Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(AMENDMENT NO. 2)
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended November 30, 2014
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 000-51736
DOMINOVAS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 20-5854735
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1395 Chattahoochee Avenue, Atlanta, GA 30318
(Address of principal executive offices) (Zip Code)
Tel: (800) 679-1249
(Registrant's telephone number, including area code)
(former address-302, 1912 Enterprise Way, Kelowna, BC V1Y 9S9)
(formerly Western Standard Energy Corp.)
Securities registered pursuant to Section 12(g) of the Act
Common Stock, par value $0.001 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [X] No [ ]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
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" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act
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 registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X]
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: 90,545,125 shares of common
stock outstanding as of November 30, 2014.
DOCUMENTS INCORPORATED BY REFERENCE
Not Applicable
Explanatory Note: This Amendment No. 2 on Form 10-Q/A is being filed to, among
other things, update the financial statements to reflect the accurate treatment
of the lease payments, retract the equity method treatment of the Pro Eco
acquisition, and to restate the asset utilizing cost method of accounting.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 12
ITEM 4T. CONTROLS AND PROCEDURES 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 1A. RISK FACTORS 13
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4. MINE SAFETY DISCLOSURES 14
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS 14
SIGNATURES 16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Dominovas Energy Corporation
(formerly Western Standard Energy Corp.)
CONSOLIDATED BALANCE SHEETS
November 30, August 31,
2014 2014
------------ ------------
(unaudited)
(Restated -
Note 7)
ASSETS
CURRENT ASSETS
Cash $ 1,049 $ 5,096
Prepaids 18,566 31,941
------------ ------------
19,615 37,037
------------ ------------
$ 19,615 $ 37,037
============ ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 293,346 $ 281,815
Accrued liabilities 274,598 162,950
Convertible debt 333,000 --
Notes payable 50,000 50,000
------------ ------------
947,944 494,765
------------ ------------
Long-Term Liabilities
Lease inducement 76,998 51,640
------------ ------------
1,024,942 546,405
------------ ------------
STOCKHOLDERS' DEFICIT COMMON STOCK
Authorized:
200,000,000 common shares with par value of $0.001
Issued and outstanding:
90,545,125 (August 31, 2014-90,525,125) common shares 90,545 90,525
ADDITIONAL PAID IN CAPITAL 5,960,314 5,955,334
OBLIGATION TO ISSUE SHARES 21,200 --
DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE (7,077,386) (6,555,227)
------------ ------------
(1,005,327) (509,368)
------------ ------------
$ 19,615 $ 37,037
============ ============
The accompanying notes are an integral part of these financial statements
3
Dominovas Energy Corporation
(formerly Western Standard Energy Corp.)
CONDOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months Three months
ended ended
November 30, November 30,
2014 2013
------------ ------------
(Restated -
Note 7)
EXPENSES
Audit and accounting fees $ -- $ 19,435
Consulting fees 165,000 21,000
Financing fees 165,000 --
Foreign exchange (gain) loss (113) 1,891
Interest expense -- 1,104
Investor communications and transfer agent 3,487 --
Regulatory filing fees 1,643 --
Legal fees 15,855 --
Office and general administration 49,448 11,983
Salaries and management fees 116,000 --
Travel and entertainment 5,839 1,000
------------ ------------
NET LOSS $ (522,159) $ (56,413)
============ ============
LOSS PER SHARE - BASIC AND DILUTED $ (0.01) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
OUTSTANDING - BASIC AND DILUTED 90,525,125 33,941,993
============ ============
The accompanying notes are an integral part of these financial statements
4
Dominovas Energy Corporation
(formerly Western Standard Energy Corp.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three months Three months
ended ended
November 30, November 30,
2014 2013
---------- ----------
(Restated -
Note 7)
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ 522,159 $ 56,403
Non-cash items included in net loss:
Interest expense -- 1,104
Consulting fees 165,000 --
Financing fees 165,000 --
Prepaid expenses 13,375 --
Accounts payable and accrued liabilities 123,179 33,656
Lease inducement 25,358 --
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (30,247) (21,643)
---------- ----------
FINANCING ACTIVITIES
Issuance of common Stock 5,000 --
Notes payable -- 58,000
Subscription received 21,200 --
Convertible debt repaid -- (5,000)
---------- ----------
NET CASH FROM FINANCING ACTIVITIES 26,200 53,000
---------- ----------
INCREASE (DECREASE) IN CASH (4,047) 31,357
Cash, beginning 5,096 (76)
---------- ----------
CASH, ENDING $ 1,049 $ 31,281
========== ==========
SUPPLEMENTARY INFORMATION
CASH PAID FOR:
Interest $ -- $ --
Income tax $ -- $ --
========== ==========
The accompanying notes are an integral part of these financial statements
5
Dominovas Energy Corporation
(formerly Western Standard Energy Corp.)
