Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2014
Commission file number 000-53707
TRIDENT BRANDS INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
200 South Executive Drive, Suite 101
Brookfield, WI 53005
(Address of principal executive offices, including zip code)
(262)789-6689
(Telephone number, including area code)
Resident Agents of Nevada
711 S. Carson Street, Suite 4
Carson City, NV 89701
(Name and Address of Agent for Service)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.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 [ ]
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,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 28,000,000 shares as of October 13,
2014
ITEM 1. FINANCIAL STATEMENTS
The un-audited financial statements for the quarter ended August 31, 2014
immediately follow.
2
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Balance Sheet
--------------------------------------------------------------------------------
(unaudited) (audited)
As of As of
August 31, November 30,
2014 2013
---------- ----------
ASSETS
CURRENT ASSETS
Cash $ 34,315 $ 131
Prepaid 1,049 --
---------- ----------
TOTAL CURRENT ASSETS 35,364 131
---------- ----------
TOTAL ASSETS $ 35,364 $ 131
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 15,159 $ 11,385
Accrued Liability 26,215 --
Loan Payable - Related Party 41,776 49,483
Loan Payable - Third Party 300,000 --
---------- ----------
TOTAL CURRENT LIABILITIES 383,150 60,868
---------- ----------
TOTAL LIABILITIES 383,150 60,868
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 300,000,000 shares
authorized; 28,000,000 shares issued and outstanding
as of May 31, 2014 and November 30, 2013 28,000 28,000
Additional paid-in capital 47,000 47,000
Deficit accumulated during exploration stage (422,785) (135,738)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (347,785) (60,738)
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 35,364 $ 131
========== ==========
See Notes to Financial Statements
3
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
November 5, 2007
Three Months Three Months Nine Months Nine Months (inception)
Ended Ended Ended Ended through
August 31, August 31, August 31, August 31, August 31,
2014 2013 2014 2013 2014
------------ ------------ ------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
TOTAL REVENUES -- -- -- -- --
Professional Fees 34,599 9,941 67,932 16,685 128,087
Mineral Expenditures -- -- -- -- 24,540
General & Administrative Expenses 7,293 2,574 12,648 23,459 63,895
Marketing, Selling & Warehousing Expenses 26,357 -- 49,757 -- 49,757
Management Salary 21,000 -- 35,000 -- 35,000
Director's Fees 18,000 -- 30,000 -- 30,000
Rent 2,496 500 5,496 500 26,696
Interest Expense 4,882 -- 6,215 -- 6,215
------------ ------------ ------------ ------------ ------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES (114,627) (13,014) (207,047) (40,644) (364,190)
OTHER INCOME (EXPENSES)
Royalty Fees (30,000) -- (80,000) -- (80,000)
Other Income -- -- -- -- 123
Gain on Note Payable Forgiveness -- -- -- -- 21,281
------------ ------------ ------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSES) (30,000) -- (80,000) -- (58,596)
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (144,627) $ (13,014) $ (287,047) $ (40,644) $ (422,786)
============ ============ ============ ============ ============
BASIC EARNING (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.01) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 28,000,000 28,000,000 28,000,000 28,000,000
============ ============ ============ ============
See Notes to Financial Statements
4
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Statement of Cash Flows (unaudited)
--------------------------------------------------------------------------------
November 5, 2007
Nine Months Nine Months (inception)
Ended Ended through
August 31, August 31, August 31,
2014 2013 2014
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (287,047) $ (40,644) $ (422,786)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Pre-paid & Deposits (1,049) -- (1,049)
Accounts Payable and Accrued Liabilities 29,989 7,346 41,373
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (258,108) (33,298) (382,461)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Loan Payable - Related Party (7,707) 29,016 41,776
Loan Payable - Third Party 300,000 300,000
Issuance of common stock -- -- 75,000
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 292,293 29,016 416,776
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 34,185 (4,283) 34,315
CASH AT BEGINNING OF PERIOD 131 4,503 --
---------- ---------- ----------
CASH AT END OF PERIOD $ 34,315 $ 220 $ 34,315
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
========== ========== ==========
Income Taxes $ -- $ -- $ --
========== ========== ==========
See Notes to Financial Statements
5
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Notes to Financial Statements
August 31, 2014
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Trident Brands
Incorporated have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission, and should be read in conjunction with the
audited financial statements and notes thereto contained in Trident's Form 10-K
filed with SEC. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year. Notes to
the financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for fiscal 2013 as reported in the
Form 10-K have been omitted.
