Attached files
| file | filename |
|---|---|
| EX-10.1 - JOINT VENTURE AGREEMENT - il2m INTERNATIONAL CORP. | f10k2013ex10i_dynamic.htm |
| EX-32.2 - CERTIFICATION - il2m INTERNATIONAL CORP. | f10k2013ex32i_dynamic.htm |
| EX-31.1 - CERTIFICATION - il2m INTERNATIONAL CORP. | f10k2013ex31i_dynamic.htm |
| EXCEL - IDEA: XBRL DOCUMENT - il2m INTERNATIONAL CORP. | Financial_Report.xls |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 2013
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to ___________
Commission File No. 333-176587
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(Name of small business issuer in its charter)
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Nevada
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27-3492854
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(State or other jurisdiction of
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(IRS Employer Identification No.)
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incorporation or organization)
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4263 Oceanside Blvd.
Oceanside, CA
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92056
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(Address of principal executive offices)
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(Zip Code)
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(619) 354-7972
(Registrant’s telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
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Title of each class registered:
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Name of each exchange on which registered:
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None
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None
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Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value
(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 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 reports), 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 Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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 Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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x
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
As of September 9, 2013, the registrant had 7,115,000 shares of its common stock outstanding.
Documents Incorporated by Reference: None.
TABLE OF CONTENTS
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2
FORWARD-LOOKING STATEMENTS
Certain information included in this Annual Report on Form 10-K (This “Report”) or in other materials we have filed or will file with the Securities and Exchange Commission (the “SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You can identify these statements by the fact that they do not relate to matters of strictly historical or factual nature and generally discuss or relate to estimates or other expectations regarding future events. They contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Such statements may include, but are not limited to, information related to: anticipated operating results; consumer demand; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues; selling, general and administrative expenses; interest expense; growth and expansion; anticipated income or benefits to be realized from our investments in unconsolidated entities; the ability to produce the liquidity and capital necessary to expand and take advantage of opportunities; legal proceedings and claims.
From time to time, forward-looking statements also are included in other periodic reports on Forms 10-Q and 8-K, in press releases, in presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. Many factors mentioned in this Report or in other reports or public statements made by us, such as government regulation and the competitive environment, will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.
Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
3
The Company
Dynamic Nutra Enterprises Holdings, Inc. (“DNE”, “we” or the “Company”), a Nevada Corporation, was incorporated in June 2010 to market and sell a brewer’s yeast product called Beta Glucan™ and later started selling other nutraceuticals. The term nutraceuticals is applied to products that range from isolated nutrients, dietary supplements and herbal products, specific diets, genetically modified food, and processed foods such as cereals, soups, and beverages. The products are exclusively derived from food sources that provide extra health benefits, in addition to the basic nutritional value found in foods. Depending on the jurisdiction, products may claim to prevent chronic diseases, improve health, delay the aging process, increase life expectancy, or support the structure or function of the body. For example, the Company’s first product, Beta Glucan, has the active component Beta 1, 3/1, 6-D glucans, which is an immune system modulator that has been be used successfully for years to ward off disease in humans. In addition, as of July 1, 2010, DNE has partnered with a network marketing organization to sell the highly successful Xango™ a nutraceutical product line derived from the mangosteen fruit which is rich in xanthones.
Our products do not require U.S. Food and Drug Administration (“FDA”) approval since the FDA has no approval authority over dietary supplements that do not include new dietary ingredients, such as our products. However, the FDA does require the following disclaimer to be found on such products: “These statements have not been evaluated by the FDA. This product is not intended to diagnose, cure, treat or prevent any disease.” As such, we have included such a disclaimer on our products. The Federal Trade Commission (“FTC”) regulates advertising, including infomercials, for dietary supplements. The FTC provides guidance under its Enforcement Policy Statement on Food Advertising; however, the FTC does not approve advertising. We have complied with the FTC provided guidance with respect to our products. However, if there are complaints raised by consumers or the FDA, the FTC is empowered to investigate such complaints.
Competition
We are a small and new entrant in the rapidly growing but crowded nutraceutical products marketplace utilizing network marketing distribution methods. Many large companies are marketing and selling supplements and nutraceuticals including General Nutrition Centers, The Vitamin Shoppe,. Amazon.com, Triarco Industries, Pfizer Nutrition Brand and Schiff Nutrition International.
We may find it hard to compete directly with these large retail brands and our marketing and sales efforts will be geared to build revenue with direct sales approaches.
Marketing and Sales
The Company is in the process of revising its original marketing and distribution method to follow a network marketing methodology (“NM”). NM is a marketing strategy in which the sales force is compensated not only for sales personally generated, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. Notable public companies in this sector are Amway, Mary Kay, PrePaid Legal and NuSkin.
Agreement with Viasalus, LLC
On June 20, 2011, we entered into an agreement with Viasalus, LLC for the purchase of a Beta Glucan product named Viasalus. Pursuant to our agreement, Viasalus, LLC will provide us a sample shipment of 200 bottles of Viasalus at a price of $1.00 per bottle, plus shipping costs. Following this initial shipment, Viasalus will sell us 1,000 bottles of the Beta Glucan product at a price of $5.00 per bottle. Thereafter, all re-orders of the Beta Glucan products must consist of a minimum order of 1,000 bottles at a purchase price of $15 per bottle. Further, we have agreed to sell the Viasalus products at a minimum of $59.95 per bottle, plus shipping costs, to our potential customers. We have further agreed to create a website in order to advertise and sell the Viasalus product.
4
Upon thirty (30) days notice, either party may terminate the Viasalus agreement. In addition, Viasalus, LLC shall have the right of first refusal to buy back any unused inventory, provided that we elect not to continue to sell such products.
