Attached files
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-K
(Mark
One)
x
|
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended October 31, 2009
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from ___________ to ___________
Commission File No.
333-142658
HENYA
FOOD CORP.
(Name of
small business issuer in its charter)
DELAWARE
|
74-3191757
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer Identification No.)
|
26
Kendall St., New Haven, Connecticut
|
06512
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(905)
709-4775
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Exchange Act:
|
|
Title
of each class registered:
|
Name
of each exchange on which registered:
|
None
|
None
|
Securities
registered under Section 12(g) of the Exchange Act:
|
|
Common
Stock, par value $.001
(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 o 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 Exchange Act. Yes o 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 report(s)), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T
(§ 229.405 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 o No o
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 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.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
See definitions of “large accelerated filer,” “accelerated filer,” and smaller
reporting companies in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
|
o
|
Accelerated
filer
|
o
|
|
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o
|
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 o No
x
Revenues
for year ended October 31, 2009: $73,789
Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of January 29, 2010, was: $510.35.
Number of
shares of the registrant’s common stock outstanding as of January 29, 2010 was:
39,601
Documents
Incorporated by Reference: None.
TABLE
OF CONTENTS
PART
I
|
|
||
ITEM 1.
|
DESCRIPTION
OF BUSINESS
|
1
|
|
ITEM
2.
|
DESCRIPTION
OF PROPERTY
|
5
|
|
ITEM
3.
|
LEGAL
PROCEEDINGS
|
6
|
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
6
|
|
PART
II
|
|||
ITEM
5.
|
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
6
|
|
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
7
|
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
7
|
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
11
|
|
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
|
12
|
|
ITEM
9A(T).
|
CONTROLS
AND PROCEDURES
|
12
|
|
PART
III
|
|||
ITEM
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT
|
13
|
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
14
|
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
|
15
|
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
16
|
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
17
|
|
PART
IV
|
|||
ITEM
15.
|
EXHIBITS
|
18
|
|
SIGNATURES
|
PART
I
ITEM 1. DESCRIPTION OF
BUSINESS
Business of
Issuer
General
Henya
Food Corp. (“Henya”) was incorporated on September 20, 2006 under the laws of
the State of Delaware. We were originally formed to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions and helping food distributors and food processors expand their
sales growth. We do not intend to undertake a reverse merger nor pursue any
acquisition which involves a change in control. We specialize in
Kosher, Natural and Organic foods. We are a multi-faceted products broker,
committed to helping Producers, Wholesalers and retailers improve their sales
and return on investment.
Until
February 1, 2009, Henya represented products to a variety of prospective
buyers. In particular, products represented included: smoked salmon;
salsa; condiments; meat alternatives (i.e. vegetarian, chicken and beef
products); kosher grocery products (i.e. pizza, tea, confectionary etc.).
On February 1, 2009, Henya’s commission agreement with a related party was
cancelled. On July 31, 2009, Henya’s commission agreements with another
two related parties were cancelled. The Company does not currently have any
customers.
Henry
Ender has been in the food business since 1974 and co-founded Foodfest
International in 1977. During this time frame Mr. Ender has
established working relationships with key managers and representatives of
supermarket chains, foodservice establishments, distributors, manufacturers and
processors in Canada, the United States and Israel. Mr. Ender has brought these
relationships to Henya providing an established base for future growth and
expansion. Through Mr. Ender, Henya has established working
relationships with distributors in Canada and the United States in addition to
the major supermarkets in Canada.
It is
important to build a close and active working relationship, so that the products
are given the necessary exposure. In order to ensure strong
product support we will work with brokers to plan visits to the market in the
future to make joint sales calls on buyers. The brokers have the most interest,
knowledge, and excitement in their product(s), which should be passed on to
distribution partners. Products that are carried in a limited number
of selected stores within a supermarket chain or independent stores require a
direct sales and distribution (“DSD”) distributor. When a supermarket
chain does not want to warehouse a purchased product, which is at the discretion
of the buyer, they will request that a DSD distributor be available to
distribute the product. Some markets may require that a broker and
distributor be used, while other areas can be most effectively serviced through
DSD distributors. We will assist in the selection of appropriate distributors
for niche markets, in the future.
In
general, retail stores, especially large chains, prefer to work through DSD
distributors and more so prefer to work with a full service DSD distributor
which is when the distributor delivers products store by store and services the
account. In other words, cleans the shelves or displays, merchandises
the product, hangs pricing, displays and other point of sale material and then
goes to the next account. The reason for this is because the distributor does
all the work for them and because they never run out of product. If
the distributor is set up properly, the retailer will always be fully stocked
with product at all times. Foodfest International 2000 Inc., as an example, is
both a full service DSD distributor and a DSD distributor as requested by
individual customers.
Henya
will make sure the product is on the shelf, adjust shelf space, handle
complaints, pull damaged product, rush through an unplanned order, handle any
special promotions or displays, and monitor competitor activity.
Henya
intends to enter into broker agreements with food processors to represent their
businesses in the food market, and with food distributors to procure new
products for their exclusive distribution in specific markets. We will
focus on the procurement of new products and subsequently listing of these
products in either the food service or retail sectors. (“Listing)” is the
process of obtaining approval from the buyer that they want to purchase the
product(s) offered and then completing the necessary documentation so that the
product is entered properly into the purchasers data base so that it scans the
product accurately, can be received at the purchasers’ location and can scan at
their checkout counters.
1
We will
seek to expand our broker base throughout North America, Europe, Israel and
Australia entering into co-broker agreements with established food brokers
servicing specific food channels in identified markets.
We also
intend to expand current operations through acquisitions of established food
distributors in key markets and through the investment of resources in food
processors that specialize in Kosher, Natural or Organic foods, in the
future.
Sales
and Marketing
Many
companies we currently represent and prospective companies typically have a
limited understanding of labeling requirements outside of their own countries.
This can dramatically impede their ability to sell their products in other
countries throughout the world, limiting their total market.
In the
future, we will assist, direct, manage and generally facilitate the process to
create appropriate labeling for products that we have confirmed sales orders
pending and approved packaging. We will create and develop a Private Label to be
utilized when manufacturers are unable to financially commit to labeling and we
have determined that the product has the necessary criteria to provide dramatic
sales results. We will develop sales and marketing materials necessary to
promote products to buyers. We will engage a public relations specialist to
insure that we consistently and aggressively communicate products represented in
the most professional manner to prospective customers, in the
future.
The
Kosher Market
Kosher is
a term that applies to foods that are fit for consumption by Jews in the
observance of Jewish dietary law. These dietary laws originate in the Bible and
have been observed by Jews for over 3,000 years. The laws relating to kosher
foods are detailed and intricate, but a few basics can be easily
understood.
Foods in
general can be grouped into three broad categories:
1.
|
Innocuous:
Some food items are always acceptable as kosher. Generally, these would be
foods like fruits and vegetables that are not further
processed;
|
2.
|
Kosher
when supervised: Other foods may be kosher if the ingredients and process
used meet kosher definitions and when supervised by a reliable kosher
authority;
|
3.
|
Never
Kosher: Some foods may never be kosher. Examples include shellfish and
pork, both of which are prohibited by Biblical
edict.
|
The foods
that can be kosher when supervised are those of most concern to food processors
desiring to carry kosher certification for their products. Contrary to a common
myth, a Rabbi does not “bless” a food to render it kosher. To produce a
kosher-certified product, all of the component ingredients must be kosher
certified - including any processing aids that contact the food. The equipment
on which the product will be made must be kosher as well.
In order
to identify the finished product as kosher, many certification agencies have
trademarked symbols that indicate the kosher status of a product as well as
identifying the agency certifying the food. Some products intended for use only
on the industrial market (not for retail sales) do not bear a kosher symbol and
are certified by letter instead.
In
addition, all kosher food can be grouped into three categories—meat, dairy or
parve (neutral). Kosher law prohibits the mixing of meat and milk, so foods like
cheeseburgers and chicken parmesan are unacceptable.
1.
|
Dairy
- Milk, cheese and other dairy products must come from a kosher animal in
order to be kosher. Milk derivatives like casein are considered dairy when
used in kosher foods, even though the USDA may classify them as
“non-dairy.”
|
2.
|
Meat
- Only meat and meat by-products from kosher species of animals are
permitted, and then only if they are slaughtered by a specially trained
“shochet” (ritual slaughterer). Kosher species include cattle, sheep,
chicken and turkey.
|
3.
|
Parve
- Some foods are inherently kosher in their natural state such as fresh
fruits, vegetables and grains. These foods, produced without meat or dairy
content, are designated with the parve status and may be eaten with either
dairy or meat products.
|
2
Passover Holiday
Passover
is an 8-day holiday that takes place in the spring and commemorates the Exodus
of the Jewish people from ancient Egypt. It involves a unique set of additional
kosher laws. During Passover, those who keep kosher refrain from eating leavened
products. Although kosher the rest of the year, certain grain products and their
derivatives may not be eaten during Passover. Special supervision is mandatory
for Passover production. Surprisingly, the market is not limited to the Jews who
observe the Jewish dietary laws. Many American consumers seek out kosher food
for a variety of reasons, ranging from health and quality to religious
observance. A kosher symbol means much more than adherence to Jewish dietary
laws. Kosher means quality.
