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EX-14 - EXHIBIT 14 - GREENESTONE HEALTHCARE CORPa6232493ex14.txt
EX-32.1 - EXHIBIT 32.1 - GREENESTONE HEALTHCARE CORPa6232493ex32_1.txt
EX-31.1 - EXHIBIT 31.1 - GREENESTONE HEALTHCARE CORPa6232493ex31_1.txt

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549

                                   FORM 10-K

  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934

                  For the Fiscal year ended December 31, 2009

                         Commission File number 0-15078

                       NOVA NATURAL RESOURCES CORPORATION
                       ----------------------------------
                 (Name of Small Business Issuer in its charter)

                    Colorado                      84-1227328
                 (State or other              (I.R.S. Employer of
           jurisdiction of incorporation         Incorporation
                Identification No.)            Identification No.)

                                2000 NE 22nd ST
                     Wilton Manors, Fl 33305 (828) 489-9408
       (Address of principal executive offices) (issuer's phone number)

           Securities registered under Section 12(b) of the Act: NONE

                      Securities registered under Section

                               12(g) of the Act:

                          Common Stock, $.01 Par Value

                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will 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. [X]

Issuer's revenues for its most recent fiscal year totaled: None Documents
Incorporated by Reference: None Transitional Small Business Disclosure Format:
Yes___. No. X

As of December 31, 2009, the Registrant had outstanding no shares of Convertible
Preferred Stock, $1.00 par value issued and outstanding.

Number of Shares of Common Stock Outstanding $.01 par value as of December 31,
2009, 5,021,764