Letter of Intent with DYNH Holdings, LLC
On April 12, 2013, we entered into a letter of intent (the “Letter of Intent”) with DYNH Holdings, LLC (“Holdings”) for the option to purchase 5,000,000 shares of common stock from Donna Cashwell. If exercised, this stock purchase would constitute a change of control transaction (the “Change of Control”). As of the date hereof, there has not been a Change of Control. However, on May 8, 2013, Donna Cashwell, our current controlling shareholder, and Laura Gignac the former officers and directors of the Company, resigned and Richard Wheeler was appointed as President, Chief Executive Officer and Director of the Company. If Holdings exercises the Option it shall obtain control of the Company. As of this date Holdings has not completed the required conditions to exercise the Option
Agreement with Pure Energy FX, Inc.
In furtherance of its new marketing plan, on July 19, 2013 the Company entered into a five year joint venture agreement with Pure Energy FX, Inc., for the purpose of conducing marketing and promotion efforts for certain beverage and health products, including a Playboy branded energy drink. The joint venture will conduct business under the name of “Alternative Health Solutions LLC”. According to the agreement, the Company agrees to contribute $27,000 to the joint venture over a three months period. Pure Energy FX, Inc. agrees to contribute all the marketing services and expertise for use in the joint venture.
Not required for smaller reporting companies.
Not required for smaller reporting companies.
Our principal executive office is located at 4263 Oceanside Blvd, Oceanside, CA 92056.
We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Not applicable.
5
Market Information
Our common stock commenced quotation on the OTC Bulletin Board (the “OTCBB”) under the symbol “DYNH” on May 31, 2012. The OTCBB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. An OTCBB equity security generally is any equity that is not listed or traded on a national securities exchange. The OTC Bulletin Board is generally considered to be a less active and efficient market than the NASDAQ Global Market, the NASDAQ Capital Market or any national exchange and will not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would offer.
Price range of common stock
In the twelve months ending May 31, 2013 our shares have traded between a low of $1.55 per share and a high of $2.04 per share with a closing price as of September 11, 2013 of $1.92 per share.
The following table shows, for the periods indicated, the high and low bid prices per share of our common stock as reported by the OTCBB quotation service. These bid prices represent prices quoted by broker-dealers on the OTCBB quotation service. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.
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Fiscal Year Ended May 31, 2013 (1)
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High
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Low
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||||||
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Quarter ended August 31, 2012
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$ | 1.85 | $ | 1.65 | ||||
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Quarter ended November 30, 2012
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$ | 1.85 | $ | 1.85 | ||||
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Quarter ended February 28, 2013
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$ | 1.85 | $ | 1.85 | ||||
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Quarter ended May 31, 2013
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$ | 2.05 | $ | 1.55 | ||||
_________________________
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(1)
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A public market for our common stock did not exist prior to May 31, 2012.
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Holders of Capital Stock
As of the date of this Report, there are more than 300 holders of our common stock.
6
Dividends
The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
On May 8, 2013, the Company issued 50,000 shares of its common stock, par value $0.0001, to Richard Wheeler, the Company’s President, Chief Executive Officer and Director, pursuant to a consulting agreement between Mr. Wheeler and the Company.
On June 11, 2013, the Company issued 25,000 shares of its common stock, par value $0.0001, to Luke Quinn, a Director, pursuant to a consulting agreement between Mr. Quinn and the Company.
The above issuances of shares are exempt from registration, pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Not required for smaller reporting companies.
7
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Limited Operating History
We have not previously demonstrated that we will be able to expand our business. We cannot guarantee that the expansion efforts described in this prospectus will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our renovation services offering.
If the proceeds of our private placement prove to be insufficient to generate additional profits, future financing may not be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
Our independent auditors have issued a going concern opinion that raises substantial doubt about our ability to continue as a going concern. As reflected in the financial statements in this prospectus, we are a development stage company with limited operations. We had a net loss of $288,747 since inception (June 8, 2010) through May 31, 2013.
Results of Operations for the year ended May 31, 2013 as compared to the year ended May 31, 2012
The following table presents the statement of operations for the year ended May 31, 2013 as compared to the year ended May 31, 2012. The discussion following the table is based on these results.
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For the Years Ended
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May 31, 2013
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May 31, 2012
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Revenues
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$
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50
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$
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403
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Total Operating Expenses
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112,274
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136,963
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Net loss
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$
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(112,547
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)
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$
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(136,560
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)
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Net loss per share - basic and diluted
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$
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(0.02
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)
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$
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(0.02
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)
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Total Revenues
For the year ended May 31, 2013 we had revenues of $50 compared to $403 for the year ended May 31, 2012. The company has had difficulty keeping the sales network intact over the last year. It is hoping that a renewed effort to attract new team members will kick off in the next quarter.
Operating Expenses
Operating expenses for the fiscal year ended May 31, 2013 were $112,274 compared to $136,963 for the year ended May 31, 2012. For the fiscal year ended May 31, 2013 we incurred consulting fees of $57,500, professional fees totaling $27,875, advertising expenses of $0, in kind contribution of services of $6,760, general and administrative expenses totaling $18,559, and impairment loss from website development of $1,580. For the fiscal year ended May 31, 2012 our consulting fees totaled $60,440, professional fees were $55,744, advertising expenses of $2,470, in kind contribution of services was $6,760, general and administrative expenses totaled $11,549 and impairment loss from website development was $0. Cash on hand as of May 31, 2013 was $50,036 compared to $22,803 for the year ended May 31, 2012.
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Net Loss
Net loss was $(112, 547) for the year ended May 31, 2013 compared to ($136,560) for the year ended May 31, 2012. Our net loss since inception (June 8, 2010) through the year ended May 31, 2013 was $(288,747).
Capital Resources and Liquidity
We raised cash to grow our business through a private placement that was completed on September 20, 2010. If we determine that we need more money to build our business, we will seek alternative sources, like a second private placement of securities or loans from our officers or others. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and are unable to raise it, we will either have to suspend or cease our expansion plans entirely. Other than as described in this registration statement, we have no other financing plans. The company is making minimal revenues and will be attempting to either grow the revenue stream or possibly bring in additional capital.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Going Concern
As reflected in the accompanying condensed unaudited financial statements, the Company is in the development stage with no operations, used cash in operations of $225,042 from inception and has a net loss since inception of $288,747. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through shareholder loans and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
Critical Accounting Policies
Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required 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 revenues and expenses during the reported period. Actual results could differ from those estimates.