NOTES TO FINANCIAL STATEMENTS
November 30, 2014
1. BASIS OF PRESENTATION
Dominovas Energy Corporation ("us", "we" or "our") is a Nevada corporation with
an inception date of October 16, 2003. We are in the business of developing fuel
cell / alternative energy projects internationally. Our principal executive
office is located at 1395 Chattahoochee Avenue in Atlanta, GA, 30318. Our
telephone number is 800-679-1249.
The following interim unaudited financial statements have been prepared in
accordance with United States Generally Accepted Accounting Principles for
interim financial information and with the rules and regulations of the
Securities and Exchange Commission ("SEC").
Accordingly these financial statements do not include all of the disclosures
required by Generally Accepted Accounting Principles for complete financial
statements. These interim unaudited financial statements should be read in
conjunction with the Company's audited financial statements for the year ended
August 31, 2014. In the opinion of management, the interim unaudited financial
statements furnished herein include all adjustments, all of which are of a
normal recurring nature, necessary for a fair statement of the results of the
interim period presented. Operating results for the three month period ended
November 30, 2014 are not necessarily indicative of the results that may be
expected for the year ending August 31, 2015.
GOING CONCERN
These consolidated financial statements have been prepared in accordance with US
GAAP on a going concern basis, which contemplated the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business. The Company incurred a net loss of $522,159 for the period ended
November 30, 2014 [2013 - $56,413] and at November 30, 2014 had a deficit
accumulated of $7,077,386. The Company has no revenue and negative working
capital of $928,329. Further losses are anticipated in the development of its
business and there can be no assurance that the Company will be able to achieve
or maintain profitability. The continuing operations of the Company and the
recoverability of the carrying value of its assets depends upon the ability of
the Company to obtain necessary financing to fund its on-going working capital
requirements and fuel cell deployment activities, and upon future profitable
operations. The accompanying financial statements do not include any adjustments
related to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result from the outcome
of this uncertainty. There is no assurance that equity or debt capital will be
available as necessary to meet the Company's capital requirements or, if the
capital is available, that it will be on terms acceptable to the Company. The
issuances of additional equity securities by the Company may result in
significant dilution in the equity interests of its current shareholders.
Obtaining commercial loans, assuming those loans would be available, will
increase the Company's liabilities and future cash commitments. If the Company
is unable to obtain financing in the amounts and on terms deemed acceptable, the
business and future success may be adversely affected.
2. RECENT ACCOUNTING PRONOUNCEMENTS
Recent pronouncements with future effective dates are either not applicable or
are not expected to be significant to the financial statement of the Company.
3. COMMON STOCK
Authorized: 200,000,000 common shares.
On April 14, 2010, the Company adopted a stock option plan allowing the
Company's directors to grant up to 5,000,000 stock options pursuant to the terms
and conditions of the stock option plan. As of November 30, 2014 no options have
been granted.
6
During the period ended November 30, 2014, the Company issued 20,000 shares at
$0.25 per share for gross proceeds of $5,000.
