,939)

(54,714)

 

Reorganization for reverse merger (Note 1)

65,000,000

4,500

$45,000,000

4,500

724

-

(20,179)

(10,455)

 

Conversion of preferred shares to Common shares

95,100,000

9,510

(31,700,000)

(3,170)

(6,340)

-

-

-

 

Net loss for the year ended October 31, 2013

-

-

-

-

-

-

(427,769)

(427,769)

 

Other comprehensive income for the year ended October 31, 2013

-

-

-

-

-

12,194

-

12,194

Balance, October 31, 2013

$173,716,000

$16,010

$13,300,000

$1,330

$(5,616)

$12,419

$(504,887)

$(480,744)

 

 

See accompanying notes to financial statements

 

-14-

 

 

Dino Energy Corporation

(Formerly Gysan Holdings Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

STATED IN US DOLLARS

 
       
    

Year ended
October 31,

Year ended
October 31,

    

2013

2012

       

Operating activities

    
 

Net loss for the period

 

$   (427,769)

 $      (56,939)

 

Item not requiring an outlay of cash:

 
  

Depreciation

 

              593

                  -

 

Changes in non-cash working capital:

 
  

Prepaid expenses

 

           9,128

         (12,127)

  

Accounts payable

 

         94,006

          24,108

  

Sales tax payable (receivable)

 

              925

                  -

  

Due to shareholder

 

       294,635

          44,719

 

Net cash provided by (used in) operating activities

 

 (28,482)

             (239)

    

Financing activities

 
 

Cash acquired from reverse merger (Note 3)

 

  16,221

                  -

 

Common share issued

 

  -   

            2,000

 

Net cash provided by financing activities

 

  16,221

            2,000

    

Net cash increase (decrease) for the period

 

       (12,261)

            1,761

    

Foreign exchange translation

 

         12,861

              225

    

Cash and cash equivalents, beginning of the period

 

           1,986

                  -

    

Cash and cash equivalents, end of the period

 

$         2,586

 $         1,986

 

 

See accompanying notes to financial statements

 

-15-

 


Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS


NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS

Dino Energy Corporation, formerly Gysan Holdings Inc., (the “Corporation”) was incorporated in the state of Nevada, United States on March 11, 2011. On June 10, 2011, the Corporation acquired Gysan Enterprises Ltd. of Calgary, Alberta, Canada as its wholly owned subsidiary. Gysan Enterprises Ltd. (“Gysan Alberta”) was incorporated on November 4, 2009 with its head office located in Calgary, Alberta, Canada. Gysan Alberta provided supporting services to an auction company to establish a new flooring division and focused on selling and marketing various types of floor coverings, namely, hardwood, engineered, and laminates to the local market. Corporation clients include homeowners, business owners, and custom builders from Calgary and the surrounding areas.

On January 23, 2013, Dino Energy Corporation acquired all the outstanding shares of Dino Energy Investments, Ltd. (“Dino”), a British Virgin Island corporation incorporated on April 12, 2012, from Dino’s current shareholders in exchange for 65,000,000 common shares and 45,000,000 preferred shares of the Corporation.  As a result of the transaction, Dino has become a wholly-owned subsidiary of the Corporation (Note 3). It is expected that Dino, as a subsidiary of the Corporation, will conduct all exploration and production activities through a wholly-owned subsidiary incorporated under the laws of Alberta, Canada.

Although the Corporation was the legal acquirer, the transaction was accounted for as a recapitalization of Dino in the form of a reverse merger, whereby Dino becomes the accounting acquirer and was deemed to have retroactively adopted the capital structure of the Corporation. Accordingly, the accompanying consolidated financial statements reflect the historical consolidated financial statements of Dino for all periods presented, and do not include the historical financial statements of the Corporation. All costs associated with the reverse merger transaction were expensed as incurred.