Loss Per Share
In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. As of May 31, 2013 and May 31, 2012 there are no common stock equivalents outstanding.
9
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, 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 ASC 740-10-25, 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 amounts of the Company’s short-term financial instruments, including accounts receivable and accounts payable, approximate fair value due to the relatively short period to maturity for these instruments.
Not required for smaller reporting companies.
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
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10
To the Board of Directors of:
Dynamic Nutra Enterprises Holdings, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Dynamic Nutra Enterprises Holdings, Inc. (a development stage company) (the “Company”) as of May 31, 2013 and 2012, and the related statement of operations, changes in stockholders’ equity (deficit) and cash flows for the years ended May 31, 2013 and 2012 and the period from June 8, 2010 (inception) to May 31, 2013. 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). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Dynamic Nutra Enterprises Holdings, Inc. (a development stage company) as of May 31, 2013 and 2012 and the results of its operations and its cash flows for the years ended May 31, 2013 and 2012 and the period from June 8, 2010 (inception) to May 31, 2013 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 10 to the financial statements, the Company is in the development stage with limited operations, a stockholder deficiency of $34,545, a net loss since inception of $288,747 and used $225,042 of cash in operations from inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
LIGGETT, VOGT & WEBB, P.A.
Certified Public Accountants
Boynton Beach, Florida
September 13, 2013
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(A Development Stage Company)
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Balance Sheets
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Assets
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May 31, 2013
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May 31, 2012
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Current Assets:
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Cash
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$ | 50,036 | $ | 22,803 | ||||
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Loan receivable
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300 | - | ||||||
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Total Current Assets
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50,336 | 22,803 | ||||||
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Property and equipment, net
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- | 1,881 | ||||||
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Other Assets:
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Debt Issue Cost, net
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9,141 | - | ||||||
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Total Assets
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$ | 59,477 | $ | 24,684 | ||||
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Liabilities and Stockholders' Equity (Deficit)
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Current Liabilities:
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Accounts payable and accrued expenses
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$ | 41,422 | $ | 1,799 | ||||
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Note payable
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100 | - | ||||||
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Total Current Liabilities
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41,522 | 1,799 | ||||||
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Long Term Liabilities:
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Note Payable - Convertible
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52,500 | - | ||||||
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Total Liabilities
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94,022 | 1,799 | ||||||
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Commitments and Contingencies (See Note 7)
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Stockholders' Equity (Deficit):
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Preferred stock, $0.0001 par value; 10,000,000 shares authorized;
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none issued and outstanding
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- | - | ||||||
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Common stock, $0.0001 par value, 100,000,000 shares authorized;
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7,090,000 and 7,040,000 shares issued and outstanding, respectively
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709 | 704 | ||||||
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Additional paid-in capital
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253,493 | 198,381 | ||||||
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Deficit accumulated during the development stage
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(288,747 | ) | (176,200 | ) | ||||
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Total Stockholders' Equity (Deficit)
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(34,545 | ) | 22,885 | |||||
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Total Liabilities and Stockholders' Equity (Deficit)
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$ | 59,477 | $ | 24,684 | ||||
See accompanying notes to financial statements
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(A Development Stage Company)
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Statements of Operations
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For the Years Ended
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For the period from
June 8, 2010
(Inception) to
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May 31, 2013
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May 31, 2012
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May 31, 2013
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Revenues
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$ | 50 | $ | 403 | $ | 1,878 | ||||||
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Operating Expenses
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Consulting expense
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57,500 | 60,440 | 142,940 | |||||||||
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Professional expense
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27,875 | 55,744 | 89,619 | |||||||||
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Officers compensation
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- | - | 4,900 | |||||||||
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Advertising expense
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- | 2,470 | 6,170 | |||||||||
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In kind contribution of services
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6,760 | 6,760 | 13,520 | |||||||||
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General and administrative
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18,559 | 11,549 | 31,573 | |||||||||
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Impairment loss from website development
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1,580 | - | 1,580 | |||||||||
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Total Operating Expenses
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112,274 | 136,963 | 290,302 | |||||||||
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Loss from Operations