THE
NATURAL/ORGANIC FOOD MARKET
The
natural food industry has undergone a significant change over the last decade.
The industry is no longer primarily made up of small, poorly organized producers
who had little interaction with the consumer.
We
believe that as the industry matured, companies who wished to remain competitive
were forced to address many facets of their organizations including the
development of new products, upgrading of equipment and facilities, investment
in market research, increased communication with consumers, and the improvement
of packaging and advertising techniques. In some cases, this has meant forming
partnerships or alliances with other natural and organic food
producers.
Although
organic sales have experienced tremendous growth in recent years, the industry
still represents a relatively small portion of total farming and food
consumption. Therefore, the organic industry has quite a way to go before it
accounts for a significant share of total food sales.
Farmers
are also being encouraged to begin farming organic products to increase incomes
as these products command higher prices than conventional crops. The premium
prices that organic foods command may be essential to maintaining the existence
of small farms in developed countries such as Canada and the United
States.
As the
natural foods industry has continued to grow and mature a significant number of
mergers and acquisitions have helped consolidate the market.
Key Factors Shaping Market
Growth
In
general, we believe that increased consumer health consciousness is the single
most important factor driving the growth of the natural and organic food
sectors. Within the United States, and internationally, consumers have become
far more aware of the quality of what they eat, the ingredients the foods
contain, and the processes that the foods go through (e.g. treatment with
pesticides, use of antibiotic drugs in animal feed, food irradiation) before
arriving at the point-of-sale.
We also
believe that increased publicity about food scares such as salmonella, listeria,
and E. coli have also aided sales of natural and organic products. However, U.S.
citizens have not reacted as negatively toward genetically modified (GM) foods
as European consumers. Industry analysts believe that U.S. consumers are more
open to the concept of GM foods because they have a higher degree of trust in
government food safety agencies than European consumers.
Packaging
has become an important factor in the success or failure of natural and organic
foods. Not only do consumers look for environmentally friendly packaging
materials, but many successful products have focused on packaging that is easy
to carry and dispose of, as consumers of these natural and organic foods tend to
be quite active.
One
factor that has hindered the growth of the organic food sector is a lack of
consistent supply. Improved distribution channels, production techniques and
growth in the number of producers has helped reduce the number of instances of
retailers running out of a product. However, we believe this problem has not
been completely eliminated and retailers continue to seek out producers who can
not only supply a new or innovative product, but those who can supply a product
consistently.
3
Advertising
Not
surprisingly, since most companies are relatively small, advertising
expenditures have also been small. Even large companies have generally relied
upon product packaging or point-of-sale advertising to inform consumers about
the benefits of their products. Although advertising is still expensive for the
vast majority of producers, the competitive nature of these markets is forcing
producers to spend more on advertising than ever before.
Most
advertising for natural and organic foods is in the form of print advertising in
trade magazines or store magazines. As many products are new to the market, or
at least new to a significant portion of consumers, a picture of the product is
a key component of a successful marketing campaign. Larger producers are also
beginning to use newspaper and radio advertising in their marketing
strategy.
Coupons
(particularly peel-off stickers) and in-store demonstrations have also proven to
be quite successful. These set-ups encourage consumers to try a product at
little to no cost while giving producers an excellent opportunity to communicate
with, and get feedback from, consumers.
Opportunities
We
believe that the U.S. natural and organic food market represents a good
opportunity for Canadian exporters and that this market is experiencing strong
annual growth across numerous product sectors. In most product categories,
consumers have yet to establish brand preferences for products. Canadian
producers who are new to the U.S. market, can readily compete with domestic
products that have already been available for an extended period of
time.
Many U.S.
retail outlets and distributors have also begun selling private-label,
organic/natural foods and beverages and are actively looking for potential
suppliers of these products. Retailers and distributors with private-label
brands aim to have a significant number of products under one label in an
attempt to generate customer loyalty, increase store margins, and offer
lower-priced products to consumers.
The
organic dairy industry has experienced one of the strongest growth of any
organic food sector over the past few years. Although this rate of growth is not
expected to continue, analysts predict that the growth of the organic dairy
industry will continue to outpace the growth of the overall organic food
market.
Soy
products have been especially popular in the dairy segment. The health benefits
of soy include lowering levels of LDL (the so-called "bad" cholesterol),
reducing the risk of heart disease, and alleviating the symptoms of
menopause.
Organic
or natural foods that are targeted at children also represent a good opportunity
for Canadian exporters. In many cases, consumers who are somewhat unwilling to
pay higher prices for food for themselves, believe that organic or natural foods
are of better quality than conventional items and are willing to pay more for
these products for their children.
A
relatively new area that has attracted a significant amount of consumer interest
is the concept of ready-to-eat, natural or organic meals and ingredients. Retail
outlets offering this type of foodservice have experienced extremely positive
feedback from consumers, who have shown a willingness to pay restaurant prices
for healthy, great-tasting foods that can be taken home.
Good
opportunities exist in, but are not limited to, the following product
categories:
·
|
meats;
|
·
|
fresh/frozen/processed
fruits and vegetables;
|
·
|
breakfast
cereals;
|
·
|
healthy
snacks;
|
·
|
health
bars;
|
·
|
prepared
salads;
|
·
|
prepared
meals;
|
·
|
condiments/sauces;
and
|
·
|
desserts.
|
4
Kosher,
Natural & Organic
The rapid
rise in the popularity of organic foods among health-conscious consumers has
been paralleled by a jump in demand for products that are labeled kosher. Many
Muslims, vegans and consumers who are lactose-intolerant or those suffering from
other food allergies also choose kosher. You do not have to be Jewish to buy
kosher these days. The rapid rise in the popularity of organic foods among
health-conscious consumers has been paralleled by a jump in demand for products
that are labeled kosher from individuals seeking more wholesome things to eat.
Lately the two trends have intersected. That has given rise to a booming new
specialty food category—kosher organic.
A number
of demand factors are behind the evolution of this unique market niche. For one,
there are Jews who observe “kashrut,” the strict dietary rules that determine if
food is properly prepared in order to be kosher, but also are interested in the
benefits of eating organically. There are health-minded members of
other religions—most notably Muslims, whose own dietary Halal rules are
fulfilled by food that is kosher—who are in this category, as well as
Seventh-Day Adventists.
At stores
like Whole Foods, it is not hard to find products with both designations on
labels. They include chicken and other poultry from Wise Organic Pastures;
Stoneyfield, Brown Cow and Horizon yogurt and whole milk; Evolution juices;
Spectrum ground flax seeds; Nature’s Path and Arrowhead Mills cereals; and Silk
Soy Milk, to name just a few. And Whole Foods’ “365” house brand features a
number of kosher-organic items including whole and soy milk, tofu and a lemon
beverage. These days it’s not just at a Whole Foods or a Wild Oats that you’ll
find such items, but a supermarket in the Midwest may have a corner area that
says kosher organic.
Some
organic product manufacturers believe in the benefits of the kosher designation
as a way to appeal to discerning shoppers. As an example, Italy’s Bionaturae
product line premiered recently with an organic pasta that is also marked as
kosher. Some brands have displayed both an organic and kosher designation for
many years. Vermont-based Stoneyfield, has sold organic and kosher dairy
products since 1984. Kosher consumers and the marketplace as a whole identify
kosher certification with quality and value.
Kosher
certification has undoubtedly impacted sales in a positive way. Wise Organic
Pastures, known for its free-range organic and kosher chickens, has been using a
double-certification for 15 years. Recently re-branded to attract a broader
customer base (it was Wise Kosher Poultry), the firm added beef to its product
line two years ago. Wise, which runs its own slaughtering plants supervised by a
squad of rabbis overseeing the kosher butchers, also has many customers with
gourmet tastes who buy its poultry because of its reputation for
quality.
There
have also been a few embarrassing missteps by companies that have certified that
an organic product is kosher. The biggest faux pas involved those popular
pre-packaged salad greens that have become ubiquitous in grocery stores. When
food inspectors discovered many were infested with insects, it triggered quite a
backlash.
The
problem of insects extends beyond greens to organic produce in general. Because
no pesticides are used, bugs are more likely to crop up in fruits and vegetables
that are raised organically. Layering two strict sets of standards on top of
each other is bound to have some pitfalls. But for the most part, the kosher
organic category is likely to keep growing more popular.
