As filed with the Securities and Exchange
Commission on November 2, 2012
Registration No. 333-179745
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 3 TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
STEVIA CORP.
(Exact name of registrant as specified in
its charter)
Nevada
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700
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98-0537233
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(State or jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer
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incorporation or organization)
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Classification Code Number)
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Identification No.)
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7117 US 31S
Indianapolis, IN 46227
(888) 250-2566
(Address and telephone number of principal
executive offices and principal place of business)
CSC Services of Nevada, Inc.
2215-B Renaissance Drive
Las Vegas, NV 89119
(702) 740-4244
(Name, address and telephone number
of agent for service)
Copies to:
Mark C. Lee
Saxon Peters
GREENBERG TRAURIG, LLP
1201 K Street, Suite 1100
Sacramento, California 95814
Telephone: (916) 442-1111
Facsimile: (916) 448-1709
Approximate date
of proposed sale to the public:
From time to time after
the effective date of this registration statement.
If any of
the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box.
þ
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
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. (Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Proposed
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Proposed
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Amount of shares
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maximum
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maximum
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Amount of
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Title of each class of
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to be
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offering price
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aggregate
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Registration
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securities to be registered
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Registered
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per share
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offering price
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Fee
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Common Stock (Southridge)
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14,885,211
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(1)
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$
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0.305
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(3)
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$
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4,539,989.30
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$
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619.25
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Common Stock (Financing Stockholders)
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1,066,667
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(2)
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$
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0.305
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(3)
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$
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325,333.43
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$
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44.37
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Common Stock Underlying Warrants (Financing Stockholders)
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1,066,667
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(4)
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$
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0.6405
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(5)
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$
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683,200.21
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$
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93.19
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Total
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17,018,545
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$
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5,548,522.94
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$
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756.81
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(6)
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(1)
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Represents
the number of shares of common stock
of the Registrant that we will put
(“Put Shares”) to Southridge
Partners II, LP (“Southridge”),
pursuant to an equity purchase agreement
(the “Equity Purchase Agreement”)
between Southridge and the Registrant,
effective on January 26, 2012.
In
the event that adjustment provisions
of the Equity Purchase Agreement
require the Company to issue more
shares than are being registered
in this registration statement,
for reasons other than those stated
in Rule 416 of the Securities Act,
the Company will file a new registration
statement to register those additional
shares.
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(2)
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In addition to the Put Shares, we are registering 1,066,667 shares of common stock issued to certain selling stockholders (the
“Financing Stockholders”) pursuant to a securities purchase agreement (the “Purchase Shares”).
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(3)
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This offering price has been estimated solely for the purpose
of computing the dollar value of the Purchase Shares and the registration
fee of the Purchase Shares in accordance with Rule 457(c) of the Securities
Act on the basis of the average of the high and low prices of the
common stock of the Company as reported on the OTCQB on October 15,
2012.
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(4)
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Represents the number of shares of common stock offered for
resale following the exercise of certain Warrants issued to the Financing
Stockholders in accordance with a securities purchase agreement entered
into on August 1, 2012 (the “Warrant Shares,” collectively
with the Put Shares and the Purchase Shares, the “Shares”).
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(5)
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This offering price has been estimated solely for the purpose
of computing the dollar value of the Warrant Shares and the registration
fee for the Shares underlying the warrants in accordance with Rule
457(g) of the Securities Act on the basis of the exercise price of
the warrants.
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(6)
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Previously paid $2,411.49.
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In the event of stock splits, stock
dividends, or similar transactions involving the Registrant’s common stock, the number of Shares registered shall, unless
otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule
416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
We hereby amend this registration statement
on such date or dates as may be necessary to delay its effective date until we shall file a further amendment which specifically
states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act
or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant
to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED
November 2, 2012
PROSPECTUS
17,018,545 Shares of Common Stock
STEVIA CORP.
Common Stock
This prospectus
relates to the resale of Shares of our common stock, par value $0.001 per share, by the selling security holders (the “Selling
Security Holders”), including (i) 14,885,211 of Put Shares that we will put to Southridge pursuant to the Equity Purchase
Agreement, (ii) 1,066,667 of Purchase Shares, and (iii) 1,066,667 shares of common stock issuable upon the exercise of outstanding
warrants (the “Warrants”).
The Equity Purchase
Agreement with Southridge provides that Southridge is committed to purchase up to $20,000,000 of our common stock. We may draw
on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Equity
Purchase Agreement.
Southridge is an “underwriter”
within the meaning of the Securities Act in connection with the resale of our common stock under the Equity Purchase Agreement.
No other underwriter or person has been engaged to facilitate the sale of shares of our common stock in this offering. This offering
will terminate thirty-six (36) months after the effective date of the Equity Purchase Agreement. Southridge will pay us 93% of
the lowest closing bid price of our common stock reported by Bloomberg Finance L.P. in a five consecutive trading day period commencing
with the date a put notice is delivered.
We will not receive
any proceeds from the sale of the shares of common stock offered by the Selling Security Holders. We may receive gross proceeds
of up to $683,200.21 if all of the warrants are exercised for cash by the Selling Security Holders. We may receive proceeds from
the sale of our Put Shares under the Equity Purchase Agreement. The proceeds will be used for working capital or general corporate
purposes. We will bear all costs associated with this registration.
Our common stock
is quoted on the OTCQB under the symbol “STEV.” The shares of our common stock registered hereunder are being offered
for sale by Selling Security Holders at prices established on the OTCQB during the term of this offering. On October 31,
2012, the closing bid price of our common stock was $0.24 per share. These prices will fluctuate based on the demand for our common
stock.
INVESTING
IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information
in this Prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission becomes effective. This Prospectus is not an offer to sell these securities and we
are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted or would be unlawful
prior to registration or qualification under the securities laws of any such state.
TABLE OF CONTENTS
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Page
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PART I - INFORMATION REQUIRED IN PROSPECTUS
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PROSPECTUS SUMMARY
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1
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
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7
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RISK FACTORS
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7
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RISKS RELATED TO OUR BUSINESS AND INDUSTRY
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7
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RISKS RELATED TO DOING BUSINESS IN VIETNAM AND
OTHER DEVELOPING COUNTRIES
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12
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RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES
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13
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USE OF PROCEEDS
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DETERMINATION OF OFFERING PRICE
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SELLING SECURITY HOLDER
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PLAN OF DISTRIBUTION
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DESCRIPTION OF SECURITIES TO BE REGISTERED
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INTERESTS OF NAMED EXPERTS AND COUNSEL
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INFORMATION WITH RESPECT TO THE REGISTRANT
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PROPERTIES
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31
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LEGAL PROCEEDINGS
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MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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31
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DIRECTORS AND EXECUTIVE OFFICERS
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34
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EXECUTIVE COMPENSATION
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35
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
AND DIRECTOR INDEPENDENCE
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37
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DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
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38
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WHERE YOU CAN FIND MORE INFORMATION
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38
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FINANCIAL STATEMENTS
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39
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PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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95
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
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RECENT SALES OF UNREGISTERED SECURITIES
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EXHIBIT INDEX
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99
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UNDERTAKINGS
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101
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SIGNATURES
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103
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You should rely only on the information
contained in this Prospectus. We have not authorized anyone to provide you with different information. We are not making an offer
of these securities in any state where the offer is not permitted.
PROSPECTUS SUMMARY
You should read the following summary
together with the more detailed information and the financial statements appearing elsewhere in this Prospectus. This Prospectus
contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors”
and elsewhere in this Prospectus. Unless the context indicates or suggests otherwise, references to “we,”
“our,” “us,” the “Company,” “Stevia” or the “Registrant” refer to Stevia
Corp., a Nevada corporation and its wholly owned subsidiary, Stevia Ventures International Ltd., a British Virgin Islands company.
Overview
Stevia Corp. was incorporated on May
21, 2007 in the State of Nevada. Our initial business focus was on development of a software product for tracking employee productivity
and projects. On June 23, 2011, we closed a voluntary share exchange transaction with Stevia Ventures International Ltd., a business
company incorporated in the British Virgin Islands, pursuant to which we acquired the rights to purchase certain strains of stevia
leaf growing in Vietnam, including certain assignable exclusive purchase contracts and an assignable supply agreement related
to the stevia leaf.
We are a farm management company primarily
focused on stevia agronomics from plant breeding to good agricultural practices to development of stevia derived products, which
can be used for human consumption as well as for aquaculture and agriculture applications.
We have established a stevia breeding,
propagation and field test research center in Vietnam on 10 Ha (25 acres) of leased land which is designed to support our commercial
field trials that are on-going in Vietnam with commercial trial harvests taking place this year. The commercial field trials are
operated across several provinces by two local grower companies which operate under grower contracts and we provide farm management
services under contract which includes
training the farmers on the correct protocols and methodologies
and providing ongoing technical assistance as well as providing the major inputs such as the seedlings, fertilizers and additives
they are required to use.
In July 2012 we formed a joint venture
with Tech-New Bio-Technology, a technology company in Hong Kong and acquired intellectual property covering several formulations
utilizing stevia extracts together with probiotics and enzymes which have applications for agriculture, aquaculture and post harvest
processing. We do not operate an extraction facility, but Tech-New Bio-Technology’s affiliate company in China has technologies
and the facility for the extraction and refinement of high purity stevia; we entered into a multi-year supply contract in March
2012 where they are committed to purchase all of our stevia leaf production for the first two years and we also have the ability
to use the resulting stevia extract to formulate our products. While we believe that our joint venture with Tech-New Bio-Technology
will increase the visibility of our intended services and products, there is no guarantee that such visibility will occur.
Our formulated products consist of ecological
fertilizers that address soil acidification, compaction and fertility decline caused by chemical fertilizer overuse; foliar fertilizers
that help plants resist infection and disease; feed formulations for livestock, fish and shrimp that enhance digestion and help
strengthen immunity; microbiological preparations that address pollution in marine environments that negatively impact aquaculture
activities; and natural preparations which aid in the preservation of crops after harvest and during processing. We also provide
private label pure stevia extracts which are suitable for food and beverage applications.
In August of 2012 we began to use our
formulated products as feed and fertilizer inputs under our farm management model after several months of commercial testing for
both aquaculture and agriculture applications. We also provided samples of our pure stevia extracts to several food & beverage
companies to begin testing in September of 2012.
All of our formulated products used
for agriculture and aquaculture are approved for use in our areas of operation and the largest obstacle we will face will be farmer
confidence to use new products. We believe that we can overcome this obstacle by building a successful and demonstrable track
record working with the current operations of Tech-New Bio-Technology and its affiliates. All of the ingredients in the products
are natural compounds and are approved by the major developed countries if we choose to expand to other markets in the future.
A list of the major developed countries that have approved the use of stevia as a food additive can be found on page 29.
The stevia industry is segmented into
several business processes, which can broadly be categorized as i) plant breeding and propagation, ii) farming, iii) extraction
and refining, iv) product formulation, v) distribution and retail. As we achieve vertical integration along the supply chain we
will continue to focus on acquisitions and intellectual property development to support further downstream integration into the
agriculture and aquaculture sectors. We believe that over the long-run this will position the Company to become an industry leader,
producing a number of value-added stevia-enhanced products.
Our Business
We are a farm management company primarily
focused on stevia agronomics from plant breeding to good agricultural practices to development of stevia derived products which
can be used for human consumption as well as for aquaculture and agriculture applications. We plan to invest in research and development
and intellectual property acquisition and provide farm management services to contract growers and other industry growers integrating
our stevia focused research and development and intellectual property acquisitions.
Our farm management services include
training the farmers on the correct protocols and methodologies and providing ongoing technical assistance during the crop cycle
as well as providing inputs such as the seedlings, fertilizers and additives they are required to use.
We employ our services under three
business models which we classify as 1) contract farming model, 2) revenue share model and 3) product supply model.
Under the contract farming model we
enter into purchase agreements with growers who are contracted to grow very specific crops for a fixed price. Under this model
we have our own market for the crop and our goal is to purchase the crop at a fixed price and we provide the farm management services
to at our cost while the farmer provides the land and labor at a fixed cost per ton of yield. This is the primary model we are
using to grow stevia in Vietnam.
Under the revenue share model the grower
has their own established market for the crop and we provide our farm management services at our cost for a share of the crop
revenue. This model will be utilized under conditions where an existing business has a proven track record and we can enhance
yield and margins by applying our services. This is the primary model we are using to apply our formulated products and we began
generating revenue under this model in August 2012.
Under the product supply model we provide
ongoing technical advice and sell our products to buyers. In September 2012 we began providing samples of stevia extract to food
and beverage companies for testing and we are working closely with local parties in Vietnam and Indonesia to provide technical
information in support of the government approval process of stevia as a food ingredient safe for human consumption.
Our mission is to maximize stockholder
value by consistently developing and acquiring the latest intellectual property and expanding our suite of formulated products
and their applications and leveraging our farm management business model to maximize market penetration and revenue margins.
To achieve these goals we intend to
develop a suite of intellectual property relating to stevia and its extracts that will enhance the value of our farm management
operations. Through our relationships with Tech-New Bio-Technology, Growers Synergy and local institutes, we are exploring the
market for commercial applications of stevia which will be vertically integrated into our services and production. We have engaged
Growers Synergy, a regional farm management services provider, to provide farm management operations and back-office and regional
logistical support for our Vietnam and Indonesia operations for a period of two years. George Blankenbaker, our president, director
and stockholder is the managing director of Growers Synergy. Growers Fresh Pte Ltd (“Growers Fresh) owns a 51% interest
in Growers Synergy and Mr. Blankenbaker controls a 49% interest in Growers Fresh.
Our current burn rate is approximately
$95,000 per month and we are dependent on additional capital to continue to operate. Failure to complete a financing will have
an adverse effect on our ability to operate and execute our business plan. We believe that $3 million of funding is sufficient
for us to break-even and achieve self-sufficiency on a cash flow basis. Based on the current burn rate, the Company does not currently
have sufficient capital to operate and we are doing so on a very limited budget, relying primarily on our goodwill with Growers
Synergy and our other vendors, and during this period we will need to raise additional capital and generate revenue. As a result,
our accounts payable are expected to grow. However, there are no assurances that Growers Synergy or our other vendors will continue
to extend credit to the Company, and if they cease extending credit to us, and we are unable to raise capital or generate sufficient
revenue, we will have to liquidate or sell certain assets.