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(112,224 | ) | (136,560 | ) | (288,424 | ) | ||||||
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Other Expense
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||||||||||||
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Interest expense
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(323 | ) | - | (323 | ) | |||||||
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Net loss before provision for income tax
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(112,547 | ) | (136,560 | ) | (288,747 | ) | ||||||
| Provision for income taxes | - | - | - | |||||||||
| Net loss | $ | (112,547 | ) | $ | (136,560 | ) | $ | (288,747 | ) | |||
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Net loss per share - basic and diluted
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$ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | |||
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Weighted average number of shares outstanding
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during the period - basic and diluted
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7,043,151 | 7,040,000 | 6,713,343 | |||||||||
See accompanying notes to financial statements
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(A Development Stage Company)
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Statement of Changes in Stockholders' Equity (Deficit)
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For the Period From June 8, 2010 (Inception) to May 31, 2013
|
||||||||||||||||||||||||||||
| Deficit | ||||||||||||||||||||||||||||
|
Preferred Stock
|
Common stock
|
accumulated | ||||||||||||||||||||||||||
|
$.001 Par Value
|
$0.0001 Par Value
|
Additional
|
during the
|
Total
|
||||||||||||||||||||||||
|
Number of
|
Paid-in
|
development |
Stockholder's
|
|||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
stage
|
Equity (Deficit)
|
||||||||||||||||||||||
|
Balance June 8, 2010
|
- | - | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||
|
Common Stock issued at par to Founder for cash and services
|
- | - | 5,000,000 | 500 | - | - | 500 | |||||||||||||||||||||
|
Common stock issued through private placement memorandum for cash ($0.10)
|
- | - | 2,040,000 | 204 | 203,796 | - | 204,000 | |||||||||||||||||||||
|
Blue Sky Fees
|
- | - | - | - | (12,175 | ) | - | (12,175 | ) | |||||||||||||||||||
|
Net loss for the period from June 8, 2010 (inception) to May 31, 2011
|
- | - | - | - | - | (39,640 | ) | (39,640 | ) | |||||||||||||||||||
|
Balance, May 31, 2011
|
- | - | 7,040,000 | 704 | 191,621 | (39,640 | ) | 152,685 | ||||||||||||||||||||
|
In kind contribution of services
|
- | - | - | - | 6,760 | - | 6,760 | |||||||||||||||||||||
|
Net loss for the year ended May 31, 2012
|
- | - | - | - | - | (136,560 | ) | (136,560 | ) | |||||||||||||||||||
|
Balance, May 31, 2012
|
- | - | 7,040,000 | 704 | 198,381 | (176,200 | ) | 22,885 | ||||||||||||||||||||
|
In kind contribution of services
|
- | - | - | - | 6,760 | - | 6,760 | |||||||||||||||||||||
|
Expenses paid by shareholder on Company's behalf
|
- | - | - | - | 43,357 | - | 43,357 | |||||||||||||||||||||
|
Stock issued for services
|
- | - | 50,000 | 5 | 4,995 | - | 5,000 | |||||||||||||||||||||
|
Net loss for the year ended May 31, 2013
|
- | - | - | - | - | (112,547 | ) | (112,547 | ) | |||||||||||||||||||
|
Balance, May 31, 2013
|
- | $ | - | 7,090,000 | $ | 709 | $ | 253,493 | $ | (288,747 | ) | $ | (34,545 | ) | ||||||||||||||
See accompanying notes to financial statements
14
|
(A Development Stage Company)
|
||||||||||||
|
Statements of Cash Flows
|
||||||||||||
|
For the Years Ended
|
For the period from
June 8, 2010
(Inception) to
|
|||||||||||
|
May 31, 2013
|
May 31, 2012
|
May 31, 2013
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net Loss
|
$ | (112,547 | ) | $ | (136,560 | ) | $ | (288,747 | ) | |||
|
Adjustments to reconcile net loss to cash used in operating activities:
|
||||||||||||
|
Amortization Expense
|
301 | 599 | 1,420 | |||||||||
|
Debt issue costs
|
263 | - | 263 | |||||||||
|
Stock issued for services
|
- | - | 500 | |||||||||
|
Stock issued for services - related party
|
5,000 | - | 5,000 | |||||||||
|
In kind contribution of services
|
6,760 | 6,760 | 13,520 | |||||||||
|
Impairment loss on website development
|
1,580 | - | 1,580 | |||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
(Increase) in accounts receivable
|
- | 128 | - | |||||||||
|
(Decrease)Increase in accounts payable and accrued expenses
|
39,623 | (8,201 | ) | 41,422 | ||||||||
|
Net Cash Used In Operating Activities
|
(59,020 | ) | (137,274 | ) | (225,042 | ) | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Payments for property and equipment
|
- | - | (3,000 | ) | ||||||||
|
Loan receivable
|
(300 | ) | - | (300 | ) | |||||||
|
Net Cash Provided By Investing Activities
|
(300 | ) | - | (3,300 | ) | |||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from note payable
|
100 | - | 100 | |||||||||
|
Proceeds from convertible note, net of debt issue costs
|
43,096 | - | 43,096 | |||||||||
|
Proceeds from issuance of common stock
|
- | - | 191,825 | |||||||||
|
Expenses paid by former shareholder
|
43,357 | - | 43,357 | |||||||||
|
Net Cash Provided By Financing Activities
|
86,553 | - | 278,378 | |||||||||
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
27,233 | (137,274 | ) | 50,036 | ||||||||
|
Cash and Cash Equivalents - Beginning of Period
|
22,803 | 160,077 | - | |||||||||
|
Cash and Cash Equivalents - End of Period
|
$ | 50,036 | $ | 22,803 | $ | 50,036 | ||||||
|
SUPPLEMENTARY CASH FLOW INFORMATION:
|
||||||||||||
|
Cash Paid During the Period for:
|
||||||||||||
|
Taxes
|
$ | - | $ | - | $ | - | ||||||
|
Interest
|
$ | - | $ | - | $ | - | ||||||
See accompanying notes to financial statements
15
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization
Dynamic Nutra Enterprises Holdings, Inc. (a development stage company) (the "Company") (“DNE”) was incorporated under the laws of the State of Nevada on June 8, 2010 to manufacture and market a brewer’s yeast product called Beta Glucan™ that can eliminate acne for a majority of people who use it as a dietary supplement. In addition, DNE plans to partner with a network marketing organization to sell the highly successful Xango™ nutraceutical product line.
Activities during the development stage include developing the business plan and raising capital.
(B) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required 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 revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated lives of depreciable assets, valuation of deferred tax assets, valuation of in-kind contribution of services and impairment of website development.
(C) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At May 31, 2013 and May 31, 2012, the Company had no cash equivalents.
(D) Website Development Costs
The Company has adopted the provisions of FASB Accounting Standards Codification No. 350 Intangible-Goodwills and Other. Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated five year life of the asset. During the year ended May 31, 2011, the Company incurred $3,000 in website development costs.
During the year ended May 31, 2013, the Company determined that the website was fully impaired and recognized an impairment of $1,580.
16
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
(E) Loss Per Share
In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There are no common stock equivalents outstanding for the years ended May 31, 2013 and 2012 and therefore a separate computation of diluted loss per share is not presented.
(F) Advertising Expense
Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $0, $2,470 and $6,170 for the year ended May 31, 2013 and May 31, 2012, and the period from June 8, 2010 (inception) to May 31, 2013, respectively.