NOTE 2. GOING CONCERN
As of August 31, 2014, Trident has not generated revenues and has accumulated
losses since inception. The continuation of Trident as a going concern is
dependent upon the continued financial support from its shareholders, its
ability to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. These factors raise substantial doubt
regarding Trident's ability to continue as a going concern.
NOTE 3. LOAN PAYABLE - RELATED PARTY
As of August 31, 2014, there is a loan payable due to Mark Holcombe, sole
officer and director of the Company, for $41,776 that is non-interest bearing
with no specific repayment terms.
NOTE 4. LOAN PAYABLE - THIRD PARTY
On July 21, 2014, Trident obtained an additional short term loan of $100,000
from 1169822 Ontario Limited. The loan bears interest at the rate of 8.0% per
annum, payable on maturity, calculated on the principle amount of the loan
outstanding. Unless paid earlier, the loan and accrued and unpaid interest shall
be payable in full on June 21, 2015. As of August 31, 2014, the full amount of
the loan is outstanding and the accrued interest expense is $882. The short term
loan of $200,000 from Rene Arseneault obtained on May 1, 2014 is still
outstanding and the accrued interest expense is $5,333.
NOTE 5. WARRANTS AND OPTIONS
On May 5, 2014, Trident granted an aggregate of 2,875,000 stock options to
directors, officers, employees and consultants of the Company pursuant to
Trident's 2013 Stock Plan. The stock options are exercisable for five years from
the date of grant at exercise prices of $0.75 per share for shares vesting 12
months from the date of issuance, $1.00 per share for shares vesting 24 months
from the date of issuance and $1.50 for shares vesting 36 months from the date
of issuance. Of the 2,875,000 stock options granted, Trident granted 1,125,000
stock options to its president, Michael Brown; 300,000 stock options to each of
its directors, Donald MacPhee, Scott Chapman, Mark Holcombe; 150,000 stock
options to its controller, Peter Salvo; and 350,000 stock options to each of its
special advisors, Robert Campbell and Karen Arsenault.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing and actual results may differ materially from historical
results or our predictions of future results.
OUR CORPORATE HISTORY AND BACKGROUND
Sandfield Ventures Corp. was incorporated in the state of Nevada in 2007. Its
primary business was resource exploration in that state. Management of our
company decided to take on a new direction for the business. The new strategy is
to focus on consumer goods - primarily branded nutrition products and
ingredients. On June 12, 2013 the Board of Directors approved an agreement and
plan of merger with a wholly-owned subsidiary called Trident Brands
Incorporated. At that point it affected the name change from Sandfield Ventures
Corp. to Trident Brands Incorporated.
On July 9, 2013, our company's board of directors approved a resolution to
effect a 4 for 1 forward split. Upon effect of the forward split, our authorized
capital increased from 75,000,000 to 300,000,000 shares of common stock and
correspondingly, our issued and outstanding shares of common stock will be
increased from 7,000,000 to 28,000,000 shares of common stock, all with a par
value of $0.001
On August 1, 2013, our directors approved the adoption of a 2013 Stock Option
Plan which permits us to issue up to 4,200,000 shares of its common stock to
directors, officers, employees and consultants of our company upon the exercise
of stock options granted under the 2013 Stock Option Plan.
On December 23, 2013, we took on an agreement with Everlast World's Boxing
Headquarters Corp., International Brand Management & Licensing. Through this
agreement, we received a 15 year license to market and sell products in the
nutritional foods and supplements category under the Everlast(R) brand.
Trident's licensing agreement enables it to introduce a portfolio of nutritional
products in categories such as supplements and functional foods using this brand
mark.
Effective March 21, 2014, we appointed the following individuals as officers and
directors:
* Donald MacPhee was appointed to our Board of Directors, Chairman of
the Audit Committee and as a member of the Corporate Governance
Committee.
7
* Scott Chapman was appointed to our Board of Directors, Chairman of the
Corporate Governance Committee, member of the Audit Committee and
member of the Compensation Committee.
* Michael Browne was appointed as our President, Chief Financial
Officer, Treasurer and Secretary.
* Peter Salvo was appointed as our Controller.
Mark Holcombe resigned as Chief Executive Officer, President, Secretary and
Treasurer, and has been appointed as Chairman of the Board of Directors and
Chairman of the Compensation Committee. Mr. Holcombe's resignation as Chief
Executive Officer, President, Secretary and Treasurer was not the result of any
disagreement with our company regarding its operations, policies, practices or
otherwise.
On May 5, 2014, we entered into a Product Development Agreement with Continental
Ingredients Canada Inc. with respect to our plan to commercialize nutritional
supplements and functional food and beverage products for sales in North
America.