Our target markets are initially Vietnam,
Indonesia and China where we have contracted with growers and have established our own nurseries and test fields. China produces
85% of the world’s stevia and the market and industry is well established there and we currently do not have any constraints
to do our business there. Our formulated products were developed in China and are approved for use in China. Our corporate structure
is currently sufficient because we are solely providing farm management services for a share of the revenue from Chinese owned
farm operations.
Although our priority is Asia, our services
are not limited to specific countries and we plan to pursue viable opportunities in other markets.
Our operations to-date have primarily
consisted of securing purchase and supply contracts and office space and developing relationships with potential partners. We
are a development stage company and we have earned nominal revenues since inception. For the three month period ended June 30,
2012 we incurred a net loss of $413,937 and for the period from inception (April 11, 2011) to March 31, 2012, we have incurred
a net loss of $2,323,551. Our assets total $57,338 and $207,122 as of as of June 30, 2012 and March 31, 2012, respectively. Further,
our auditors have issued a going concern opinion in their audit report dated June 29, 2012. This means that there is substantial
doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital.
Recent Developments
The table below sets forth shares of
our common stock that have been recently issued in exchange for certain services and rights.
Date
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Issuance of Shares
for Services and/or Rights
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March 19, 2012
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On March 19, 2012, we issued 27,500 shares of our common stock to Empire Relations Group
(“Empire”) as consideration for consulting services rendered by Empire to the Company (the “Empire Shares”).
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July 5, 2012
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On July 5, 2012, we entered into a Technology Acquisition Agreement (the “Technology
Agreement”) with Tech-New Bio-Technology, pursuant to which we acquired the rights to certain technology from Technew
in exchange for 3,000,000 shares of our common stock (the “Technew Shares”).
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July 5, 2012
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On July 5, 2012, we issued 500,000 shares of our common stock (the “Growers Synergy
Shares”) to Growers Synergy Pte Ltd., a corporation organized under the laws of Singapore (“Growers Synergy”),
as consideration for services rendered by Growers Synergy to the Company. George Blankenbaker, our president, director and
stockholder is the managing director of Growers Synergy. Growers Fresh Pte Ltd (“Growers Fresh) owns a 51% interest
in Growers Synergy and Mr. Blankenbaker controls a 49% interest in Growers Fresh.
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Corporate Information
Our principal executive offices are
located at 7117 US 31 S., Indianapolis, IN, 46227. Our telephone number is 888-250-2566. We maintain a corporate website at http://www.steviacorp.us.
Stock Transfer Agent
Our stock transfer agent is Securities
Transfer Corporation, and is located at 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034. The agent’s telephone
number is 469-633-0101.
The Offering
Issuer
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Stevia Corp.
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Securities
Offered for Resale
(1)
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Up 14,885,211 Put Shares, 1,066,667 Purchase Shares and 1,066,667
Warrant Shares, for an aggregate of 17,018,545 shares of common stock.
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Common Stock Outstanding Before the Offering
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66,555,635 shares
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Common Stock to be Outstanding After the Offering assuming
all of the Securities are Resold
(2)
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83,574,180 shares
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Use of Proceeds
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We will not receive any proceeds from the sale of the shares of
common stock offered by Selling Security Holders, other than any proceeds we may receive in the event the Warrants are exercised
for cash. However, we will receive proceeds from sale of our common stock under the Equity Purchase Agreement. The
proceeds from the offering will be used for working capital and general corporate purposes. See “Use of Proceeds.”
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Trading
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Our common stock is quoted on the OTCQB under the symbol “STEV.”
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Risk Factors
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You should carefully consider the information set forth in the
section entitled “Risk Factors” beginning on page 2 of this prospectus in deciding whether or not to invest in
our common stock.
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(1) The Selling Shareholders are offering
1,066,667 shares of common stock underlying the Warrants at the market price or at negotiated prices.
(2) Includes the 1,066,667 shares issuable
upon exercise of the Warrants.
Equity Purchase Agreement
This offering relates to the resale
of up to an aggregate of $20,000,000 in put shares (“Put Shares”) that we may put to Southridge pursuant to the Equity
Purchase Agreement. Assuming the resale of all 14,885,211 shares offered in this prospectus as Put Shares, this would
constitute approximately 17.85% of our outstanding common stock. It is likely that the number of shares offered in this registration
statement is insufficient to allow us to receive the full amount of proceeds under the Equity Purchase Agreement.
The amount of $20,000,000 was selected
based on our potential use of funds over the effective time period to acquire targeted intellectual property and scale our business
at a rapid rate. Our ability to receive the full amount is largely dependent on the daily dollar volume of stock traded during
the effective period. Based strictly on the current daily trading dollar volume up to October 2012, we believe it is unlikely
that we will be able to receive the entire $20,000,000. We are not dependent on receiving the full amount to execute our business
plan and in July 2012 we made our first major intellectual property acquisition by issuing 3 million shares of our common stock
instead of paying cash. We believe that we can negotiate similar deals in the future and although our ability to receive the full
$20,000,000 would possibly speed our rate of growth, it is not essential for us to achieve our long-term business objectives over
time.
On January 26, 2012, we entered into the Equity Purchase Agreement with Southridge pursuant to which,
we have the right, for a three-year period, commencing on the date of the Equity Purchase Agreement (but not before the date which
the SEC first declares effective this registration statement) (the “Commitment Period”), of which this prospectus forms
a part, registering the resale of the Put Shares by Southridge, to resell the Put Shares purchased by Southridge under the Equity
Purchase Agreement. As a condition for the execution of the Equity Purchase Agreement, we issued 35,000 shares of our common stock
to Southridge as a commitment fee.
In order to sell shares to Southridge under
the Equity Purchase Agreement, during the Commitment Period, the Company must deliver to Southridge a written put notice on any
trading day (the “Put Date”), setting forth the dollar amount to be invested by Southridge (the “Put Notice”). For
each share of our common stock purchased under the Equity Purchase Agreement, Southridge will pay ninety-three percent (93%) of
the lowest closing bid price (“Closing Price”) of any trading day during the five trading days immediately following
the date on which the Company has deposited an estimated amount of Put Shares to Southridge’s brokerage account in the manner
provided by the Equity Purchase Agreement (the “Valuation Period”). The Company may, at its sole discretion, issue
a Put Notice to Southridge and Southridge will then be irrevocably bound to acquire such shares.
The Equity Purchase Agreement provides
that the number of Put Shares to be sold to Southridge shall not exceed the number of shares that when aggregated together with
all other shares of the Company’s common stock which Southridge is deemed to beneficially own, would result in Southridge
owning more than 9.99% of the Company’s outstanding common stock. The Equity Purchase Agreement provides that any provision
of the Equity Purchase Agreement may be amended or waived only by an instrument in writing signed by the party to be charged with
enforcement, however, the Company will not agree to any amendment or waiver of any provision in the Equity Purchase Agreement
that alters the pricing mechanism or the 9.99% ownership cap which will result in the transaction becoming ineligible to be made
on a shelf basis under Rule 415(a)(1)(i). Additionally, the Company believes that Southridge will also not agree to any amendment
or waiver of any provision in the Equity Purchase Agreement that alters the pricing mechanism or the 9.99% ownership cap which
will result in the transaction becoming ineligible to be made on a shelf basis under Rule 415(a)(1)(i)..
In the event that during a Valuation
Period for any Put Notice, the Closing Price on any trading day falls more than twenty percent (20%) below the Floor Price, then
for each such trading day we shall be under no obligation to sell and Southridge’s obligation to fund one-fifth of the put
amount for each such trading day shall terminate and the put amount shall be adjusted accordingly. In the event that during a
Valuation Period the Closing Price falls below the Floor Price for any two (2) trading days, then the balance of each party’s
rights and obligations to purchase and sell the investment amount under such Put Notice shall terminate on such second trading
day (the “Termination Date”). The put amount shall be adjusted to include only one-fifth (1/5) of the initial put
amount for each trading day during the Valuation Period prior to the Termination Date that the Closing Price equals or exceeds
the Floor Price. As used herein, the “Floor Price” means the average of the five (5) most recent closing bid
prices prior to the Put Date.
If, during any Valuation Period, the Company
(i) subdivides or combines the common stock; (ii) pays a dividend in shares of common stock or makes any other distribution of
shares of common stock; (iii) issues any options or other rights to subscribe for or purchase shares of common stock and the price
per share is less than closing price in effect immediately prior to such issuance; (iv) issues any securities convertible into
shares of common stock and the consideration per share for which shares of common stock may at any time thereafter be issuable
pursuant to the terms of such convertible securities shall be less that the closing price in effect immediately prior to such issuance;
(v) issue shares of common stock otherwise than as provided in the foregoing subsections (i) through (iv) at a price per share
less than the closing price in effect immediately prior to such issuance, or without consideration; or (vi) makes a distribution
of its assets or evidences of its indebtedness to the holders of common stock as a dividend in liquidation or by way of return
of capital or other than as a dividend payable out of earnings or surplus legally available for dividends under applicable law
(collectively, a “Valuation Event”), then a new Valuation Period shall begin on the trading day immediately after the
occurrence of such Valuation Event and end on the fifth trading day thereafter.
We are relying on an exemption from the
registration requirements of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. The transaction
does involve a private offering, Southridge is an “accredited investor” and/or qualified institutional buyer and Southridge
has access to information about us and its investment.
At the average of the high and low
prices of the common stock of the Company as reported on the OTCQB on October 15, 2012 of $0.305 per share, we will be able to
receive up to $4,539,989 in gross proceeds, assuming the sale of the entire 14,885,210 Put Shares being registered hereunder pursuant
to the Equity Purchase Agreement. We would be required to register 50,688,560 additional shares to obtain the remaining balance
of $15,460,011 under the Equity Purchase Agreement at the average of the high and low prices of the common stock of the Company
as reported on the OTCQB on October 15, 2012 of $0.305 per share.
Assuming the sale of the entire $20,000,000
in Put Shares being registered hereunder pursuant to the Equity Purchase Agreement, we will be able to receive $20,000,000 in gross
proceeds. Neither the Equity Purchase Agreement nor any rights or obligations of the parties under the Equity Purchase Agreement
may be assigned by either party to any other person.
There are substantial risks to investors
as a result of the issuance of shares of our common stock under the Equity Purchase Agreement. These risks include dilution of
stockholders, significant decline in our stock price and our inability to draw sufficient funds when needed.
Southridge will periodically purchase our
common stock under the Equity Purchase Agreement and will, in turn, sell such shares to investors in the market at the market price. This
may cause our stock price to decline, which will require us to issue increasing numbers of common shares to Southridge to raise
the same amount of funds, as our stock price declines.
SUMMARY OF FINANCIAL INFORMATION
The following selected financial information
is derived from the Company’s Financial Statements appearing elsewhere in this Prospectus and should be read in conjunction
with the Company’s Financial Statements, including the notes thereto, appearing elsewhere in this Prospectus.
Summary of Statements of Operations
For the Period from April 1, 2012 to June 30, 2012:
Total revenue
|
|
$
|
280
|
|
|
|
|
|
|
Net loss
|
|
|
(413,937
|
)
|
|
|
|
|
|
Net loss per common share (basic and diluted)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
Weighted average common shares
|
|
|
58,354,775
|
|
For the Period from April 11, 2011 (inception) to March 31,
2012:
Total revenue
|
|
$
|
1,300
|
|
|
|
|
|
|
Net loss
|
|
|
(2,323,551
|
)
|
|
|
|
|
|
Net loss per common share (basic and diluted)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
Weighted average common shares
|
|
|
45,093,271
|
|
Statement of Financial Position
|
|
June 30, 2012
|
|
|
|
|
|
Cash
|
|
$
|
17,062
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
16,608
|
|
|
|
|
|
|
Total current assets
|
|
|
33,950
|
|
|
|
|
|
|
Total assets
|
|
$
|
57,338
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
1,167,970
|
|
|
|
|
|
|
Stockholders’ deficit
|
|
$
|
(1,110,632
|
)
|
|
|
|
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
57,338
|
|
|
|
March 31,
2012
|
|
|
|
|
|
Cash
|
|
$
|
15,698
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
168,874
|
|
|
|
|
|
|
Total current assets
|
|
|
184,572
|
|
|
|
|
|
|
Total assets
|
|
$
|
207,122
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
997,567
|
|
|
|
|
|
|
Stockholders’ deficit
|
|
$
|
(790,445
|
)
|
|
|
|
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
207,122
|
|
DISCLOSURE REGARDING FORWARD-LOOKING
STATEMENTS
Except for statements of historical
facts, this Prospectus contains forward-looking statements involving risks and uncertainties. The words “anticipate,”
“believe,” “estimate,” “expect,” “future,” “intend,” “plan”
or the negative of these terms and similar expressions or variations thereof are intended to forward looking statements. Such
statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions
and other factors (including the risks contained in the section of this registration statement on Form S-1 entitled “Risk
Factors”) relating to the Registrant’s industry, the Registrant’s operations and results of operations and any
businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected,
intended or planned.
Although the Registrant believes that
the expectations reflected in the forward looking statements are reasonable, the Registrant cannot guarantee future results, levels
of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States,
the Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The
following discussion should be read in conjunction with the Registrant’s financial statements and the related notes included
in this registration statement on Form S-1.
RISK FACTORS
You should carefully consider the
risks described below together with all of the other information included in our public filings before making an investment decision
with regard to our securities. If any of the following events described in these risk factors actually occurs,
our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock
could decline, and you may lose all or part of your investment.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We are a development stage company with a limited operating
history on which to evaluate our business or base an investment decision.
