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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: December 31, 2014
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________
 
Commission File Number 000-53781
 
 
STEVIA CORP.
(Name of registrant as specified in its charter)

Nevada
 
98-0537233
(State or Other Jurisdiction of
 
(I.R.S. Employer
Incorporation or Organization)
 
Identification Number)
     
7117 US 31 S, Indianapolis, IN
 
46227
(Address of Principal Executive Offices)
 
(Zip Code)

(888) 250-2566
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

None
 
None
(Title of each class)
 
(Name of each exchange on which registered)
 
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.  x Yes  ¨ No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  x Yes  ¨ No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 
¨
 Large accelerated filer
¨
 Accelerated filer
¨
 Non-accelerated filer
 (Do not check if smaller  reporting company)
x
 Smaller Reporting  company
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ¨ Yes  x No
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class
 
Outstanding at January 5, 2015
     
Common stock, $.001 par value
 
198,239,385


 
 

 

STEVIA CORP.
FORM 10-Q

December 31, 2014

INDEX

 
PAGE
PART I—FINANCIAL INFORMATION
 
   
Item 1.  Financial Statements.
4
   
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
47
   
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
51
   
Item 4.  Controls and Procedures
51
   
PART II—OTHER INFORMATION
 
   
Item 1.  Legal Proceedings
52
   
Item 1A.  Risk Factors
52
   
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
52
   
Item 3.  Defaults Upon Senior Securities
52
   
Item 4.  Mine Safety Disclosures
52
   
Item 5.  Other Information
52
   
Item 6.  Exhibits
53
   
Signatures
54
 

 
2

 

FORWARD-LOOKING STATEMENTS
 
This Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report.  Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms, or the negative of such terms.  Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements.  Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources, and accounting matters.  Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation, and other circumstances affecting anticipated revenues and costs, and the risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed on July 15, 2014.
 
As used in this Form 10-Q, “we,” “us” and “our” refer to Stevia Corp., which is also sometimes referred to as the “Company.”
 
YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS
 
The forward-looking statements made in this report on Form 10-Q relate only to events or information as of the date on which the statements are made in this report on Form 10-Q.  Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.  You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.
 


 
3

 

PART I—FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
Stevia Corp.

December 31, 2014 and 2013

Index to the Consolidated Financial Statements


Contents
Page(s)
   
Consolidated Balance Sheets at December 31, 2014 (Unaudited) and March 31, 2014
5
   
Consolidated Statements of Operations for the Nine Months and Three Months Ended December 31, 2014 and 2013 (Unaudited)
6
   
Consolidated Statement of Changes in Equity (Deficit) for the Fiscal Year Ended March 31, 2014 and for the Reporting Period Ended December 31, 2014 (Unaudited)
7
   
Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2014 and 2013 (Unaudited)
8
   
Notes to the Consolidated Financial Statements (Unaudited)
9
 

 
4

 
 
 Stevia Corp.
 Consolidated Balance Sheets
 
   
December 31, 2014
   
March 31, 2014
 
 Assets
           
             
 Current assets:
           
 Cash
  $ 1,420,252     $ 735,044  
 Accounts receivable
    261,388       673,039  
 Convertible note receivable
    250,000       -  
 Deposit for formation of majority-owned subsidiary
    25,000       -  
 Prepaid seeds and fertilizer
    3,610,300       1,498,008  
 Other current assets
    19,000       2,041  
                 
    Total current assets     5,585,940       2,908,132  
                 
 Non-current assets:
               
 Property and equipment
    32,163       24,400  
 Accumulated depreciation
    (7,865 )     (5,627 )
                 
    Property and equipment, net     24,298       18,773  
                 
 Acquired technology
    1,635,300       1,635,300  
 Accumulatd amortization
    (272,550 )     (190,785 )
                 
    Acquired technology, net     1,362,750       1,444,515  
                 
 Website development costs
    18,365       6,203  
 Accumulated amortization
    (4,581 )     (2,937 )
                 
    Website development costs, net     13,784       3,266  
                 
 Security deposit
    -       15,000  
                 
    Total assets   $ 6,986,772     $ 4,389,686  
                 
 Liabilities and equity (deficit)
               
                 
 Current liabilities:
               
Accounts payable
  $ 24,159     $ 540,144  
Accounts payable - president and CEO
    404,285       252,486  
Credit card payable
    20,154       -  
Accrued expenses
    19,350       17,500  
Accrued interest
    148,739       89,490  
Advances from president and significant stockholder
    2,497       852  
Convertible notes payable - net of discount
    1,061,228       455,761  
                 