Under the Agreement, we have engaged Continental Ingredients on an exclusive
basis to provide services for the development, manufacturing and supply of our
products for a period of five years commencing on May 5, 2014 and ending on May
5, 2019, such term to renew automatically for a further 12 months unless either
party delivers written termination notice six months prior to the expiration of
the initial term or renewal period.
On May 5, 2014, we appointed Robert Campbell and Karen Arseneault as special
advisors.
Also on May 5, 2014, we granted an aggregate of 2,875,000 stock options to
directors, officers, employees and consultants of our company pursuant to our
2013 Stock Plan. The stock options are exercisable for five years from the date
of grant at exercise prices of $0.75 per share for shares vesting 12 months from
the date of issuance, $1.00 per share for shares vesting 24 months from the date
of issuance and $1.50 for shares vesting 36 months from the date of issuance. Of
the 2,875,000 stock options granted, we granted:
1. 1,125,000 stock options to our President, Chief Financial Officer,
Treasurer and Secretary, Michael Browne;
2. 300,000 stock options to each of our directors, Donald MacPhee, Scott
Chapman, Mark Holcombe;
3. 150,000 stock options to its controller, Peter Salvo; and
4. 350,000 stock options to each of our special advisors, Robert Campbell
and Karen Arseneault.
Our administrative office is located at 200 South Executive Drive, Suite 101,
Brookfield, Wisconsin, 53005. Our fiscal year end is November 30.
8
RESULTS OF OPERATIONS
We are still in our development stage and have generated no revenues to date.
We incurred operating expenses of $144,627 and $13,014 for the three months
ended August 31, 2014 and 2013, respectively. These expenses consisted of
general operating expenses, rent and professional fees incurred in connection
with the day to day operation of our business and the preparation and filing of
our required reports with the U.S. Securities and Exchange Commission.
We incurred operating expenses of $287,047 and $40,644 for the nine months ended
August 31, 2014 and 2013, respectively. These expenses consisted of general
operating expenses, rent and professional fees incurred in connection with the
day to day operation of our business and the preparation and filing of our
required reports with the U.S. Securities and Exchange Commission. Our net loss
from inception (November 5, 2007) through August 31, 2014 was $422,786.
We have sold $75,000 in equity securities to date. We sold $15,000 in equity
securities to our officer and director and $60,000 to independent investors.
The following table provides selected financial data about our company for the
quarter ended August 31, 2014.
Balance Sheet Data: 8/31/14
------------------- -------
Cash $ 34,315
Total assets $ 35,364
Total liabilities $ 383,150
Shareholders' equity $(347,785)
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at August 31, 2014 was $34,315 with $383,150 in outstanding
liabilities. Of the liabilities there is a $41,776 note payable to Mark
Holcombe, a director, for funds he has loaned the Company.
We also have two short term loans. The first of $200,000 from Rene Arseneault,
which bears interest at the rate of 8.0% per annum, payable on maturity,
calculated on the principle amount of the loan outstanding. Unless paid earlier,
the loan and accrued and unpaid interest shall be payable in full on April 30,
2015. As of August 31, 2014, the full amount of the loan is outstanding and the
accrued interest expense is $5,333.
The second of $100,000 from 1169822 Ontario Limited, which bears interest at the
rate of 8.0% per annum, payable on maturity, calculated on the principle amount
of the loan outstanding. Unless paid earlier, the loan and accrued and unpaid
interest shall be payable in full on June 21, 2015. As of August 31, 2014, the
full amount of the loan is outstanding and the accrued interest expense is $882.
9
Management believes the current funds available to the company will not be
sufficient to fund our operations for the next twelve months. The company is
currently exploring bridge financing options. We are a development stage company
and have generated no revenue to date.
PLAN OF OPERATION
CASH REQUIREMENTS
Over the next 12 months we intend to carry on business as a food and nutrition
product company. We anticipate that we will incur the following operating
expenses during this period:
Estimated Funding Required During the Next 12 Months
Expense Amount ($)
------- ----------
Professional fees 156,000
Rent 9,600
Sales, Travel and Marketing 280,000
Other general administrative expenses 60,000
Royalty obligations(1) 177,500
--------
Total $683,100
========
----------
(1) Due to the Trade Mark License Agreement of June 4, 2013 that was assigned
to us in the assignment Agreement dated December 23, 2013.
We will require funds of approximately $683,100 over the next twelve months to
operate our business. These funds may be raised through equity financing, debt
financing, or other sources, which may result in further dilution in the equity
ownership of our shares. There is no assurance that we will be able to maintain
operations at a level sufficient for an investor to obtain a return on their
investment in our common stock. Further, we may continue to be unprofitable.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not anticipate the purchase or sale of any plant or significant equipment
during the next 12 months.