Our business prospects are difficult to
predict because of our limited operating history, early stage of development and unproven business strategy. We are a development
stage company that has generated nominal revenues. Stevia is still a relatively new product in the sweetener marketplace and it
has historically not been commercially grown in Vietnam or many of our other target locations. Both the continued growth of the
stevia market in general, and our ability to introduce commercial development of stevia to new regions, face numerous risks and
uncertainties. In particular, we have not proven that we can produce stevia in a manner that enables us to be profitable and meet
manufacturer requirements, develop intellectual property to enhance stevia production, develop and maintain relationships with
key growers and strategic partners to extract value from our intellectual property, raise sufficient capital in the public and/or
private markets, or respond effectively to competitive pressures. If we are unable to accomplish these goals, our business is unlikely
to succeed and you should consider our prospects in light of these risks, challenges and uncertainties.
We have insignificant revenues and have
incurred losses.
Our auditors have expressed uncertainty
as to our ability to continue as a going concern as of our fiscal year ended March 31, 2012. Furthermore, since inception we have
generated nominal revenues. As of June 30, 2012, we had an accumulated deficit of approximately $2,737,488. We anticipate that
our existing cash and cash equivalents will not be sufficient to fund our longer term business needs and we will need to generate
revenue or receive additional investment in the Company to continue operations. Such financing may not be available in sufficient
amounts, or on terms acceptable to us and may dilute existing stockholders.
If we fail to raise additional capital,
our ability to implement our business model and strategy could be compromised.
We have limited capital resources and operations.
To date, our operations have been funded entirely from the proceeds from debt and equity financings. We expect to require substantial
additional capital in the near future to develop our intellectual property base and to establish the targeted levels of commercial
production of stevia. We may not be able to obtain additional financing on terms acceptable to us, or at all. Even if we obtain
financing for our near term operations, we expect that we will require additional capital beyond the near term. If we are unable
to raise capital when needed, our business, financial condition and results of operations would be materially adversely affected,
and we could be forced to reduce or discontinue our operations.
We face intense competition which could
prohibit us from developing a customer base and generating revenue.
The industries within which we compete,
including the sweetener industry and the fertilizer and feed industries, are highly competitive with companies that have greater
capital resources, facilities and diversity of product lines. Additionally, if demand for stevia continues to grow, we expect many
new competitors to enter the market as there are no significant barriers to stevia production. More established agricultural companies
with much greater financial resources which do not currently compete with us may be able to easily adapt their existing operations
to production of stevia. Due to this competition, there is no assurance that we will not encounter difficulties in obtaining revenues
and market share or in the positioning of our services or that competition in the industry will not lead to reduced prices for
the stevia leaf. Our competitors may also introduce new non-stevia based low-calorie sweeteners or be successful in developing
a fermentation-derived stevia ingredient or other alternative production method which could also increase competition and decrease
demand for stevia-based products.
Inability to protect our proprietary
rights could damage our competitive position.
Our business will be heavily dependent
upon the intellectual property we develop or acquire. Any infringement or misappropriation of our intellectual property could damage
its value and limit our ability to compete. We will rely on patents, copyrights, trademarks, trade secrets, confidentiality provisions
and licensing arrangements to establish and protect our intellectual property. We may have to engage in litigation to protect the
rights to our intellectual property, which could result in significant litigation costs and require a significant amount of our
time. In addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside
the United States, which could make it easier for competitors to capture market position in such countries by utilizing technologies
that are similar to those developed or licensed by us.
Competitors may also harm our sales by
designing products that mirror the capabilities of our products or technology without infringing our intellectual property rights.
If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively enforce our intellectual
property rights, our competitiveness could be impaired, which would limit our growth and future revenue.
A successful claim of infringement against
us could result in a substantial damage award and materially harm our financial condition. Even if a claim against us is unsuccessful,
we would likely have to devote significant time and resources to defending against it.
We may also find it necessary to bring
infringement or other actions against third parties to seek to protect our intellectual property rights. Litigation of this nature,
even if successful, is often expensive and disruptive of a company’s management’s attention, and in any event may
not lead to a successful result relative to the resources dedicated to any such litigation.
We may be unable to effectively develop
an intellectual property portfolio or may fail to keep pace with advances in technology.
We have a limited operating history in
the agriculture industry and there is no certainty that we will be able to effectively develop a viable portfolio of intellectual
property. The success of our farm management services, which are the core of our business, depends upon our ability to create such
intellectual property.
Even if we are able to develop, manufacture
and obtain any regulatory approvals and clearances necessary for our technologies and methods, the success of such services will
depend upon market acceptance. Levels of market acceptance for our services could be affected by several factors, including:
|
·
|
the availability of alternative services from our competitors;
|
|
·
|
the price and reliability of the our services relative to that of our competitors; and
|
|
·
|
the timing of our market entry.
|
Additionally, our intellectual property
must keep pace with advances by our competitors. Failure to do so could cause our position in the industry to erode rapidly.
Confidentiality agreements with employees
and others may not adequately prevent disclosure of our trade secrets and other proprietary information.
Our success depends upon the skills,
knowledge and experience of our technical personnel, our consultants and advisors as well as our licensors and contractors. Because
we operate in a highly competitive field, we will rely significantly on trade secrets to protect our proprietary technology and
processes. However, trade secrets are difficult to protect. We enter into confidentiality and intellectual property assignment
agreements with our corporate partners, employees, consultants, outside scientific collaborators, developers and other advisors.
These agreements generally require that the receiving party keep confidential and not disclose to third parties confidential information
developed by us during the course of the receiving party’s relationship with us. These agreements also generally provide
that inventions conceived by the receiving party in the course of rendering services to us will be our exclusive property. However,
these agreements may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could
be independently discovered by competitors, in which case we would not be able to prevent use of such trade secrets by our competitors.
The enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive
and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to
protect trade secrets. The failure to obtain or maintain meaningful trade secret protection could adversely affect our competitive
position.
We will produce products for consumption
by consumers that may expose us to litigation based on consumer claims and product liability.
The stevia produced at our farms will be
integrated into stevia-based products which will be consumed by the general public. Additionally, we may manufacture and sell private
label stevia-based food products. Even though we intend to grow and sell products that are safe, we have potential product risk
from the consuming public. We could be party to litigation based on consumer claims, product liability or otherwise that could
result in significant liability for us and adversely affect our financial condition and operations.
If our services do not gain acceptance
among stevia growers, we may not be able to recover the cost of our intellectual property development.
Our business model relies on the assumption
that we will be able to develop methods and protocols, secure valuable plant strains and develop other intellectual property for
stevia farming that will be attractive to both stevia growers and manufacturers. We spent $285,175 for this purpose as of June
30, 2012 and issued 3,000,000 shares to acquire intellectual property related to stevia and we estimate spending approximately
fifteen percent of our operating expense budget to continue developing and improving this intellectual property portfolio. If
we are unable to secure such intellectual property or if our methods and protocols do not gain acceptance among growers or manufacturers,
our intellectual property will have limited value. A number of factors may affect the market acceptance of our products and services,
including, among others, the perception by growers of the effectiveness of our intellectual property, the perception among manufacturers
of the quality of stevia produced using our intellectual property, our ability to fund marketing efforts, and the effectiveness
of such marketing efforts. If such products and services do not gain acceptance by growers and/or manufacturers, we may not be
able to fund future operations, including the expansion of our own farming projects and development and/or acquisition of additional
intellectual property, which inability would have a material adverse effect on our business, financial condition and operating
results.
Any failure to adequately establish
a network of growers and manufacturers will impede our growth.
We expect to be substantially dependent
on manufacturers to purchase the stevia produced both at our own farms and at those of our customers. We have entered into a supply
agreement with a manufacturer and two purchase agreements with growers and are in the process of establishing a network of growers
to produce stevia using the methods and protocols we are developing. The relationship with this manufacturer and its perception
of the stevia produced using our farm management services will determine its willingness to enter into purchase contracts with
us and our customers on attractive terms. Our ability to secure such contracts will influence our attractiveness to growers who
are potentially interested in partnering with us. Achieving significant growth in revenue will depend, in large part, on our success
in establishing this production network. If we are unable to develop an efficient production network, it will make our growth
more difficult and our business could suffer.
If we are unable to deliver a consistent,
high quality stevia leaf at sufficient volumes, our relationship with our manufacturers may suffer and our operating results will
be adversely affected.
Manufacturers will expect us to be able
to consistently deliver stevia at sufficient volumes, while meeting their established quality standards. If we are unable to consistently
deliver such volumes either from our own farms, or those of our grower partners, our relationship with these manufacturers could
be adversely affected which could have a negative impact on our operating results.
Changes in consumer preferences or negative
publicity or rumors may reduce demand for our products.
Recent data suggests consumers are adopting
stevia as a sweetener in many products. However, stevia is a relatively new ingredient in consumer products and many consumers
are not familiar with it. Therefore, any negative reports or rumors regarding either the taste or perceived health effects of stevia,
whether true or not, could have a severe impact on the demand for stevia-based products. Manufacturers may decide to rely on alternative
sweeteners which have a more established history with consumers. Primarily operating at the grower level, we will have little opportunity
to influence these perceptions and there can be no assurance that the increased adoption of stevia in consumer food and beverage
products will continue. Additionally, new sweeteners with similar characteristics to stevia may emerge which could be cheaper to
produce or be perceived to have other qualities superior to stevia. Any of these factors could adversely affect our ability to
produce revenues and our business, financial condition and results of operations would suffer.
Failure to effectively manage growth
of internal operations and business may strain our financial resources.
We intend to significantly expand the scope
of our farming operations and our research and development activities in the near term. Our growth rate may place a significant
strain on our financial resources for a number of reasons, including, but not limited to, the following:
|
·
|
The need for continued development of our financial and information management systems;
|
|
·
|
The need to manage strategic relationships and agreements with manufacturers, growers and partners;
and
|
|
·
|
Difficulties in hiring and retaining skilled management, technical and other personnel necessary
to support and manage our business.
|
Additionally, our strategy envisions a
period of rapid growth that may impose a significant burden on our administrative and operational resources. Our ability to effectively
manage growth will require us to substantially expand the capabilities of our administrative and operational resources and to attract,
train, manage and retain qualified management and other personnel. Our failure to successfully manage growth could result in our
sales not increasing commensurately with capital investments. Our inability to successfully manage growth could materially adversely
affect our business.
Adverse weather conditions, natural
disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.
Weather-related events could significantly
affect our results of operations. We do not currently maintain insurance to cover weather-related losses and if we do obtain such
insurance it likely will not cover all weather-related events and, even when an event is covered, our retention or deductible may
be significant. Cooler temperatures in the regions where we operate could negatively affect us, while not affecting our competitors
in other regions.
Our crops, and those of our grower partners,
could also be affected by drought, temperature extremes, hurricanes, windstorms and floods. In addition, such crops could be vulnerable
to crop disease and to pests, which may vary in severity and effect, depending on the stage of agricultural production at the time
of infection or infestation, the type of treatment applied and climatic conditions. Unfavorable growing conditions caused by these
factors can reduce both crop size and crop quality. In extreme cases, entire harvests may be lost. These factors may result in
lower production and, in the case of farms we own or manage, increased costs due to expenditures for additional agricultural techniques
or agrichemicals, the repair of infrastructure, and the replanting of damaged or destroyed crops. We may also experience shipping
interruptions, port damage and changes in shipping routes as a result of weather-related disruptions.
Competitors and industry participants may
be affected differently by weather-related events based on the location of their production and supply. If adverse conditions are
widespread in the industry, it may restrict supplies and lead to an increase in prices for stevia leaf, but our typical fixed-price
supply contracts may prevent us from recovering these higher costs.
Our operations and products are regulated
in the areas of food safety and protection of human health and the environment.
Our operations and products are subject
to inspections by environmental, food safety, health and customs authorities and to numerous governmental regulations, including
those relating to the use and disposal of agrichemicals, the documentation of food shipments, the traceability of food products,
and labeling of our products for consumers, all of which involve compliance costs. Changes in regulations or laws may require,
operational modifications or capital improvements at various locations. If violations occur, regulators can impose fines, penalties
and other sanctions. The costs of these modifications and improvements and of any fines or penalties could be substantial. We can
be adversely affected by actions of regulators or if consumers lose confidence in the safety and quality of stevia, even if our
products are not implicated.
If we are unable to continually innovate
and increase efficiencies, our ability to attract new customers may be adversely affected.
In the area of innovation, we must be able
to develop new processes, plant strains, and other technologies that appeal to stevia growers. This depends, in part, on the technological
and creative skills of our personnel and on our ability to protect our intellectual property rights. We may not be successful in
the development, introduction, marketing and sourcing of new technologies or innovations, that satisfy customer needs, achieve
market acceptance or generate satisfactory financial returns.
Global economic conditions may adversely
affect our industry, business and result of operations.
Disruptions in the global credit and financial
market could result in diminished liquidity and credit availability, a decline in consumer confidence, a decline in economic growth,
an increased unemployment rate, and uncertainty about economic stability. These economic uncertainties can affect businesses such
as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities. Such conditions
can lead consumers to postpone spending, which can cause manufacturers to cancel, decrease or delay orders with us. We are unable
to predict the likelihood of the occurrence, duration or severity of such disruptions in the credit and financial markets and adverse
global economic conditions and such economic conditions could materially and adversely affect our business and results of operations.
Our business depends substantially on
the continuing efforts of our executive officers and our business may be severely disrupted if we lose their services.
Our future success depends substantially
on the continued services of our executive officers, especially our President and director, Mr. George Blankenbaker. We do not
maintain key man life insurance on any of our executive officers and directors. If one or more of our executive officers are unable
or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Therefore, our business
may be severely disrupted, and we may incur additional expenses to recruit and retain new officers. In addition, if any of our
executives joins a competitor or forms a competing company, we may lose some of our customers.
Our engagement of Growers Synergy
Pte Ltd. may represent a potential conflict of interest.
