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| EX-31 - PROSALUTIS HOLDINGS INC. | exhibit312.htm |
| EX-9 - PROSALUTIS HOLDINGS INC. | fsdec312016.htm |
UNITED STATES
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 December 31, 2016
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from_________ to____________
Commission file number: 00054082
PROSALUTIS HOLDINGS INC.
British Columbia, Canada
N/A
State or other jurisdiction of
(I.R.S. Employer
incorporation or organization
Identification No.)
2306 - 980 Seymour Street, Vancouver, British Columbia, V6B 1B5
(Address of principal executive offices)
778-654-3221
(Registrant’s telephone number)
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 15(d) of the Exchange Act from their obligations under those Sections. Yes [ ] No [x]
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 [ ]
No [x]
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ]
No [x]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the 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.
Yes [ ]
No [x]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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 Act).
Yes [ ]
No [x]
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 price of such common equity, as of the last business day of registrant’s most recently completed fiscal quarter - $153,684.
The number of shares outstanding of the registrant’s common stock as of December 31, 2016 was 102,798,063.
Documents Incorporated By Reference
None
Item 1.
BUSINESS
The Company acquired the rights, title and interest in intellectual property relating to a drug named SPT1000, a natural metabolite which has a strong anti-inflammatory effect on the brain. This agreement was completed on March 15, 2016. The rights involved the issuance of 100,000,000 shares of common stock at $.001 per share.
Item 1A Risk Factors
RISKS THAT MAY AFFECT FUTURE RESULTS
We are a relatively young company with no operating history
Since we are a young company, it is difficult to evaluate our business and prospects. At this stage of our business operations, even with our good faith efforts, potential investors have a high probability of losing their investment. Our future operating results will depend on many factors, including the ability to generate sustained and increased demand and acceptance of our website, the level of our competition, and our ability to attract and maintain key management and employees. While management believes their estimates of projected occurrences and events are within the timetable of their business plan, there can be no guarantees or assurances that the results anticipated will occur.
We expect to incur net losses in future quarters
If we do not achieve profitability, our business may not grow or operate. We may not achieve sufficient revenues or profitability in any future period. We will need to generate revenues from the sales of advertising on our website, or take steps to reduce operating costs to achieve and maintain profitability. Even if we are able to generate revenues,
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we may experience price competition that will lower our gross margins and our profitability. If we do achieve profitability, we cannot be certain that we can sustain or increase profitability on a quarterly or annual basis.
We will require additional funds to operate in accordance with our business plan
We may not be able to obtain additional funds that we will require. We do not presently have adequate cash from operations or financing activities to meet our short term or long-term needs. If unanticipated expenses, problems, and unforeseen business difficulties occur, which result in material delays, we will not be able to operate within our budget. If we do not achieve our internally projected sales revenues and earnings, we will not be able to operate within our budget. If we do not operate within our budget, we will require additional funds to continue our business. If we are unsuccessful in obtaining those funds, we cannot assure you of our ability to generate positive returns to the Company. Further, we may not be able to obtain the additional funds that we require on terms acceptable to us, if at all. We do not currently have any established third-party bank credit arrangements. If the additional funds that we may require are not available to us, we may be required to curtail significantly or to eliminate some or all of our development, publishing, or sales and marketing programs.
If we need additional funds, we may seek to obtain them primarily through equity or debt financings. Such additional financing, if available on terms and schedules acceptable to us, if available at all, could result in dilution to our current stockholders and to you. We may also attempt to obtain funds through arrangement with corporate partners or others. Those types of arrangements may require us to relinquish certain rights to our intellectual property.
We are highly dependent on our President and CEO.
We are largely dependent on Mauricio Gonzalez, our President and CEO, for specific proprietary technical knowledge and the Company market knowledge. Our success may also depend on our ability to attract and retain other qualified management and sales and marketing personnel. We compete for such persons with other companies and other organizations, some of which have substantially greater capital resources than we do. We cannot give you any assurance that we will be successful in recruiting or retaining personnel of the requisite caliber or in adequate numbers to enable us to conduct our business.
If capital is not available to us to expand our business operations, we will not be able to pursue our business plan.
We will require a minimum of $1,500,000 to complete our future obligations. Cash flows from operations, to the extent available, will be used to fund these expenditures. We intend to seek additional capital from loans from our shareholder and from public and private equity offerings. Our ability to access capital will depend on reaching certain milestones in our business plan. It will also be dependent upon the status of the capital markets at the time such capital is sought. Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected. In such event, it would not be likely that investors would obtain a profitable return on their investments or a return of their investments.
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Risks Relating to Our Common Stock
We are controlled by a principal stockholder.
Innovestica LP is our largest stockholder, holding beneficially, as of December 31, 2016, approximately sixty-eight (68%) percent of our outstanding shares. Through its share ownership, the stockholder is in a position to control the registrant and to elect our entire board of directors.