Employees
We
currently have no employees other than Henry Ender, our Chief Executive Officer,
Secretary and Director and Fred Farnden, our President, Chief Financial Officer
and Director.
ITEM 2. DESCRIPTION OF
PROPERTY
We
currently operate our business from our Canadian office at 361 Connie Crescent,
Concord, Ontario, Canada L4K 5R2. We rented the office space for $1,500 a month
from a related party for a period of 5 years commencing November 1, 2006.
Effective February 1, 2009, the Company, with the consent of its related
landlord, a company controlled by the directors, cancelled the existing rental
agreement. No new rental agreement has been entered into.
5
ITEM
3. LEGAL PROCEEDINGS
We are
not presently parties to any litigation, nor to our knowledge and belief is any
litigation threatened or contemplated.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common
Stock
Our
common stock is currently trading on the Over-The-Counter Bulletin Board under
the symbol “HNYZ.” There has never been an active public market for shares of
our common stock and trading has been characterized by low volume and high
volatility.
Penny
Stock
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person’s account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person’s account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Holders
As of
January 29, 2009, 39,601 shares of common stock are issued and outstanding and
held by approximately 70 shareholders. Holders of our common stock are entitled
to one vote for each share on all matters submitted to a stockholder
vote.
Holders
of common stock do not have cumulative voting rights.
Therefore,
holders of a majority of the shares of common stock voting for the election of
directors can elect all of the directors. Holders of our common stock
representing a majority of the voting power of our capital stock issued and
outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of our stockholders. A vote by
the holders of a majority of our outstanding shares is required to effectuate
certain fundamental corporate changes such as liquidation, merger or an
amendment to our Articles of Incorporation.
Although
there are no provisions in our charter or by-laws that may delay, defer or
prevent a change in control, we are authorized, without shareholder approval, to
issue shares of preferred stock that may contain rights or restrictions that
could have this effect.
6
Holders
of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of liquidation, dissolution or winding up, each outstanding share entitles
its holder to participate pro rata in all assets that remain after payment of
liabilities and after providing for each class of stock, if any, having
preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
The
issued and outstanding shares of our Common Stock were issued in accordance with
the exemptions from registration afforded by Section 4(2) of the Securities Act
of 1933.
Dividends
Since
inception we have not paid any dividends on our common stock. We currently do
not anticipate paying any cash dividends in the foreseeable future on our common
stock. Although we intend to retain our earnings, if any, to finance
the exploration and growth of our business, our Board of Directors will have the
discretion to declare and pay dividends in the future.
Payment
of dividends in the future will depend upon our earnings, capital requirements,
and other factors, which our Board of Directors may deem relevant.
Recent Sales of Unregistered
Securities
In April
2009, the Company’s Board of Directors approved a 1000:1 reverse stock split.
The reverse stock split was effective on July 2, 2009. All share and per share
amounts used in the Company’s financial statements have been restated to reflect
the 1000 for 1 reverse stock split.
Not
applicable.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Caution Regarding
Forward-Looking Information
Certain
statements contained herein, including, without limitation, statements
containing the words “believe(s)”, “anticipate(s)”, “expect(s)” and words of
similar import, constitute forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
Such
factors include, among others, the following: international, national and local
general economic and market conditions; demographic changes; the ability of the
Company to sustain, manage or forecast its growth; the ability of the Company to
successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous
filings.
Given
these uncertainties, readers of this prospectus and investors are cautioned not
to place undue reliance on such forward-looking statements.
Business
Overview
We were
incorporated on September 20, 2006 under the laws of the State of Delaware. We
were originally formed to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions and helping food
distributors and food processors expand their sales growth. We do not intend to
undertake a reverse merger nor pursue any acquisition which involves a change in
control. We specialize in Kosher, Natural and Organic foods. We are a
multi-faceted products broker, committed to helping Producers, Wholesalers and
retailers improve their sales and return on investment.
7
Until
February 1, 2009, Henya represented products to a variety of prospective
buyers. In particular, products represented included: smoked salmon;
salsa; condiments; meat alternatives (i.e. vegetarian, chicken and beef
products); kosher grocery products (i.e. pizza, tea, confectionary etc.).
On February 1, 2009, Henya’s commission agreement with a related party was
cancelled. On July 31, 2009, Henya’s commission agreements with another
two related parties were cancelled. The Company does not currently have any
customers.
RESULTS OF OPERATIONS FOR
THE YEAR ENDED OCTOBER 31, 2009 COMPARED TO THE YEAR ENDED OCTOBER 31,
2008
For
the
Year
Ended
31
October 2009
|
For
the
Year
Ended
31
October 2008
|
||||||
REVENUE
|
|||||||
Commission
income from related companies
|
$
|
72,029
|
$
|
422,675
|
|||
Interest
on notes receivable from shareholders
|
1,760
|
1,760
|
|||||
73,789
|
424,435
|
||||||
EXPENSES
|
|||||||
Officers
and directors fees
|
30,000
|
120,000
|
|||||
Rent
paid to a related company
|
4,500
|
18,000
|
|||||
Interest
and bank charges
|
14,704
|
22,285
|
|||||
Overhead paid to a related party
|
57,623
|
169,070
|
|||||
General
and administrative
|
15,658
|
3,755
|
|||||
Professional fees
|
36,769
|
40,200
|
|||||
Bad
debts
|
527,764
|
-
|
|||||
687,018
|
373,310
|
||||||
NET
(LOSS) EARNINGS
|
$
|
(613,229)
|
$
|
51,125
|
|||
Total
Revenues
We had
revenues of $73,789 for the year ended October 31, 2009 and $424,435 for the
year ended October 31, 2008. The decrease was primarily due to
the current economic conditions where it became necessary to cancel our
commission agreements with related third parties in the second and third
quarters of the year ended October 31, 2009 whereas we had agreements to charge
5.0% commissions for the year ended October 31, 2008.
Expenses
Total
expenses for the year ended October 31, 2009 were $687,018 as compared to
$373,310 for the year ended October 31, 2008. The increase in expenses was due
primarily to a bad debt provision of 527,764 compared to a bad debt provision of
$nil for the year ended October 31, 2008.
Net
(Loss) Earnings
Net
(loss) earnings were $(613,229) for the year ended October 31, 2009, compared to
$51,125 for the year ended October 31, 2008.
Capital Resources and
Liquidity
As of 31
October, 2009, we had negative working capital of approximately $403,540.
It is the intent of management and significant stockholders, if necessary, to
provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity. However, there is no legal obligation for
either management or significant stockholders to provide additional future
funding. Should this pledge fail to provide financing, we have not identified
any alternative sources.
As set
forth in the notes to the financial statements, our independent auditors have
expressed substantial doubt about our ability to continue as a going concern
because we have no viable operations or significant assets and we are dependent
upon significant shareholders to provide sufficient working capital to maintain
the solvency of the corporate entity.
8
We are
still in the process of developing and implementing our business plan and
raising additional capital. As such, we are considered to be a development stage
company. Management believes that actions presently being taken to obtain
additional funding and implement its business plan provide the opportunity for
us to continue as a going concern.
The
Company will attempt to raise additional financing for working capital to
support sales and marketing efforts in other regions. However,
completion of our plan of operation is subject to attaining adequate revenue. We
cannot assure investors that adequate revenues will be generated. In the absence
of our projected revenues, we may be unable to proceed with our plan of
operations. Even without significant revenues within the next twelve months, we
still anticipate being able to continue with our present activities, but we may
require financing to potentially achieve our goal of profit, revenue and
growth.
We
anticipate that our operational as well as general and administrative expenses
for the next twelve months will total $100,000 for the following
expenses:
Trade
Show Expenses
|
$
|
30,000
|
||
Web
Development and Entertainment
Costs
|
$
|
20,000
|
||
Finance
|
$
|
20,000
|
||
Professional
fees
|
$
|
30,000
|
The
Company has budgeted $30,000 for expenses to attend trade shows in North
America, Europe, and Israel to source new products and meet new principals in
order to facilitate the expansion of the Company’s core
business. The Company has also allocated $20,000 for web
development to promote its services in addition to an allowance for
entertainment costs associated with new client development.
During
the fiscal year ended 31 October, 2009, we received commission income from the
related company, Foodfest International 2000 Inc. (Concord, Ontario), controlled
by our directors totalling $72,029 (2008 - $422,675). Due to the
economic decline and current financial conditions of the related companies,
$527,764 receivable from related companies was written off to bad debts this
year.