We have engaged Growers Synergy Pte
Ltd, a regional farm management services provider, to provide farm management operations and back-office and regional logistical
support for our Vietnam and Indonesia operations for a period of two years. During the fiscal year ended March 31, 2012, Growers
Synergy received $180,000 for consulting services rendered to the Company. George Blankenbaker, our president, director and stockholder
is the managing director of Growers Synergy. Growers Fresh Pte Ltd (“Growers Fresh) owns a 51% interest in Growers Synergy
and Mr. Blankenbaker controls a 49% interest in Growers Fresh. As a result, there is a potential conflict of interest on Mr. Blankenbaker’s
role in the Company and Growers Synergy and such potential conflict could materially affect the terms of any engagement entered
into by the Company and Growers Synergy. Such terms, if not negotiated at arms length may not be in the best interest of the Company
and our stockholders.
Litigation may adversely affect our
business, financial condition and results of operations.
From time to time in the normal course
of our business operations, we may become subject to litigation that may result in liability material to our financial statements
as a whole or may negatively affect our operating results if changes to our business operation are required. The cost to defend
such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated
with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid
or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results
of operations.
We may be required to incur significant
costs and require significant management resources to evaluate our internal control over financial reporting as required under
Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse
effect on our stock price.
As a smaller reporting company as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include
an internal control report with our Annual Report on Form 10-K. This report must include management’s assessment of the
effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include
disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply,
or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an
adverse effect on the trading price of our equity securities. As of June 30, 2012, the management of the Company assessed the
effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control
over financial reporting established in
Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Management concluded, as of the
quarter ended June 30, 2012, that its internal controls and procedures were not effective to detect the inappropriate application
of U.S. GAAP rules. Management realized there were deficiencies in the design or operation of our internal control that adversely
affected our internal controls which management considers to be material weaknesses including those described below:
|
·
|
We have not achieved the optimal level of segregation of duties relative to key financial reporting
functions.
|
|
·
|
We
do not have an audit
committee or an independent
audit committee financial
expert. While not being
legally obligated to
have an audit committee
or independent audit
committee financial
expert, it is the management’s
view that to have an
audit committee, comprised
of independent board
members, and an independent
audit committee financial
expert is an important
entity-level control
over our financial statements.
|
Achieving continued compliance with
Section 404 may require us to incur significant costs and expend significant time and management resources. No assurance can be
given that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would
be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors
could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities,
as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting
firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating
effectively.
RISKS RELATED TO DOING BUSINESS IN VIETNAM
AND OTHER DEVELOPING COUNTRIES
Our international operations will be
subject to the laws of the jurisdictions in which we operate.
A significant portion of our initial business
operations will occur in Vietnam. We will be generally subject to laws and regulations applicable to foreign investment
in Vietnam. The Vietnamese legal system is based, at least in part, on written statutes. However, since these
laws and regulations are relatively new and the Vietnamese legal system continues to rapidly evolve, the interpretations of many
laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.
In April 2012, we announced plans to begin
field tests in Indonesia. Similar to Vietnam, the modern Indonesia legal system was formed relatively recently and is continuing
to evolve. As we continue our expansion into Indonesia and other developing countries, we will face similar risks and uncertainties
regarding the legal system as we currently face in Vietnam.
We cannot predict the effect of future
developments in the legal systems of developing countries, including the promulgation of new laws, changes to existing laws or
the interpretation or enforcement thereof, the preemption of local regulations by national laws, or the overturn of local government’s
decisions by the superior government. These uncertainties may limit legal protections available to us.
Our international operations involve
the use of foreign currencies, which subjects us to exchange rate fluctuations and other currency risks.
The revenues and expenses of our international
operations are generally denominated in local currencies, which subjects us to exchange rate fluctuations between such local currencies
and the U.S. dollar. These exchange rate fluctuations will subject us to currency translation risk with respect to the reported
results of our international operations, as well as to other risks sometimes associated with international operations. In
the future, we could experience fluctuations in financial results from our operations outside of the United States, and there can
be no assurance we will be able, contractually or otherwise, to reduce the currency risks associated with our international operations.
We may be adversely affected by economic
and political conditions in the countries where we operate.
We operate in Vietnam and other countries
throughout the world. Economic and political changes in these countries, such as inflation rates, recession, foreign ownership
restrictions, restrictions on transfer of funds into or out of a country and similar factors may adversely affect results of operations.
While it is our understanding that the
economy in Vietnam has grown significantly in the past 20 years, the growth has been uneven, both geographically and among various
economic sectors. The government of Vietnam has implemented various measures to encourage or control economic growth
and guide the allocation of resources. Some of these measures benefit the overall Vietnamese economy, but may also have
a negative effect on us. For example, our financial condition and results of operations may be adversely affected by
government control over capital investments or changes in tax regulations that are applicable to us.
The Vietnamese economy has been transitioning
from a planned economy to a more market-oriented economy. Although in recent years the Vietnamese government has implemented
measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets
and the establishment of sound corporate governance in business enterprises, a substantial portion of the productive assets in
Vietnam are still owned by the Vietnamese government. The continued control of these assets and other aspects of the
national economy by Vietnam government could materially and adversely affect our business. The Vietnamese government
also exercises significant control over Vietnamese economic growth through the allocation of resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries
or companies. Efforts by the Vietnamese government to slow the pace of growth of the Vietnamese economy could negatively
affect our business.
Our insurance coverage may be inadequate
to cover all significant risk exposures.
We will be exposed to liabilities that
are unique to the products we provide. While we intend to maintain insurance for certain risks, the amount of our insurance
coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from
risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational
risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could
have a material adverse effect on our business, financial condition and results of operations. In addition, because
the insurance industry in Vietnam and other developing countries are still in their early stages of development, business interruption
insurance available in such countries relating to our intended services and products offers limited coverage compared to that offered
in many other developed countries. We do not have any business interruption insurance. Any business disruption
or natural disaster could result in substantial costs and diversion of resources.
It will be extremely difficult to acquire
jurisdiction and enforce liabilities against our officers, directors and assets outside the United States.
Substantially all of our assets are currently
located outside of the United States and a significant number of our officers and directors may reside outside of the United States
as well. As a result, it may not be possible for United States investors to enforce their legal rights, to effect service
of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and
criminal penalties of our directors and officers under Federal securities laws. Moreover, we have been advised that Vietnam in
particular does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United
States. Further, it is unclear if extradition treaties now in effect between the United States and Vietnam would permit effective
enforcement of criminal penalties of the Federal securities laws.
RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES
The relative lack of public company
experience of our management team may put us at a competitive disadvantage.
Our management team lacks public company
experience and is generally unfamiliar with the requirements of the United States securities laws and U.S. Generally Accepted Accounting
Principles, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley
Act of 2002. The individuals who now constitute our senior management team have never had responsibility for managing a publicly
traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely
basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately
responds to such increased legal, regulatory compliance and reporting requirements. Our failure to comply with all applicable requirements
could lead to the imposition of fines and penalties and distract our management from attending to the growth of our business.
Our stock is categorized as a penny
stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s
ability to buy and sell our stock.
Our stock is categorized as a “penny
stock”. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that
has a market price (as defined) less than $4.00 per share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers
who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation
of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny
stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information,
must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing
before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that
is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade
our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common
stock.
FINRA sales practice requirements
may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock”
rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in
recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable
for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers
must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives
and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers
to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares.
We expect to experience volatility
in our stock price, which could negatively affect stockholders’ investments.
Although our common stock is quoted
on the OTCQB under the symbol “STEV”, there is a limited public market for our common stock. No assurance
can be given that an active market will develop or that a stockholder will ever be able to liquidate its shares of common stock
without considerable delay, if at all. Many brokerage firms may not be willing to effect transactions in the securities. Even
if a purchaser finds a broker willing to effect a transaction in these securities, the combination of brokerage commissions, state
transfer taxes, if any, and any other selling costs may exceed the selling price. Furthermore, our stock price may
be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations,
as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations
may adversely affect the market price and liquidity of our common stock.
In the past, securities class action litigation
has often been brought against a company following periods of volatility in the market price of its securities. Due to the
volatility of our common stock price, we may be the target of securities litigation in the future. Securities litigation
could result in substantial costs and divert management’s attention and resources.
Stockholders should also be aware that,
according to SEC Release No. 34-29093, the market for “penny stock”, such as our common stock, has suffered in recent
years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic
price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers;
and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management
is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines
of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence
of these patterns or practices could increase the future volatility of our share price.
To date, we have not paid any cash dividends
and no cash dividends will be paid in the foreseeable future.
We do not anticipate paying cash dividends
on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if
the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend to retain
all earnings for our operations.
The elimination of monetary liability
against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers
and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers
and employees.
Our Articles of Incorporation contain
a provision permitting us to eliminate the personal liability of our directors to our company and stockholders for damages for
breach of fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification
obligations under our employment agreements with our officers. The foregoing indemnification obligations could result in the Company
incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may
be unable to recoup. These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors
and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders
against our directors and officers even though such actions, if successful, might otherwise benefit our company and stockholders.
Certain restrictions on the extent
of puts may have little, if any, effect on the adverse impact of our issuance of shares in connection with the Equity Purchase
Agreement, and as such, Southridge may sell a large number of shares, resulting in substantial dilution to the value of shares
held by existing stockholders.
Southridge has agreed to refrain from holding
an amount of shares which would result in Southridge owning more than 9.99% of the then-outstanding shares of our common stock
at any one time. These restrictions, however, do not prevent Southridge from selling shares of common stock received
in connection with a put, and then receiving additional shares of common stock in connection with a subsequent put. In
this way, Southridge could sell more than 9.99% of the outstanding common stock in a relatively short time frame while never holding
more than 9.99% at one time.
Because Southridge will be paying less
than the then-prevailing market price for our common stock, your ownership interest may be diluted and the value of our common
stock may decline by exercising the put right pursuant to the Equity Purchase Agreement.
The common stock to be issued to Southridge
pursuant to the Equity Purchase Agreement will be purchased at an 7% discount to the lowest closing bid price of our common stock
reported by Bloomberg, L.P. during the five consecutive trading day period immediately following the date of our notice to Southridge
of our election to put shares pursuant to the Equity Purchase Agreement. Because the put price is lower than the prevailing market
price of our common stock, to the extent that the put right is exercised, your ownership interest may be diluted. Southridge has
a financial incentive to sell our common stock immediately upon receiving the shares to realize the profit equal to the difference
between the discounted price and the market price. If Southridge sells the shares, the price of our common stock could decrease.
If our stock price decreases, Southridge may have a further incentive to sell the shares of our common stock that it holds. These
sales may have a further adverse impact on our stock price.
The Equity Purchase Agreement’s
pricing structure may result in dilution to our stockholders.
Pursuant to the Equity Purchase Agreement,
Southridge committed to purchase, subject to certain conditions, up to $20,000,000 of our common stock over a three-year period.
If we sell shares to Southridge under the Equity Purchase Agreement , it will have a dilutive effect on the holdings of our current
stockholders, and may result in downward pressure on the price of our common stock. If we draw down amounts under the Equity Purchase
Agreement, we will issue shares to Southridge at a discount. If we draw down amounts under the Equity Purchase Agreement when our
share price is decreasing, we will need to issue more shares to raise the same amount than if our stock price was higher. Issuances
in the face of a declining share price will have an even greater dilutive effect than if our share price were stable or increasing,
and may further decrease our share price.
If we issue additional shares in
the future, whether in connection with a financing or in exchange for services or rights, it will result in the dilution of our
existing stockholders.
Our articles of incorporation authorize
the issuance of up to 100,000,000 shares of common stock with a par value of $0.001 per share. Our Board of Directors may choose
to issue some or all of such shares to acquire one or more companies or properties, to fund our overhead and general operating
requirements and in exchange for services rendered to the Company. Such issuances may not require the approval of our stockholders.
We have previously issued shares of our common stock in exchange for services provided to the Company and for certain rights,
including as consideration for intellectual property rights. Any future issuances may reduce the book value per share and may
contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares
in the future, such issuance will reduce the proportionate ownership and voting power of all current stockholders.
We would have to increase our authorized
shares of common stock from the current 100,000,000 shares to have enough shares to exercise the full equity line in accordance
with the Equity Purchase Agreement.
In order to exercise the entire equity
line of $20 million, and assuming the resale of all of the shares being offered in this prospectus, the Company would be required
to issue 65,573,770 additional shares of its common stock to Southridge based on the average of the high and low bid prices of
our common stock on October 15, 2012. The Company currently has 66,555,635 shares outstanding, with only 33,444,365 shares authorized,
but unissued. Accordingly, we may be required to seek stockholder approval to amend our Articles of Incorporation to increase
our authorized number of common stock. There is no guarantee that such stockholder approval can be obtained and as such, we may
not be able to access the full amount available under Equity Purchase Agreement.
We may not be able to access sufficient funds pursuant
to the terms of the Equity Purchase Agreement.
Our ability to put shares to Southridge
and obtain funds pursuant to the terms of the Equity Purchase Agreement is limited, including restrictions on when we may exercise
our put rights, restrictions on the amount we may put to Southridge at any one time, which is determined in part by the trading
price of our common stock, and a limitation on Southridge’s obligation to purchase if such purchase would result in Southridge
beneficially owning more than 9.99% of our common stock. Accordingly, we may not be able to access sufficient funds when needed.
USE OF PROCEEDS
Selling Security Holders may sell all
of the common stock offered by this Prospectus from time-to-time. We will not receive any proceeds from the sale of those shares
of common stock. We may, however, receive up to $683,200.21 upon the cash exercise of the Warrants and aggregate gross proceeds
of $20,000,000 if all shares of common stock are sold to Southridge pursuant to the Equity Purchase Agreement. Any such proceeds
we receive will be used for working capital and general corporate matters.
DETERMINATION OF OFFERING PRICE
There currently is a limited public market for our common stock.
Selling Security Holders will determine at what price they may sell the offered shares, and such sales may be made at prevailing
market prices or at privately negotiated prices. See “Plan of Distribution” below for more information.