    Total current liabilities     1,680,412       1,356,233  
                 
 Non-Current liabilities:
               
 Derivative note liabilities
    809,579       1,027,434  
 Derivative warrant liabilities
    1,656,765       4,364,190  
                 
    Total non-current liabilities     2,466,344       5,391,624  
                 
    Total liabilities     4,146,756       6,747,857  
                 
 Commitments and Contingencies
               
                 
 Equity (Deficit)
               
 Stevia Corp stockholders' equity (deficit):
               
 Common stock par value $0.001: 750,000,000 shares authorized,
               
        198,239,385 and 149,109,271 shares issued and outstanding, respectively     198,239       149,108  
 Additional paid-in capital
    16,233,234       11,383,415  
 Accumulated deficit
    (13,224,686 )     (13,597,941 )
                 
    Total Stevia Corp stockholders' equity (deficit)     3,206,787       (2,065,418 )
                 
 Non-controlling interest in subsidiaries
               
 Noncontrolling interest - accumulated deficit in consolidated subsidiaries
    (366,771 )     (292,753 )
                 
     Non-controlling interest in subsidiaries     (366,771 )     (292,753 )
                 
    Total Equity (Deficit)     2,840,016       (2,358,171 )
                 
    Total Liabilities and Equity (Deficit)   $ 6,986,772     $ 4,389,686  
 
 
 
See accompanying notes to the consolidated financial statements.
 
 
5

 
 
 Stevia Corp.
 Consolidated Statements of Operations
 
   
For the Nine Months
   
For the Three Months
   
For the Nine Months
   
For the Three Months
 
   
Ended
   
Ended
   
Ended
   
Ended
 
   
December 31, 2014
   
December 31, 2014
   
December 31, 2013
   
December 31, 2013
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
 Revenue
                       
 Royalty income
  $ 486,000     $ 162,000     $ 917,710     $ 351,000  
 Sales
    2,322,607       64,735       919,166       -  
 Sales - related party
    178,822       28,710       56,989       37,746  
                                 
     Total revenue     2,987,429       255,445       1,893,865       388,746  
                                 
 Cost of revenue
                               
 Farm produce
    1,839,379       177,244       758,809       -  
 Farm expenses
    47,028       21,237       318,234       4,925  
 Farm management services - related parties
    180,000       60,000       180,000       60,000  
                                 
     Total cost of revenue     2,066,407       258,481       1,257,043       64,925  
                                 
 Gross margin
    921,022       (3,036     636,822       323,821  
                                 
 Operating expenses:
                               
 Directors' fees
    70,313       23,438       195,313       7,813  
 Professional fees
    513,175       234,290       487,867       178,135  
 Research and development
    221,872       39,872       262,810       71,930  
 Salary and compensation - officer
    160,095       53,365       600,000       -  
 Salary and compensation - others
    -       -       66,556       378  
 General and administrative expenses
    222,021       (67,768     387,040       133,641  
                                 
     Total operating expenses     1,364,720       460,441       1,999,586       391,897  
                                 
Loss from operations
    (266,454 )     (286,233 )     (1,362,764 )     (68,076 )
                                 
 Other (income) expense:
                               
 Change in fair value of derivative liability
    (1,215,623 )     775,770       (675,949 )     (40,105 )
 Debt discount
    446,929       53,423       616,970       53,787  
 Debt settlement loss
    -       -       561,077       561,077  
 Excess of fair value of warrants over notes, net of OID
    -       -       38,075       38,075  
 Financing cost
    118,800       72,000       30,000       8,000  
 Interest expense
    84,203       20,283       132,992       85,089  
 Other (income) expense
    -       -       83,343       83,343  
                                 
     Other (income) expense, net     (565,691 )     921,476       786,508       789,266  
                                 
 Income (loss) before income tax provision and non-controlling interest
    299,237       (1,207,709 )     (2,149,272 )     (857,342 )
                                 
 Income tax provision
    -       -       -       -  
                                 
 Net income (loss)
                               
 Net income (loss) before non-controlling interest
    299,237       (1,207,709 )     (2,149,272 )     (857,342 )
 Net loss attributable to non-controlling interest
    (74,018 )     (22,274 )     (131,788 )     (25,932 )
                                 
     Net income (loss) attributable to Stevia Corp.   $ 373,255     $ (1,185,435 )   $ (2,017,484 )   $ (831,410 )
                                 
 Earnings per share
                               
 - Basic:
  $ 0.00     $ (0.01 )   $ (0.03 )   $ (0.01 )
                                 
 - Diluted:
  $ 0.00     $ (0.01 )   $ (0.03 )   $ (0.01 )
                                 
 Weighted average common shares outstanding
                               
 - Basic:
    182,585,139       197,541,892       72,842,975       79,632,959  
                                 
 - Diluted:
    201,747,804       197,541,892       72,842,975       79,632,959  
 

 
See accompanying notes to the consolidated financial statements.
 