During the period ended November 30, 2014, the Company received subscriptions of
$17,500 to issue 70,000 shares at $0.25 per share. The shares were issued on
February 28, 2015.
During the period ended November 30, 2014, the Company received subscriptions of
$3,700 to issue 10,572 shares at $0.35 per share. The shares were issued on
February 28, 2015.
4. RELATED PARTY TRANSACTIONS
During the three months ended November 30, 2014, the Company incurred wages of
$23,250 (November 30, 2013 - $Nil), $22,500 (2013 - $Nil), $26,000 (November 30,
2013 - $Nil) and $44,250 (November 30, 2013 - $Nil) to the Executive Vice
President of Business Operations, the Executive Vice President of Fuel Cell
Operations, the Chief Operating Officer and the President and Chief Executive
Office of the Company, respectively. As of August 31, 2014, unpaid wages of
$274,598 (August 31, 2014 - $162,950) was owing to the related parties and is
included in accrued liabilities.
As of November 30, 2014, the Company owed notes payable of $50,000 (August 31,
2014 - $50,000) to a former director of the Company. The notes are non-interest
bearing, unsecured and due on demand.
5. CONVERTIBLE DEBT
On October 27, 2014, the Company issued Kodiak Capital Group ("Kodiak") a
convertible note in the amount of $165,000 (see exhibit 10.10) in exchange for
consulting services rendered. The note is non-interest bearing, is due on
October 27, 2015, and is unsecured. The Company may repay the loan at any time
prior to October 27, 2015 without incurring any penalties.
Kodiak may convert the entire loan amount into shares of the Company's common
stock, at a conversion price for each share equal to the lowest closing bid
price for the common stock for the thirty trading days ending on the trading day
immediately before the conversion date multiplied by 50% at any time up to April
28, 2015.
As the value of the shares under the conversion option is greater than the face
value of the debt, the value of the shares, should the conversion option be
exercised, of $330,000 has been recognized as a liability in these financial
statements. Financing fees of $165,000 was recorded on the transaction.
6. COMMITMENTS
On April 28, 2014, the Company entered into a lease agreement for office,
warehouse and production space in Atlanta, GA for a term of five years. Under
the agreement, the Company is committed to rent payments of a minimum of $
13,374 per month commencing November 1, 2014.
Under the agreement, the Company is committed to the following monthly rent
payments:
Dates Monthly Amount
----- --------------
Though October 2015 $ 13,374
November 1, 2015 to October 31, 2016 $ 13,776
November 1, 2016 to October 31, 2017 $ 14,189
November 1, 2017 to October 31, 2018 $ 14,615
November 1, 2018 to October 31, 2019 $ 15,053
Under the agreement, the Company also has to incur $125,000 in leasehold
improvements by September 30, 2014. If the expenses are not incurred by
September 30, 2014, the total lease will be in default. As of the date of these
financial statements, the Company has not yet incurred the required expenditures
and the lease is in default.
7
On March 1, 2014, the Company entered into an employment agreement with the
President and Chief Executive Officer of the Company. Under the agreement, the
Company will pay him an annual salary of $177,000 for 18 months with a 25%
increase after 18 months. The agreement will be in effect for 3 years.
On March 1, 2014, the Company entered into an employment agreement with the
Chief Operating Officer of the Company. Under the agreement, the Company will
pay him an annual salary of $104,000 for 18 months with a 25% increase after 18
months. The agreement will be in effect for 3 years.
On March 1, 2014, the Company entered into an employment agreement with the
Executive Vice President of Operations of the Company. Under the agreement, the
Company will pay him an annual salary of $93,000 for 18 months with a 25%
increase after 18 months. The agreement will be in effect for 3 years.
On May 1, 2014, the Company entered into an employment agreement with the
Executive Vice President of Fuel Cell Operations of the Company. Under the
agreement, the Company will pay him an annual salary of $112,000. The agreement
will be in effect for 5 years.