SELLING SECURITY HOLDERS
The Put Shares
We agreed to register for resale $20,000,000
of Put Shares that we will put to Southridge pursuant to the Equity Purchase Agreement. In accordance with Rule 415(a)(1)(i),
we are registering 14,885,211 Put Shares in this offering. The Equity Purchase Agreement provides that Southridge is committed
to purchase up to $20,000,000 of our common stock. We may draw on the facility from time to time, as and when we determine appropriate
in accordance with the terms and conditions of the Equity Purchase Agreement. We will not receive any proceeds from the sale of
these shares of common stock offered by Southridge. However, we will receive proceeds from the sale of our Put Shares under the
Equity Purchase Agreement. The proceeds will be used for working capital or general corporate purposes.
Southridge is the potential purchaser of
our common stock under the Equity Purchase Agreement. The $20,000,000 of Put Shares offered in this prospectus is based on the
Equity Purchase Agreement between Southridge and us. Southridge may from time to time offer and sell any or all of the Put Shares
that are registered under this prospectus. The put option price is 93% of the lowest Closing Price in the five trading day period
immediately following the Put Date.
We are unable to determine the exact number
of shares that will actually be sold by Southridge according to this prospectus due to:
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the ability of Southridge to determine when and whether it will sell any of the Put Shares under
this prospectus; and
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•
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the uncertainty as to the number of Put Shares that will be issued upon exercise of our put options
under the Equity Purchase Agreement.
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The following information contains a description
of how Southridge shall acquire the shares to be sold in this offering. Southridge has not held a position or office, or had any
other material relationship with us, except as follows.
Southridge is a limited partnership organized
and existing under the laws of the state of Delaware. All investment decisions of, and control of, Southridge is held by its general
partner Southridge Advisors, LLC. Stephen M. Hicks is the manager of Southridge Advisors, LLC, and he has voting and investment
power over the shares beneficially owned by Southridge Partners II, LP. To the extent such shares are offered for sale through
a Put Notice, Southridge will acquire all shares being registered in this offering in the financing transactions with us.
Southridge intends to sell up to $20,000,000
of shares of our common stock pursuant to the Equity Purchase Agreement under this prospectus. On January 26, 2012, the Company
and Southridge entered into the Equity Purchase Agreement pursuant to which we have the opportunity, for a three-year period commencing
on the date of the Equity Purchase Agreement (but not before the date which the SEC first declares effective this registration
statement), to sell shares of our common stock. For each share of our common stock purchased under the Equity Purchase Agreement,
Southridge will pay 93% of the lowest Closing Price during the Valuation Period. As a condition for the execution of the Equity
Purchase Agreement, we issued 35,000 shares of our common stock to Southridge as a commitment fee.
In addition, in the event the Closing Price
decreases below the Floor Price during the Valuation Period, Southridge shall not be allowed to fund one-fifth (1/5) of the put
amount on the Put Notice for each such trading day, and the put amount on the Put Notice shall be adjusted accordingly. In the
event that during a Valuation Period the Closing Price falls below the Floor Price for any two (2) trading days, then the
balance of each party’s rights and obligations to purchase and sell the investment amount under such Put Notice shall terminate
on such second trading day, and the put amount shall be adjusted to include only one-fifth (1/5) of the initial put amount for
each trading day during the Valuation Period prior to such termination date that the closing Closing Price equals or exceeds the
Floor Price.
We are relying on an exemption from the
registration requirements of the Securities Act for the private placement of our securities under the Equity Purchase Agreement
pursuant to Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. The transaction
does not involve a public offering, Southridge is an “accredited investor” and/or qualified institutional buyer and
Southridge has access to information about us and its investment.
There are substantial risks to investors
as a result of the issuance of shares of our common stock under the Equity Purchase Agreement. These risks include dilution of
stockholders and significant decline in our stock price.
Southridge will periodically purchase shares
of our common stock under the Equity Purchase Agreement and will in turn, sell such shares to investors in the market at the prevailing
market price. This may cause our stock price to decline, which will require us to issue increasing numbers of shares to Southridge
to raise the same amount of funds, as our stock price declines.
Southridge is an “underwriter”
within the meaning of the Securities Act.
The Purchase Shares and Warrant Shares
On August 1, 2012, we entered into a Securities
Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Financing Stockholders”)
to raise $500,000 in a private placement financing (the “Offering”). On August 6, 2012, after the satisfaction of certain
closing conditions, the Offering closed and we issued to the Purchasers: (i) an aggregate of 1,066,667 shares of our common stock
at a price per share of $0.46875 (the “Purchase Shares”) and (ii) warrants to purchase an equal number of shares of
our common stock at an exercise price of $0.6405 with a term of 5 years (the “Warrants”), for aggregate gross proceeds
of $500,000. The Purchase Shares and Warrants were issued pursuant to an exemption from registration afforded by Section 4(2) and
Regulation D (Rule 506) under the Securities Act of 1933, as amended and corresponding provisions of state securities laws.
The Selling Security Holders Table
The following table sets forth the names
of the Selling Security Holders, the number of shares of common stock beneficially owned by each Selling Security Holder as of
the date hereof and the number of shares of common stock being offered by each Selling Security Holder. The shares being
offered hereby are being registered to permit public secondary trading, and the Selling Security Holders may offer all or part
of the shares for resale from time to time. However, the Selling Security Holders are under no obligation to sell all or any portion
of such shares nor are the Selling Security Holders obligated to sell any shares immediately upon effectiveness of this prospectus.
All information with respect to share ownership has been furnished by the Selling Security Holders. The “Amount
Beneficially Owned After Offering” column assumes the sale of all shares offered.
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Shares
Beneficially
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Amount
Beneficially
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Percent
Beneficially
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Owned Prior To
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Shares to
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Owned After
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Owned
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Name
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Offering
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be Offered
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Offering
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After Offering
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Southridge Partners II, LP (1)
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35,000
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14,885,211
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35,000
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Less than 1
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%
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Anson Investments Master Fund LP(2)
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1,706,666
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1,706,666
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(4)
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0
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0
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%
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Cranshire Capital Master Fund, Ltd. (3)
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426,668
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426,668
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(5)
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0
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0
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%
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(1)
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Southridge Partners II, LP is a limited partnership organized and exiting under the laws of the state of Delaware. Southridge Advisors, LLC is the general partner of Southridge and has voting and investment power over the shares beneficially owned by Southridge Partners II, LP. Stephen M. Hicks is the manager of Southridge Advisors, LLC, and he has voting and investment power over the shares beneficially owned by Southridge Partners II, LP.
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(2)
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Moez Kassam has voting and dispositive control over the shares beneficially owned by Anson Investments Master Fund LP.
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(3)
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Cranshire Capital Advisors, LLC (“CCA”) is the investment manager of Cranshire Capital Master Fund, Ltd. (“Cranshire Master Fund”) and has voting control and investment discretion over securities held by Cranshire Master Fund. Mitchell P. Kopin (“Mr. Kopin”), the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Cranshire Master Fund.
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(4)
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Includes 853,333 shares of our common stock and 853,333 shares underlying warrants to purchase
our common stock.
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(5)
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Includes 213,334 shares of our common stock and 213,334 shares underlying warrants to purchase
our common stock.
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All expenses incurred with respect to the registration of the
common stock will be borne by us, but we will not be obligated to pay any underwriting fees, discounts, commission or other expenses
incurred by the Selling Security Holders in connection with the sale of the Purchase Shares.
Neither the Selling Security Holders nor any of their associates
or affiliates has held any position, office, or other material relationship with us in the past three years.
PLAN OF DISTRIBUTION
This prospectus relates to the resale
of Shares of our common stock, par value $0.001 per share, by the Selling Security Holders, including (i) 14,885,211 of Put Shares
that we will put to Southridge pursuant to the Equity Purchase Agreement, (ii) 1,066,667 of Purchase Shares, and (iii) 1,066,667
shares of common stock issuable upon the exercise of outstanding Warrants.
The Selling Security Holders and any of
their respective pledges, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares
of our common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. The
Selling Security Holders may use any one or more of the following methods when selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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broker-dealers may agree with a Selling Security Holder to sell a specified number of such shares at a stipulated price per
share;
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through the writing of options on the shares;
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a combination of any such methods of sale; and
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·
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any other method permitted pursuant to applicable law.
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According to the terms of the Equity Purchase
Agreement, neither Southridge nor any affiliate of Southridge acting on its behalf or pursuant to any understanding with it will
execute any short sales during the term of this offering.
The Selling Security Holders or their respective
pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals
and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the Selling Security Holders and/or the purchasers of shares for whom
such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer
might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own
account and at their own risk. It is possible that the Selling Security Holders will attempt to sell shares of common
stock in block transactions to market makers or other purchasers at a price per share which may be below the then market price. The
Selling Security Holders cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by,
the Selling Security Holders. In addition, the Selling Security Holders and any brokers, dealers or agents, upon effecting
the sale of any of the shares offered in this prospectus are “underwriters” as that term is defined under the Securities
Act or the Exchange Act, or the rules and regulations under such acts. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
Discounts, concessions, commissions and
similar selling expenses, if any, attributable to the sale of shares will be borne by a Selling Security Holder. The Selling Security
Holders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.
The Selling Security Holders may from time
to time pledge or grant a security interest in some or all of the shares of common stock owned by them, and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or any other applicable
provision of the Securities Act amending the list of Selling Security Holders to include the pledgee, transferee or other successors
in interest as Selling Security Holder under this prospectus.
The Selling Security Holders also may transfer
the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of Selling Security Holders to include the pledgee, transferee or other successors in interest as a Selling
Security Holder under this prospectus.
We are required to pay all fees and expenses
incident to the registration of the shares of common stock. Otherwise, all discounts, commissions or fees incurred in
connection with the sale of our common stock offered hereby will be paid by the Selling Security Holders.
The Selling Security Holders acquired or
will acquire the securities offered hereby in the ordinary course of business and have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common
stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by
any Selling Security Holder. We will file a supplement to this prospectus if a Selling Security Holder enters into a
material arrangement with a broker-dealer for sale of common stock being registered. If the Selling Security Holders
use this prospectus for any sale of the shares of common stock, it will be subject to the prospectus delivery requirements of the
Securities Act.
Pursuant to a requirement by the Financial
Industry Regulatory Authority, or FINRA, the maximum commission or discount to be received by any FINRA member or independent broker/dealer
may not be greater than eight percent (8%) of the gross proceeds received by us for the sale of any securities being registered
pursuant to SEC Rule 415 under the Securities Act.
The anti-manipulation rules of Regulation
M under the Exchange Act, may apply to sales of our common stock and activities of the Selling Security Holders. The
Selling Security Holders will act independently of us in making decisions with respect to the timing, manner and size of each sale.
Southridge is an “underwriter”
within the meaning of the Securities Act in connection with the sale of our common stock under the Equity Purchase Agreement. For
each share of common stock purchased under the Equity Purchase Agreement, Southridge will pay 93% of the lowest closing bid price
of our common stock during the Valuation Period.
We will pay all expenses incident to
the registration, offering and sale of the shares of our common stock to the public hereunder other than commissions, fees and
discounts of underwriters, brokers, dealers and agents. If any of these other expenses exists, we expect Southridge
to pay these expenses. Southridge’s obligations under the Equity Purchase Agreement may not be assigned without
our written consent and this resale registration statement does not cover sales by any assignee of Southridge. We have agreed
to indemnify Southridge and its controlling persons against certain liabilities, including liabilities under the Securities Act.
We estimate that the expenses of the offering to be borne by us will be approximately $40,000. We will not receive
any proceeds from the resale of any of the shares of our common stock by Southridge. We may, however, receive proceeds
from the sale of our common stock under the Equity Purchase Agreement.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
The following summary includes a description
of material provisions of our capital stock.
Authorized and Outstanding Securities
The Company is authorized to issue 100,000,000
shares of common stock, par value $0.001 per share. As of August 29, 2012, there were issued and outstanding 66,555,635
shares of our common stock.
Common Stock
The holders of our common stock are
entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative
voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time
by the board of directors in its discretion from funds legally available therefore. In the event of a liquidation, dissolution
or winding up of the Company, the holders of common stock are entitled to share pro rata all assets remaining after payment in
full of all liabilities. Holders of common stock have no preemptive rights to purchase the Company’s common stock. There
are no conversion or redemption rights or sinking fund provisions with respect to the common stock.
Dividends
Dividends, if any, will be contingent upon
our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within
the discretion of our board of directors. We intend to retain earnings, if any, for use in its business operations and accordingly,
the board of directors does not anticipate declaring any dividends in the foreseeable future.
Warrants
The Warrants issued in connection with
the Offering in August 2012, pursuant to which 1,066,667 shares of common stock are issuable thereunder, have an exercise price
of $0.6405 per share with a term of 5 years. The Warrants contain anti-dilution provisions and may be exercised cashless if the
underlying shares of common stock issuable upon exercise of the Warrants are not registered in a specified time period after closing
of the Offering and issuance of the Warrants.
Registration Rights
Southridge Registration Rights
In accordance with the Registration Rights
Agreement (“Rights Agreement”) entered into with Southridge, Southridge is entitled to certain rights with respect
to the registration of the shares of common stock issued in connection with the Equity Purchase Agreement (the “Registrable
Securities”).
Within ninety (90) days after the effective
date of the Rights Agreement, we are obligated to file a registration statement with respect to the Registrable Securities. Upon
becoming effective, such registration statement shall remain effective at all times until the earliest of (i) the date that is
three months after the completion of the last sale of common shares under the Equity Purchase Agreement, or (ii) the date Southridge
no longer owns any of the Registrable Securities. We must also use all commercially reasonable efforts to register and/or qualify
the Registrable Securities under such other securities or blue sky laws of such jurisdictions as Southridge may reasonably request
and in which significant volumes of shares of our common stock are traded.
We will pay all reasonable expenses incurred
in connection with the registrations described above. However, we will not be responsible for any broker or similar concessions
or any legal fees or other costs of Southridge.
Financing Stockholder Registration Rights
In accordance with the Registration
Rights Agreement (the “Financing Rights Agreement”) entered into with the Financing Stockholders (defined as those
certain accredited investors who took part in the Offering in August 2012), the Financing Stockholders are entitled to certain
rights with respect to this registration statement and with respect to future securities.