The Corporation’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Corporation has a net loss of $427,769 (2012: $56,939) for the year ended October 31, 2013 and at October 31, 2013 had a deficit accumulated since its inception of $504,887 (2012: $56,939). The Corporation has working capital deficit of $480,744 (2012: $54,714) as at October 31, 2013. The Corporation requires additional funds to maintain its existing oil and gas developments and exploration plans. These conditions raise substantial doubt about our Corporation’s ability to continue as a going concern. Management’s plans in this regard are to raise equity and debt financing as required, but there is no certainty that such financing will be available or that it will be available at acceptable terms. The outcome of these matters cannot be predicted at this time and the financing environment is difficult.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Corporation’s financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These consolidated financial statements include the Corporation’s wholly owned subsidiary, Gysan Enterprises Ltd. Dino Energy Investments Ltd. and Dino Energy Investments Alberta Ltd., and 100 percent of its assets, liabilities and net income or loss since acquisition. All inter-company balances and transactions have been eliminated.


 

 

-16-

 

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, management considers liquid investments with an original maturity of three months or less to be cash equivalents. As at October 31, 2013, all cash amounts deposited in accounts were federally insured.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statements reflect all of the costs of doing business.

Comprehensive Income (Loss)

The Corporation adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Corporation’s other comprehensive income represents foreign currency translation adjustments.

Net Income (Loss) per Common Share

FASB ASC 260 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive.

Financial Instruments

Fair Value

The Corporation follows FASB ASC 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Corporation defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.



-17-

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Corporation considers the principal or most advantageous market in which the Corporation would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.  

The Corporation has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Corporation has not elected the fair value option for any eligible financial instruments.

The Corporation uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follows:

§

Level 1 – observable inputs such as quoted prices in active markets;

§

Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

§

Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Cash and cash equivalents are measured using level 1 inputs.

Assets and Liabilities that are measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Corporation’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The fair value of financial instruments consisting of cash and cash equivalents, accounts payable and due to shareholder were estimated to approximate their carrying values based on the short-term maturity of these instruments.

Risks

Financial instruments that potentially subject the Corporation to credit risk consist principally of cash.  

Management does not believe the Corporation is exposed to significant credit risk. Management, as well, does not believe the Corporation is exposed to significant interest rate risks during the period presented in these consolidated financial statements.

Currency risks

The Corporation incurs expenditures in Canadian dollars. Consequently, some assets and liabilities are exposed to Canadian dollar foreign currency fluctuations. As at October 31, 2013, cash and cash equivalents, accounts payable and due to shareholder were all denominated in Canadian dollars.


-18-

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Equipment

Equipment is recorded at cost. Amortization is calculated using the declining balance method and at the following annual rate which is intended to amortize the cost over its useful life:

Automobile – 30%

Impairment of Long-Lived Assets

Impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. No impairments of these types of assets were recognized during the year ended October 31, 2013.

Income Taxes

The Corporation follows FASB ASC Topic 820, “Income Taxes” which requires the use of the asset and liability method of accounting for income taxes.  Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The tax consequences of most events recognized in the current year’s financial statements are included in determining income taxes currently payable. However, because tax laws and financial accounting standards differ in their recognition and measurement of assets, liabilities, equity, revenues, expenses, gains and losses, differences arise between the amount of taxable income and pre-tax financial income for a year and between the tax bases of assets or liabilities and their reported amounts in the financial statements. Because the Corporation assumes that the reported amounts of assets and liabilities will be recovered and settled, respectively, a difference between the tax basis of an asset or a liability and its reported amount in the balance sheet will result in a taxable or a deductible amount in some future years when the related liabilities are settled or the reported amounts of the assets are recovered, which gives rise to a deferred tax asset. The Corporation must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent the Corporation believes that recovery is not likely, the Corporation must establish a valuation allowance.

The Corporation has adopted FASB guidance on accounting for uncertainty in income taxes which provides a financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under this guidance, the Corporation may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance also extends to de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures.