We do not
anticipate the purchase or sale of any significant equipment. We also do not
expect any significant changes in the number of employees although depending on
if financing is raised we may add additional representatives. We do not intend
to increase our staff until such time as we can raise the capital or generate
revenues to support the increase in overhead expense. At this time we have not
entered into any agreements or negotiations with a sales and marketing entity to
undertake marketing for us. The foregoing represents our best estimate of our
cash needs based on current planning and business conditions. The exact
allocation, purposes and timing of any monies raised in subsequent private
financings may vary significantly depending upon the exact amount of funds
raised and status of our business plan.
In the
event we are not successful in reaching our initial revenue targets, additional
funds may be required, and we would then not be able to proceed with our
business plan for the development and marketing of our core services. Should
this occur, we would likely seek additional financing to support the continued
operation of our business. We anticipate that depending on market conditions and
our plan of operations, we would incur operating losses in the foreseeable
future. We base this expectation, in part, on the fact that we may not be able
to generate enough gross profit from our consulting services to cover our
operating expenses.
Off-Balance Sheet
Arrangements
We do not
have any outstanding derivative financial instruments, off-balance sheet
guarantees, interest rate swap transactions or foreign currency contracts. We do
not engage in trading activities involving non-exchange traded
contracts.
CRITICAL
ACCOUNTING POLICIES
Our
significant accounting policies are described in Note 5 to our consolidated
financial statements included in this Annual Report. We prepare our financial
statements in conformity with U.S. GAAP, which requires our management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities on the date of the
financial statements and the reported amounts of revenues and expenses during
the financial reporting period. Since the use of estimates is an integral
component of the financial reporting process, actual results could differ from
those estimates. Some of our accounting policies require higher degrees of
judgment than others in their application. We consider the policies discussed
below to be critical to an understanding of our financial statements as their
application places the most significant demands on our management’s
judgment.
9
NEW
ACCOUNTING PRONOUNCEMENTS
In August 2009, the
FASB issued guidance on the measurement of liabilities at fair value. The
guidance provides clarification that in circumstances in which a quoted market
price in an active market for an identical liability is not available, an entity
is required to measure fair value using a valuation technique that uses the
quoted price of an identical liability when traded as an asset or, if
unavailable, quoted prices for similar liabilities or similar assets when traded
as assets. If none of this information is available, an entity should use a
valuation technique in accordance with existing fair valuation principles. There
was no impact on the financial statements as a result of adopting this
guidance.
On
July 1, 2009, the FASB issued the FASB Accounting Standards
Codification (the Codification). The Codification became the single source of
authoritative nongovernmental U.S. GAAP, superseding existing FASB, American
Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force
(EITF) and related literature. The Codification eliminates the previous US GAAP
hierarchy and establishes one level of authoritative GAAP. All other literature
is considered non-authoritative. The Codification was effective for interim and
annual periods ending after September 15, 2009. The company adopted
the Codification for the year ending October 31, 2009. There was no impact
to the financial results as this change is disclosure-only in
nature.
In
May 2009, the FASB issued guidelines on subsequent event accounting which
sets forth: 1) the period after the balance sheet date during which management
of a reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements; 2) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and 3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. These guidelines were effective for
interim and annual periods ending after June 15, 2009. There was no impact
on the financial statements as a result of adopting this guidance.
10
ITEM 8. FINANCIAL
STATEMENTS
HENYA
FOOD CORP.
FINANCIAL
STATEMENTS
31
October 2009
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Balance
Sheets as of 31 October 2009 and 31 October 2008
|
F-2
|
Statements
of Operations for the years ended 31 October 2009 and 2008 and for the
period from inception, 20 September 2006 to 31 October
2009.
|
F-3
|
Statement
of Changes in Stockholders’ Equity for the period from inception, 20
September 2006, to 31 October 2009.
|
F-4
|
Statements
of Cash Flows for the years ended 31 October 2009 and 2008 and
for the period from inception, 20 September 2006 to 31 October
2009.
|
F-5
|
Notes
to the Financial Statements
|
F-6
to F-13
|
11
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Henya
Food Corp.
We have
audited the accompanying balance sheets of Henya Food Corp. (A
Development Stage Company) as at 31 October 2009 and 2008 and the related
statements of operations and comprehensive income, changes in stockholders'
deficit, and cash flows for each of the years then ended and for the period from
the date of inception (20 September 2006) to 31 October 2009. Henya Food Corp.’s
Management is responsible for these financial statements. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor have we been engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Henya Food Corp. (A Development
Stage Company) as at 31 October 2009 and 2008 and the results of its operations
and comprehensive income, cash flows and changes in stockholders' deficits for
the years ended 31 October 2009 and 2008 and for the period from the date of
inception (20 September 2006) to 31 October 2009 in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in note 4 to the financial
statements, the Company has suffered losses from operations since inception and
has a working capital deficit that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
described in note 4. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ DNTW
Chartered Accountants, LLP
Licensed
Public Accountants
Markham,
Ontario, Canada
29
January 2010
F-1
HENYA
FOOD CORP.
(A
Development Stage Company)
BALANCE
SHEETS
AS
AT
31
October
2009
|
31October
2008
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$
|
129
|
$
|
254
|
||||
Accounts
receivable due from related parties
|
-
|
542,060
|
||||||
Prepaid
expenses
|
-
|
7,588
|
||||||
TOTAL
ASSETS
|
$
|
129
|
$
|
549,902
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
88,044
|
$
|
65,328
|
||||
Accrued
liabilities
|
250,000
|
450,000
|
||||||
Loans
payable
|
65,625
|
53,125
|
||||||
TOTAL
CURRENT LIABILITIES
|
403,669
|
568,453
|
||||||
TOTAL
LIABILITIES
|
403,669
|
568,453
|
||||||
Commitments
and Contingencies (see note 13)
|
||||||||
STOCKHOLDERS’
DEFICIT
|
||||||||
Capital
stock
|
40
|
40
|
||||||
Additional
paid in capital
|
427,244
|
197,244
|
||||||
Notes receivable from stock issued
|
(34,614
|
)
|
(32,854
|
)
|
||||
Deficit
accumulated during the development stage
|
(796,210
|
)
|
(182,981
|
)
|
||||
TOTAL
STOCKHOLDERS’ DEFICIT
|
(403,540
|
)
|
(18,551
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
129
|
$
|
549,902
|
The
accompanying notes are an integral part of these financial
statements.
F-2
HENYA
FOOD CORP.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME
For
the Year Ended 31 October 2009
|
For
the Year Ended 31 October 2008
|
For
the period from inception, 20 September 2006 to 31 October
2009
|
|||||||||
REVENUE
|
- | ||||||||||
Commission
income from related companies
|
$
|
72,029
|
$
|
422,675
|
$
|
911,236
|
|||||
Interest
on notes receivable from stockholders
|
1,760
|
1,760
|
4,600
|
||||||||
73,789
|
424,435
|
917,156
|
|||||||||
EXPENSES
|
|||||||||||
Bad
debts on accounts receivable due from related parties
|
527,764
|
-
|
527,764
|
||||||||
Officers
and directors fees
|
30,000
|
120,000
|
480,000
|
||||||||
Rent
paid to a related company
|
4,500
|
18,000
|
40,500
|
||||||||
Severance
expense
|
-
|
-
|
171,840
|
||||||||
Interest
and bank charges
|
14,704
|
22,285
|
45,036
|
||||||||
General
and administrative
|
15,658
|
3,755
|
19,509
|
||||||||
Consulting
expenses paid with common stock
|
-
|
-
|
10,000
|
||||||||
Overhead
paid to a related party
|
57,623
|
169,070
|
323,748
|
||||||||
Professional
fees
|
36,769
|
40,200
|
94,969
|
||||||||
687,018
|
373,310
|
1,716,366
|
|||||||||
NET
(LOSS) INCOME AND COMPREHENSIVE INCOME
|
$ |
(613,229)
|
$
|
51,125
|
$ |
(796,210)
|
|||||
(LOSS)
INCOME PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
DILUTED
|
$ |
(15.49) |
$ |
1.29 |
$ |
(18.36) |
|||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
|
39,601
|
39,498 |
43,356 |
The
accompanying notes are an integral part of these financial
statements.
F-3
HENYA
FOOD CORP.