Within thirty (30) days following the effective
date of the Financing Rights Agreement, we are obligated to file a registration statement with respect to the shares of common
stock held by the Financing Stockholders and the common stock issuable upon exercise of the Warrants held by the Financing Stockholders.
We must use commercially reasonable best efforts to keep such registration statement continuously effective until all registrable
securities covered by such registration statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without
volume or manner-of-sale restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion
letter to such effect.
All fees and expenses incident to the performance
of or compliance with, the Financing Rights Agreement by the Company shall be borne by the Company
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant
or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries
as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The financial statements included in this
prospectus and in the registration statement have been audited by Li & Company, PC, and are included in reliance upon such
report given upon the authority of said firm as experts in auditing and accounting.
The validity of the issuance of the common
stock hereby will be passed upon for us by Greenberg Traurig, LLP.
INFORMATION WITH RESPECT TO THE REGISTRANT
Background
We are a farm management company primarily
focused on stevia agronomics from plant breeding to good agricultural practices to development of stevia derived products which
can be used for human consumption as well as for aquaculture and agriculture applications.
We were incorporated on May 21, 2007 in
the State of Nevada under the name Interpro Management Corp. On March 4, 2011, we changed our name to Stevia Corp. and effectuated
a 35 for 1 forward stock split of all of our issued and outstanding shares of common stock. Our initial business focus was on development
of a software product for tracking employee productivity and projects.
On June 23, 2011, we closed a voluntary
share exchange transaction (the “Share Exchange Transaction”) with Stevia Ventures International Ltd., a business
company incorporated in the British Virgin Islands, pursuant to which we acquired certain rights relating to stevia production,
including certain exclusive purchase contracts and a supply agreement related to stevia. In connection with the Share Exchange
Transaction, on June 23, 2011, Mohanad Shurrab, a stockholder of the Company, surrendered 33,000,000 shares of the Company’s
common stock to the Company for cancellation.
On March 19, 2012, we formed a wholly-owned
subsidiary, Stevia Asia Limited, a company incorporated under the companies ordinance of Hong Kong (“Stevia Asia”)
that will allow the Company to expand its China operations. Hero Tact Limited, a wholly-owned subsidiary of Stevia Asia, was incorporated
under the companies ordinance of Hong Kong.
On July 5, 2012, Stevia Asia entered
into a Cooperative Agreement with Technew Technology Limited (“Technew Technology”), a company incorporated under
the companies ordinance of Hong Kong, and Zhang Jia, a Chinese citizen (together with Technew Technology, the “Partners”)
pursuant to which Stevia Asia and Partners have agreed to engage in a joint venture to be owned 70% by Stevia Asia and 30% by
Technew Technology, through the entity Stevia Technew Limited (the “Joint Venture”). The Partners will be responsible
for managing the Joint Venture and Stevia Asia has agreed to contribute $200,000 per month, up to a total of $2,000,000 in financing,
subject to the performance of the Joint Venture in terms of its ability to generate revenue and profits and Stevia Asia’s
financial capabilities. Stevia Asia contributed $200,000 to the Joint Venture in August 2012 and failure to complete a financing
will have an adverse effect on our ability to contribute further to the Joint Venture and execute our business plan. The Cooperative
Agreement shall automatically terminate upon either Stevia Asia or Technew ceasing to be a stockholder in the Joint Venture, or
may be terminated by either Stevia Asia or Technew upon a material breach by the other party which is not cured within 30 days
of notice of such breach.
The following diagram illustrates our corporate structure:
Overview
Our focus is on implementing quality
agribusiness solutions to our partners, contract growers and customers to maximize the efficient production of stevia leaf and
the economic development of its extracts.
Our mission is to maximize shareholder
value by consistently developing and acquiring the latest intellectual property and expanding our suite of formulated products
and their applications and leveraging our farm management business model to maximize market penetration and revenue margins.
To achieve these goals we intend to
develop a suite of intellectual property relating to stevia and its extracts that will enhance the value of our farm management
operations. Through our relationships with Tech-New Bio-Technology, Growers Synergy and local institutes, we are exploring the
market for commercial applications of stevia which will be vertically integrated into our services and production.
Our target markets are initially Vietnam,
Indonesia and China. In Vietnam and Indonesia we have contracted with growers and have established our own nurseries and test
fields. In China we are producing our proprietary formulated products and applying them to aquaculture projects under our revenue
share model. Although our priority is Asia, our services are not limited to specific countries and we plan to pursue viable opportunities
in other markets.
The Industry and Our Opportunity
Stevia as a Food Additive
We believe that health issues created by
the modern diet are causing consumers to look for more natural products and simpler ingredient lines on the foods and beverages
they purchase and causing governments to put pressure on the food industry to offer products with reduced calories.
In evaluating potential sweetener alternatives,
manufacturers focus on taste, pricing, and a sustainable and scalable supply. We believe stevia fulfills these four criteria and
has the added advantage of contributing no calories to food and beverage with a near zero glycemic index, making it safe for diabetics.
Originating from Paraguay, stevia leaf
has been valued for centuries because of its sweetening and herbal properties and has been used as an approved sweetener in Japan
and Korea for decades. Extracts from stevia contain a mixture of different molecules that vary depending upon climate and growing
conditions and it was historically impossible to come up with clear and consistent specifications of the product needed to make
it a reliable ingredient as well as conduct clinical trials required by the FDA for the approval process. This issue was only
overcome in recent years by identifying the steviol glycoside molecules with the best taste profiles and by developing innovative
and unique process technologies to separate and purify stevia extract to pharmaceutical levels of purity on a reliable and consistent
basis: and, importantly, to do so in commercially viable volumes.
In 2008, Rebaudioside A, a steviol glycoside,
was granted GRAS (Generally Recognized as Safe) status by the U.S. Food and Drug Administration following applications by Cargill
and Merisant. Since then, approval by legislators across the world has opened the door to new formulations and reformulations of
foods and beverages with zero or reduced calorie content. In 2009, stevia was incorporated into leading soft drinks brands manufactured
by Coca-Cola and PepsiCo and has since been incorporated into many categories of food and beverages.
The stevia industry is segmented into
several business processes, which can broadly be categorized as i) plant breeding and propagation, ii) farming, iii) extraction
and refining, iv) product formulation, v) distribution and retail.
A significant portion of the cost of
Rebaudioside A is a result of the leaf cost and we believe there remains considerable opportunity to build value in the supply
chain by focusing on stevia agronomics. The stevia genus includes more than 100 species and each species contains unique sweet
compounds. However, only two of these species contain steviol glycosides and of these two the variety with the sweetest compounds
is stevia rebaudiana bertoni. There is relatively little technical knowledge of this species and almost all commercial growing
of stevia has occurred in China because of the traditional Japanese and Korean markets. Now with the global market demand for
high TSG (total steviol glycoside) and high Reb-A (Rebaudioside A) producing plants, there is an increased demand for agronomic
and farm management expertise to establish new plantations and rapidly scale leaf production.
The primary competitors within this market
segment include: PureCircle, which has extensive operations in China as well as subsidiaries in South America (Paraguay) and Africa
(Kenya); Stevia One, an independent grower established in Peru, who is adopting the plantation model and is targeting approximately
1,000 Ha under cultivation; S&W Seed Company, who signed a supply agreement with PureCircle in July of 2010 to grow stevia
in North America under its subsidiary, Stevia California; and GLG Life Tech Corporation, a China-centric company which has chosen
to continue to focus on building and expanding its supply chain within China.
Stevia as a Commercial Product
Stevia is classified as a medicinal
herb in China where more than 80% of the world’s supply of stevia is grown and stevia has been used as a medicinal herb
as well as a sweetener for centuries in its native country of Paraguay. Japan is the largest consumer of stevia extract and stevia
has accounted for more than 40% of Japan’s entire sweetener market consumption since 1992. Research articles studying the
efficacy of stevia as a feed supplement and fertilizer have been published by several universities in Japan, China and South Korea
for more than ten years. There are also several small local companies in Japan, South Korea and China that produce feed and fertilizer
products that are formulated using stevia extracts and they have been supplying these products to their local markets for several
years. We believe that the feed and fertilizer markets provide additional growth opportunities for stevia.
We began testing products formulated
with stevia by adding stevia extracts to an existing probiotic and enzyme product line that was produced by our Tech-New Bio-Technology.
Product samples were prepared in March of 2012 and tested in commercial settings. The following table provides a summary of the
tests conducted:
Commercial Tests Conducted
Company
|
|
Type of Operation
|
|
Formulas
Tested
|
|
Size of test
|
|
Result
|
Guangzhou Health China
Technology Development Co. Ltd.
|
|
Prawn Farm &
Greenhouse
|
|
Feed
Fertilizer
|
|
5 x 1.25 Acres
5 x 1,000m
2
|
|
Yield Increase
Yield Increase
|
|
|
|
|
|
|
|
|
|
PT Farm 2 Home
|
|
Broccoli Farm
|
|
Fertilizer
|
|
3 Acres
|
|
Yield Increase
|
|
|
|
|
|
|
|
|
|
RongYao Fisheries Pte. Ltd.
|
|
Fish Hatchery &
Grow-out facility
|
|
Feed
|
|
1,000m
3
1.25 Acres
|
|
Higher Survivability
Yield Increase
|
|
|
|
|
|
|
|
|
|
Stevia Corp.
|
|
Stevia Nursery
|
|
Fertilizer
|
|
1000m
2
|
|
Higher Survivability
|
|
|
|
|
|
|
|
|
|
Wang Yuan Agriculture Science &
Technology Co Ltd
|
|
Chili Farm
|
|
Fertilizer
|
|
5 x 1 Acres
|
|
Yield Increase
|
After we obtained the rights
to the product formulations in July 2012, we began testing in Vietnam to obtain government approval of stevia as a commercial
product (agricultural use such as fertilizer and animal feed supplement), which has been achieved, and we continue testing the products
at our research center as well as working with a Vietnam government institute that is conducting tests for
dairy cows.
The first commercial application was
started in August of 2012 for the production of approximately 2.5 acres of shrimp in China under the revenue share model with
the intention to expand as we confirm available funding. In October 2012, a commercial application was started for the production
of 90 acres of chili in Vietnam under the revenue share model. We are also using the formulations for the commercial stevia trial
fields in Vietnam.
Our product line includes aquaculture
feed for shrimp and fish, feed for livestock, granular fertilizers and foliar spray, each of which, we believe, holds the potential
to open new revenue opportunities to us.
By vertically integrating down the
supply chain, we believe we significantly enhance our revenue potential. An average hectare of stevia will produce approximately
6 tons of dry leaf per year. Because we have entered into a long-term supply contract with a leaf buyer and are growing elite
strains, we believe our leaf prices will be more stable and predictable. We expect to generate approximately $2,000 for each ton
of dry leaf, so each hectare will potentially produce $12,000 of dry stevia leaf. On average, dry stevia leaf produces approximately
10% of net usable extract by weight and the average price for the extract is approximately $100,000 per ton, so each hectare can
potentially produce $60,000 of extract (6 tons x 10% x $100,000) which is five times the value of the dry stevia leaf and when
we use the extracts to create our proprietary formulations, we can increase our revenue potential further.
Products and Services
Our farm management services include
training the farmers on the correct protocols and methodologies and providing ongoing technical assistance during the crop cycle
as well as providing inputs such as the seedlings, fertilizers and additives they are required to use. We apply our services under
three business models which we classify as 1) contract farming model, 2) revenue share model and 3) product supply model.
Under the contract farming and revenue
share models we do not charge for the services and inputs, but rather our services provide us with a competitive advantage to
secure growers who are willing to dedicate their land and resources to grow crops with an expectation of high yielding, high quality
crops and guaranteed purchase prices. Under these models we will generate our revenue from the crops that are grown and we only
enter into production agreements with growers when there is already a committed buyer for the end crop. Under the contract farming
model we will purchase the crop from the grower at a fixed price and sell to our own customer. Under the revenue share model,
the grower already has their own buyer and we will share the revenue.
Under the product supply model we will
market our products in combination with technical services to buyers and charge a fee. We believe that this model will contribute
a small part of our overall revenue initially until we establish a proven track record and solid reputation for our services and
products under the first two models. We do not expect to focus on providing strictly farm management or technical services for
a fee and it is difficult to estimate what we would charge for such services.
To support
our farm management services w
e established a research center in Vietnam on 25 acres of leased land. We confirmed
elite plant varieties, developed propagation techniques, conducted field trials across several provinces, documented local operating
procedures and post-harvest techniques, and began trial harvests in March 2012.
We continue to focus on research and
development to further evolve and develop new protocols, methodologies and intellectual properties and believe that this will
be key to maintain our competitive advantage.
We utilize the contract farming model
to produce stevia leaf for our trial harvests and use the stevia extracts to produce our proprietary formulated products, which
we are applying under the revenue share model to an aquaculture operation beginning August 2012 and a chili operation beginning
October 2012.
In September 2012, we began providing
samples of stevia extract to food and beverage companies for testing and we are working closely with local parties in Vietnam
and Indonesia to provide technical information in support of the government approval process of stevia as a food ingredient safe
for human consumption. Although we believe that this product line will have growth potential, there is no guarantee that stevia
will be approved as a food ingredient in Vietnam and Indonesia. We expect a government ruling by the first quarter of 2013 by
both Vietnam and Indonesia and if the rulings are positive, we expect companies will take another year to plan product launches.
We do not expect to incur additional expenses relating to government approval in Indonesia and Vietnam.
Growth Cycle -
The stevia
plant is a perennial but the growing cycle varies greatly depending on the particular strain and location. Stevia is sensitive
to frost and in China where most stevia is grown today, it is common to only have one or two harvests. Closer to the equator
it is possible to harvest year round with some dormancy during the winter months. It is also possible to manipulate
the harvest cycle and in developing countries where manual labor is the preferred method, a short cycle of as little as 45 to
60 days between harvests is preferred. However, in more developed countries where mechanization is the focus, a longer growing
cycle is preferred and cycles of more than 120 days have been achieved.