-19-

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation

The functional currency of the Corporation’s subsidiaries is Canadian dollars (“C$”). The Corporation maintains its financial statements in United States currency. All assets and liabilities of the Corporation’s subsidiaries are translated into U.S. dollars at the exchange rate prevailing at the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the year.  The resulting translation adjustments are included in accumulated other comprehensive income.

Gains or losses resulting from transactions denominated in foreign currencies are included in net loss on the statement of operations as incurred. Exchange gains or losses arising from foreign currency transactions are included in the determination of other comprehensive income for the respective periods.

Newly Adopted Accounting Policies

In December 2011, the FASB issued new accounting guidance for disclosures about offsetting assets and liabilities which requires an entity to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Corporation adopted this guidance in fiscal year 2013 and it did not have significant impact on its results of operations, financial condition and cash flows.

New Accounting Pronouncements

In February 2013, the FASB issued new accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. Under the guidance, an entity is required to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The guidance did not change the requirements for reporting net income or other comprehensive income in the financial statements. The new guidance is effective for annual reporting periods beginning on or after December 15, 2012, and interim periods within those annual periods. The Corporation expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its results of operations, financial condition and cash flows.

In March 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2013-05, "Foreign Currency Matters (Topic 830); Parent’s Accounting for the Cumulative Translation Adjustment upon De-recognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This guidance applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. ASU No. 2013-05 is effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Corporation will adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its results of operations, financial condition and cash flows.



-20-

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry Forward, a Similar Tax Loss, or a Tax Credit Carry Forward Exists. This new guidance provides specific financial statement presentation requirements of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. The guidance states that an unrecognized tax benefit in those circumstances should be presented as a reduction to the deferred tax asset. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The Corporation will adopt this guidance in fiscal year 2014 and does not believe that the adoption of this guidance will have a material impact on its financial statements.

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Corporation’s financial statements upon adoption.

NOTE 3 – BUSINESS ACQUISITION

On November 16, 2012, the Corporation entered into a share exchange agreement whereby the Corporation would acquire all of the issued and outstanding shares of Dino Energy Investments, Ltd. (“Dino”).  The agreement was completed on January 23, 2012 where the Corporation acquired all issued and outstanding shares of Dino in exchange for 65,000,000 common shares and 45,000,000 preferred shares of the Corporation (Note 1).

The acquisition constitutes a reverse merger and is accounted for in accordance with Accounting Standards Codification 805 – Business Combinations, as the former shareholders of Dino now control 94% of the outstanding and issued voting shares of the Corporation and therefore, Dino is deemed to be the acquirer for accounting purposes.  Under these accounting principles, the post-merger financial statements represent the historical assets and liabilities of Dino and the legal equity structure of the Corporation.

The allocation of purchase consideration for net liabilities of $9,895 at January 23, 2013 is as follows:

Cash

$

16,221

Sales tax receivable

 

925

Property and equipment

 

1,820

Accounts payable

 

(8,446)

Due to shareholder

 

(20,415)

Net liabilities acquired

$

(9,895)

NOTE 4 – DUE TO SHAREHOLDER

As at October 31, 2013, the Corporation was obligated to a shareholder for funds advanced to the Corporation for working capital. The advances are unsecured and no interest rate or payback schedule has been established.



-21-

 

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 5 – CAPITAL STOCK

 

On January 23, 2013, the Corporation acquired all the outstanding shares of Dino Energy investments, Ltd. (“Dino”), a British Virgin Island Company, from Dino’s shareholders in exchange for 65,000,000 common shares and 45,000,000 preferred shares of The Corporation (Note 1 and Note 3).  As a result of the reverse acquisition, there were 78,616,000 common shares and 45,000,000 preferred shares outstanding.

 

On August 5, 2013, the Corporation issued 95,100,000 common shares as a result of conversion of 31,700,000 preferred shares.

As at October 31, 2013, there were no warrants or options outstanding.