(G) Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, 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 ASC 740-10-25, 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.
As of May 31, 2013 and 2012, the Company has a net operating loss carryforward of $274,898 and $169,040, respectively, available to offset future taxable income through May 31, 2033. The valuation allowance at May 31, 2013 was $95,740 and at May 31, 2012 was $57,474. The net change in the valuation allowance for the year ended May 31, 2013 was an increase of $35,992. The Company’s income tax returns for years 2013 and 2012 are currently open, by statute, for review by authorities. All other losses incurred by the Company in previous years and through the year ended May 31, 2013 are limited due to Internal Revenue Code Section 382 which restricts the deductibility of prior net operating losses where there has been a change in control. It was determined that an ownership change occurred in April 3, 2013. The amount of the Company’s net operating losses incurred prior to the ownership change is limited based on the value of the Company on the date of ownership change.
17
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
The Company's income tax expense differed from the statutory rates (federal 34% and state 0.00%) as follows:
|
May 31, 2013
|
May 31, 2012
|
|||||||
|
Statutory rate applied to earnings before income taxes:
|
$ | (38,266 | ) | $ | (46,430 | ) | ||
|
Increase (decrease) in income taxes resulting from:
|
||||||||
|
State income taxes
|
||||||||
|
Change in deferred tax asset valuation allowance
|
35,992 | 44,132 | ||||||
|
Non-deductible expenses
|
2,275 | 2,298 | ||||||
|
Income Tax Expense
|
$ | - | $ | - | ||||
|
May 31, 2013
|
May 31, 2012
|
|||||||
|
Deferred tax liability:
|
$ | - | $ | - | ||||
|
Deferred tax asset
|
||||||||
|
Net Operating Loss Carryforward
|
95,740 | 57,474 | ||||||
|
Valuation allowance
|
(95,740 | ) | (57,474 | ) | ||||
|
Net deferred tax asset
|
- | - | ||||||
|
Net deferred tax liability
|
$ | - | $ | - | ||||
The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company's continued operating losses and the uncertainty of the Company's ability to utilize all of the net operating loss carryforwards before they will expire through the year 2033.
The components of income tax expense related to continuing operations are as follows:
|
May 31, 2013
|
May 31, 2012
|
|||||||
| Federal | ||||||||
| Current | $ | - | $ | - | ||||
| Deferred | - | - | ||||||
| $ | - | $ | - | |||||
| State and Local | ||||||||
| Current | $ | - | $ | - | ||||
| Deferred | - | - | ||||||
| $ | - | $ | - | |||||
(H) Business Segments
The Company operates in one segment and therefore segment information is not presented.
18
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
(I) Revenue Recognition
The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company recognizes revenue from commissions earned upon the purchase of nutraceutical products by its network members monthly as commissions are earned. The rate of commissions earned is based on the total monthly sales volume and ranges between 5-10% of net sales.
The Company will recognize revenue from the sale of Beta Glucan net of any sales discounts and incentives at the time the price is fixed and determinable, the products are shipped and the collections are reasonably assured. The Company will recognize any promotional products, samples or incentives as cost of goods sold following the guidance of ASC 605-50-25. The Company will include shipping revenue in gross sales and includes the cost of shipping in cost of goods sold.
(J) Concentration of Credit Risk
The Company at times has cash in banks in excess of FDIC insurance limits. The Company had no cash in excess of FDIC insurance limits at May 31, 2013 and 2012.
For the years ended May 31, 2013 and 2012, 100% of sales were from one customer.
(K) Fair Value of Financial Instruments
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
19
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
|
|
●
|
Level 1 – quoted market prices in active markets for identical assets or liabilities. |
|
|
●
|
Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
●
|
Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
At May 31, 2013 and 2012, the Company has no instruments that require additional disclosure.
(L) Debt Issue Costs
Debt issue costs in connection with raising funds through the issuance of convertible note are amortized over the life of the convertible note.
(L) Recent Accounting Pronouncements
Recent accounting pronouncements issued by FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, did not, or are not believed by management, to have a material impact on the Company’s present or future financial statements.
NOTE 2 WEBSITE DEVELOPMENT COSTS
|
May 31, 2013
|
May 31, 2012
|
|||||||
|
Website development costs
|
$ | 1,420 | $ | 3,000 | ||||
|
Accumulated amortization
|
(1,420 | ) | (1,119 | ) | ||||
|
Total
|
$ | - | $ | 1,881 | ||||
Amortization expense was $301, $599, $1,420 for the year ended May 31, 2013 and 2012, and the period from June 8, 2010 (inception) to May 31, 2013, respectively.
During the year ended May 31, 2013, the Company determined that the website was fully impaired and recognized an impairment of $1,580.
NOTE 3 LOAN RECEIVABLE
During the year ended May 31, 2013, the Company loaned $300 to a former related party.The loan is non-interest bearing and due on demand.
20
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
NOTE 4 DEBT ISSUE COSTS
During the year ended May 31, 2013, the Company paid debt issue costs totaling $9,404.
The following is a summary of the Company’s debt issue costs:
|
Debt issue costs as of May 31, 2013
|
$ | 9,404 | ||
|
Amortization of debt issue costs as of May 31, 2013
|
$ | (263 | ) | |
|
Debt issue costs – net as of May 31, 2013
|
$ | 9,141 |
NOTE 5 CONVERTIBLE NOTE
On May 17, 2013 the Company issued a convertible promissory note in the amount of $52,500. The note is bearing interest at a rate of 3% per annum and is due on September 30, 2014. The note can be converted into 50,000 shares of Preferred Stock of the Company prior to the maturity date or if a change of control occurs prior to repayment. As of May 31, 2013, the Company has accrued interest of $60.
NOTE 6 NOTE PAYABLE
On May 14, 2014 the Company received $100 from an unrelated party. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand.