7. RESTATEMENT OF CURRENT YEAR FINANCIAL STATEMENTS
During the period ended November 30, 2014, management identified a potential
default in a lease agreement which indicated that the Company would permanently
cease to use the premises; therefore an accrual was made to recognize the losses
under the onerous contract. Subsequent to the period ended November 30, 2014, it
was determined that the accrual was unnecessary as the Company has not abandoned
the lease and are still using the premises. A lease inducement has also been
recognized, representing the rental discount received during the year.
For the financial statements for the period ended November 30, 2014, management
used the equity method to account for its investment in Pro Eco Energy Corp
("Pro Eco"); however, because the company did not have the ability to exercise
significant influence over Pro Eco and because the fair value of the shares is
not easily determinable, management subsequently recognized that the cost method
would be more appropriate.
The net effect of these adjustments are that assets decreased by $207,045 and
liabilities decreased by $761,709.
As previously
reported Change Restated
-------- ------ --------
CONSOLIDATED BALANCE SHEET:
Investment in Pro Eco $ 207,045 $ (207,045) $ --
Total assets $ 226,660 $ (207,045) $ 19,615
Lease inducement $ -- $ 76,998 $ 76,998
Accrued liabilities $ 1,113,305 $ (838,707) $ 274,598
Deficit $(7,632,050) $ 554,664 $(7,077,386)
Total liabilities $ 1,786,651 $ (761,709) $ 1,024,942
Total shareholders' deficit $(1,559,991) $ 554,664 $(1,005,327)
CONSOLIDATED STATEMENT OF OPERATIONS:
Income from investment in Pro Eco $ 14,139 $ (14,139) $ --
Office and general
administration $ (16,442) $ (38,732) $ (55,174)
Net loss $ (469,288) $ (52,871) $ (522,159)
Loss per share $ (0.01) $ -- $ (0.01)
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following discussion should be read in conjunction with our financial
statements and the related notes that appear elsewhere in this interim report.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward looking statements. Factors that could cause or
contribute to such differences include those discussed below and elsewhere in
this interim report on Form 10-Q.
Our interim financial statements are stated in United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
Since we are a development stage company, there is no assurance that a
commercially viable business will be identified in the near term. Our plan of
operation is to seek for opportunities in the green and renewable energy
industry.
LIQUIDITY
ANTICIPATED CASH REQUIREMENTS
For the three months ended November 30, 2014, we recorded a net operating loss
of $522,159. As of November 30, 2014, we had cash of $1,049. We do not have
sufficient funds for working capital and will need to obtain further financing.
Our financial condition as of November 30, 2014 and 2013 and the results of
operations and cash flows for the three months then ended are summarized as
follows:
WORKING CAPITAL
Our working capital position as of November 30, 2014 compared to November 30,
2013 and the cash flows for the three months then ended are summarized below:
3 months Ended Nov 30,
2014 2013
---------- ----------
Current Assets $ 19,615 $ 34,437
Current Liabilities (947,944) (447,013)
Working Capital (Deficiency) $ (928,329) $ (412,576)
The increase in our working capital deficiency was primarily due to an increase
in convertible debt associated with the financing arrangement.
CASH FLOWS
3 months Ended Nov 30,
2014 2013
---------- ----------
Net cash used in Operating Activities $ (30,247) $ (21,643)
Net cash used in Investing Activities $ -- $ --
Net cash provided by Financing Activities $ 26,200 $ 53,000
Increase in Cash during the Period $ (4,047) $ 31,357
Cash, Beginning of Period $ 5,095 $ (76)
Cash, End of Period $ 1,049 $ 31,281
9
RESULTS OF OPERATIONS
The following is a summary of our results of operations for the three months
ended November 30, 2014 and 2013:
3 months Ended Nov 30,
2014 2013
---------- ----------
Audit and accounting fees $ -- $ 19,435
Consulting fees 165,000 21,000
Financing fees 165,000 --
Foreign exchange (gain) loss (113) 1,891
Interest expense -- 1,104
Investor communications and transfer agent 3,487 --
Regulatory filing fees 1,643 --
Legal fees 15,855 --
Office and general administration 49,448 11,983
Salaries and management fees 116,000 --
Travel and entertainment 5,839 1,000
---------- ----------
NET LOSS $ (522,159) $ (56,413)
========== ==========
REVENUE
We have not earned any revenues since our inception and we do not anticipate
earning revenues until such time as we manufacture and deploy RUBICON(TM) fuel
cell power plants under Power Purchase Agreements.