NOTE 6 – FIRST NATION AGREEMENT

On July 20, 2012, Dino entered into an exploration right acquisition agreement (the “Exploration Agreement”) with a First Nation group in Alberta, Canada (the “First Nation”) for the exploration, development and production of hydrocarbon resources on and under the First Nation’s reserve lands.  The Exploration Agreement includes a number of conditions precedents including a deposit of $50,000 required for the negotiation, preparation and execution of the Agreement and any additional agreements.  

As part of the Exploration Agreement, Dino was required to provide an initial deposit of $10,000,000 to be held in escrow until the earlier of issuance of the lease under the Exploration Agreement or the termination of the Agreement.  This amount was revised to $2,000,000 in an amendment to the Exploration Agreement dated October 24, 2012. The Exploration Agreement was further amended in an agreement dated May 27, 2013. According to this amended agreement, the initial deposit now consists of a $2,000,000 deposit directly to the legal counsel of the First Nation and a $8,000,000 deposit to the trust account of the Corporation’s legal counsel. The Corporation has made a deposit of $150,000 and equipment toward this amount.

As part of the Exploration Agreement, the Corporation is also required to contribute up to $25,000,000 to the construction of infrastructure, housing and the community multiplex within five years of issuance of the lease under the Exploration Agreement.  No expenditures for construction have been made to date.

The amending agreement of May 27, 2013 expired on July 1, 2013.  The management of the Corporation has decided against further pursuing the project.  As a result, expenses of $210,196 in relation to the Exploration Agreement have been written off during the year.


 

 

-22-

 

 

 

 

Dino Energy Corporation (Formerly Gysan Holdings Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2013 and 2012

STATED IN US DOLLARS

 

NOTE 7 – INCOME TAXES

Income tax recovery differs from that which would be expected by applying the effective rates to net income (loss) as follows:

  

October 31,

2013


October 31,

2012

Net loss

$

(427,769)

$

(56,939)

Statutory and effective rates

 

34%

 

34%

Income tax recovery at effective rate

$

(145,441)

$

(19,360)

Effect of non-deductible amounts and other

 

(51,096)

 

-

Effect of rate differential between jurisdictions

 

54,150

 

19,360

Change in valuation allowance

 

142,387

 

-

Corporate income tax recovery recognized in the accounts

$

-

$

-

The Corporation has Canadian income tax loss carry forwards of approximately $240,000 which will commence to expire in 2032 if not utilized.  In addition, in the Corporation has American income tax loss carry forwards of approximately $242,000 which expire in the years from 2031 to 2033 if not fully utilized.

The components of the net deferred tax assets are:

 

 


October 31,

2013

 


October 31,

2012

Non-capital losses carried forward

$

142,387

$

-

Valuation allowance

 

(142,387)

 

-

Deferred tax assets  recognized

$

-

$

-

Potential benefits of income tax losses have not been recognized in these consolidated financial statements  because the Corporation cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward in future years.

NOTE 8 – SUBSEQUENT EVENT

As of November 1, 2013, the Corporation has wound up its whole owned subsidiary, Dino Energy Investments, Ltd.  All assets and liabilities of the subsidiary have been assumed by the Corporation.


 



 

-23-




 

 

 

 

ITEM 9. CHANGES IN AND DISAREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 


Not Applicable

 

ITEM 9A. CONTROLS AND PROCEDURES

 


Disclosure Controls and Procedures

 

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, the Company’s principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation these officers have concluded that as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were effective and were adequate to insure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act were recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms.

 

Management’s Report on Internal Control over Financial Reporting

 

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting is supported by written policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations which may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 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.

 

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of October 31, 2013. In making this assessment, management used the framework set forth in the report entitled “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission, or (“COSO”). The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of October 31, 2013.

 


-24-

 

 

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting during the quarter ended October 31, 2013 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

 

Regulatory Statement

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. As a “Smaller Reporting Company” management’s report was not subject to attestation by the Company’s registered public accounting firm.

 

ITEM 9B. OTHER INFORMATION

 


None


PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

The following table sets forth certain information regarding the Company's directors and executive officers as of October 31, 2013:

 

MANAGEMENT

The following table provides information concerning our officers and directors.