NOTE 7 STOCKHOLDERS’ EQUITY
(A) Preferred Stock
The Company’s Articles of Incorporation authorize 10,000,000 shares of preferred stock with a par value of $.0001 with rights and preferences to be determined by the Board of Directors.
(B) Common Stock Issued for Cash and Services
For the year ended May 31, 2013, the Company issued 50,000 shares of common stock to a consultant for services with a fair value of $5,000 ($0.10 per share) (See Note 9).
For the period ended May 31, 2011, the Company issued 2,040,000 shares of common stock for $204,000 ($0.10/share) and paid direct offering cost of $12,175. The Company also issued 5,000,000 shares of common stock to its founder for $100 in cash and services with a fair value of $400 ($0.0001 per share) (See Note 9).
21
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
(C) In Kind Contribution of Services
For the year ended May 31, 2013, the Officers of the Company contributed services having a fair value of $6,760 (See Note 8).
For the year ended May 31, 2012, the Officers of the Company contributed services having a fair value of $6,760 (See Note 8).
NOTE 8 COMMITMENTS AND CONTINGENCIES
On May 24, 2013, the Company entered into a 21 month consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $500 per month from May 24, 2013 until and including August 30, 2013. The consulting fee increases to $2,500 per month from September 1, 2013 until and including February 24, 2015.
On May 8, 2013, the Company entered into a five year consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $2,000 a month and grant 50,000 shares of its common stock.
On January 1, 2011, the Company entered into a consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $5,000 a month. The agreement was terminated effective March 31, 2013. The Company paid $50,000 and $60,000 for services for the years ended May 31, 2013 and May 31, 2012, respectively.
On July 15, 2010, the Company entered into a $10,000 consulting agreement for services to further the business. These services include, but are not limited to the following: identify individuals and groups that may have an interest in learning more about the product offerings and invite these individuals and groups to listen to a presentation and assist the team with follow up. This agreement is to remain in effect unless either party desires to cancel the agreement. No services were rendered as of May 31, 2013.
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.
22
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2013
NOTE 9 RELATED PARTY TRANSACTIONS
For the year ended May 31, 2013, the Officers of the Company contributed services having a fair value of $6,760 (See Note 6(C)).
For the year ended May 31, 2013, the Company issued 50,000 shares of common stock to a consultant for services with a fair value of $5,000 ($0.10 per share) (See Note 7(B)).
For the year ended May 31, 2012, the Officers of the Company contributed services having a fair value of $6,760 (See Note 6(C)).
For the period ended May 31, 2011, the Company issued 2,040,000 shares of common stock for $204,000 ($0.10/share) and paid direct offering cost of $12,175. The Company also issued 5,000,000 shares of common stock to its founder for $100 in cash and services with a fair value of $400 ($0.0001 per share) (See Note 6(B)).
The Company paid $4,500 to the Officers of the Company as compensation expense during 2011.
NOTE 10 GOING CONCERN
As reflected in the accompanying financial statements, the Company is in the development stage with limited operations, a stockholders deficiency of $34,545, has used cash in operations of $225,042 from inception and has a net loss since inception of $288,747. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
NOTE 11 SUBSEQUENT EVENTS
On June 11, 2013, the Company entered into a five year consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $2,000 a month and grant 25,000 shares of its common stock.
On July 19, 2013 the Company entered into a five year joint venture agreement with Pure Energy FX, Inc., for the purpose of conducing marketing and promotion efforts for certain beverage and health products, including a Playboy branded energy drink. The joint venture will conduct business under the name of “Alternative Health Solutions LLC”. According to the agreement, the Company agrees to contribute $27,000 to the joint venture over a three months period. Pure Energy FX, Inc. agrees to contribute all the marketing services and expertise for use in the joint venture.
23
Our accountant is Liggett, Vogt and Webb, P.A. Independent Registered Public Accounting Firm. We do not presently intend to change accountants. At no time have there been any disagreements with such accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s President, Chief Financial Officer, Secretary, Treasurer and Director, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, 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 May 31, 2013. 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 President have determined and concluded that, as of May 31, 2013, the Company’s internal control over financial reporting was effective.
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 Control over Financial Reporting
On April 12, 2013, we entered into a Letter of Intent with DYNH Holdings, LLC, pursuant to which, the officers and directors of the Company resigned and Richard Wheeler was appointed as President, Chief Executive Officer and Director of the Company. No change in our system of internal control over financial reporting occurred during the period covered by this annual report for the fiscal year ended May 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
24
Our directors, executive officers and key employees are listed below. Our executive officers are elected annually by our Board of Directors. Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.
|
Name
|
Age
|
Position
|
||
|
Richard Wheeler
|
72
|
President, Chief Executive Officer and Director
|
||
|
Luke Quinn (1)
|
59
|
Director
|
|
(1)
|
Luke Quinn was appointed as a Director of the Company on June 11, 2013.
|
Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.
Richard Wheeler, 72, President, Chief Executive Officer and Director
Richard Wheeler, 72, serves as the President, Chief Financial Officer and sole member of the board of directors of the Company. Mr. Wheeler has been successful in marketing, administration and relationship management for over thirty-five years in the medical devices and circuit board marketing and manufacturing industries. In 2011, Mr. Wheeler filed for protection under Chapter 7 of the U.S. Bankruptcy Code in the United States Bancruptcy Court for the Southern District of California due to supply issues relating to the Japanese tsunami, and was discharged on March 27, 2012. For almost twenty years, as CEO of SVS Imaging, Inc., a medical imaging systems provider, based in Carlsbad, CA, he established a multi-million dollar distribution procedure to the highly competitive medical services industry. After his initial schooling, he was employed by United Technology’s Tool and Die Group, where he holds twelve patents to reduce noise and vibration in the workplace. Using this experience he formed N.E. Industrial Sales and Supply Company, which was an early proponent of workplace ergonomics, which developed soundproofing, shock and vibration absorption systems for large equipment.