(A
Development Stage Company)
STATEMENT
OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR
THE YEAR ENDED 31 OCTOBER 2009
Shares |
Common
Stock
|
Additional
Paid
in
Capital
|
Accumulated
Other
Comprehensive
Income
|
Notes
Receivable from Stock Issued
|
Deficit
Accumulated During the Development Stage
|
Total Stockholders' Deficit | |||||||||||||||
Common
stock issued at inception
|
50,000 | $ | 50 | $ | 49,950 | $ | (40,000 | ) | $ | - | $ | (10,000 | ) | ||||||||
Cor
Net loss
|
(11,759 | ) | (11,759 | ) | |||||||||||||||||
BALANCE,
31 OCTOBER 2006
|
50,000 | 50 | 49,950 | (40,000 | ) | (11,759 | ) | (1,759 | ) | ||||||||||||
Common
stock issued during the year
|
209 | - | 150,350 | 150,350 | |||||||||||||||||
Allocation
of common stock proceeds against deferred offering
costs
|
(150,000 | ) | (150,000 | ) | |||||||||||||||||
Common
stock cancelled during the year
|
(10,667 | ) | (11 | ) | (10,655 | ) | 10,666 | - | |||||||||||||
Interest
on notes receivable, net
|
(1,760 | ) | (1,760 | ) | |||||||||||||||||
Officers
accrued fees forgiven
|
107,600 | 107,600 | |||||||||||||||||||
Net
loss
|
(222,347 | ) | (222,347 | ) | |||||||||||||||||
BALANCE,
31 OCTOBER 2007
|
39,542 | 39 | 147,245 | (31,094 | ) | (234,106 | ) | (117,916 | ) | ||||||||||||
Common
stock issued during the year
|
59 | 1 | 49,999 | 50,000 | |||||||||||||||||
Interest
on notes receivable
|
(1,760 | ) | (1,760 | ) | |||||||||||||||||
Net
income
|
51,125 | 51,125 | |||||||||||||||||||
BALANCE,
31 OCTOBER 2008
|
39,601 | 40 | 197,244 | (32,854 | ) | (182,981 | ) | (18,551 | ) | ||||||||||||
Interest
on notes receivable
|
(1,760 | ) | (1,760 | ) | |||||||||||||||||
Officers
accrued fees forgiven
|
230,000 | 230,000 | |||||||||||||||||||
Net
income
|
(613,229 | ) | (613,229 | ) | |||||||||||||||||
BALANCE,
31 OCTOBER 2009
|
39,601 | $ | 40 | $ | 427,244 | $ | (34,614 | ) | $ | (796,210 | ) | $ | (403,540 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-4
HENYA
FOOD CORP.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
For
the Year Ended 31 October 2009
|
For
the Year Ended 31 October 2008
|
For
the period from inception, 20 September 2006 to 31 October
2009
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||
Net
(loss) income
|
$
|
(613,229)
|
|
$
|
51,125
|
$
|
(796,210
|
)
|
||
Adjustment
to reconcile net earnings to net cash provided by operating
activities
|
||||||||||
Issuance
of common stock for services
|
-
|
-
|
10,000
|
|||||||
Forgiveness
of debt owed to officers
|
230,000
|
-
|
337,600
|
|||||||
Interest
on notes receivable from stock issued, net
|
(1,760)
|
|
(1,760)
|
|
(5,280
|
)
|
||||
Interest
accrued on the loans payable
|
12,500
|
15,793
|
35,625
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||||
Accounts
receivable due from related parties
|
542,060
|
(185,457)
|
|
-
|
||||||
Accounts
payable
|
22,716
|
30,953
|
88,044
|
|||||||
Accrued
liabilities
|
(200,000)
|
|
120,000
|
250,000
|
||||||
Prepaid
expenses
|
7,588
|
(7,588)
|
|
-
|
||||||
CASH
FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
(125)
|
|
23,066
|
(80,221
|
)
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||
Loans
payable
|
-
|
(25,000)
|
|
80,000
|
||||||
Proceeds
from common stock issued
|
-
|
-
|
150,350
|
|||||||
Deferred
offering costs
|
-
|
-
|
(150,000
|
)
|
||||||
CASH
FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
-
|
(25,000)
|
|
80,350
|
||||||
NET
(DECREASE) INCREASE IN CASH
|
(125)
|
|
(1,934)
|
|
129
|
|||||
CASH,
BEGINNING OF YEAR/PERIOD
|
254
|
2,188
|
-
|
|||||||
CASH,
END OF YEAR/PERIOD
|
$
|
$129
|
$
|
254
|
$
|
129
|
||||
NON
CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||
Issuance
of common stock to settle a loan payable
|
$
|
$-
|
$
|
50,000
|
$
|
50,000
|
The
accompanying notes are an integral part of these financial
statements.
F-5
HENYA FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
1.
|
NATURE
OF OPERATIONS
|
Henya
Food Corp. ("the Company") was incorporated on 20 September 2006 in the State of
Delaware. The Company acts as a sales representative to broker kosher, natural
and organic food products to retailers and distributors throughout Canada and to
kosher retailers and distributors in the United States, Israel, Europe and
Australia. The Company operates from its offices in Ontario,
Canada.
2.
|
BASIS
OF PRESENTATION
|
The
Company has earned limited revenues from limited principal operations and
accordingly, the Company's activities have been accounted for as those of a
"Development Stage Enterprise" as set forth in Statement of Financial Accounting
Standards (“SFAS”) No. 7, Accounting and Reporting by
Development Stage Enterprises (“SFAS No. 7 “). Among the disclosures
required by SFAS No. 7 are that the Company's financial statements be identified
as those of a development stage company, and that the statements of operation,
changes in stockholders' equity and cash flows disclose activity since the date
of the Company's inception.
3.
|
CONTROL
BY PRINCIPAL STOCKHOLDERS
|
The
directors, executive officers and their affiliates or related parties, own
beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of the common stock of the Company. Accordingly, the
directors, executive officers and their affiliates, if they voted their shares
uniformly, would have the ability to control the approval of most corporate
actions, including increasing the authorized capital stock of the Company and
the dissolution, merger or sale of the Company's assets or
business.
4.
|
GOING
CONCERN
|
The
Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. The Company has experienced losses from operations
since inception in the amount of $796,210 and has a negative working capital
balance of $403,540 that raise substantial doubt as to its ability to continue
as a going concern.
The
Company's ability to continue as a going concern is contingent upon its ability
to obtain the financing and strategic alliances necessary to attain profitable
operations. Management is pursuing various sources of financing and intends to
raise equity financing through a private placement with a private group of
investors in the near future. In the event the Company is not able to
raise the necessary equity financing from private investors, the shareholders
intend to finance the Company by way of shareholder loans, as needed, until
profitable operations are attained.
The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
F-6
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
The
accounting policies of the Company are in accordance with United States of
America generally accepted accounting principles. Outlined below are those
policies considered particularly significant:
Commission
Recognition
The
Company's commission recognition policies are in compliance with the relevant
sections of the Financial Accounting Standards Board’s (the “FASB”) Accounting
Standards Codification (“ASC”), namely ASC Topic 605 “Revenue
Recognition”. Commission income is recognized at the date a
formal arrangement exists, the price is fixed or determinable, the services are
complete (commissions are calculated on sales net of any returns), no other
significant obligation of the Company exists and collection is reasonably
assured. For the year ended 31 October 2009, substantially all of our
commission income is from related parties. See note 7.
Henya
earns commissions in the form of brokerage fees based on sales of products of
individual companies represented. A related company, Foodfest,
currently represents the majority of brokerage fees earned. Henya
currently doesn’t have brokerage agreements with any related companies or
non-related companies.
Cash
and Cash Equivalents
Cash and
cash equivalents consist of a commercial bank account carried at cost, which
approximates current value. Items are considered to be cash equivalents if the
original maturity is three months or less.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are recorded at the invoiced amount net of sales returns and an
allowance for doubtful accounts. The Company determines its allowance
for doubtful accounts by considering a number of factors, including the age of
the receivable, the financial stability of the customer, discussions that may
have occurred with the customer and management's judgment as to the overall
collectibility of the receivable from that customer. The Company
writes off accounts receivable when they become uncollectible, and payments
subsequently received on such receivables are credited to the allowance for
doubtful accounts in the period of recovery. As at 31 October 2009
management determined to write off all accounts receivable due from related
companies, because the related companies have sustained unanticipated losses and
are incapable to repay these amounts.
Concentration
of Credit Risk
The
Company is exposed to credit risk of its accounts receivable arising from the
fact that one company, Foodfest, currently represents the vast majority of
brokerage fees earned. This risk is mitigated by the fact that accounts
receivable due from related companies has been written off.
F-7
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Income
Taxes
The
Company accounts for income in accordance with ASC 740, “Income Taxes”. Under Standard
740, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Standard 740, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
Fair
Value of Financial Instruments
The
carrying value of the company's accounts receivable due from related parties,
accounts payable and accrued liabilities approximates fair value because of the
short-term maturity of these instruments.
Earnings
or Loss Per Share
The
Company accounts for earnings per share pursuant to ASC 260, “Earnings per Share, which
requires disclosure on the financial statements of "basic" and "diluted"
earnings (loss) per share. Basic earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding for the year. Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding plus common stock equivalents (if dilutive) related to stock options
and warrants for each year. There were no dilutive financial
instruments for the period ended 31 October 2009.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. These
estimates are reviewed periodically, and, as adjustments become necessary, they
are reported in earnings in the period in which they become known.