EXPENSES
Our operating expenses for the three months ended November 30, 2014 compared to
the same period in 2013 increased by the net amount of $465,746 primarily due to
salary expenses, and fees associated with the Company's financing arrangement.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements and related notes are presented in accordance with
Generally Accepted Accounting Principles in the United States of America ("US")
and are expressed in US dollars. The Company is a development stage company as
defined by Statement of Financial Accounting Standard ("SFAS") No. 7,
"Accounting and Reporting by Development Stage Enterprises" and has not realized
any revenues from its planned operations to date.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
Company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and the accrual of costs and
expenses that are readily apparent from other sources. The actual results
experienced by the Company may differ materially from the Company's estimates.
To the extent there are material differences, future results may be affected.
10
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts payable, notes
payable and convertible debentures. It is management's opinion that the Company
is not exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximates their carrying values due to the relatively short maturity of these
instruments.
FOREIGN CURRENCY TRANSLATION
The functional and reporting currency of the Company is the United States
dollar. Monetary assets and liabilities denominated in foreign currencies are
translated into United States Dollars at the period-end exchange rates.
Non-monetary assets and liabilities are translated at the historical rates in
effect when the assets were acquired or obligations incurred. Transactions
occurring during the period are translated at rates in effect at the time of the
transaction. The resulting foreign exchange gains and losses are included in
operations.
INCOME TAXES
Deferred tax assets and liabilities are recorded for temporary differences
between the tax basis of assets and liabilities, and the reported amounts in the
consolidated financial statements using the statutory tax rates in effect for
the year when the reported amount of the asset or liability is recovered or
settled, respectively. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the results of operations in the period
that includes the enactment date. A valuation allowance is recorded to reduce
the carrying amounts of deferred tax assets to the amount that is more likely
than not to be realized. For each tax position taken or expected to be taken in
a tax return, the Company determine whether it is more likely than not that the
position will be sustained upon examination based on the technical merits of the
position, including resolution of any related appeals or litigation. A tax
position that meets the more likely than not recognition threshold is measured
to determine the amount of benefit to recognize. The tax position is measured at
the largest amount of benefit that is greater than 50% likely of being realized
upon settlement.
LOSS PER SHARE
The Company computes net loss per share of both basic and diluted loss per share
("LPS") on the face of the statement of operations. Basic LPS is computed by
dividing the net loss available to common shareholders by the weighted average
number of outstanding common shares during the period. Diluted LPS gives effect
to all potentially dilutive common shares outstanding during the period,
including convertible debt, stock options and warrants, using the treasury stock
method. The computation of diluted LPS does not assume conversion, exercise or
contingent exercise of securities that would have an anti-dilutive effect on
LPS.
STOCK-BASED COMPENSATION
The Company has adopted the fair value recognition policy, whereby compensation
expense is recognized for all share-based payments based on the fair value at
monthly vesting dates, estimated in accordance with the provisions of SFAS 123R.
All transactions in which goods and services are the consideration received for
the issuance of equity instruments are accounted for based on fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. Equity instruments issued to Advisory
Board members and the cost of the services received as consideration are
measured and recognized based on the fair value of the equity instruments
issued.
11
On April 14, 2010, our shareholders approved our 2010 Equity Compensation Plan.