We expect to be subject to SEC regulations and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and other trading market rules, are creating uncertainty for public companies.
We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest appropriate resources to comply with evolving standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
Our annual and quarterly results of operations will fluctuate, and these fluctuations could cause our stock price to decline.
Our quarterly and annual operating results are likely to fluctuate in the future. These fluctuations could cause our stock price to decline. The nature of our business involves variable factors, such as the timing of any license agreement, the timing of launch and market acceptance of our product, and the timing of the research, development and regulatory submissions of our products in development that could cause our operating results to fluctuate. The forecasting of the timing and amount of sales of our products is difficult due to market uncertainty and the uncertainty inherent in seeking FDA and other necessary approvals for our product. As a result, in some future quarters or years, our clinical, financial or operating results may not meet the expectations of securities analysts and investors, which could result in a decline in the price of our stock.
We do not have a history of paying dividends on our common stock.
Historically, we have not declared and paid any cash dividends on our common stock. We intend to retain all of our earnings for the foreseeable future to finance the operation and expansion of our business. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.
Any future sale of a substantial number of shares included in our current registration statement could depress the trading price of our stock, lower our value and make it more difficult for us to raise capital.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the then current trading price of our common stock. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the then current trading price of our common stock.
At this time there is no trading volume in our common stock
At the present time, until all of our SEC filings are made and brought up to date, there is a stop signal on the trading of our stock and as such there is no market for existing stockholders to sell their shares into the market.
ITEM 2. DESCRIPTION OF PROPERTY.
We currently maintain our executive offices 2306 - 980 Seymour Street, Vancouver, British Columbia, V6B 1B5 which are provided to us at free of charge at this time.
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ITEM 3. LEGAL PROCEEDINGS.
The company is not party to any legal proceedings
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is listed on the OTC Markets – Pink Sheets under the Symbol GFGVF. The stock is currently not trading.
DIVIDENDS
The Company has not paid any cash dividends since its inception and does not contemplate paying any in the foreseeable future. It is anticipated that earnings, if any, will be retained for the operation of the Company's business.
PENNY STOCK STATUS
If and when the Company begins to trade again, we believe that the price of the stock will be such that, it will be a "penny stock," as the term is defined by Rule 3a51-1 of the Securities Exchange Act of 1934. This makes it subject to reporting, disclosure and other rules imposed on broker-dealers by the Securities and Exchange Commission requiring brokers and dealers to do the following in connection with transactions in penny stocks:
1. Prior to the transaction, to approve the person's account for transactions in penny stocks by obtaining information from the person regarding his or her financial situation, investment experience and objectives, to reasonably determine based on that information that transactions in penny stocks are suitable for the person, and that the person has sufficient knowledge and experience in financial matters that the person or his or her independent advisor reasonably may be expected to be capable of evaluating the risks of transactions in penny stocks. In addition, the broker or dealer must deliver to the person a written statement setting forth the basis for the determination and advising in highlighted format that it is unlawful for the broker or dealer to effect a transaction in a penny stock unless the broker or dealer has received, prior to the transaction, a written agreement from the person. Further, the broker or dealer must receive a manually signed and dated written agreement from the person in order to effectuate any transactions is a penny stock.
2. Prior to the transaction, the broker or dealer must disclose to the customer the inside bid quotation for the penny stock and, if there is no inside bid quotation or inside offer quotation, he or she must disclose the offer price for the security transacted for a customer on a principal basis unless exempt from doing so under the rules.
3. Prior to the transaction, the broker or dealer must disclose the aggregate amount of compensation received or to be received by the broker or dealer in connection with the transaction, and the aggregate amount of cash compensation received or to be received by any associated person of the broker dealer, other than a person whose function in solely clerical or ministerial.
4. The broker or dealer who has effected sales of penny stock to a customer, unless exempted by the rules, is required to send to the customer a written statement containing the identity and number of shares or units of each such security and the estimated market value of the security. The imposition of these reporting and disclosure requirements on a broker or dealer make it unlawful for the broker or dealer to effect transactions in penny stocks on behalf of customers. Brokers or dealers may be discouraged from dealing in penny stocks, due to the additional time, responsibility involved, and, as a result, this may have a deleterious effect on the market for the company's stock.
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ITEM 6 SELECTED FINANCIAL DATA
The information required by Item 301 of Regulation S-K is not required since the Company is a small company reporting issuer.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to fully establish our proposed websites and our ability to conduct business with Palm, Inc. and be successful in selling products. Although we believe the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the report will prove to be accurate.
GENERAL
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related footnotes for the year ended December 31, 2016 elsewhere in this Annual Report on Form 10-K. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.
Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted with the International Financial Reporting Standards as issued by the International Accounting Standards Board. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements relate to the allowance for doubtful accounts. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in this Annual Report on Form l0-K for the year ended December 31, 2016.