F-8
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Stock
Compensation
The
Company does not have a formal stock option plan. However, we offered to some of
our employees and consultants stock-based compensation in the form of shares of
our common stock. We account for these issuances of common stock to employees
and consultants in accordance with ASC 718, “Compensation – Stock
Compensation” (“ASC 718”).
Effective
July 1, 2005, we adopted ASC 718 using the modified prospective method. Under
this method, stock compensation expense includes: (1) compensation cost for all
share-based payments granted based on the grant date fair value estimated in
accordance with ASC 718 and amortized on a straight-line basis over the
share-based payments’ remaining vesting period.
Recent
Accounting Pronouncements
In
August 2009, the FASB issued guidance on the measurement of liabilities at
fair value. The guidance provides clarification that in circumstances in which a
quoted market price in an active market for an identical liability is not
available, an entity is required to measure fair value using a valuation
technique that uses the quoted price of an identical liability when traded as an
asset or, if unavailable, quoted prices for similar liabilities or similar
assets when traded as assets. If none of this information is available, an
entity should use a valuation technique in accordance with existing fair
valuation principles. There was no impact on the financial statements as a
result of adopting this guidance.
On
July 1, 2009, the FASB issued the FASB Accounting Standards
Codification (the Codification). The Codification became the single source of
authoritative nongovernmental U.S. GAAP, superseding existing FASB, American
Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force
(EITF) and related literature. The Codification eliminates the previous US GAAP
hierarchy and establishes one level of authoritative GAAP. All other literature
is considered non-authoritative. The Codification was effective for interim and
annual periods ending after September 15, 2009. The company adopted
the Codification for the year ending October 31, 2009. There was no impact
to the financial results as this change is disclosure-only in
nature.
In
May 2009, the FASB issued guidelines on subsequent event accounting which
sets forth: 1) the period after the balance sheet date during which management
of a reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements; 2) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and 3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. These guidelines were effective for
interim and annual periods ending after June 15, 2009. There was no impact
on the financial statements as a result of adopting this
guidance.
F-9
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
6.
|
CAPITAL
STOCK
|
31
October
2009
|
31
October
2008
|
|||||||
Authorized | ||||||||
110,000,000 common shares, $0.001 par value | ||||||||
10,000,000 preferred shares, $0.001 par value
|
||||||||
Issued
|
||||||||
39,601 common shares (31 October 2008 - 39,601)
|
$
|
40
|
$
|
40
|
On 20
September 2006 the Company issued 40,000 and 10,000 common shares to the
founders of the corporation for consideration of notes receivable and services
rendered respectively. The notes bear interest at 6% per annum and are due
on demand. The notes receivable from the common stock issued are
presented as a reduction of stockholders’ equity in the Statement of Changes in
Stockholders’ Deficiency. The stock issued for consulting services
have been valued at the fair market value of the services received by the
Company of $10,000 and are reported in the Statement of Operations under
consulting. The fair value of services received is the amount that
these individuals have billed to the Company which is based on hourly rates that
these individuals normally charge in providing similar services.
In
October 2006, the Company received proceeds of $67,965 related to common shares
to be issued subsequent to the year end. Offering costs were recorded as a
reduction of these proceeds bringing the net value of shares to be issued to
Nil. In December 2006, the Company issued 67, common shares to these individuals
and related parties.
In
December 2006, the Company issued 82 common shares to various individuals and
related parties for proceeds of $82,385. Of this amount $82,035 was used to pay
for deferred offering costs incurred.
In
October 2007, the Company bought back and cancelled 10,667 common shares for the
amount issued of $10,666.
In August
2008, the Company issued 59 common shares for the settlement of $50,000 of a
loan payable.
In April
2009, the Company’s Board of Directors approved a 1000:1 reverse stock split.
The reverse stock split is effective on July 2, 2009. All share and per share
amounts used in the Company’s financial statements have been restated to reflect
the 1000 for 1 reverse stock split. As a result of the reverse split an
additional 60 common shares were issued as a result of rounding up the number of
shares held to the nearest thousand.
7.
|
RELATED
PARTY TRANSACTIONS
|
Related
party transactions are in the normal course of operations and are recorded at
amounts established and agreed between the related parties. Related party
transactions not disclosed elsewhere in these financial statements are as
follows:
The
Company received commission income totalling $72,029 for the year ended 31
October 2009 (2008 - $422,675) from related companies controlled by directors of
the Company. Included in account receivable is $0 at 31 October 2009
(2008 - $542,060) from these related companies.
F-10
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
|
7.
|
RELATED
PARTY TRANSACTIONS (continued)
|
Beginning
in November 2006, the Company began paying rent to a company controlled by the
directors of the Company on a month-by-month basis for $1,500 per
month. The Company paid rent totalling $4,500 for the year ended 31
October 2009 (2008 - $18,000).
The
Company paid $57,623 (2008 – $169,070) to a related company during the year for
overhead expenses incurred on behalf of the Company. This amount is from the
Company’s agreement where it will pay as overhead, 80% (2008 - 40%) of its
revenue to the related company. This allows the Company the use of the personnel
and office equipment, including phone, fax and other office equipment as needed.
However this policy has been suspended.
The
Company accrued fees for the officers and directors totaling $30,000 for the
year ended 31 October 2009 (2008 - $120,000).
Effective
February 1, 2009, Foodfest International 2000 Inc. (“Foodfest”), a company
controlled by the directors, with the consent of the Company, has discontinued
the commission agreement.
Effective
July 2, 2009, Bandana Bandito, LLC (“Bandito”) and Coastal Water Seafoods Ltd.
(“Coastal”), two companies controlled by the directors, with the consent of the
Company, have discontinued the commission agreements.
Effective
February 1, 2009, the officers and directors agreed to forgive the payment of
$230,000 of accrued management fees which was owed to them and to cancel the
existing management agreements. No new agreements have been entered
into.
Effective
February 1, 2009, the Company, with the consent of its related landlord, a
company controlled by the directors, cancelled the existing rental agreement. No
new rental agreement has been entered into.
Effective
February 1, 2009, the Company, with the consent of a related party, a company
controlled by the directors, has cancelled the overhead agreement. No new
agreement has been entered into.
On
February 1, 2009, the Company has forgiven $532,432 which was owed by a related
party controlled by the directors due to the inability of the related party to
repay the amount. During the year ended October 31, 2009, $12,013 of this bad
debt was recovered.
On July
31, 2009, the Company has forgiven $7,345 which was owed by another two related
parties controlled by the directors due to their inability to repay these
amounts.
8.
|
ECONOMIC
DEPENDENCE
|
The
Company had brokered sales for a number of food retailers to earn commissions.
Agreements were in place with a number of retailers, related to the Company by
virtue of being controlled by directors of the Company. Of the $72,029 in
brokerage fees earned in the year, all $72,029 or 100%, was from Foodfest (In
2008 - Of the $422,675 in brokerage fees earned in the year, $422,675 or 100%
was from Foodfest International) which is one of the related companies. An
overhead charge of $57,623 (2008 – $169,070) was recorded as payable to Foodfest
for the year ended 31 October 2009 and has been applied against the amount
receivable from Foodfest.
9.
|
INCOME
TAXES
|
The
Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740
prescribes the use of the liability method whereby deferred tax asset and
liability account balances are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates. The effects of future changes in tax laws or rates are not
anticipated.
Under ASC
740, income taxes are recognized for the following: a) amount of tax payable for
the current year, and b) deferred tax liabilities and assets for future tax
consequences of events that have been recognized differently in the financial
statements than for tax purposes.
As at 31
October 2009, there were no differences between financial reporting and tax
bases of assets and liabilities. The Company will have tax losses available to
be applied against future years' income as a result of the losses incurred.
However, due to the losses incurred in the period and expected future operating
results, management determined that it is more likely than not that the deferred
tax asset resulting from the tax losses available for carry forward will not be
realized through the reduction of future income tax payments. Accordingly a 100%
valuation allowance has been recorded for deferred income tax
assets.
F-11
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
|
9.
|
INCOME TAXES
(continued)
|
The
components of deferred income taxes have been determined at the combined
Canadian federal and provincial statutory rate of 33% (2008 - 33.50%) as
follows:
2008
|
2007
|
|||||||
Deferred
income tax assets (liabilities):
|
||||||||
Loss
carryforwards
|
$ | 262,749 | $ | 61,298 | ||||
Valuation
allowance
|
(262,749 | ) | (61,298 | ) | ||||
Deferred income
taxes
|
$ | - | $ | - |
10.
|
LOANS
PAYABLE
|
In August
2008, the Company borrowed $50,000 from Marvin Silver, a shareholder of the
company, to finance operations. The loan is unsecured, bears interest at an
effective rate of 25% and has no maturity date.