 
 
6

 
 
Stevia Corp.
Consolidated Statement of Changes in Equity (Deficit)
For the Fiscal Year Ended March 31, 2014 and the reporting period ending December 31, 2014
(Unaudited)
 
   
Common Stock Par Value $0.001
   
 
         
 
   
 
   
 
 
   
Number of Shares
   
Amount
   
Additional
paid-in
Capital
   
Accumulated 
Deficit
   
 Total STEV
Stockholders'
Equity (Deficit)
   
Non-controlling
Interest
   
Total
Equity (Deficit)
 
                                           
 Balance, March 31, 2013
    63,555,635     $ 63,556     $ 4,760,624     $ (4,359,415 )   $ 464,765       (214,158 )     250,607  
                                                         
 Common shares issued for consulting services
                                                       
 valued at $0.20 per share on April 30, 2013
    500,000       500       99,500               100,000               100,000  
                                                         
 Exercise of warrant with exercise price adjusted
                                                       
 to $0.20 per share on May 6, 2013
    853,333       853       169,813               170,666               170,666  
                                                         
 Commissions and legal fees paid in connection with the exercise of
                                                       
 warrants on May 6, 2013
                    (18,653 )             (18,653 )             (18,653 )
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the exercise of warrants
                    595,852               595,852               595,852  
                                                         
 Warrants issued to investors in connection with warrants
                                                       
 exercised on May 6, 2013 classified as derivative liability
                    (833,106 )             (833,106 )             (833,106 )
                                                         
 Make good shares released to officer for achieving
                                                       
 the second and third milestones on June 21, 2013
    3,000,000       3,000       597,000               600,000               600,000  
                                                         
 Common shares issued for future director
                                                       
 services on October 4, 2011
                                                       
 earned during the period endng June 30,2013
                    93,750               93,750               93,750  
                                                         
 Reclassification to derivative liability for warrants
                                                       
 that became derivatives
                    (167,949 )             (167,949 )             (167,949 )
                                                         
 Common shares issued for future director
                                                       
 services on October 4, 2011
                                                       
 earned during the period endng September 30, 2013
                    93,750               93,750               93,750  
                                                         
 Anti-dilution shares issued in accordance with the Security Purchase
                                                       
 Agreement dated August 1, 2012 on October 1, 2013
    286,666       286       (286 )             -               -  
                                                         
 Common shares issued for future director service
                                                       
  on December 4, 2013
    1,500,000       1,500       186,000               187,500               187,500  
                                                         
 Common shares issued for future director service
                                                       
  on December 4, 2013
                    (187,500 )             (187,500 )             (187,500 )
                                                         
 Common shares issued per debt settlement agreement
                                                       
 for past due accounts payable and related settlement costs
    13,000,000       13,000       1,416,715               1,708,937               1,708,937  
                                                         
 Common shares issued for future director service on December 4, 2013
                                                       
 earned during the period endng December 31, 2013
                    7,811               7,811               7,811  
                                                         
 Common shares issued per debt settlement agreement
                                                       
 for past due accounts payable and related settlement costs
    2,538,882       2,539       276,683               -               -  
                                                         
 Exercise of warrants with exercise price reset
                                                       
 to $0.0585 per share on February 13, 2014
    1,877,333       1,877       107,947               109,824               109,824  
                                                         
 Exercise of warrants with exercise price reset
                                                       
 to $0.053365 per share in February and March, 2014
    4,096,534       4,097       214,515               218,612               218,612  
                                                         
 Commissions paid in connection with the exercise of
                                                       
 warrants on during the quarter ending March 31, 2014
                    (26,275 )             (26,275 )             (26,275 )
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the exercise of warrants
                    943,456               943,456               943,456  
                                                         
 Cashless exercise of warrants with exercise price reset
                                                       
 to $0.053365 per share on March 11, 2014
    3,438,181       3,438       180,040               183,478               183,478  
                                                         