Yield -
Expected annual dry leaf
yields of plant varieties commonly sourced from China is three to six tons per Ha. Field trial data indicates that six
tons or more per hectare (Ha) can be achieved working with elite strains. By continuing to build our inventory of elite strains
and refine our farm management practices and technologies, we plan to improve yield and plant performance and exploit the
economic value of our intellectual property.
Harvest -
Stevia is a very labor
intensive plant and traditionally has been harvested by hand. As larger commercial operations have begun to focus on stevia,
a considerable amount of research is being put into the mechanization of planting, harvesting and leaf removal. While we
will need to maximize mechanization in the United States to be economical, in many Asian locations there is both an abundance
of low cost labor and an expectation that stevia will provide an economic stimulus and employ many of
the farmers in poor rural areas. So the adoption of mechanization will need to consider both economic
and social factors.
Location -
Currently
over 80% of stevia is grown in China and almost all of the high Reb-A variety stevia leaf is being produced in China. China is
the center of commercial stevia growing for historical reasons due to its proximity to Japan and Korea, which have historically
been the major markets for stevia. Due to its climate, we believe China is likely not the most geographically optimal location
to grow stevia, as stevia is sensitive to frost and China typically produces only one or two crops per year, requiring leaf processors
to purchase and store sufficient leaf for an entire year of production.
We believe that diversifying the supply chain of stevia
leaf would provide several advantages:
|
·
|
Incorporating Southern Hemisphere production provides two major growing seasons;
|
|
·
|
Incorporation Equatorial production provides for year round production;
|
|
·
|
Enables better control of leaf quality where major propagation of stevia varieties is controlled;
|
|
·
|
Provides protection against country-specific political, regulatory, disease, and natural disaster risk; and
|
|
·
|
Provides operations closer to end markets.
|
We believe infrastructure is a major
criteria for field site selection and can be especially challenging in developing countries. In addition, we believe a viable
site must have the proper weather and soil that is suitable for plant growth as well as being in a location that satisfies logistical
business considerations, such as being easily accessible and in close proximity to a capable labor pool. It is our belief
that access to water can often be a challenge and greatly limits the areas where an irrigation model can be applied. We
believe Vietnam has excellent road infrastructure and our fields are easily accessible by passenger car or lorry and most
potential growing areas are located within hours of a major port city. Indonesia has an abundance of low cost labor and land
available for acquisition that is suitable for new varieties of stevia that we are breeding and/or acquiring to grow in the equatorial
zone.
Land
Use and Capital Requirements -
As we expand our operations, there are two primary business models available
to manage farm operations. The plantation model will involve us controlling the land and assets through lease or purchase arrangements
and hiring the necessary workers which will require higher upfront capital cost but enable rigorous control over operations with
potentially higher revenue per acre. The contract farm model involves entering into agreements with existing farmers to utilize
our agriculture inputs and protocols in order to produce specified crops under contract at negotiated prices. The contract farm
model requires lower upfront capital and enables us to more quickly scale over larger areas in those instances where we are able
to efficiently manage operations and implement supervisory control. If successfully implemented, we believe the contract farming
model provides the fastest ramp to positive cash flow while also conserving capital.
We are managing 100 Ha (250 acres)
of trial harvest stevia farms under the contract farming model and plan to continue scaling using this model.
Under the revenue share model the grower
owns, leases or contracts the land and we provide our farm management services and products as part of the agriculture inputs
and then we share the revenue. This does not require us to have any obligations or liability for land and enables us to expand
rapidly and maximize revenue by leveraging existing operations with minimal capital commitment.
We intend to scale the use of our formulated
products using the revenue share model which we started implementing in August of 2012. We will initially work on projects with
our joint venture partner.
Labor and Research and Development
-
Our initial research and development funding was used to establish our research center and engage specialists who
have secured elite plant varieties, culled the original planted varieties, developed propagation techniques, conducted field trials,
documented local operating procedures and developed post-harvest techniques. We target spending approximately fifteen percent
of our operating expense budget towards research and development to continue improving and develop new intellectual properties.
Financial
- The value
of the stevia leaf fluctuates based on supply and demand and the quality of the leaf. Wide seasonal variances on
the open market are common and can make long-term planning difficult. Because we have entered into a long-term supply contract
with a leaf buyer and we are growing elite strains, we believe our prices will be more stable and predictable and we will
be able to plan our growth and commit to large contract growers. In addition, buyers of leaf pay a substantial
premium for high quality leaf. This places strong economic value on our intellectual property, including our elite stevia
strains, and our farm management solutions.
Current contracted selling price for leaf
that meets the minimum standards is set at a fixed price. Leaf exceeding the minimum standards will receive a premium for which
the benchmarks and price tiers will be reviewed each year based on comparative market leaf quality and supply and demand.
Historically, leaf that produced 13%
TSG and 70% Reb-A was purchased at a premium. Elite strains can potentially deliver TSG well above 12% and Reb-A above 80% providing
significant economic advantage. Minimum standards require a TSG of 12% or more, Reb-A to be at least 60% of TSG, maximum of 5%
impurities and a maximum moisture content of 10%. During the refining process, the net yields of usable extract will be slightly
lower.
Our Key Contracts and Relationships
Growers Synergy
Effective November 1, 2011, we engaged
Growers Synergy Pte Ltd, a regional farm management services provider (“Growers Synergy”), to provide farm management
operations and back-office and regional logistical support for our Vietnam and Indonesia operations for a period of two years
at a cost of $20,000 per month. In addition, Growers Synergy will enter into an agreement to purchase from us all the non-stevia
crops produced at the farms for which they are providing management services.
We believe that the relationship with
Growers Synergy will provide us with a strategic advantage and potential synergistic partnership by providing us with guaranteed
off-take agreements for agriculture crops other than stevia, which will be produced as part of inter-cropping practices to maintain
optimal soil conditions for stevia farming. Growers Synergy will work with us and our technology partner, Tech-New Bio-Technology,
to combine the agronomy protocol with the farming models. Models and their related protocols will be commercially field tested
during the first two years working with the provincial and national programs and establishing 100 Ha of field trials.
A local farm management service, such
as Growers Synergy, is critical to assist us in training local teams with the documented protocol sufficient to scale to 1,000
Ha to create a turnkey project. Our goal, after two years, is to be vested with fully documented protocols, local teams of trained
staff capable of supporting the scale up to 1,000 Ha and farmers communities that are capable of growing stevia. To help us achieve
this Growers Synergy will provide the necessary resources and assign staff to fill certain managerial and support staff positions.
Tech-New Bio-Technology
In March 2012, we entered into both
a Supply Agreement and Cooperative Agreement with Guangzhou Health China Technology Development Company Limited, operating under
the trade name Tech-New Bio-Technology (“TechNew”). TechNew is a developer and manufacturer of hi-tech biotechnology
products which offers a series of specialized ecological fertilizers, microbiological preparations and management systems for
the agriculture and aquaculture industry as well as technologies for the extraction and refinement of high purity stevia. Under
the terms of the Supply Agreement, we are able to sell dry stevia plant product exclusively to TechNew including all leaf and
stem for a term of five years with an option to renew for a further four years with the price to be negotiated by the parties
on a yearly basis to reflect changes in the specifications and market price. During the first two years TechNew is obligated to
purchase all of our production with quantity to be negotiated from the third year onwards. Under the terms of the Cooperative
Agreement, we agreed to explore potential technology partnerships with TechNew, with the intent to formalize a joint venture to
pursue promising technologies and businesses. These include the inclusion of stevia extracts in its current product formulations
for use in agriculture and aquaculture applications including fertilizers and feed.
Through our cooperative agreement with
TechNew, we will also explore a potential relationship to integrate extraction and refining technology to produce high purity
Reb-A and other steviol glycosides for the consumer market. We believe that vertically integrating our technologies for both commercial
and consumer products may provide advantages of a diversified market, but we do not intend to enter the consumer market with a
finished product. It is our goal to develop core strengths in farm management and developing technologies for production and post
harvest processes, and we believe that the consumer market is extremely competitive.
We supplied leaf to TechNew from our
trial harvests and all of the leaf we have supplied has been used to produce products formulated with stevia extract. It is our
intention to apply as much leaf as possible towards producing the higher value added products rather than sell the leaf as a commodity
under the supply contract.
TechNew Technology Limited
On July 5, 2012, our wholly-owned subsidiary,
Stevia Asia entered into a Cooperative Agreement with Technew Technology Limited (“Technew Technology”), a company
incorporated under the companies ordinance of Hong Kong, and Zhang Jia, a Chinese citizen (together with Technew Technology, the
“Partners”) pursuant to which Stevia Asia and Partners have agreed to engage in a joint venture to be owned 70% by
Stevia Asia and 30% by Technew Technology (the “Joint Venture”), through the entity Stevia Technew Limited. The Joint
Venture will allow us to further explore potential stevia commercial applications, which we would integrate into our farm management
services and our own stevia production.
Independent Grower Relationships
We plan to develop a network of partner
growers who we can market our production methods and technologies to and who will also help supply us with the stevia product
necessary to fulfill our supply obligations. To date we have entered into initial purchase agreements for stevia under the contract
farming model where we provide the seedlings, fertilizer additives, protocols and technical supervision with an obligation to
purchase the stevia leaf at a fixed price per ton and the grower is responsible for the land, labor and all other inputs. The
agreements are reviewed annually to negotiate price and quantity for the subsequent renewal year to reflect changes in specifications,
market prices and demand. We have also entered into revenue share agreements with growers where we provide our proprietary feed
or fertilizer additives and farm management services in return for a share of the revenue. These agreements are reviewed each
growing/harvest cycle with renewal terms to be negotiated and confirmed for each subsequent cycle.
Our Farm Management Services and Intellectual
Property
Our objective is to provide a full
spectrum of farm management services to manage our contract farms, service industry growers and provide for optimal production.
To achieve this objective, our focus is on intellectual property development and continued development and improvement of cultivar
varieties for intended growing sites, propagation protocol, cultivation technology including an intercropping system and regional
adaptability test, and post-harvest and refinery processes.
We are also continuing to develop and
improve local SOP (standard operating procedures) manuals specific to each growing location and plant variety, which document
the proper use of all inputs including a proprietary crop production system that we believe is more efficient and cost effective
than traditional methods. We believe these customized operating manuals will result in advanced propagation and growing techniques
that can improve the quality and efficiency of a variety of crops.
We are also developing a wide portfolio
of highly efficient and environmentally friendly crop nutrition products. These products are performance minerals, plant phyto-chemicals,
functional nutrients and microbial formulations. All products are derived from natural sources and can be used as sustainable
agriculture solutions and/or for organic farming. While it is our intent to develop the foregoing highly efficient and environmentally
friendly crop nutrition products, there is no guarantee we will be successful in developing such a portfolio of products.
We are still developing protocols regarding
stevia production and we plan to provide a wide spectrum of agricultural consulting and solutions for stevia growers, including:
TechNew Suite of Products -
through our technology partner, TechNew, we are able to contract manufacture the extraction and refinement of high purity stevia
and we acquired their formulas for using stevia extract in feed and fertilizer applications. We have also entered into a joint
venture with Technew Technology to further explore potential stevia commercial applications, which we would integrate into our
farm management services and our own stevia production.
Elite Germplasm -
high performance
mother stock suitable for varied regions and environment.
Advanced Propagation Techniques
-
methods that are efficient, more cost effective, and produce a higher quality plant.
To date we have not filed patents or
registered trademarks and we do not license any of our technologies. We previously had a license arrangement with Agro-Genesis,
however, such license was cancelled when we partnered with TechNew.
Our Competitive Advantage
We believe our intellectual property
suite that we are developing and our ability to serve across a wide spectrum of agricultural consulting and solutions will provide
us with a competitive advantage against our competitors.
We also believe our intellectual property,
particularly our fertilizers and feed additives and other input products used in our protocols, have the potential to create a
dedicated customer base because the protocols once implemented on a farm call for continual use of our fertilizers and feed additives
and other products as a mandatory production input. We believe this long-term customer relationship can enable us to create a
substantial barrier to entry to potential new competitors, while at the same time providing networking benefits that could further
propagate our business.
Our ability to fully develop our suite
of products and apply them to a customer base is dependent on our ability to raise sufficient capital to fund our business operations.
Market Trends
The original products launched that
used stevia were zero calorie beverages. Subsequent product launches included a blend of sugar and stevia that advertised reduced
calories. Stevia is now used across 38 categories of food and beverages with most of the applications involving a blend of sugar
and stevia for a reduced calorie product using all natural sweeteners.
Our Properties
Our primary focus is on providing farm
management services to our contract growers. We have acquired two grower supply contracts and three nursery fields in Vietnam.
More than twenty fields have been established in five provinces in the northern half of Vietnam with a total propagation of 100
Ha (250 acres).
The provincial locations include Hanoi,
Bac Giang, Hai Duong, Hoa Binh and Nghe An.
On December 14, 2011 we entered into
a land lease agreement with Stevia Ventures Corporation, one of our Suppliers, and Vinh Phuc Province People’s Committee
Tam Dao Agriculture & Industry Co., Ltd (“Vinh Phuc”) whereby Stevia Ventures Corporation leased 10 Ha (25 acres)
of land over 5 years and we developed a research facility that will also serve as a propagation center for farms located in the
surrounding provinces and particularly those serving the provincial and national sponsored projects.
To better service multiple farms located
across the many provinces stretching from north central Vietnam to the Chinese border, we will utilize the greenhouse facilities
of our local grower partners in a decentralized model that more efficiently addresses the logistical challenges presented by the
contract farming model. It is assumed that the commercial fields will be scaled by stem cutting and we will provide the seedlings
to the growers as one of the inputs.
In addition to our Vietnam operations,
in April 2012, we announced plans to begin a 2 Ha (5 acres) initial field trial in Indonesia which will utilize our intercropping
model.
Regulation
Stevia extracts may be used in a wide
variety of consumer products including soft drinks, vegetable products, tabletop sweeteners, confectioneries, fruit products and
processed seafood products, in a wide range of countries, including almost all major markets, and as a dietary supplement in others.