25
Mr. Wheeler has continually been involved in his community as a long time member of the Carlsbad Rotary. As Foundation president, he successfully organized, in concert with the AVID curriculum, “Advancement Via Individual Determination,” a scholarship program for Carlsbad High School students.
Mr. Wheeler’s qualifications to serve on our board of directors include his extensive medical device marketing, administrative and management experience.
Luke Quinn, 59, Director
Mr. Quinn is 59 years old. Since March 2005, he has been an investor in real estate purchasing and selling real property including renovating/maintaining residential and commercial building for his own account. He also has had experience working in the resort development offices of Intravelnet Ltd, Vancouver BC and Handa International, St. John’s, Antigua. Prior to his experience in real estate was the Official Representative in Ukraine – Foreign trade association “Mashinoexport” (One of top 20 export-import association of Russia), Kiev, Ukraine. Mr. Quinn’s duties included searching for business partners in such industries as aviation, shipbuilding, railway transport and electronic. In addition, Mr. Quinn prepared quarterly business and political analyses of economic climate in Ukraine. His highest earned degree is a PhD in Control Systems from Institute of Cybernetics, National Academy of Science of Ukraine. Mr. Quinn’s language proficiency include English, Russian, Ukrainian, Polish (spoken), French (spoken)
Mr. Quinn’s qualifications to serve on our board of directors include his executive and extensive real estate experience.
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.
Director Independence and Committees
We have no independent directors nor have we formed any nominating, audit or compensation committees.
Family Relationships
There are no family relationships between our directors and executive officers.
Certain Legal Proceedings
To the best of our knowledge, other than Mr. Wheeler (as described above) none of our directors or executive officers has, during the past ten years:
|
●
|
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
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●
|
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
|
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●
|
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
|
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●
|
been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
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●
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been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
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●
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been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
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, the Company has an effective Registration Statement on Form S-1and is not required to comply with Section 16(c) of the Exchange Act.
26
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.
Board Committees
Our Board of Directors has no separate committees and our Board of Directors acts as the audit committee and the compensation committee. We do not have an audit committee financial expert serving on our Board of Directors.
The Company paid $7,000 to its executive during the year ended May 31, 2013.
There are no other stock option plans, retirement, pension or profit sharing plans for the benefits of our officers and directors other than as described herein.
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the period ended May 31, 2013 and May 31, 2012.
Summary Compensation Table
|
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option Awards
($)
|
Non-Equity Incentive Plan Compensation ($)
|
Non-Qualified Deferred Compensation Earnings
($)
|
All Other Compensation
($)
|
Totals
($)
|
|||||||||||||||||||||||||
|
Donna
Cashwell,
President,
Chief Executive
Officer and
Director(1)
|
2013
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
|||||||||||||||||
|
Donna
Cashwell,
President,
Chief Executive(1)
Officer and Director
|
2012
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
|||||||||||||||||
|
Laura Gignac,
Vice President
and
Director(1)
|
2013
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
|||||||||||||||||
|
Laura Gignac,
Vice President
and
Director(1)
|
2012
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
|||||||||||||||||
|
Richard Wheeler,
President, Chief Executive Officer, Director(2)
|
2013
|
$
|
2,000
|
$
|
0
|
$
|
5,000
|
(3) |
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
7,000
|
||||||||||||||||
|
Richard Wheeler,
President, Chief Executive Officer, Director(2)
|
2012
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||||
| (1) | On May 8, 2013, Donna Cashwell and Laura Gignac resigned from their positions as officers and directors of the Company. |
| (2) | On May 8, 2013, Richard Wheeler was appointed as President, Chief Executive Officer and Director of the Company. |
| (3) | On May 8, 2013, the Company issued 50,000 shares of common stock to its executive having a fair value of $5,000 (0.10 per share) for services. |
Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officers named in the above Summary Compensation Table for the fiscal year ended May 31, 2013.
Aggregated Option Exercises and Fiscal Year-End Option Value. There were no stock options exercised during the fiscal year ended May 31, 2013 by the executive officers named in the Summary Compensation Table.
Long-Term Incentive Plan (“LTIP”) Awards. There were no awards made to named executive officers in the last completed fiscal year under any LTIP.
27
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
Our directors did not receive any compensation during the years ended May 31, 2013 and 2012. As of the date hereof, one of our directors were compensated as follows:
|
Name
|
Fees earned
or paid in cash ($)
|
Stock awards
|
Bonus
|
Option
Awards ($)
|
All Other
Compensation
|
Total ($)
|
||||||||||||||||||
|
Luke Quinn (1)
|
$
|
2,000
|
$
|
2,500
|
(2) |
$
|
0
|
$
|
0
|
$
|
0
|
$
|
4,500
|
|||||||||||
|
(1)
|
Luke Quinn was appointed as a Director of the Company on June 11, 2013. On June 11, 2013, the Company entered into a consulting agreement with Mr. Quinn pursuant to which the Company agreed to pay Mr. Quinn semi annually in advance at the rate of $2,000 per month.
|
|
(2)
|
On June 11, 2013, the Company issued 25,000 shares of Common Stock to Mr. Quinn having a fair value of $2,500 ($0.10 per share) for services pursuant to a consulting agreement.
|
Employment Agreements
On May 8, 2013, the Company entered into a Consulting Agreement with Richard Wheeler, the Company’s President, Chief Executive Officer and Director, pursuant to which, at the Company’s request, he will analyze prospective investments for the Company and, as an agent of the Company, provide business consulting services for any such investments that the Company may make. He is obligated to provide the services for at least ten days per month. In accordance with the terms of the Consulting Agreement, the Company will pay Mr. Wheeler semi annually in advance at the rate of $2,000 per month and has granted him 50,000 shares of common stock. The Consulting Agreement is for a term of five years but is terminable at any time during the term with or without cause by either party upon notice to the other party.
Other than as disclosed above, we do not have any employment agreements in place with any executive officers or employees.