Transitional Small Business Disclosure Format YES ___ NO X

NOVA NATURAL RESOURCES CORPORATION TABLE OF CONTENTS Page -------- PART I Item 1. Business 3 Item 1A. Risk Factors 7 Item 2. Description of Property 7 Item 3. Legal Proceedings 7 Item 4. Submission of Matter to a Vote of Security Holders 7 PART II Item 5. Market for Common Equity and Related Stockholder Matters 7 Item 6. Selected Financial Data 8 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 9 Item 8. Financial Statements and Supplementary Data 10 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 18 Item 9A(T). Controls and Procedures 18 PART III Item 10. Directors, Executive Officers and Corporate Governance 19 Item 11. Executive Compensation 21 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related shareholder Matters 21 Item 13. Certain Relationships and Related Transactions 21 Item 14. Principal Accounting Fees and Services 22 PART IV Item 15. Exhibits, Financial Statement Schedules 22 Signatures 23 2
PART 1 Item 1. Description of Business ------------------------------- On March 29, 2010 the company entered into an agreement with Greenestone Clinic Inc., a Private Canadian Corporation, to provide Consulting Services to Nova Natural Resources Corporation for the development and operation of certain Medical Clinics in the province of Ontario, Canada. The term of the agreement is for one year whereby Greenestone will provide both the medical and business expertise in the initial startup of private clinics. Greenestone will provide the technical assistance to insure the clinics are in compliance with governmental policy and procedure requirements and the necessary detailed operational requirements to operate the clinics. Greenestone currently has an operational facility with some services Nova plans to offer in its first Ontario facility which may be viewed at www.greenestone.net. Nova Natural Resources Corporation (the "Registrant", "Company" or "Nova") was incorporated under Colorado Law on April 1, 1993 and is the surviving company in a merger, effective February 1, 1995, of the Company and Nova Natural Resources Corporation, a Delaware corporation. The merger was effected to change the Company's domicile from Delaware to Colorado and caused no change in the Company's capitalization. The Delaware Corporation was the successor to Nova Petroleum Corporation and Power Resources Corporation, which merged in 1986. Prior to that merger, Nova Petroleum Corporation and Power Resources Corporation operated since 1979 and 1972, respectively. Significant changes in the Company business On February 27, 2001, the Company closed a transaction pursuant to the terms of an Asset Purchase Agreement dated February 9, 2001 (the "Agreement") with TORITA DONGHAO LLC ("Torita Delaware"), a Delaware Corporation, by which Torita Delaware acquired control of the Company. Torita Delaware manufactures, markets, and sells electronic equipment, including computer hardware, computer monitors, television sets, internet access devices for use with TV sets, digital video devices (DVD's) and related equipment. Torita Delaware's products are marketed in Southeast Asia. Its production facilities occupy 128,000 square feet in Zhuhai City in the People's Republic of China ("PRC") and include six manufacturing lines with an annual production capacity of approximately 1 million PC's, 1 million DVD devices and 200,000 TV sets. Torita Delaware owns 50% of the former cosmetics arm of Torita Group, though this business line has not played a significant role in the Company's operations. The Company wrote off its equity investment of $15,107 in the cosmetics company in the fourth quarter of the fiscal year, since it is uncertain whether this investment will be recoverable. Torita Delaware was formed by the spin-off of the electronics and the cosmetics divisions of the Torita Group of the PRC. Torita Group ("Torita"), a large, diversified company with over ten years of operating history in China, was composed of several divisions with diverse business interests. During calendar year 2001, Torita went into receivership due to its large portfolio of non-performing real estate assets. These assets are in the process of disposition, a process expected to take several years to accomplish. Although Torita Delaware and Torita are completely separate companies, this event caused an indirect effect on the Company's ability to do business. Historically, the Company's electronics manufacturing operations utilized Torita's credit facilities as its major source of working capital. When the Company became independent of Torita, it no longer had access to that capital, but the relationship was retained with Torita's lenders, including the maintenance of a $7 million line of credit with a local bankWhen Torita subsequently went into receivership, even though the Company was no longer affiliated with Torita, this line of credit was withdrawn. In addition, Torita's bankruptcy filing caused many of the Company's existing suppliers to cut off their credit terms with the Company, due to the past close association of the two companies. These events made it much more difficult for the Company to obtain credit in China. On March 16, 2003, pursuant to unanimous approval of the board of directors of Nova, the Company authorized its president to secure a convertible note from Henan Zhenyuen (Group) Co., LTD, and to appoint three new Directors. The company appointed Ms. Li Wang, Mr. Yanbo Yin both Chinese Nationals and reappointed Mr. Chris Tse. Mr. Tse was also appointed the President and CEO of the company upon the resignation of its former President Mr. Edward Chan. Mr. Chan also resigned as a Director of the company. Additionally, Mr. Han Zhende of the Torita group resigned as a Director. The note from Zhenyuen (Group) was never secured. The company secured funding from a company called Good Creative Limited a BVI. This information was communicated in an 8K filing and press release by the current management. 3
On 11 November 2003 Nova entered into an agreement to divest of the core business, the electronic assets the company had idled at 2002 year end. The electronic business unit declined shortly after acquisition due to a slow down in demand for existing products and a lack of immediate working capital required for new product introduction. Revenue decreased significantly from 2001 of $4.8MM to 2002 of $.4MM whereby the company was unable to continue operations. Previous management was unsuccessful in efforts to raise the necessary working capital in the time frame in which the business unit had opportunities for its product. The decrease in demand, consumption of saleable inventory and lack of working capital resulted in discontinuing the operations at year end 2002. The business had remained idle while the new management team and board of directors accessed the market conditions for the company products and production capabilities. The current board of directors had determined that restarting the operations created significant risk for its shareholders and determined that raising funds with equity would be difficult if not impossible. Therefore, the Directors approached the original owners and reached an agreement for the return of assets in turn for the return of the Torita Electronic (Hong Kong) Ltd., common stock in the amount of 138,612,287 shares. This was the control block originally issued for the assets but did not include stock issued for services in connection with facilitation of the deal and payment for services. The divesture agreement was entered into with Han Zhende, President of Torita Electronic (Hong Kong) Company Ltd., and provided for the return of the assets acquired from the original agreement, dated Feb 09 2001 between Torita Donghao, LLC and Nova Natural Resource Corporation. The agreement provided for the return of assets, assumption of all liabilities associated with the Chinese operation in turn for the return to Nova the 138,612,287 shares of common stock originally issued to Torita Electronic (Hong Kong) Ltd. On 17 Jun 2004 Nova entered into an agreement to purchase the assets of two Gas Stations located in Anyang City, Henan Province, China from Great Frame International Enterprise Limited, a Hong Kong Company. The stations were equipped with LPG refilling equipment. The stations along with a recently acquired LPG conversion technology would allow Nova to continue the conversion of additional vehicles within the Anyang market and expand into other markets within the region. The stations had the capacity to generate in excess of two million dollars in combined fuel alternatives, but the primary focus was to convert and service LPG vehicles. This was due to higher gross margins and