GOING CONCERN
There is significant doubt about our ability to continue as a going concern.
As shown in the accompanying financial statements, we have incurred net losses
of $422,786 since inception. This condition raises substantial doubt as to our
ability to continue as a going concern. In response to these conditions, we may
raise additional capital through the sale of equity securities, through an
offering of debt securities or through borrowings from financial institutions or
10
individuals. The financial statements do not include any adjustments that might
be necessary if we are unable to continue as a going concern.
Our objective is the creation of value through strategic investments high growth
early stage consumer brands businesses. We intend to focus on control
investments in companies within the segment/sectors which are currently
experiencing long term growth. Our goal is to provide our shareholders with
private equity like returns through strategic investments in multiple branded
platforms. The platforms we will be focusing on are:
* Brand Licenses or Consolidated Licenses
* Consumer hard and soft goods
* Functional Food and Beverage
* Life Science technology that have applications in consumer products
* Natural and Organic food and beverage Intellectual Property and/or
licenses in recognized brand platforms
INVESTMENT STRATEGY
Trident will seek to acquire majority and/or control positions through common
and preferred equity, senior secured, unsecured, and convertible debt in
organizations who meet our investment hurdles. Through our management and
directors vast expertise in both the consumer branded segment and investment
experience, we seek to provide our shareholders with near term value and
liquidity. Through strategic investment and controlled organic growth, Trident
Brands will seek to provide their investments with solid short and long term
returns and yields.
The Company strategic objective is:
* Make strategic controlled investments in high growth companies
* Merge brands/business lines into larger multi-national Companies
* Build and grow strategic brands organically
* Mitigate risk by creating a diverse portfolio of companies in the
growth sectors listed above.
COMPANIES & STRATEGIC PARTNERSHIPS
EVERLAST NUTRITION
Trident Brands finalized documentation to acquire Sports Nutrition Products Inc.
the company has obtained a 15 year exclusive North American license for
Everlast's functional and nutritional product brand segment from IBML (a
worldwide leader in Brand licensing). This transaction closed in December 2013.
PRODUCT PRODUCTION
Trident Brands is currently in negotiations with vendors to outsource the
manufacture of the products currently under the Everlast brand. These vendors
would be responsible for the private label production of our products.
11
PRODUCT DEVELOPMENT
On May 5, 2014, Trident Brands Incorporated (the "Company") entered into a
Product Development Agreement with Continental Ingredients Canada Inc.
("Continental Ingredients") with respect to the Company's plan to commercialize
nutritional supplements and functional food and beverage products for sales in
North America (the "Agreement").
Under the Agreement the Company has engaged Continental Ingredients on an
exclusive basis to provide services for the development, manufacture and supply
of the Company's products for a period of five years commencing on May 5, 2014
and ending on May 5, 2019, such term to renew automatically for a further 12
months unless either party delivers written termination notice six months prior
to the expiration of the initial term or renewal period.
Continental Ingredients will submit for approval by the Company, proposals for
the production of any products. Once product specifications have been approved
by the Company, the parties will enter into separate production agreements for
the manufacturing, pricing and distribution of the products (the "Production
Agreements"). The pricing of the products under the Production Agreements will
result in a gross margin to Continental Ingredients of between 20 to 30 percent,
as more particularly described in the Agreement.
The Company will remain the sole owner or licensee of all intellectual property
rights associated with the products.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is accumulated and communicated to our management, including our
principal executive and financial officer, recorded, processed, summarized and
12
reported within the time periods specified in SEC rules and forms relating to
our company, particularly during the period when this report was being prepared.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter ended August 31, 2014 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Chief Executive Officer
31.2 Sec. 302 Certification of Chief Financial Officer
32.1 Sec. 906 Certification of Chief Executive Officer
32.2 Sec. 906 Certification of Chief Financial Officer
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
----------
* Document is incorporated by reference and can be found in its entirety in
our Registration Statement on Form SB-2, SEC File Number 333-148710, at the
Securities and Exchange Commission website at www.sec.gov.
13
SIGNATURES
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.
October 13, 2014 Trident Brands Incorporated
/s/ Mike Browne
------------------------------------
By: Mike Browne
(President, Chief Financial Officer,
Chief Executive Officer,
Treasurer & Secretary)
/s/ Peter Salvo
------------------------------------
By: Peter Salvo
(Controller)
/s/ Mark Holcombe
------------------------------------
By: Mark Holcombe
(Director & Chairman of the Board)
/s/ Donald MacPhee
------------------------------------
By: Donald MacPhee
(Director)
/s/ Scott Chapman
------------------------------------
By: Scott Chapman
(Director)
1