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 9, 2013 for: (i) each of our directors; (ii) each of our executive officers: (iii) all of our directors and executive officers as a group; and (iv) all persons, to our knowledge, are the beneficial owners of more than five percent (5%) of the outstanding shares of common stock. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to the securities.
|
Name
|
Number of
Shares
Beneficially
Owned
|
Percent of
Class (1)
|
||||||
|
Beneficial Owners
|
||||||||
|
Donna Cashwell(2)
|
5,000,000(3)
|
70%
|
||||||
|
All Beneficial Owners as a group
|
5,000,000
|
70%
|
||||||
|
|
||||||||
|
Richard Wheeler
|
50,000
|
*
|
||||||
|
Luke Quinn
|
25,000
|
*
|
||||||
|
Laura Gignac(2)
|
0
|
1%
|
||||||
|
All Executive Officers and Directors as a group
|
75,000
|
|||||||
* Less than 1%
| (1) | Based on 7,115,000 shares of common stock outstanding as of September 9, 2013. |
| (2) | On May 8, 2013, Donna Cashwell and Laura Gignac resigned from their positions as officers and directors of the Company. |
| (3) | The 5,000,000 shares issued to Donna Cashwell are subject to a Stock Purchase Option Agreement, dated April 3, 2013, by and among Donna Cashwell, the Company, and DYNH Holdings, LLC. |
28
Securities Authorized for Issuance under Equity Compensation Plans
None.
Except as disclosed below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party:
(A) Any of our directors or officers;
(B) Any proposed nominee for election as our director;
(C) Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our common stock; or
(D) Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.
For the year ended May 31, 2013, the Officers of the Company contributed services having a fair value of $6,760.
On May 8, 2013, the Company entered into a Consulting Agreement with Richard Wheeler, the Company’s President, Chief Executive Officer and Director, pursuant to which, at the Company’s request, he will analyze prospective investments for the Company and, as an agent of the Company, provide business consulting services for any such investments that the Company may make. He is obligated to provide the services for at least ten days per month. In accordance with the terms of the Consulting Agreement, the Company will pay Mr. Wheeler semi annually in advance at the rate of $2,000 per month and has granted him 50,000 shares of common stock. The Consulting Agreement is for a term of five years but is terminable at any time during the term with or without cause by either party upon notice to the other party.
On June 11, 2013, the Company entered into a Consulting Agreement with Luke Quinn, a Director of the Company, pursuant to which, at the Company’s request, he will analyze prospective investments for the Company and, as an agent of the Company, provide business consulting services for any such investments that the Company may make. He is obligated to provide the services for at least ten days per month. In accordance with the terms of the Consulting Agreement, the Company will pay Mr. Quinn semi annually in advance at the rate of $2,000 per month and has granted him 25,000 shares of common stock. The Consulting Agreement is for a term of five years but is terminable at any time during the term with or without cause by either party upon notice to the other party.
29
Director Independence
We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
|
●
|
the director is, or at any time during the past three years was, an employee of the company;
|
|
●
|
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
|
|
●
|
a family member of the director is, or at any time during the past three years was, an executive officer of the company;
|
|
●
|
the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
|
|
●
|
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
|
|
●
|
the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.
|
We do not currently have a separately designated audit, nominating or compensation committee.
Audit Fees
For the Company’s fiscal years ended May 31, 2013 and May 31, 2012, we were billed approximately $13,495 and $18,028 respectively, for professional services rendered for the audit and reviews of our financial statements.
Audit Related Fees
The Company did not incur any audit related fees, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended May 31, 2013 and May 31, 2012.
Tax Fees
For the Company’s fiscal years ended May 31, 2013 and May 31, 2012, 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, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended May 31, 2013 and May 31, 2012.
Pre-Approval of Services
We do not have an audit committee. As a result, our Board of Directors performs the duties of an audit committee. Our Board of Directors evaluates and approves in advance the scope and cost of the engagement of an auditor before the auditor renders the audit and non-audit services. We do not rely on pre-approval policies and procedures.
30
(a) The following documents are filed as part of this report:
Financial Statements:
The balance sheets of the Company as of May 31, 2013 and May 31, 2012, the related statements of operations, changes in stockholders’ equity and cash flows for the years then ended, the footnotes thereto, and the report of Liggett, Vogt and Webb, P.A., independent auditors, are filed herewith.
Exhibits:
|
Exhibit No.
|
Description
|
|
|
3.1 (1)
|
Articles of Incorporation
|
|
|
3.2 (1)
|
Bylaws
|
|
|
10.1
|
Joint Venture Agreement, dated June 19, 2013, by and among Dynamic Nutra Enterprise Holdings, Inc. and Pure Energy FX Inc.
|
|
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS **
|
XBRL Instance Document
|
|
|
101.SCH **
|
XBRL Taxonomy Schema
|
|
|
101.CAL **
|
XBRL Taxonomy Calculation Linkbase
|
|
|
101.DEF **
|
XBRL Taxonomy Definition Linkbase
|
|
|
101.LAB **
|
XBRL Taxonomy Label Linkbase
|
|
|
101.PRE **
|
XBRL Taxonomy Presentation Linkbase
|
(1) Previously filed as an Exhibit to Form S-1 filed on August 31, 2011
*In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
31
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, thereunto duly authorized.
Date: September 13, 2013
|
Dynamic Nutra Enterprises Holdings, Inc.
|
|
|
/s/ Richard Wheeler
|
|
|
Name: Richard Wheeler
President, Chief Executive Officer and Director
(Duly Authorized Officer, Principal Executive
Officer and Principal 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
|
Position
|
Date
|
||
|
/s/ Richard Wheeler
|
President, Chief Executive Officer and Director
|
September 13, 2013
|
||
|
Richard Wheeler
|
(Principal Executive Officer and Principal Financial Officer)
|
|||
|
/s/ Luke Quinn
|
Director
|
September 13, 2013
|
||
|
Luke Quinn
|
32