the positive environmental impact. Nova intended to issue 600,000 shares of common stock at an agreed price of $2.00 per share, for a total purchase price of $1,200,000. The majority owner and President/Director of Great Frame International Enterprise Limited was Wang Li; Ms Li was also a director of Nova. Upon the completion of the proposed agreement Wang Li would have become the largest shareholder of NOVA with approximately 45% of the issued and outstanding shares. This acquisition was designed to prove the LPG conversion technology was a benefit for both Nova and the Chinese market. The average cost to convert a taxi from gas to LPG was approximately $420 and the conversion cost for a bus was approximately 25% higher. It was estimated that the average taxi would drive 450KM per day with a monthly fuel saving of $73.00, creating a pay back for the driver in six months. The pay back for a bus was approximately one and a half years, but combined with the positive environmental results the local governments were eager to convert. The company expected the primary growth revenue generator would be the refilling of the LPG vehicles; the current gross margin was significantly higher than that of the non converted petrol vehicles. Given the increasing vehicles entering the Chinese market and vast number of vehicles that could benefit from the conversion the company worked for over one year to try and bring this deal to a successful close. The company engaged several outside parties in both the US and China to develop a successful structure for the transaction whereby Nova would have full rights privileges and true ownership of the assets identified in the deal. Although representatives of Nova visited the sites of these assets, the deal was complicated by a transfer of the state assets to the Hong Kong Company. This transfer could not be assured was acceptable under Chinese Law, making the deal risky on the representations made by Great Frame International and since Wang Li was a director of both companies Nova consulted with additional resources. The company evaluated several alternatives in restructuring the deal, but in meeting with Chinese Accountants and Legal Advisors, it was determined that the transaction could not be structured in a manner initially negotiated. This information was communicated in an 8K filing and press release by the current management. On 1 July 2005 Nova rescinded the agreement entered into on June 17, 2004 to purchase the assets of two Gas Stations located in Anyang City, Henan Province, China. The agreement previously entered into with Great Frame International Enterprise Limited, a Hong Kong Company, provided that Great Frame would provide written evidence that the agreement was in compliance with Chinese Laws and procedures and that the assets described in the agreement were not encumbered in any manner. Failing to comply with this requirement the company cancelled the agreement. Additionally, Mr. Chris Tse President & CEO and Chairman of the Board, accepted the resignation of Wang Li and Yin Yanbo as directors of the company and decided to serve as sole officer and director of the company until such time as qualified replacements could be selected. This information was communicated in the form of an 8K filing by the current management. On March 29, 2010 the company entered into an agreement with Greenestone Clinic Inc., a Private Canadian Corporation, to provide Consulting Services to Nova Natural Resources Corporation for the development and operation of certain Medical Clinics in the province of Ontario, Canada. The term of the agreement is for one year whereby Greenestone will provide both the medical and business expertise in the initial startup of private clinics. Greenestone will provide the technical assistance to insure the clinics are in compliance with governmental policy and procedure requirements and the necessary detailed operational requirements to operate the clinics. Greenestone currently has an operational facility with some services Nova plans to offer in its first Ontario facility which may be viewed at www.greenestone.net 4
Change in Control Effective at Closing of the Torita Delaware transaction, all of Nova's officers and directors, except Brian B. Spillane, resigned, as contemplated by the Agreement. Edward T. S. Chan, CEO of Torita Delaware, thereupon was named President, Treasurer and a Director of the Company. Mr. Spillane resigned as President, but remains a Director of the Company, and was appointed its Secretary. Mr. Spillane continued his affiliation with the Company and continued to maintain the Company's corporate office in Denver, Colorado at the request of Torita Delaware. This request was not a requirement for approval of the transaction by the Company's former Board of Directors. In September 2001, Han Zhende and Chris Tse, both based in China, were appointed Directors of the Company. Mr. Han is the Company's Chief Operating Officer, and is in charge of the Company's electronics manufacturing operations in Zhuhai City, the People's Republic of China. Mr. Tse resigned as Vice President and a Director of the Company in November. Upon effectuation of the Agreement, Torita Electronic (Hong Kong) Ltd. held 138,612,287 shares of the Registrant's $0.10 par value common stock, 59.5% of the total common shares issued and outstanding, and therefore became the new controlling shareholder of the Company. Affiliates of Torita Delaware controlled an additional 32% of the then-issued and outstanding shares. The consideration used to obtain such control was the acquisition by the Company of 100% of the business and operating assets of Torita Delaware. On March 16 2003 the board of directors accepted the resignation of Mr. Edward Chan as the President and CEO and appointed Mr. Chris Tse to the position of President and CEO. On June 30, 2003, pursuant to majority shareholder consent and affirmed by 199,873,886 votes constituting 71.5% of the 279,551,551 shares issued and outstanding as of June 28, 2003, the majority shareholders voted and approved the appointment of Mr. Chris Tse as the Company President and Chief Executive Officer and appointment to the Board of Directors. Mr. Edward Chan was terminated as the President and Chief Executive Officer and removed from the Board of Directors. This action was in response to the failure of Mr. Chan to place into writing his verbal resignation as the President and from the Board of Directors. This information was communicated in an 8K filing and press release by the current management. On March 15, 2007 the shareholders of Nova Natural Resources Corp., by majority consent accepted the resignation of the sole Director and Officer of the Company Mr. Chris Tse, appointed Mr. David Putnam as the President & CEO and Chief Financial Officer of the Company, and appointed Mr. Nick Laroche as a Company Director. Mr. Putnam currently resides in Toronto, Ontario; therefore the Company executive offices are in the process of being relocated to Toronto, Ontario. This action was taken by the Shareholders of the Corporation by a vote, or concurrence of the majority of the outstanding shares. This action was approved in excess of the two third majority as required by Colorado Law and the Company Articles of Incorporation. On October 1, 2007 the Board accepted the resignation of Mr. David Putnam, the President & CEO, additionally Mr. Putnam resigned from the Board of Directors. The Board accepted the appointed of Mr. Wayne A. Doss to serve as the President and CEO and Director replacing Mr. Putnam. Mr. Doss has been a consultant and business advisor for the company since 2001. Employees At December 31, 2009, Nova had only one employee, its President & CEO, Mr. Wayne A. Doss. Environmental Regulations The Company is not currently subject to any pending administrative or judicial enforcement proceedings arising under environmental laws or regulations. Environmental laws and regulations may be adopted in the future which may have an impact upon the Company's operations. 5