Under the 2010 Plan, options may be granted to our directors, officers,
employees and consultants as determined by our board of directors. Pursuant to
the 2010 Plan, we reserved for issuance up to 5,000,000 shares of our
outstanding common stock under the 2010 plan. However no options have been
granted as of November 30, 2014 and therefore no stock-based compensation has
been recorded to date for stock options.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent pronouncements with future effective dates are either not applicable or
are not expected to be significant to the financial statement of the Company.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial position, revenues and expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4T. 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, as amended, we are required to maintain and our management
is required to evaluate the effectiveness of our Company's disclosure controls
and procedures (as defined in Rules 13a-15 (e) and 15d-15(e) of the Exchange
Act). Our management with the participation of our principal executive officer
and principal financial officer evaluated the effectiveness of our 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 Quarterly
report on Form 10-Q. Based on this evaluation, our management determined that
our Company's disclosure controls and procedures were effective as of November
30, 2012.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our Company's
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include controls and procedures designed to ensure that information required to
be disclosed in our Company's reports filed under the Exchange Act is
accumulated and communicated to our principal executive officer and our
principal accounting officer, as appropriate, to allow timely decisions
regarding required disclosure.
Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues, if any, within
our Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
our last fiscal quarter that have materially affected or are reasonably likely
to materially affect, our internal control over financial reporting.
The term internal control over financial reporting is defined as a process
designed by, or under the supervision of, our principal executive and principal
12
financial officer, or persons performing similar functions, and effected by our
board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of our financial reporting and the
preparation of our financial statements for external purposes in accordance with
Generally Accepted Accounting Principles and includes those policies and
procedures that:
1. pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our
assets;
2. provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles, and that our receipts
and expenditures are being made only in accordance with authorizations
of our management and directors; and,
3. provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on our financial statements.
CERTIFICATIONS
Certifications with respect to disclosure controls and procedures and internal
control over financial reporting under Rules 13a-14(a) or 15d-14 of the Exchange
Act are attached to this quarterly report on Form 10-Q.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
Company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial stockholder, is an
adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On November 12, 2012, the Company issued 2,500,000 shares of common stock in
exchange for conversion of $3,125 of debt.
On November 12, 2012, the Company issued 30,769,857 shares of common stock at
$0.00125 per share for gross proceeds of $41,587 which was used for general
working capital.
On November 27, 2012, the Company issued 480,000 common shares at $0.25 per
share for gross proceeds of $120,000 which was used for general working capital.
On December 1, 2013, the Company issued 1,000,000 shares to an officer of the
Company for accounting services rendered. The fair value of the shares is
$10,000 (Note 6).
On December 1, 2013, the Company issued 1,000,000 shares to a director of the
Company for consulting services rendered. The fair value of the shares is
$10,000 (Note 6).
On December 1, 2013, the Company issued 2,250,000 shares to directors of the
Company for directors' fees. The fair value of the shares is $22,500 (Note 6).
On December 6, 2013, the Company issued 3,016,666 shares at $0.001 per share for
gross proceeds of $30,167.
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On December 15, 2013, the Company issued 4,000,000 Company shares for the
acquisition of 41% of Pro Eco Energy Ltd. The fair value of the shares is
$198,788 (Note 3).
On December 20, 2013, the Company issued 3,000,000 shares to settle debt of
$75,000 owing to an officer of the Company and to the President and CEO of the
Company. The fair value of the shares was $30,000. The gain on the settlement of
the debt of $45,000 has been recorded as additional paid in capital (Note 6).
On January 22, 2014, the Company issued 1,385,000 shares at $0.01 per share for
gross proceeds of $13,850.
On February 20, 2014, the Company acquired 100% of Dominovas Energy LLC in
exchange for 45,000,000 of the Company's common shares. The fair value of the
shares issued is $450,000 (Note 8).
On February 20, 2014, a director of the Company cancelled 4,495,734 shares owned
by the President and CEO of the Company. The value of the shares is $4,496.