 Cashless exercise of warrants on March 11, 2014
    (611,391 )     (611 )     (182,867 )             (183,478 )             (183,478 )
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the cashless exercise of warrants
                    145,612               145,612               145,612  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.1194 per share on March 11, 2014
    1,973,337       1,973       233,643               235,616               235,616  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.25 per share on March 11, 2014
    1,124,274       1,124       279,945               281,069               281,069  
                                                         
 Common shares issued for notes conversion
                                                       
 at $0.0585 per share on January 21 and February 4, 2014
    850,000       850       48,875               49,725               49,725  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.053365 per share on February 19 and February 27, 2014
    1,400,158       1,400       73,319               74,719               74,719  
                                                         
 Common shares issued for notes conversion
                                                       
 at $0.0555 per share on March 3, 2014
    630,631       631       34,369               35,000               35,000  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.0551 per share on February 28 and Mar 5, 2014
    2,262,069       2,262       122,378               124,640               124,640  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.0559 per share on March 26 and March 27, 2014
    1,669,648       1,670       91,663               93,333               93,333  
                                                         
 Common shares issued for notes and accrued interest conversion
                                                       
 at $0.057 per share on March 31, 2014
    1,119,299       1,119       62,681               63,800               63,800  
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the notes and accrued interest conversion
                    627,333               627,333               627,333  
                                                         
 Warrants issued to the placement agent in connection with
                                                       
 issuance and conversion of convertible notes
                    (139,223 )             (139,223 )             (139,223 )
                                                         
 Common shares issued for consulting services
                                                       
 valued at $0.053365 per share on February 24, 2014
    7,300,000       7,300       382,265               389,565               389,565  
                                                         
 Common shares issued for officer's service
                                                       
 valued at $0.053365 per share on February 24, 2014
    20,000,000       20,000       1,047,300               1,067,300               1,067,300  
                                                         
 Common shares issued for officer's service
                                                       
 valued at $0.053365 per share on February 24, 2014
                    (1,067,300 )             (1,067,300 )             (1,067,300 )
                                                         
 Common shares issued for officer's service
                                                       
 valued at $0.053365 per share on February 24, 2014
                    213,460               213,460               213,460  
                                                         
 Common shares issued per the Debt Conversion Agreement
                                                       
 valued at $0.053365 per share on February 26, 2014
    9,339,348       9,339       489,055               498,394               498,394  
                                                         
 Common shares issued for the subsidiary's debt conversion
                                                       
 valued at $0.053365 per share on February 26, 2014
    7,405,334       7,405       387,781               395,186               395,186  
                                                         
 Common shares issued for future director service on December 4, 2013
                                                       
 earned during the period endng March 31, 2014
                    23,439               23,439               23,439  
                                                         
                              (9,238,526 )     (9,238,526 )     (78,595 )     (9,317,121 )
                                                         
 Balance, March 31, 2014
    149,109,271       149,108       11,383,415       (13,597,941 )     (2,065,418 )     (292,753 )     (2,358,171 )
                                                         
 Cashless exercise of warrants with exercise price reset
                                                       
 to $0.053365 per share on April 4, 2014
    4,684,718       4,685       245,315               250,000               250,000  
                                                         
 Cashless exercise of warrants on April 4, 2014
    (841,750 )     (842 )     (249,158 )             (250,000 )             (250,000 )
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the cashless exercise of warrants
                    1,039,025               1,039,025               1,039,025  
                                                         
 Common shares and warrants issued for cash at $0.15 per share
                                                       
  on April 9, 2014
    1,500,000       1,500       223,500               225,000               225,000  
                                                         
 Warrants issued to the investor in connection with
                                                       
 issuance of common stocks
                    (163,707 )             (163,707 )             (163,707 )
                                                         
 Common shares issued for consulting services vested upon one year
                                                       
 valued at $0.053365 per share on April 30, 2014
    500,000       500       26,183               26,683               26,683  
                                                         
 Exercise of warrants for cash with exercise price
                                                       
 at $0.053365 per share in May and June, 2014
    9,772,052       9,772       511,714               521,486               521,486  
                                                         
 Commissions paid in connection with the exercise of
                                                       
 warrants during the quarter ending June 30, 2014
                    (35,612 )             (35,612 )             (35,612 )
                                                         
 Reclassification of derivative liability to additional paid-in capital
                                                       
 associated with the exercise of warrants
                    1,264,438               1,264,438               1,264,438  
                                                         
 Common shares issued for notes conversion
                                                       
 at $0.0812 per share on May 27 and May 28, 2014 to one investor
    652,710       653       52,347               53,000               53,000