Other Information ----------------- Material Events that occurred during 2007/2008/2009 On March 15, 2007 the shareholders of Nova Natural Resources Corp., by majority consent accepted the resignation of the sole Director and Officer of the Company Mr. Chris Tse, appointed Mr. David Putnam as the President & CEO and Chief Financial Officer of the Company, and appointed Mr. Nick Laroche as a Company Director. Mr. Putnam currently resides in Toronto, Ontario, therefore the Company executive offices are in the process of being relocated to Toronto, Ontario. This action was taken by the Shareholders of the Corporation by a vote, or concurrence of the majority of the outstanding shares. This action was approved in excess of the two third majority as required by Colorado Law and the Company Articles of Incorporation. On March 31, 2007 the newly appointed Board of Directors approved the appointment of Mr. Putnam as the Company President & CEO and the majority consent in reference to the appointment of the new Directors, Mr. Putnam and Mr. Laroche. The New Board of Directors approved the issuance of 2,500,000 shares of rule144 restricted common stock for each of it new Directors. The Board of directors authorized the President to proceed with the acquisition of the Lotta Minutes Prepaid Calling Card transaction after reviewing the Executive Summary. The Board authorized the President to proceed with securing the rights and privileges in an asset acquisition structure whereby Nova Natural Resources would acquire 100% of said rights and privileges. The President was authorized to issue up to ten million (10,000,000) shares of Nova Natural Resources Rule 144 Restricted Common Shares and up to $500,000.00 (with the condition the funds would be paid based upon a future funding or once the company has adequate working capital) to secure rights. On April 15, 2007 the Board approved the Lotta Minutes Pre-Paid Calling Card transaction and authorized the President to issue ten million (10,000,000) shares of Nova Natural Resources Rule 144 Restricted Common Stock to Glen Simon for 100% of 2133185 Ontario Inc., for all rights and privileges concerning the Lotta Minutes deal as defined in the Lotta Minutes Executive Summary and documentation. On April 30, 2007 the Board approved the consulting contracts with two outside consultants to assist the company in its new venture. The consultants, Mr. Aluwahlia and Mr. Wendlegoed will each receive 2,500,000 shares of rule 144 Restricted Common Stock at .01 for said services. On October 1, 2007 the Company cancelled the Lotta Minutes deal for non performance of the acquisition agreement terms, ten million (10,000,000) shares were authorized to be issued in conjunction with the closing of the deal, the shares were never issued and the board of directors cancelled the authorization to issue said shares and the five million (5,000,000) shares for the consultants associated with the Lotta Minutes Deal. On October 1, 2007 the Board accepted the resignation of Mr. David Putnam, its President and CEO, additionally Mr. Putnam resigned from the Board of Directors. The Board accepted the appointed of Mr. Wayne A. Doss to serve as the President and CEO and Director replacing Mr. Putnam. Mr. Doss has been a consultant and business advisor for the company since 2001. On June 20, 2008 the Board of Directors cancelled the authorization for the issuance of five million (5,000,000) shares to Mr. Laroche and Mr. Putnam which were authorized March 31, 2007, but were never issued. The Board of Directors initially approved the issuance of 2,500,000 shares of rule144 restricted common stock for each Director. The Board felt the shares were not warranted. The Board approved the issuance of one million (1,000,000) shares of rule 144 restricted common stock for Mr. Doss the current President and CEO for services to the company since Mr. Doss has served without salary since the October 1, 2007 appointment. On July 1, 2008 the Board of Directors approved the conversion of a Convertible Note Payable in the amount of 19,000.00 to convert at .02 per share for the issuance of nine hundred fifty thousand shares (950,000) of rule-144 restricted common stock. 6
Item 1A. Risk Factors --------------------- Not applicable because we are a smaller reporting company. Item 2. Description of Properties --------------------------------- The executive offices of the Company are located in a residence at 2000 NE 22 ND Street, Wilton Manors, Florida, 33305. The space is approximately 250 sq ft. The Company is currently in the process of relocating its executive offices to Canada. Item 3. Legal Proceedings ------------------------- The Company knows of no legal proceedings contemplated or threatened against it. Item 4. Submission of Matter to a Vote of Security Holders ---------------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2008. Part II ------- Item 5. Market for Common Equity and Related Shareholder matters ---------------------------------------------------------------- The Company's Common Stock is quoted on the OTC Bulletin Board under the symbol "NVNJ" at December 31, 2009 with no trading activity. The company must seek sponsorship by a market maker to file the 15C211 to return to the OTCBB active trading and plans to do so in 2010. The number of record holders of the Company's Common Stock as of December 31, 2009 was approximately 115 in certificate holders. As of December 31, 2009 1,553 option shares were outstanding under the Company's employee stock option plan. On 13 August 2003 the shareholders of Nova Natural Resources Corp., by majority consent authorized the Board of Directors to institute a 1 for 3000 reverse stock split with no fractional shares to be issued. Nova, a Colorado Corporation required two thirds majority for such action. The majority consent was approved by two hundred two million one hundred sixth four thousand (202,164,000) votes and constituted an approval in excess of the two thirds required. The board approved the reverse and set the effective date for August 22, 2003. Further, the shareholders authorized the Board of Directors to increase the common stock authorized and issued to 50,000,000 shares following the implementation of the reverse. The Company has not paid any dividends on its Common Stock and does not expect to do so in the foreseeable future. The Company intends to employ its cash flow and earnings, if any, for working capital needs. 7
Shareholders The number of record holders of the Company's Common Stock as of December 31, 2009 was approximately 115. Dividends To date, we have not paid any cash dividends on our common stock, nor do we anticipate that we will pay dividends in the foreseeable future. Payment of dividends in the future will depend upon the Company's earnings and its cash requirements at that time. Securities Authorized for Issuance Under Equity Compensation Plans As of fiscal 2009, no securities were authorized for issuance under compensation plans previously approved by security holders. As of fiscal 2009, no securities were authorized for issuance under compensation plans not previously approved by security holders. Equity Securities Issuances During Fiscal 2007/2008 o On March 31, 2007 the Company issued two million five hundred thousand shares of restricted common stock to each of the new Directors Mr. Putnam and Mr. Laroche, for a total of five million (5,000,000) shares. o On March 31, 2007 the Company issued 1,250,000 shares of restricted common stock to its consultant Mr. Wayne A Doss for services. o On April 15, 2007, the Company was authorized to issue 10,000,000 shares of restricted common stock for the acquisition of the Lotta Minutes Calling Card rights. o On April 30, 2007 the Company was authorized to issue 5,000,000 shares of restricted common stock to two consultants involved in the Lotta Minutes Deal. o On October 1, 2007 the Company cancelled the Lotta Minutes deal for non performance of the acquisition agreement terms, ten million (10,000,000) shares were authorized to be issued in conjunction with the closing of the deal, the shares were never issued and the board of directors cancelled the authorization to issue said shares and the five million (5,000,000) shares for the consultants associated with the Lotta Minutes Deal. On June 20, 2008 the Board of Directors cancelled the authorization for the issuance of five million (5,000,000) shares to Mr. Laroche and Mr. Putnam which were authorized March 31, 2007, but were never issued. The Board of Directors initially approved the issuance of 2,500,000 shares of rule144 restricted common stock for each Director. The Board felt the shares were not warranted. The Board approved the issuance of one million (1,000,000) shares of rule 144 restricted common stock for Mr. Doss the current President and CEO for services to the company since Mr. Doss has served without salary since the October 1, 2007 appointment. On July 1, 2008 the Board of Directors approved the conversion of a Convertible Note Payable in the amount of 19,000.00 to convert at .02 per share for the issuance of nine hundred fifty thousand shares (950,000) of rule-144 restricted common stock. Item 6. Selected Financial Data ------------------------------- Not Applicable because we are a smaller reporting company. Item 7. Management Discussion and Analysis ------------------------------------------ The following Management's Discussion and Analysis ("MD&A) for the twelve month period ended December 31, 2009 compared with the twelve month period ended December 31, 2008 provides readers with an overview of the operations of Nova Natural Resources Corporation ("Nova"). The MD&A provides information that the management of Nova believes is important to access and understand the results of operations and the financial condition of the Company. 8