On May 15, 2014, the Company issued 468,000 shares at $0.25 per share for gross
proceeds of $117,000.
On August 31, 2014, the Company issued 60,000 shares at $0.25 per share for
gross proceeds of $15,000.
On October 17, 2014, the Company issued 20,000 shares at $0.25 per share for
gross proceeds of $5,000.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
None
ITEM 5. OTHER INFORMATION
During 2010, the Company adopted a stock option plan known as the 2010 Equity
Compensation Plan, where up to 5,000,000 options may be granted. The plan was
approved by the shareholders of the Company at special meeting of the
shareholders held on April 14, 2010. We have not granted any stock options under
the plan as of May 31, 2014.
Effective February 20, 2014, Dallas Gray resigned as our President, Chief
Executive Officer and Chief Financial Officer. As a result of the resignation,
we appointed Neal Allen to the Board of Directors and as our new President,
Chief Executive Officer, Interim Chief Financial Officer and Chief Accounting
Officer. Mr. Allen was also elected as Chairman of the Board of Directors.
Effective February 20, 2014, we appointed Spero Plavoukos to the Board of
Directors. Effective December 2, 2013, we appointed Darren Jacklin to the Board
of Directors.
ITEM 6. EXHIBITS
Exhibits required by Item 601 of Regulation S-K:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation. (attached as an exhibit to our Registration
Statement on Form SB-2, filed on November 2, 2005).
3.2 Bylaws (attached as an exhibit to our Registration Statement on Form
SB-2, filed on November 2, 2005).
3.3 Articles of Merger (attached as an exhibit to our current report on
Form 8-K filed on June 28, 2006).
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3.4 Certificate of Change dated June 8, 2006 (attached as an exhibit to our
Registration Statement on Form S-1 filed on July 28, 2014).
3.5 Certificate of Change dated August 27, 2007 (attached as an exhibit to
our Registration Statement on Form S-1 filed on July 28, 2014).
3.6 Articles of Merger dated August 27, 2007 (attached as an exhibit to our
Registration Statement on Form S-1 filed on July 28, 2014).
3.7 Articles of Merger dated November 28, 2007 (attached as an exhibit to
our Registration Statement on Form S-1 filed on July 28, 2014).
3.8 Certificate of Amendment to Articles of Incorporation filed February
24, 2014 (attached as an exhibit to our current report on Form 8-K
filed on February 28, 2014)
10.1 Equity Purchase Agreement, dated as of February 20, 2014 among Western
Standard Energy Corp., Dominovas Energy, LLC and the Members of
Dominovas Energy, LLC 2014 (attached as an exhibit to our current
report on Form 8-K filed on February 28, 2014).
10.2 Employment Agreement of Neal Allen dated February 20, 2014 2014
(attached as an exhibit to our current report on Form 8-K filed on
February 28, 2014).
10.3 Employment Agreement of Michael Watkins dated February 20, 2014 2014
(attached as an exhibit to our current report on Form 8-K filed on
February 28, 2014).
10.4 Equity Purchase Agreement between the Company and Kodiak Capital Group,
LLC (attached as an exhibit to our current report on Form 8-K filed on
October 21, 2014).
10.5 Registration Rights Agreement between the Company and Kodiak Capital
Group, LLC (attached as an exhibit to our current report on Form 8-K
filed on October 21, 2014).
10.6 Note by the Company to Kodiak Capital Group, LLC (attached as an
exhibit to our Registration Statement on Form S-1 filed on November 13,
2014).
31.1 Certification Statement pursuant to Section 302 of the Sarbanes- Oxley
Act of 2002
32.1 Certification Statement pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
101 Interactive Data Files pursuant to Rule 405 of Regulation S-T.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed n accordance with Section 13
or 15(d) of the Exchange Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DOMINOVAS ENERGY CORPORATION
/s/ Neal Allen
--------------------------------------------
Neal Allen President, Treasurer and Director
Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer
Dated: March 31, 2015
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