Name and Address

Age

Position(s)

Eric David Lawson

68

President, CEO, Director

Vanleo Y.W. Fung

34

Secretary, CFO, Treasurer, Director

Solomon Auyeung

73

Director

Trent Sittler

41

Director

 

-25-

 

 

The directors named above serve for one year terms or until their successors are elected or they are re-elected at the annual stockholders’ meeting. Officers hold their positions at the pleasure of the board of directors, absent any employment agreement, none of which currently exists or is contemplated. There is no arrangement or understanding between any of our directors or officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current directors to the Company’s board.

Eric David Lawson will serve as the President, CEO and a Director of the Company. From 1997 to 2004, Mr. Lawson has held executive positions at a number of privately held resort development companies, including serving as the CFO of Rancho Banderez, S.A. de C.V., a resort located in Puerto Vallarta, Mexico and the President and CEO of Costa Maya Reef Resort Ltd., a resort located in Belize, Central America. In April, 2004, Mr. Lawson joined Sage Funding Inc. as the President of the asset management firm located in Calgary, Alberta, Canada. Subsequently, in January, 2012, Mr. Lawson became the President and Director of Sunchaser Properties Inc., a privately held real estate investment and development company. Mr. Lawson received a Bachelor of Science degree in 1968 and was awarded a Master of Education degree in 1969 from the University of Oregon, located in Eugene, Oregon.

Vanleo Y. W. Fung will serve as the Treasurer, Secretary, CFO, and a Director of the Company. Mr. Fung graduated from the University of Calgary in 2002 with a Bachelor of Economics degree. From July, 2002 to June, 2006, Mr. Fung served as an account manager or executive for a number of IT companies in Hong Kong where he was responsible for the regions of Hong Kong, Taiwan, and Macau. In the summer of 2007, Mr. Fung joined World Financial Group located in Calgary, Alberta, Canada and was working as an Associate in providing financial planning services. In January, 2012, Mr. Fung joined Kachak Investment, Inc., a marketing company for residential energy services in Alberta, Canada where he is responsible for the training and development of marketing consultants.

 

Solomon Auyeung will serve as a Director of the Company. From 1978 to 1988, Mr. Auyeung served as a Technologist in various departments of Dome Petroleum Ltd., participating in a number of extensive reservoir engineering studies. From 1988 to 1989, Mr. Auyeung joined Amoco Canada Petroum Ltd. as Staff Production Technologist in managing petroleum reservoir developments in the regions of Western Canada. From 1989 to 1991, Mr. Auyeung became a Consultant with Amoco Canada Petroleum Ltd. with responsibilities in petroleum asset management. Mr. Auyeung received a Bachelor of Education degree from the University of Saskatchewan in 1974 and a Diploma of Mechanical Engineering Technology in 1978.

 

Trent Sittler will serve as a Director of the Company. Mr. Sittler graduated from the University of Saskatchewan in April, 1997 with a Bachelor of Science degree in Mechanical Engineering. Mr. Sittler began his career as a Design Engineer, and later moved into various managerial positions with Bonnybrook Custom Steel Forms Ltd. from November, 1998 to October 2005. In January, 2006, Mr. Sittler joined GE Oil & Gas ESP (Canada) Ltd. working as Surface Pumping Systems Business Development Manager in developing the Surface Pumping (SPS) Division business in Western Canada.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

As of the date of this annual report, management is not aware of any material legal proceedings which involve this Company.  

OTHER SIGNIFICANT EMPLOYEES

No other significant employees exist at the current time.

 

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FAMILY RELATIONSHIPS

No family relationship exists between or among any of our officers and directors.

AUDIT COMMITTEE

The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert at this time, because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.