Our objective is to present readers with a view of Nova through the eyes of management. This discussion and analysis should be read in conjunction with Nova's financial statements and accompanying notes to the financial statements for the twelve month period ended December 31, 2009. About Nova Natural Resources Corporation Nova has been a business in transition since the divesture of the electronic business. Management has reviewed many business opportunities but has passed on those that did not insure the company with free and clear assets and exclusive protection of the opportunity. On March 29, 2010 the company entered into an agreement with Greenestone Clinic Inc., a Private Canadian Corporation, to provide Consulting Services to Nova Natural Resources Corporation for the development and operation of certain Medical Clinics in the province of Ontario, Canada. The term of the agreement is for one year whereby Greenestone will provide both the medical and business expertise in the initial startup of private clinics. Greenestone will provide the technical assistance to insure the clinics are in compliance with governmental policy and procedure requirements and the necessary detailed operational requirements to operate the clinics. Greenestone currently has an operational facility with some services Nova plans to offer in its first Ontario facility which may be viewed at www.greenestone.net The Company has not earned any revenue from limited principal operations since 2002. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Financial Accounting Standards Board Statement No. 7 (" SFAS 7 "). Management's discussion of anticipated future operations contains predictions and projections which may constitute forward looking statements. The Private Securities Litigation Reform Act of 1995, including provisions contained in Section 21E of the Securities Exchange Act of 1934, provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include, but are not limited to, the following: Forward-looking Information This Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-K which is not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate", or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties and actual results may differ materially depending on a variety of factors, many of which are not within the Company's control. ITEM 7A. QUANTITIATIVE AND QUALITATIVE DISCLOUSURES ABOUT MARKET RISK --------------------------------------------------------------------- Not applicable because we are a smaller reporting company. 9
Item 8. Financial Statements and Supplementary Data --------------------------------------------------- NOVA NATURAL RESOURCES CORPORATION Financial Statements December 31, 2009 and 2008
NOVA NATURAL RESOURCES CORPORATION Financial Statements December 31, 2009 and 2008 TABLE OF CONTENTS Page(s) ------- Report of Independent Registered Accounting Firm F-1 Balance Sheets as of December 31, 2009 and 2008 F-2 Statements of Operations for years ended December 31, 2009, 2008 and 2007 F-3 Changes in Stockholders' Deficit for the years ended December 31, 2009 and 2008 F-4 Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007 F-5 Notes to the Financial Statements F-6 - F-11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders Nova Natural Resources Corporation We have audited the accompanying balance sheets of Nova Natural Resources Corporation (the Company) as of December 31, 2009 and 2008, and the related statements of operations, changes in stockholders' equity, and cash flows for the years then ended, and the year ended December 31, 2007. These financial statements are the responsibility of the Company's management. 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 of America). 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 were we 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Nova Natural Resources Corporation as of December 31, 2009 and 2008, and the results of its operations and cash flows for the years then ended, and the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in financial statement Note 2, the Company has incurred losses since inception, and has not engaged in any operations. This raises substantial doubt about the Company's ability to meet its obligations and to continue as a going concern. Management's plans in regard to this matter are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ EddyChin, Chartered Accountant Eddy Chin, Chartered Accountant Thornhill, Ontario March 29, 2010 F-1
NOVA NATURAL RESOURCES CORPORATION Balance Sheets December 31, 2009 2008 --------------- ---------------- ASSETS Current assets Cash $ 5,550 $ 849 --------------- ---------------- Total current assets 5,550 849 --------------- ---------------- Total assets $ 5,550 $ 849 =============== ================ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities $ 10,401 $ 37,676 Related party notes 168,687 96,992 --------------- ---------------- Total current liabilities 179,088 134,668 --------------- ---------------- Stockholders' deficit Common stock; $.01 par value, 50,000,000 shares authorized; 5,021,764 shares issued and outstanding 50,218 50,218 Additional paid-in capital 5,631,664 5,631,664 Accumulated deficit (5,855,420) (5,815,701) --------------- ---------------- Total stockholders' deficit (173,538) (133,819) --------------- ---------------- Total liabilities and stockholders' deficit $ 5,550 $ 849 =============== ================ See accompanying notes to financial statements F-2
NOVA NATURAL RESOURCES CORPORATION Statement of Operations Year Ended December 31, 2009 2008 2007 ---------------- ---------------- --------------------- Revenues $ - $ - $ - ---------------- ---------------- --------------------- Operating expenses General and administrative 39,719 14,289 88,500 ---------------- ---------------- --------------------- Total operating expenses 39,719 14,289 88,500 ---------------- ---------------- --------------------- Net loss $ (39,719) $ (14,289) $ (88,500) ================ ================ ===================== Net loss per common share $ (0.01) $ (0.00) $ (0.01) ================ ================ ===================== Weighted average shares outstanding 5,021,764 5,021,764 8,071,764 ================ ================ ===================== See accompanying notes to financial statements F-3
NOVA NATURAL RESOURCES CORPORATION Statement of Changes in Stockholders' Deficit Common Stock Additional Accumulated Shares Amount Paid-in Capital Deficit Total --------------- ---------------- --------------- --------------- ----------------- Balance, December 31, 2007 8,071,764 $ 80,718 $ 5,622,164 $ (5,801,382) $ (98,500) Adjustment - - - (30) (30) Common stock rescinded (4,000,000) (40,000) - - (40,000) Common stock issued for convertible note 950,000 9,500 9,500 - 19,000 Net loss, year ended December 31, 2009 - - - (14,289) (14,289) --------------- ---------------- --------------- --------------- ----------------- Balance, December 31, 2009 5,021,764 50,218 5,631,664 (5,815,701) (133,819) Net loss, year ended December 31, 2009 - - - (39,719) (39,719) --------------- ---------------- --------------- --------------- ----------------- Balance, December 31, 2009 5,021,764 $ 50,218 $ 5,631,664 $ (5,855,420) $ (173,538) =============== ================ =============== =============== ================= See accompanying notes to financial statements F-4
NOVA NATURAL RESOURCES CORPORATION Statements of Cash Flows Year Ended December 31, 2009 2008 2007 -------------- ------------- -------------- Operating activities Net loss $ (39,719) $ (14,289) $ (88,500) Adjustment to reconcile net loss to net cash used in operating activities: Accounts payable and accrued liabilities (27,275) (10,354) 26,000 -------------- ------------- -------------- Net cash used in operating activities (66,994) (24,643) (62,500) -------------- ------------- -------------- Investing activities - -------------- ------------- -------------- Financing activities Common stock issued for cash - - 62,500 Common stock rescinded - (40,000) - Common stock issued for convertible note - 19,000 - Proceeds from related party notes 90,695 65,492 - Repayments of related party notes (19,000) (19,000) - -------------- ------------- -------------- Net cash used in financing activities 71,695 25,492 62,500 -------------- ------------- -------------- Net change in cash during the year 4,701 849 - Beginning cash balance 849 - -------------- ------------- -------------- Ending cash balance 5,550 849 - ============== ============= ============== Supplemental cash flow information Cash paid for interest $ - $ - $ - ============== ============= ============== Cash paid for income taxes $ - $ - $ - ============== ============= ============== See accompanying notes to financial statements F-5