11.
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
During
the year ended 31 October 2009 the Company paid expenses as
follows:
2009
|
2008
|
|||||||
income taxes
|
$ | - | $ | - | ||||
Interest
|
$ | 1,579 | $ | 5,808 |
F-12
HENYA
FOOD CORP.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
31
OCTOBER 2009
|
12.
|
COMMITMENTS
|
On 21
January 2008, the Company entered into a settlement agreement with a former
shareholder of the company whereby, in exchange for the return of 10,667 shares
on 31 October, 2007, the Company agreed to pay $200,000 to the former
shareholder with the following terms;
1)
This amount is payable one day following a restriction period of one year
from the date the Company’s common stock begins to trade publicly. The funds
will be raised by issuing new common shares in a private placement. As security
for this transaction, the Company has placed 3,000 shares of its common stock in
Escrow with a law firm. $200,000 has been accrued for this as severance expense.
The expense has been netted against amounts forgiven by the shareholder as part
of the settlement.
2) Within
five business days of the Company receiving funds totalling $3,500,000 from a
private placement, the Company will pay a total of $50,000 in final settlement
of all obligations owed to the former shareholder. If the Company does not
receive the funds from a private placement before the end of the restriction
period stated in #1 above, interest at a rate of 5% per annum will accrue on the
outstanding balance from the end of the restriction
period. Additionally, if the Company does not receive the funds from
a private placement before the end of the restriction period stated in #1 above,
an amount of the shares held in Escrow valued at $50,000 shall be delivered to
the shareholder. $50,000 of accrued management fees remains payable in relation
to this.
13. COMPARATIVE
INFORMATION
Certain
comparative figures have been reclassified in order to conform with the current
year’s financial statement presentation.
F-13
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM
9A(T). CONTROLS AND PROCEDURES
Evaluation
of disclosure controls and procedures
Under the
supervision and with the participation of our management, including our chief
executive officer and principal financial officer, we conducted an evaluation of
our disclosure controls and procedures, as such term is defined under Rule
13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of
1934, as amended (Exchange Act), as of 31 October, 2009. Based on this
evaluation, our chief executive officer and principal financial officer have
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports we file or submit
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 and that our disclosure and controls are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our chief executive and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
Management's Annual Report
on Internal Control Over Financial Reporting
The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting for the
Company. Our internal control system was designed to, in general,
provide reasonable assurance to the Company’s management and board regarding the
preparation and fair presentation of published financial statements, but because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Our
management assessed the effectiveness of the Company’s internal control over
financial reporting as of October 31, 2009. The framework used by
management in making that assessment was the criteria set forth in the document
entitled “Internal Control – Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on that assessment,
our management has determined that as of October 31, 2009, the Company’s
internal control over financial reporting was effective for the purposes for
which it is intended.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this annual report.
Changes in internal
controls
We have
not made any changes to our internal controls subsequent to the Evaluation Date.
We have not identified any deficiencies or material weaknesses or other factors
that could significantly affect these controls, and therefore, no corrective
action was taken.
12
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
The
directors and executive officers of the Company are:
Name
|
Age
|
Position
|
Date
Appointed
|
Henry
Ender
|
58
|
Chief
Executive Officer, Secretary, Director
|
September
20, 2006
|
Fred
Farnden
|
61
|
President,
Chief Financial Officer, Director
|
January
2, 2008
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years:
HENRY
ENDER, Chief Executive Officer, Secretary and Director
Henry
Ender was appointed as our President, CEO, and CFO on September 20, 2006. Mr.
Ender co-founded Foodfest International 2000, Inc. (“Foodfest”) in 1977.
During the past five years, Henry has been involved in the day-to-day
operations of Foodfest. He has been responsible for developing the
import/export side of the business. Mr. Ender has developed a working
relationship with supermarket buyers in Ontario, Canada. Henry has
established a network of distributors in Canada and the U.S. who facilitate
the sale and delivery of products imported by Foodfest in their local
regions. Henry has been involved in direct sales, product
selection and procurement, merchandising and
marketing. Since inception, Henry has been providing the
direction in Henya’s approach to the market and providing the necessary guidance
to properly execute the company’s business plan.
FRED
FARNDEN, President, Chief Financial Officer and Director
Mr.
Farnden started his career in the food business in 1971 and has been involved in
management and/or ownership positions with Safeway Stores Incorporated,
Spetifore and Sons Ltd., Coast Labeling and Services Ltd., Coastal Water
Seafoods Ltd. and Foodfest International 2000 Inc.
Foodfest
imports products from Israel and Canada into the United States and from Israel
and the United States to Canada. Foodfest is a direct sales and
distribution (“DSD”) food company in the Province of Ontario and is a customer
of Henya. Foodfest sells imported products to other DSD food
distributors in Canada and the United States. Foodfest sells to
Canadian supermarkets including: Loblaws; Real Canadian Super Store; No Frill’s;
Fortino’s; Zehr’s; Sobeys; Price Choppers; A&P Dominion; Food Basics;
Wal-Mart; Highland Farms and Longos. Specialty stores include Whole Foods;
Pusateri’s; Kosher City; Hartman’s and Hermes. In Canada, Foodfest sells to
co-distributors including: Tree of Life; Sunopta; Regitan and Richmond Specialty
Foods which reach specific markets. In Canada, Foodfest services over 3,000
retail and institutional customers. In the U.S., Foodfest sells in New York;
Massachusetts; Maryland; Florida; Illinois; Minnesota and
California. Foodfest has established vendor relationships with the
supermarkets listed above,which provides Foodfest the opportunity to present new
products to the buyers for their consideration. Mr. Ender started out
in the food business in 1974 and has been involved in a management and ownership
position of North Kensington Markets; Central Smoked Fish; International Shrimp
Storage; NKM Chapmans Fine Foods; Canada Seafood Corporation; Allseas Fisheries;
Mike’s Fish/St.Lawrence Market; Seacore Seafood Corporation; Seafood Warehouse
International and Foodfest.
Foodfest
is a DSD company which means it is a distributor which sells and delivers store
by store, stopping at each store or account to drop products and sometimes even
merchandise those goods. Henya is a food broker which means it represents
products to a variety of prospective buyers. These buyers could be specialty
stores, retail grocery chains, wholesalers, foodservice operators and
distributors, drug chains, mass merchandisers, industrial users or military
installations. In trying to sell products and achieve a listing, a broker may
make presentations to the head offices of chains and wholesale groups. More and
more, key buying decisions are being made at regional headquarters. If a product
is listed, then it's on the list of products that the stores can order. Once a
product is listed, Henya, as a broker, may also schedule promotions. Henya keeps
in touch with the head office of The Principals represented to ensure direct
feedback and co-ordination between the head office and the retail
accounts.
As well
as representing products to buyers (selling), Henya offer a number of other
services. These may include merchandising (planning promotions and keeping
product on the shelf), computerized ordering and data collection
services.
In the
future, Henya will call on retail outlets on a regular basis which is normally
every four to six weeks in rural locations and once a week for major retail and
wholesale accounts in the city. Also in the future, Henya plans to
confirm product shelf placement, adjust shelf space, handle complaints, pull
damaged product, rush through an unplanned order, handle any special promotions
or displays, and monitor competitor activity. In the future, Henya
also plans to provide problem solving solutions for its clients.
13
In their
positions with Foodfest, Mr. Ender and Mr. Farnden are responsible for managing
the distribution of products to retail accounts, foodservice accounts and other
distributors throughout Canada and the United States. In their positions with
Henya, Mr. Ender and Mr. Farnden are responsible for representing manufacturers
and distributors who have products they wish to sell to retail accounts,
foodservice accounts and distributors.
Term of
Office
Our
directors were appointed for one-year terms to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers were appointed by our board of directors and hold
office until removed by the board.
Our
officers and directors will remain in office until the next annual meeting
of our stockholders, and until their successors have been duly elected and
qualified. There are no agreements with respect to the election of our
directors. We have not compensated our directors for service on our Board of
Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors. Officer(s) are appointed annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.
We do not have any standing committees. Our Board of Directors may in the future
determine to pay Directors’ fees and reimburse Directors for expenses related to
their activities.
Our
officers and directors have not filed any bankruptcy petition, been convicted of
or been the subject of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or federal securities
laws within the past five (5) years.
Audit
Committee
We do not
have a standing audit committee of the Board of Directors. Management has
decided not to establish an audit committee at present because of our limited
resources and limited operating activities do not warrant the formation of an
audit committee or the expense of doing so. We do not have a financial expert
serving on the Board of Directors or employed as an officer based on
management’s belief that the cost of obtaining the services of a person who
meets the criteria for a financial expert under Item 401(e) of Regulation S-B is
beyond its limited financial resources and the financial skills of such an
expert are simply not required or necessary for us to maintain effective
internal controls and procedures for financial reporting in light of the limited
scope and simplicity of accounting issues raised in its financial statements at
this stage of its development.