Results of Operations
For the year ended December 31, 2016, the Company earned $11,345 of which $11,345 was from interest.
General and administrative expenses for the year ended December 31, 2016 included $174,007 paid to outside consultants mainly related to negotiating the Technology Agreement that was signed in March 2016.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Since the Company is not trading at this time and the fact that it is a smaller reporting issuer, this information will be omitted from this filing.
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ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference to the consolidated financial statements and accompanying notes set forth in this Annual Report on Form 10-K.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A CONTROLS AND PROCEDURES
The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2016, the end of the period covered by this Annual Report on Form 10-K. Based upon such evaluation, our Chief Executive Officer has concluded that our disclosure controls and procedures were effective as of such date.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016, based on the guidelines established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements for external reporting purposes in accordance with International Accounting Standards Board, and that our receipts and expenditures are being made only in accordance with authorizations of our management and/or directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Based on that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2016.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
ITEM 9B OTHER INFORMATION
None
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
Our officers and directors are as follows:
Mauricio Gonzalez
Director, President, CEO
Garth Jensen
Director, CFO
Frank Pillich
Director
Relevant Education and Experience
Mauricio Gonzalez
Mauricio Gonzalez has over 20 years of capital markets experience. He has served as an officer, director and consultant to private and public technology and resource firms at all stages of corporate development. Mr. Gonzalez has been involved in the debt and equity financing of micro and small-cap issuers listed on American, Canadian and European exchanges.
Garth Jensen
Garth has over thirty years experience in a variety of financial roles including most recently contract positions as CFO of six publicly traded companies listed in Toronto, Frankfurt and on NASDAQ. Prior to establishing a financial consulting practice, Garth was V.P. & Treasurer at Imperial Life and Treasurer at Ralston Purina Canada.
A former banker, Garth served as the V.P. International Capital Markets at First National Bank of Chicago (Canada) and Senior Manager, Capital Markets, Bank of Nova Scotia.
Garth has also been a part-time professor at the University of Guelph, Laurentian University and Ryerson University teaching Corporate Finance and four southern Ontario colleges instructing in Economics, International Finance, International Law, Commercial Law and Statistics over the last twenty years.
Garth has written articles for magazines and trade papers on Foreign Exchange Hedging, Cash Management, Investment/Borrowing Strategies, as well as participating in articles major daily newspapers on derivatives/hedging and cash management.
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Garth has his LL.M. with Merit in Finance and Banking Law, a Postgraduate Diploma with Merit in Commercial and Corporate law, a Postgraduate Certificate with Merit in International Business Law, a M.Sc. in Financial Economics, all from the University of London. He has completed level two of the three-year program of the CFA designation. Garth holds FCSI (Fellow of the Canadian Securities Institute) and FMA (Financial Management Advisor) designations. He also has a B.A. in Economics and a B.Sc. as well as completed a variety of investment industry courses through the Canadian Securities Institute and the NASD in the U.S.
Frank Pillich
Mr. Pillich is a public relations consultant out of Switzerland, and is responsible for overseeing all areas of company
Communications including investor relations, corporate communications and internal communications.
Mr. Pillich has managed the last 15 years strategic financial communications programs for clients in the professional services, financial services, and media and entertainment sectors. In addition, Mr. Pillich has advised on
High profile M&A, IPOs, joint ventures and bankruptcies. Mr. Pillich’s broad communications expertise includes proxy communications, shareholder activism, succession planning, debt refinancing and crisis communications.
CODE OF ETHICS
We have not yet adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions, since we have been focusing our efforts on obtaining financing for the company. We expect to adopt a code by the end of the current fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to us, or written representations that no Form 5 filings were required, we believe that during the fiscal period ended December 31, 2016, there was compliance with all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners.
ITEM 11 EXECUTIVE COMPENSATION
No other officers or directors received compensation during the year ended December 31, 2016.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
None of the officers or directors own any stock in the Company.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
For the audited fiscal period ended December 31, 2016, our principal accountants have billed approximately $7,500.
AUDIT-RELATED FEES
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There were no fees billed for assurance and related services reasonably related to the performance of the audit or review of our financial statements outside of those fees disclosed above under "Audit Fees".
TAX FEES
There were no fees billed during this fiscal period for tax compliance, tax advice, and tax planning services.
ALL OTHER FEES
There were no fees billed for services by our principal accountant, other than those disclosed above.
PRE-APPROVAL POLICIES AND PROCEDURES
Prior to engaging our accountants to perform a particular service, our board of directors obtains an estimate for the service to be performed.
PART IV
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(1)
31.1
32.1
CERTIFICATION
SIGNATURES
In 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.
PROSALUTIS HOLDINGS INC.
Dated: June 28, 2017
s/s Mauricio Gonzales
Mauricio Gonzales, CEO
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
s/s Mauricio Gonzales
Mauricio Gonzales, CEO
June 28, 2017
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