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 1 - Nature of Business Nova Natural Resources Corporation (the Company) is a Colorado Corporation formed for the purpose of mineral exploration. Management has decided that the company would be more valuable and the interest of its shareholders would be better served by the sale or reverse merger of the company and is actively looking at new business opportunities. Note 2 - Significant Accounting Policies Estimates --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash ---- For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2009, 2008 or 2007. Income taxes ------------ Income taxes are provided for using the liability method of accounting in accordance with SFAS No. 109 "Accounting for Income Taxes," and clarified by FIN 48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109." A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. Share Based Expenses -------------------- ASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. , may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity. F-6
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 2 - Significant Accounting Policies (continued) Share Based Expenses (continued) -------------------------------- The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity - Based Payments to Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date. Going Concern ------------- The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) as a last resort, seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recently Implemented Standards ------------------------------ ASC 105, Generally Accepted Accounting Principles ("ASC 105") (formerly Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162) reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board ("FASB") into a single source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. All guidance contained in the Accounting Standards Codification ("ASC") carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed "non-authoritative". F-7
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 2 - Significant Accounting Policies (continued) Recently Implemented Standards (continued) ------------------------------------------ ASC 105 is effective on a prospective basis for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the guidance included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Company's references to GAAP authoritative guidance but did not impact the Company's financial position or results of operations. ASC 855, Subsequent Events ("ASC 855") (formerly Statement of Financial Accounting Standards No. 165, Subsequent Events) includes guidance that was issued by the FASB in May 2009, and is consistent with current auditing standards in defining a subsequent event. Additionally, the guidance provides for disclosure regarding the existence and timing of a company's evaluation of its subsequent events. ASC 855 defines two types of subsequent events, "recognized" and "non-recognized". Recognized subsequent events provide additional evidence about conditions that existed at the date of the balance sheet and are required to be reflected in the financial statements. Non-recognized subsequent events provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date and, therefore; are not required to be reflected in the financial statements. However, certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. This guidance was effective prospectively for interim or annual financial periods ending after June 15, 2009. The Company implemented the guidance included in ASC 855 as of April 1, 2009. The effect of implementing this guidance was not material to the Company's financial position or results of operations. In August 2009, the FASB issued Accounting Standards Update No. 2009-05, "Measuring Liabilities at Fair Value," ("ASU 2009-05"). ASU 2009-05 provides guidance on measuring the fair value of liabilities and is effective for the first interim or annual reporting period beginning after its issuance. The Company's adoption of ASU 2009-05 did not have an effect on its disclosure of the fair value of its liabilities. In September 2009, the FASB issued ASC Update No. 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) ("ASC Update No. 2009-12"). This update sets forth guidance on using the net asset value per share provided by an investee to estimate the fair value of an alternative investment. Specifically, the update permits a reporting entity to measure the fair value of this type of investment on the basis of the net asset value per share of the investment (or its equivalent) if all or substantially all of the underlying investments used in the calculation of the net asset value is consistent with ASC 820. The update also requires additional disclosures by each major category of investment, including, but not limited to, fair value of underlying investments in the major category, significant investment strategies, redemption restrictions, and unfunded commitments related to investments in the major category. The amendments in this update are effective for interim and annual periods ending after December 15, 2009 with early application permitted. The Company does not expect that the implementation of ASC Update No. 2009-12 will have a material effect on its financial position or results of operations. F-8
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 2 - Significant Accounting Policies (continued) Recently Implemented Standards (continued) ------------------------------------------ In June 2009, FASB issued Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R) ("Statement No. 167"). Statement No. 167 amends FASB Interpretation No. 46R, Consolidation of Variable Interest Entities an interpretation of ARB No. 51 ("FIN 46R") to require an analysis to determine whether a company has a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has a) the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. The statement requires an ongoing assessment of whether a company is the primary beneficiary of a variable interest entity when the holders of the entity, as a group, lose power, through voting or similar rights, to direct the actions that most significantly affect the entity's economic performance. This statement also enhances disclosures about a company's involvement in variable interest entities. Statement No. 167 is effective as of the beginning of the first annual reporting period that begins after November 15, 2009. Although Statement No. 167 has not been incorporated into the Codification, in accordance with ASC 105, the standard shall remain authoritative until it is integrated. The Company does not expect the adoption of Statement No. 167 to have a material impact on its financial position or results of operations In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140 ("Statement No. 166"). Statement No. 166 revises FASB Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Extinguishment of Liabilities a replacement of FASB Statement 125 ("Statement No. 140") and requires additional disclosures about transfers of financial assets, including securitization transactions, and any continuing exposure to the risks related to transferred financial assets. It also eliminates the concept of a "qualifying special-purpose entity", changes the requirements for derecognizing financial assets, and enhances disclosure requirements. Statement No. 166 is effective prospectively, for annual periods beginning after November 15, 2009, and interim and annual periods thereafter. Although Statement No. 166 has not been incorporated into the Codification, in accordance with ASC 105, the standard shall remain authoritative until it is integrated. The Company does not expect the adoption of Statement No. 166 will have a material impact on its financial position or results of operations. Note 3 - Stockholders' Equity Common stock ------------ The authorized common stock of the Company consists of 50,000,000 shares with par value of $0.01. During the year ended December 31, 2009, the Company rescinded 4,000,000 shares of common stock issued to a consultant and also issued 950,000 shares of common stock valued at $19,000 for the conversion of an outstanding note payable. The Company did not issue any stock during the year ended December 31, 2009. There were 5,021,764 common shares outstanding as of December 31, 2009 and 2008. The Company is not authorized to issue preferred stock. F-9