Certain Legal
Proceedings
No
director, nominee for director, or executive officer of the Company has appeared
as a party in any legal proceeding material to an evaluation of his ability or
integrity during the past five years.
Compliance With Section
16(A) Of The Exchange Act.
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended 31 October,
2009.
Code of
Ethics
The
Company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.
ITEM
11. EXECUTIVE COMPENSATION
Compensation of Executive
Officers
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the fiscal
years ended October 31, 2009 and 2008 in all capacities for the accounts of our
executives, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):
14
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
(shares)
($)
|
Option
Awards
($)
|
Non-Equity Incentive Plan
Compensation ($)
|
Non-Qualified Deferred
Compensation Earnings ($)
|
All Other Compensation
($)
|
Totals
($)
|
||||||
Henry
Ender
CEO,
Secretary,
and
Director
|
2008
|
60,000 | 60,000 | ||||||||||||
2009
|
15,000 | 15,000 | |||||||||||||
Fred
Farnden President, CFO and Director
|
2008
|
60,000 | 60,000 | ||||||||||||
2009
|
15,000 | 15,000 |
Term of
Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
Our
officers and directors have not filed any bankruptcy petition, been convicted of
or been the subject of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or federal securities
laws within the past five (5) years.
Certain Legal
Proceedings
No
director, nominee for director, or executive officer of the Company has appeared
as a party in any legal proceeding material to an evaluation of his ability or
integrity during the past five years.
Option
Grants Table. There were no
individual grants of stock options to purchase our common stock made to the
officers named in the Summary Compensation Table from January 1, 2009 through
December 31, 2009.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table. There were no stock options
exercised during period ending December 31, 2009, by the officers named in the
Summary Compensation Table.
Long-Term
Incentive Plan (“LTIP”) Awards Table. There were no awards made to
a named executive officer in the last completed fiscal year under any
LTIP
Employment
Agreement
None.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth the number and percentage of shares of our common
stock, owned as of January 29, 2010, by all persons (i) known to us who own
more than 5% of the outstanding number of such shares, (ii) by our directors,
and (iii) by our officers and directors as a group. Unless otherwise indicated,
each of the stockholders has sole voting and investment power with respect to
the shares beneficially owned.
15
Security Ownership of
Certain Beneficial Owners
Title
of Class
|
Name
and Address of Beneficial Owner
|
Amount
and Nature
of
Beneficial Ownership
|
Percentage
of Class (1)
|
Common
Stock
|
Canadian
Endernational Limited
361
Connie Crescent
Concord,
ON L4K-5R2
|
14,
667
|
37.09%
|
Security Ownership of
Management
Title
of Class
|
Name
and address of Beneficial Owner (2)
|
Amount
and Nature
of
Beneficial Ownership
|
Percentage
of Class (1)
|
Common
Stock
|
Henry
Ender (2)
26
Kendall St.
New
Haven, Connecticut 06512
|
14,727
|
37.24%
|
Common
Stock
|
Fred
Farnden
8563
109B Street
Delta,
BC V4C-4H4
|
14,
667
|
37.09%
|
Common
Stock
|
All
directors and officers as a group (2 persons)
|
29,394
|
74.26%
|
(1)
|
Based
on 39,601 shares of our common stock outstanding.
|
(2)
|
Canadian
Endernational Limited is controlled by Henry Ender and therefore Mr. Ender
is deemed as the beneficial owner of the 14, 667 shares held in the name
of Canadian Endernational Limited. Mr. Ender also controls Foodfest
International 2000, Inc. and therefore Mr. Ender is deemed as the
beneficial owner of the 50 shares held in the name of Foodfest
International 2000, Inc. In addition, Mr. Ender’s wife, Yael
Soglowek-Ender, personally owns 5 shares and she controls Canadian Triloon
Corp. which owns 5 shares and therefore Mr. Ender is deemed to
beneficially own these 10 shares. In total, Mr. Ender beneficially owns
14,727 shares.
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The
Company received commission income totalling $72,029 for the year ended 31
October 2009 (2008 - $422,675) from related companies controlled by directors of
the Company. Included in account receivable is $0 at 31 October 2009
(2008 - $542,060) from these related companies.
Beginning
in November 2006, the Company began paying rent to a company controlled by the
directors of the Company on a month-by-month basis for $1,500 per
month. The Company paid rent totalling $4,500 for the year ended 31
October 2009 (2008 - $18,000).
The
Company paid $57,623 (2008 – $169,070) to a related company during the year for
overhead expenses incurred on behalf of the Company. This amount is from the
Company’s agreement where it will pay as overhead, 80% (2008 - 40%) of its
revenue to the related company. This allows the Company the use of the personnel
and office equipment, including phone, fax and other office equipment as needed.
However this policy has been suspended.
The
Company accrued fees for the officers and directors totaling $30,000 for the
year ended 31 October 2009 (2008 - $120,000).
Effective
February 1, 2009, Foodfest International 2000 Inc. (“Foodfest”), a company
controlled by the directors, with the consent of the Company, has discontinued
the commission agreement.
Effective
July 2, 2009, Bandana Bandito, LLC (“Bandito”) and Coastal Water Seafoods Ltd.
(“Coastal”), two companies controlled by the directors, with the consent of the
Company, have discontinued the commission agreements.
Effective
February 1, 2009, the officers and directors agreed to forgive the payment of
$230,000 of accrued management fees which was owed to them and to cancel the
existing management agreements. No new agreements have been entered
into.
Effective
February 1, 2009, the Company, with the consent of its related landlord, a
company controlled by the directors, cancelled the existing rental agreement. No
new rental agreement has been entered into.
16
Effective
February 1, 2009, the Company, with the consent of a related party, a company
controlled by the directors, has cancelled the overhead agreement. No new
agreement has been entered into.
On
February 1, 2009, the Company has forgiven $532,432 which was owed by a related
party controlled by the directors due to the inability of the related party to
repay the amount. During the year ended October 31, 2009, $12,013 of this bad
debt was recovered.
On July
31, 2009, the Company has forgiven $7,345 which was owed by another two related
parties controlled by the directors due to their inability to repay these
amounts.
We were
formed on September 20, 2006 and 14,667 shares were issued to Canadian
Endernational Limited, which is controlled by Henry Ender. Other than the shares
issued set forth herein there have been no other transactions with our
promoters.
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit
Fees
For the
Company’s fiscal year ended October 31, 2009 and October 31, 2008, we were
billed $20,000 and $31,465, respectively, by our present principal accountant
for professional services rendered for the annual audit and interim quarterly
reviews of our financial statements.
Tax Fees
For the
Company’s fiscal year ended October 31, 2009 and 2008, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.
All Other
Fees
The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal year ended October 31, 2009 and
2008.
Audit and Non-Audit Service
Pre-Approval Policy
We do not
have an audit committee currently serving and as a result our board of directors
performs the duties of an audit committee. Our board of directors will evaluate
and approve in advance, the scope and cost of the engagement of an auditor
before the auditor renders audit and non-audit services. We do not rely on
pre-approval policies and procedures.
17
PART IV
(a).
Documents filed as part of this Annual Report:
1.Financial
Statements
The
audited financial statements filed in this Annual Report are listed on page F-1
hereof.
2.
Financial Statement Schedules
The
Supplemental Schedule of Cashflow Information appears on page F-5
hereof.
3.
Exhibits
EXHIBIT
NO.
|
DESCRIPTION
|
3.1
|
Articles
of Incorporation (1)
|
3.2
|
By-Laws
(1)
|
3.3
|
Memo
regarding Management Compensation (2)
|
14.1
|
Code
of Ethics (3)
|
31.1
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
(1) filed
as an exhibit to the SB-2 filed with the SEC on May 7, 2007
(2) filed
as an exhibit to the SB-2/a4 filed with the SEC on November 19,
2007
(3) filed
as an exhibit to the Form 10-K filed with the SEC on February 13,
2009
18
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
Henya Food Corp.
Dated:
January 29, 2010
By:
|
/s/ Henry
Ender
|
Chief
Executive Officer
|
|
By:
|
/s/ Fred
Farnden
|
Chief
Financial Officer
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Name
|
Title
|
Date
|
/s/
Henry
Ender
|
Chief
Executive Officer, Secretary and Director
|
January
29, 2010
|
Henry
Ender
|
||
/s/
Fred
Farnden
|
President,
Chief Financial Officer, Principal Accounting Officer and
Director
|
January
29, 2010
|
Fred
Farnden
|
19