CODE OF BUSINESS CONDUCT AND ETHICS

On August 10, 2010, we adopted a Code of Business Conduct and Ethics applicable to our officers, including our principal executive officer, principal financial officer, principal accounting officer or controller and any other persons performing similar functions. Our Code of Business Conduct and Ethics was designed to deter wrongdoing and promote honest and ethical conduct, full, fair and accurate disclosure, compliance with laws, prompt internal reporting and accountability to adherence to our Code of Business Conduct and Ethics. A copy of our Code of Business Conduct and Ethics will be posted on our website whenever we set it up. Our Code of Business Conduct and Ethics will be provided free of charge by us to interested parties upon request. Requests should be made in writing and directed to the Company at the following address: Unit 7, 833-1st Avenue N.W., Calgary, AB T2N 0A4.

NOMINATING COMMITTEE

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

DIRECTOR INDEPENDENCE

The Company is not quoted on a national securities exchange, and therefore it is not subject to any director independence requirements. None of the Company’s present directors qualify as an independent director pursuant to Rule 10A-3 promulgated under the Exchange Act, due to their affiliation with the Company as employees or officers.

DIRECTORS

All of our directors hold office until the next annual meeting of the shareholders of the Company, or until their successors have been qualified after being elected or appointed.  Officers serve at the discretion of the board of directors.

Section 16(a) Beneficial Ownership Reporting Compliance.

 

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Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended October 31, 2013, the Company does not believe that any person required to make filings under Section 16(a) during such fiscal year failed to file such reports or filed such reports late.

 


ITEM 11.  EXECUTIVE COMPENSATION

 

The following is a summary of the compensation we paid to our President and executive officers for the period from our inception until the year ended October 31, 2013.


ANNUAL COMPENSATION

LONG TERM COMPENSATION

Awards

Payouts


Name

Position

Period

Ended

Salary

($)

Bonus

($)

Other Annual

Compensation

($)

Restricted

Stock

Awards

($)

Securities

Underlying/

Option SARS

LTIP

Payouts

All Other

Compensation

          

Grace

Weisgerber

President

10/31/2013

10/31/2012

0

0

0

0

0

12,055

0

0

0

0

0

0

0

12,055

          

Winnie W.L. Fung

Secretary

10/31/2013

10/31/2012

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Eric Lawson

President

10/31/2013

0

0

0

0

0

0

0

Vanleo Y.W. Fung

Treasurer

10/31/2013

0

0

0

0

0

0

0

DIRECTOR COMPENSATION

We do not have a formal compensation plan for our directors.

EMPLOYMENT CONTRACTS

We do not have any employment agreements with our employees or officers.

 

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STOCK OPTIONS AND WARRANTS

We have no outstanding stock options or warrants.

OPTION/SAR GRANTS TABLE

There have been no stock options/SARS granted under our stock option plans to executive officers and directors, since we have no such plans in effect.

AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE

There have been no exercises of stock options/SAR by executive officers.

LONG-TERM INCENTIVE PLAN AWARDS

There have been no long-term incentive plan awards made by the Company.

RE-PRICING OPTIONS

 

We have not re-priced any stock options.

 

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding the beneficial ownership of our common stock as of October 31, 2013, by (i) each person who is known by us to own beneficially more than 5% of our outstanding common stock; (ii) each of our officers and directors; and (iii) all of our directors and officers as a group.

Name and Address of Beneficial Owner

 

Amount and Nature of

Beneficial Ownership

 

Percent of Class(1)(2)


Grace Weisgerber

3710 Sage Hill Dr., N.W.

Calgary, AB Canada T3R 1E7

 


3,315,000


 


1.91%


Winnie W. L. Fung

Unit 7

833 1st Avenue, N.W.

Calgary, AB Canada  T2N 0A4

 


3,185,000


 


1.83%


Alan Chan

3023 28th Street, S.W.