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 3 - Stockholders' Equity (continued) Net loss per common share ------------------------- Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per Share." The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during 2009 or 2008. Note 4 - Income Taxes We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Per Statement of Accounting Standard No. 109 "Accounting for Income Tax" and FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No.109", when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry-forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry-forward period. The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: Income tax provision at the federal statutory rate 35% Effect on operating losses -35% ---------- - Net deferred tax assets consist of the following: 2009 2008 2007 -------------- ------------- --------------- Net operating loss carry forward $ 5,855,420 $ 5,815,701 $ 5,801,382 Valuation allowance (5,855,420) (5,815,701) (5,801,382) -------------- ------------- --------------- Net deferred tax asset $ - $ - $ - ============== ============= =============== F-10
NOVA NATURAL RESOURCES CORPORATION Notes to Financial Statements December 31, 2009 and 2008 Note 4 - Income Taxes (continued) A reconciliation of income taxes computed at the statutory rate is as follows: 2009 2008 2007 ---------------- --------------- ----------------- Tax at statutory rate $ 39,719 $ 14,289 $ 88,500 Valuation allowance (39,719) (14,289) (88,500) ---------------- --------------- ----------------- Net deferred tax asset $ - $ - $ - ================ =============== ================= The Company did not pay any income taxes during the years ended December 31, 2009, 2008 or 2007 The net federal operating loss carry forward will expire in 2023 and 2024. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. Note 5 - Related Party Transactions The Company has received loans multiple shareholders totaling from inception to December 31, 2009 for the purposes of funding operations. The loans are non-interest bearing and due on demand and as such are included in current liabilities as of the balance sheet dates. Additionally, the loans are convertible to common stock at the option of the note holder. Imputed interest has been considered but was determined to be immaterial to the financial statements as a whole. The Company received proceeds from such loans of $90,695 and $65,492 during the years ended December 31, 2009 and 2008. Additionally, $19,000 of the loans were repaid with cash during 2009 and $19,000 was converted to 950,000 shares of common stock during the year ended December 31, 2009. Note 6 - Subsequent Events The Company has evaluated subsequent events through March 25, 2010 and determined there are no events to disclose. F-11
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 We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the "Evaluation"), under the supervision and with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls") as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our President has concluded that the Company's disclosure controls and procedures were effective. Changes in Internal Controls ---------------------------- We have also evaluated our internal controls for financial reporting, and there have been no changes in our internal controls that have materially affected, or are reasonably likely to material affect, the internal control over financial reporting or in other factors that could affect those controls subsequent to the date of their last evaluation. Limitations on the Effectiveness of Controls -------------------------------------------- Our President and CEO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Management's Report on Internal Control over Financial Reporting ---------------------------------------------------------------- Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. 18
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. 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 made an internal assessment of the effectiveness of our internal control over financial reporting as of 12/31/2007. In making this assessment, it used the experience of the President and CEO. Based on this evaluation, our management concluded that the internal control is ineffective since there is a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by the President and CEO with no oversight by another internal professional with accounting expertise. Our President does possess accounting expertise but our company does not have an audit committee. This weakness is due to the company's lack of working capital to hire additional staff. To remedy this material weakness, we intend to raise additional capital to engage another internal accountant to assist with financial reporting as soon as our finances will allow. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report. PART III Item 10. Directors, Executive Officers, and Corporate Governance ---------------------------------------------------------------- The following table sets forth the names and ages of the member(s) of our Board of Directors and our executive officers and the positions held by each. Name Age Position ------------------- ------- -------------------------------- Wayne A. Doss 56 President, chief executive officer and director DR Luke Fazio 34 Director Mr. Doss was elected as president, chief executive officer and director in October 2007. Set forth below are descriptions of the background of the executive officer and director of the Company and principal occupations for the past five years: Wayne A. Doss was elected as president, chief executive officer and director of Nova Natural Resources Corporation in October 2007 and has acted in a consultant capacity since 2003. Before being elected as president, chief executive officer and director of Nova Mr. Doss was a business consultant for several Public Companies. Mr. Doss was the President and CEO of Keller Industries and Keller Ladders from 1989 to 2000, until the unit was sold. Keller was a 250,000,000 building products company with over 4,000 employees. The President and Chief Executive Officer was appointed by the Board of Directors and holds office at the discretion of the Board. None of the officers or Board member(s) has been involved in any bankruptcy petition filed by or against any business of which they were a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time. None of the officers or Board member(s) has any conviction in a criminal proceeding or is subject to a pending criminal proceeding. None of the officers or Board members is subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities. None of the officers or Board members have been found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our officers and directors and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership of equity securities of Nova with the SEC. Officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) forms that they file. Mr. Wayne Doss has not filed Form 4 Statement of Changes in Beneficial Ownership but his holdings are reflected in this filing. On March 29, 2010, Mr. Wayne A. Doss, Director of the company placed the name of Dr. Luke Fazio MD CM FRCSC, forward for nomination to the Board of Directors of the company. The Board of Directors unanimously resolved that Dr. Luke Fazio MD CM FRCSC be elected to the Board of Directors of Nova Natural Resources Corporation and serve for one year unless reelected for a longer term.Dr. Luke Fazio, 34, completed his medical school training at McGill University in Montreal in 1999. He performed his training in Urology at the University of Western Ontario and became a fellow of the Royal College of Surgeons of Canada in 2004. Dr. Fazio went on to a fellowship in endourology and minimally-invasive surgery at St. Michael's Hospital in Toronto in association with the University of Toronto. Dr. Fazio has been on staff as an attending urologist at Kingston General Hospital in association with Queen's University. Dr. Fazio is currently on staff at Humber River Hospital in Toronto practicing general urology with a special interest in the management of urinary stones and minimally-invasive surgery. Dr. Fazio also serves as a member of the medical team at Greenestone Clinic in Muskoka, Ontario, Canada 19
Code of Ethics The Board of Directors adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers and employees, including our CEO and senior officers. A copy of our Code of Ethics is attached hereto as an Exhibit 14. Shareholders may also request a copy of the Code of Ethics from: Nova Natural Resources Corporation Attention: Investor Relations 2000 NE 22nd Street Wilton Manors, Fl. 33305 Board Meetings and Committees On March 15, 2007 the shareholders of Nova Natural Resources Corp., by majority consent accepted the resignation of the sole Director and Officer of the Company Mr. Chris Tse, appointed Mr. David Putnam as the President & CEO and Chief Financial Officer of the Company, and appointed Mr. Nick Laroche as a Company Director. Mr. Putnam currently resides in Toronto, Ontario, therefore the Company executive offices are in the process of being relocated to Toronto, Ontario. This action was taken by the Shareholders of the Corporation by a vote, or concurrence of the majority of the outstanding shares. This action was approved in excess of the two third majority as required by Colorado Law and the Company Articles of Incorporation. On March 31, 2007 the newly appointed Board of Directors approved the appointment of Mr. Putnam as the Company President & CEO and the majority consent in reference to the appointment of the new Directors, Mr. Putnam and Mr. Laroche. The New Board of Directors approved the issuance of 2,500,000 shares of rule144 restricted common stock for each of it new Directors. The Board of directors authorized the President to proceed with the acquisition of the Lotta Minutes Prepaid Calling Card transaction after reviewing the Executive Summary. The Board authorized the President to proceed with securing the rights and privileges in an asset acquisition structure whereby Nova Natural Resources would acquire 100% of said rights and privileges. The President was authorized to issue up to ten million (10,000,000) shares of Nova Natural Resources Rule 144 Restricted Common Shares and up to $500,000.00 (with the condition the funds would be paid based upon a future funding or once the company has adequate working capital) to secure rights. On April 15, 2007 the Board approved the Lotta Minutes Pre-Paid Calling Card transaction and authorized the President to issue ten million (10,000,000) shares of Nova Natural Resources Rule 144 Restricted Common Stock to Glen Simon for 100% of 2133185 Ontario Inc., for all rights and privileges concerning the Lotta Minutes deal as defined in the Lotta Minutes Executive Summary and documentation. On April 30, 2007 the Board approved the consulting contracts with two outside consultants to assist the company in its new venture. The consultants, Mr. Aluwahlia and Mr. Wendlegoed will each receive 2,500,000 shares of rule 144 Restricted Common Stock at .01 for said services. On October 1, 2007 the Company cancelled the Lotta Minutes deal for non performance of the acquisition agreement terms, ten million (10,000,000) shares were authorized to be issued in conjunction with the closing of the deal, the shares were never issued and the board of directors cancelled the authorization to issue said shares and the five million (5,000,000) shares for the consultants associated with the Lotta Minutes Deal. On March 29, 2010, Mr. Wayne A. Doss, Director of the company placed the name of Dr. Luke Fazio MD CM FRCSC, forward for nomination to the Board of Directors of the company. The Board of Directors unanimously resolved that Dr. Luke Fazio MD CM FRCSC be elected to the Board of Directors of Nova Natural Resources Corporation and serve for one year unless reelected for a longer term.Dr. Luke Fazio, 34, completed his medical school training at McGill University in Montreal in 1999. He performed his training in Urology at the University of Western Ontario and became a fellow of the Royal College of Surgeons of Canada in 2004. Dr. Fazio went on to a fellowship in endourology and minimally-invasive surgery at St. Michael's Hospital in Toronto in association with the University of Toronto. Dr. Fazio has been on staff as an attending urologist at Kingston General Hospital in association with Queen's University. Dr. Fazio is currently on staff at Humber River Hospital in Toronto practicing general urology with a special interest in the management of urinary stones and minimally-invasive surgery. Dr. Fazio also serves as a member of the medical team at Greenestone Clinic in Muskoka, Ontario, Canada. On March 29, 2010, Mr. Nick Laroche, Director of Nova Natural Resources Corporation resigned and the Board of Directors accepted the resignation. Mr. Laroche decided to focus on his business interest and relocated to The Peoples Republic of China to join his new wife. 20
Audit Committee We currently do not have an Audit Committee, the Board currently handles the duties of the Audit Committee. The Company does not believe that not having an Audit Committee will have any adverse effect on its financial statements, based upon current operations. Management will assess whether an Audit Committee may be necessary in the future. Item 11. Executive Compensation ------------------------------- The President, Chief Executive Officer and Director has received cash compensation for our last fiscal year. There have been no annuity, pension or retirement benefits ever paid to our officers or directors. We currently do not have an employment agreement with the President, Chief Executive Officer and Sole Director. Summary Compensation Table The following table shows the compensation for the fiscal year ended December 31, 2009 earned by the President, Chief Executive Officer and Director: Fiscal Stock Year Awards Option All Other Name and Principle Position Ended Salary ($) Bonus ($) ($)(1) Awards ($)\ Compensation ($) Total ($) --------------------------------------------------------------------------------------------------------------------------------- Wayne A. Doss (as) 2009 $ 0 $ 0 $ 10,000 $ 0 $ 0 $ 10,000 President, Chief Executive Officer 2008 $ 0 $ 0 $ 10,000 $ 0 $ 0 $ 10,000 Item 12. Security Ownership of Certain Beneficial Owners and Management and --------------------------------------------------------------------------- Related Stockholder Matters. ---------------------------- The following table sets forth information regarding the ownership of our common stock as of December 31, 2009 by: (i) each Director; (ii) each of the Named Executives Officers in the Summary Compensation Table; (iii) all Executive Officers and Directors of the Company as a group and (iv) all those known by us to be beneficial owners of more than five percent of our common stock. As of December 31, 2009, there are 5,021,764 shares of common stock outstanding. Title Of Class Name and Beneficial Owner Amount and Nature of Beneficial Percent of Class Owner ------------------------------------------------------------------------------------------------------ Common Stock Wayne Doss 2,430,000 48.4 Common Stock Ed Blasiak 475,000 9.5 Common Stock Robert Salna 400,000 8 Item 13. Certain Relationships and Related Transactions ------------------------------------------------------- None 21
Item 14. Principal Accountant Fees and Services ----------------------------------------------- In January 2002, the Company's Board engaged Eddy S.L. Chin Chartered Accountant as the independent accountant of the Company. Fees that we paid to Eddy S.L. Chin Chartered Accountant for the fiscal year ended December 31, 2009, fees paid for the fiscal year ended December 31, 2008 and December 31, 2007 are set forth below: -------------------------------------------------------------------------------- 2009 2008 2007 Audit fees $ 10,000 $ 10,000 $ 10,000 Tax fees 0 All other fees 0 --------------------------------------------------- $ 10,000 $ 10,000 $ 10,000 =================================================== Audit Fees Audit fees were for professional services rendered for the audit of our annual financial statements for the years ended December 31, 2009, 2008 and 2007. Tax Fees Nil fees were paid to auditors for tax compliance, tax advice or tax compliance services during the fiscal years ended December 31, 2009, 2008and 2007. All Other Fees We did not incur any other fees billed by auditors for services rendered to our Company, other than the services covered in "Audit Fees" for the fiscal years ended December 31, 2009, 2008 and 2007. PART IV ------- ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. ------------------------------------------------- Exhibit No. Description Exhibit 14 Code of Ethics Exhibit 31.1 Section 302 Certification of the Chief Executive Officer Exhibit 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003 22
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NOVA NATURAL RESOURCES CORP. ---------------------------- Registrant DATE: March 30, 2010 By: /S/ Wayne A. Doss ------------------------------- Wayne A. Doss President, CEO and CFO 23