Calgary, AB Canada  T3E 2J4

 



2,000,000


 



1.15%

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Cuiling Liao

148 Santana Court NW

Calgary, AB Canada T3K 3L8

 

30,000,000


 

17.26%



Lisa Wong

308 Holmes Avenue

Toronto, ON, Canada M2M 4N3

 

                  50,000,000

 

28.78%


Treasury Elite, Ltd

Unit H, 1/F, Tower 7, Metro City, Phase 2

Tseung Kwan O, Hong Kong

 

 

 

65,000,000

Common

5,766,667

Preferred

 

 

 

37.42%


12.81%



Vanleo Y.W. Fung(3)

3023 – 28th Street S.W.

Calgary, Alberta, Canada T3E 2J4

 


50,000

 


.02%


Trent Sittler(3)

149 Panamount Drive NW

Calgary, Alberta, Canada T3K 5L7

 


60,000

 


.03%

All officers and directors as a group (1 persons)


 

60,000


 

.03%


(1)

Applicable percentage ownership for the common stock is based on 173,716,000 shares of common stock outstanding as of October 31, 2013. There are no outstanding options, warrants, rights, rights to acquire the common stock or preferred stock.

(2)

Applicable percentage ownership for Class A Preferred Stock is based on 13,300,000 shares of Class A Preferred Stock which is currently outstanding.  Each Class A Preferred Share has three votes, and each share is convertible into three shares of the Company’s Common Stock.  There were no options, warrants, rights, conversions, privileges, or similar rights to acquire the Class A Preferred Stock of the Company outstanding as of October 31, 2013.

 

 

 

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CHANGES IN CONTROL

We are not aware of any arrangements that may result in a change in control of the Company.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, ANDDIRECTOR INDEPENDENCE.

Although we have not adopted formal procedures for the review, approval or ratification of transactions with related persons, we adhere to a general policy that such transactions should only be entered into if they are on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties and their approval is in accordance with applicable law. Such transactions require the approval of our board of directors.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

MNP, LLP is the Company’s independent registered public accountant.

Audit Fees

The aggregate fees billed by MNP, LLP for professional services rendered for the audits of our annual financial statements in connection with statutory and regulatory filings were $7,000 for the year ended October 31, 2013.

Audit-Related Fees

The aggregate fees billed by MNP, LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements were $ 8,500 for the year ended October 31, 2013.

Tax Fees

The aggregate fees billed by MNP, LLP for professional services for tax compliance, tax advice and tax planning were $3,750 for the year ended October 31, 2013.

All Other Fees

The aggregate fees billed by MNP, LLP for other products and services were $3,500 for the year ended October 31, 2013.

Pre-approval Policy

We do not currently have a separate audit committee. The services described above were approved by our Board of Directors, which serves as our audit committee.

 

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ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

 

Index to Exhibits

  

Exhibit  

Description  

 

 

*3.1

Certificate of Incorporation

  

*3.2

Amended and Restated Certificate of Incorporation

  

*3.3

Bylaws

  

*4.0

Stock Certificate

  

14

Code of Ethics

  

31.1

Certification of the Company‘s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant‘s Annual Report on Form 10-K for the year ended October 31, 2013.

31.2

Certification of the Company‘s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant‘s Annual Report on Form 10-K for the year ended October 31, 2013.

32.1

Certification of the Company‘s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.2

Certification of the Company‘s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

______________________________________

 

*Filed as an exhibit to the Company‘s registration statement on Form S-1, as filed with the Securities and Exchange Commission on March 9, 2012, and incorporated herein by this reference.

 

SIGNATURES

 

In accordance with 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.

 

 

 

 

 

DINO ENERGY CORPORATION

  

 

  

Dated: February 13,  2014

By:  

/s/ Eric Lawson

 

Name: 

 Eric Lawson

 

Title:  

 President

 

In accordance with the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

 

 

Title

 

 

Date

 

 

 

 

 

 

 

 

 

/s/  Eric Lawson

 

 

 President/CEO/Director

 

 

February 13, 2014

 

 

 

 

 

 

 

 

 

        

/s/ Vanleo Y.W. Fung

 

 

 Secretary/CFO/Treasurer/Director

 

 

February 13, 2014

 

        
        
        

 


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