Clinical studies have supported the safety and stability of stevia’s various high purity compounds used in food and beverages.
There is no documented health threat.
Cargill and Merisant each submitted applications
to the United Stated Food and Drug Administration (FDA) in 1998 for GRAS approval. On December 17, 2008 the stevia extract, Rebaudioside
A (Reb-A), received GRAS approval.
In December 2008, Australia and New Zealand
approved highly purified forms of stevia extracts as safe for use in food and beverages. Previously, such extracts had only been
permitted for use as a dietary supplement in these countries.
Stevia extracts have been sanctioned by
the Ministry of Health of China to be used as a food additive, and are listed in the Sanitation Standard of Food Additives.
In July 2010 the FDA issued GRAS clearance
for PureCircle’s high purity SG95 stevia product which opened up opportunities for many more applications as well as more
cost effective solutions.
In November 2011, the European Union cleared
stevia for use as a food additive in its twenty seven member states.
Further regulatory clearances were secured
for Reb-A in Switzerland confirming the growing regulatory support for high purity stevia. Presently in Canada stevia extracts
are permitted for use only as a dietary supplement.
Our proprietary fertilizer and feed
additive products are approved for use in China and Vietnam and we have started using them in commercial operations. All of the ingredients in the products are natural compounds and are approved by the major developed countries,
but registration of the products will be required in each country before importation is allowed.
Foreign Currency Exchange Rate
The Company expects that international
revenues will account for a majority of our total revenues. Our international operations expose the Company to foreign currency
fluctuations. Revenues and related expenses generated from our international subsidiaries will generally be denominated in the
functional currencies of the local countries. For example, revenues derived from the People’s Republic of China (“PRC”)
will be denominated in Renminbi, or RMB.
Our statements of income of our international
operations are translated into United States dollars at the average exchange rates in each applicable period. To the extent the
United States dollar strengthens against foreign currencies, the translation of foreign currency denominated transactions will
result in reduced revenues, operating expenses and net income for our business. Similarly, our revenues, operating expenses and
net income will increase if the United States dollar weakens against foreign currencies.
We are also exposed to foreign exchange
rate fluctuations as we convert the financial statements of our foreign subsidiaries and our investments in equity interests into
United States dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign
subsidiaries’ financial statements into United States dollars will lead to a translation gain or loss which is recorded
as a component of accumulated other comprehensive income which is part of stockholders’ equity. In addition, we may have
certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency.
Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain
or loss.
China
– The Company
expects to derive revenue from China. Pursuant to the Foreign Currency Administration Rules promulgated in 1996 and amended in
2008 and various regulations issued by the State Administration of Foreign Exchange (“SAFE”), and other relevant PRC
government authorities, RMB is freely convertible only to the extent of current account items, such as trade-related receipts
and payments, interest and dividends. Capital account items, such as direct equity investments, loans and repatriation of investments,
require the prior approval from the SAFE or its local counterpart for conversion of RMB into a foreign currency, such as U.S.
dollars, and remittance of the foreign currency outside the PRC.
Payments for transactions that take
place within the PRC must be made in RMB. Unless otherwise approved, PRC companies must repatriate foreign currency payments received
from abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks subject
to a cap set by the SAFE or its local counterpart. Unless otherwise approved, domestic enterprises must convert all of their foreign
currency receipts into RMB. The value of the RMB against the U.S. dollar and other currencies is affected by, among other things,
changes in China’s political and economic conditions. Since July 2005, the RMB has no longer been pegged to the U.S. dollar.
The RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is
possible that in the future, PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention
in the foreign exchange market.
Because some of our revenue is expected to come from China, appreciation or depreciation in the value
of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect
to any underlying change in our business or results of operations. As a result, we face exposure to adverse movements in currency
exchange rates as the financial results of our Chinese derived revenue are translated from local currency into U.S. dollar upon
consolidation. Our operations are subject to risks typical of international business, including, but not limited to, differing
economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange
rate volatility.
International Laws
A significant portion of our initial business
operations will occur in Vietnam. We will be generally subject to laws and regulations applicable to foreign investment
in Vietnam. Similarly, as we expand into Indonesia and other markets, we will be subject to the laws and regulations
of such jurisdictions. The Vietnam legal system is based, at least in part, on written statutes. However, since these
laws and regulations are relatively new and the Vietnamese legal system continues to rapidly evolve, the interpretations of many
laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. Similar
to Vietnam, the modern Indonesia legal system was formed relatively recently and is continuing to evolve.
Country
|
|
Type of Approval
|
|
|
|
North America
|
|
|
USA
|
|
Food additive
|
Canada
|
|
Dietary supplement
|
Mexico
|
|
Food additive
|
Latin America
|
|
|
Argentina
|
|
Food additive
|
Brazil
|
|
Food additive
|
Chile
|
|
Food additive
|
Colombia
|
|
Food additive
|
Ecuador
|
|
Food additive
|
Paraguay
|
|
Food additive
|
Peru
|
|
Food additive
|
Uruguay
|
|
Food additive
|
Venezuela
|
|
Food additive
|
Asia Pacific
|
|
|
Australia
|
|
Food additive
|
Brunei
|
|
Food additive
|
China
|
|
Food additive
|
Hong Kong
|
|
Food additive
|
Indonesia
|
|
Food additive
|
Japan
|
|
Food additive
|
Malaysia
|
|
Food additive
|
New Zealand
|
|
Food additive
|
Singapore
|
|
Food additive
|
South Korea
|
|
Food additive
|
Taiwan
|
|
Food additive
|
Thailand
|
|
Food additive
|
Vietnam
|
|
Dietary supplement
|
28
Europe
|
|
|
Austria
|
|
Food additive
|
Belgium
|
|
Food additive
|
Bulgaria
|
|
Food additive
|
Cyprus
|
|
Food additive
|
Czech Republic
|
|
Food additive
|
Denmark
|
|
Food additive
|
Estonia
|
|
Food additive
|
Finland
|
|
Food additive
|
France
|
|
Food additive
|
Germany
|
|
Food additive
|
Hungary
|
|
Food additive
|
Ireland
|
|
Food additive
|
Italy
|
|
Food additive
|
Latvia
|
|
Food additive
|
Lithuania
|
|
Food additive
|
Luxembourg
|
|
Food additive
|
Malta
|
|
Food additive
|
The Netherlands
|
|
Food additive
|
Poland
|
|
Food additive
|
Portugal
|
|
Food additive
|
Romania
|
|
Food additive
|
Slovakia
|
|
Food additive
|
Slovenia
|
|
Food additive
|
Spain
|
|
Food additive
|
Sweden
|
|
Food additive
|
Switzerland
|
|
Food additive
|
Russia
|
|
Food additive
|
United Kingdom
|
|
Food additive
|
We cannot predict the effect of future
developments in the legal systems of developing countries, including the promulgation of new laws, changes to existing laws or
the interpretation or enforcement thereof, the preemption of local regulations by national laws, or the overturn of local government’s
decisions by the superior government. These uncertainties may limit legal protections available to us.
Marketing
We believe it is important to educate
the local governments and farmer communities on the merits of stevia becoming a new commercial crop and its potential as a new
economic stimulus for rural farmers. Our President, Mr. George Blankenbaker, and our local partner have been conducting talks
and training sessions for more than three years in Vietnam and have fostered local support at many levels. To support the farmer’s
transition to stevia farming and provide an opportunity to showcase the stevia opportunity to farmers’ communities, the
Vietnam government has provided financial support at both the provincial and national level to plant 20 Ha (50 acres) and 50 Ha
(125 acres) respectively, both of which are expected to be completed in 2012. The fields are small plots located in several villages
and will serve as demonstration fields and stepping stones to gain wide support from growers in several villages.
We have entered into formal cooperative
agreements with several local institutes, including the National Institute of Medicinal Materials in Hanoi and the Agricultural
Science Institute of Northern Central Vietnam. The terms of these agreements generally provide that we will provide stevia seedlings
and other products and services, at prices and in quantities as will be mutually agreed by the parties, at the clients’
nurseries and provide the clients with off-take agreements for crops produced using our systems. As part of our services, we provide
technical assistance to assure the clients adhere to our established growing protocols. We also agree to work cooperatively with
the clients on research projects relating to stevia development, the cost of such projects to be shared between the parties as
may be mutually agreed. These agreements provide local technical assistance for our grower partners and also provide additional
credibility when our grower partners present the stevia opportunity to the local farmers’ communities.
We are also in contact with non-governmental
organizations (NGO) that are seeking programs to bring to the communities that they serve which are generally located in poor rural
areas in need of economically sound projects. If the stevia model proves to be viable for these locations, the NGOs have indicated
that they will be interested in introducing and funding stevia farming programs. However, many of these poor rural areas are located
in areas of poor soil quality, that lack adequate access to water or that suffer from other environmental constraints which limit
the opportunities for this approach.
We also hope to generate many local testimonials
from our field trials and the farmers in Vietnam are very fluid and willing to adopt new crops if the new crops are proven to be
more economically viable than their current crops.
In connection with commercial opportunities
for stevia derived products, we intend to develop a mark that can be applied to a buyer’s brand which would signify premium
quality stevia-derived products.
Currently our marketing efforts are
focused on facilitating governmental approval of stevia by providing local parties and government officials with required information
and data to help them advance the process. We are also focused on educating our growers on our new proprietary formulations. These
efforts are more administrative in nature and we do not currently anticipate a need for a large marketing budget to support current
operations.
Product Alternatives
As a full service stevia farm management
service provider we will face competition from both non-stevia sweetener products and from other service providers within the stevia
industry.
Food Additive Product Alternatives
- We believe stevia is the leader among natural zero calorie sweeteners at this time and it takes years to develop and bring to
market new sweeteners of which few end up possessing all the qualities needed to be adopted mainstream. At this time we are not
aware of any proven and viable alternative which possesses all of the positive qualities of stevia. As discussed above, the other
sweeteners currently on the market lack many of the qualities that make stevia attractive to consumers and manufacturers, including
the zero calorie/near zero glycemic index combination.
Therefore, we believe that the most likely
threat to stevia growers will come from alternative “natural” methods to produce stevia extracts that obviate the need
to farm stevia, such as fermentation-derived stevia.
A fermentation-derived stevia ingredient
can be produced in a lab where low cost plant materials are converted into sweet steviol glycosides through controlled fermentation
methods that duplicate the natural biochemical pathways that are involved in the natural production of the sweet components of
the stevia leaf and would still meet the requirements to be classified as a “natural” ingredient and when done at
volume could potentially be produced more economically than the farming method and without impurities.
Major known companies that are progressing
down this track include Evolva Holding SA of Switzerland who has acquired San Francisco based Abunda Nutrition, Inc., and Blue
California of Rancho Santa Margarita, California.
There are four areas on which we will focus
to reduce the risk and/or impact of alternative methods of stevia ingredient production.
|
1.
|
Increase farming efficiencies
. The more efficient and scaled farming becomes, the higher
the economic hurdle will be for other methods of production. We believe that our intellectual property and continued research and
development activities will allow our farms and those of our customers to increase efficiencies, decrease cost of production and
produce better quality leaf.
|
|
2.
|
Intellectual Property Protections.
We have a strong focus on developing protectable intellectual
property which we believe should create barriers to entry and protect our methodologies. Additionally, where applicable we will
continue to consider the acquisition of potentially synergistic intellectual property.
|
|
3.
|
Crop Diversification.
Our farm management infrastructure and the majority of our intellectual
property is applicable to most crops providing us with the flexibility
to diversify our crops and the customer base for our farm management
solutions.
|
|
4.
|
Product Diversification
. We will explore additional markets and uses for stevia and seek
to acquire technology to diversify its applications.
|
Commercial Product Alternatives
Small regional companies in Japan, China,
and South Korea have been producing commercial stevia products for several years, focusing on their local markets. We believe with
the awareness of stevia on a global scale, this will provide an opportunity to develop a large commercial market. Once the market
reaches critical mass, large companies such as CP Group will likely enter the market.
We intend to protect our market by
positioning ourselves as both the primary provider of raw extract to companies as well as establishing our own vertical markets
utilizing our farm management core competency to contract farm using our commercial stevia products.
Employees
George Blankenbaker, our President and
a director, is our sole employee.
Our relationship with our farm management
partner, Growers Synergy, currently provides the staffing necessary to operate our farms and our technology partner, TechNew, provides
the staffing for our technical operations.
We chose to outsource the operations management
during our development phase to minimize expenses and provide a team of qualified experienced staff to lead us through the development
phase until we are ready to commercialize. As we begin commercialization and revenue generation, we intend to begin to hire full
time staff.
Summary Plan of Operation
The following table provides our current
and intended plan of operation, including our goals, estimated costs and timelines in connection with our aim of expanding our
operations to provide farm management services and products in China, Vietnam and Indonesia. There can be no assurance that our
plan of operation and goals will be accomplished on the timelines set forth below, at the costs noted, or at all.
Goals
|
|
Status
|
|
Requirements
|
|
Timeline
|
|
Estimated
Budget
|
Build elite strains of Stevia
|
|
Completed (Continue Improving)
|
|
-
|
|
Ongoing
|
|
*
|
Develop Intellectual Property
|
|
Completed (Continue Improving)
|
|
-
|
|
Ongoing
|
|
*
|
Develop Farming Protocols
|
|
Completed (Continue Improving)
|
|
-
|
|
Ongoing
|
|
*
|
Develop Operating Manuals
|
|
Completed (Continue Improving)
|
|
-
|
|
Ongoing
|
|
*
|
Conduct Product Testing
|
|
Completed (Continue Improving)
|
|
-
|
|
Ongoing
|
|
*
|
Vietnam stevia trial harvest
|
|
Achieved 250 Acres
|
|
Assess results end of 2012
|
|
Jan. 2013
|
|
-
|
Indonesia stevia trial harvest
|
|
Established 1 acre of test plots
|
|
Adaptation of Elite Strains
|
|
2013 - 2014
|
|
$240,000
|
Feed Product approvals
|
|
Approved in Vietnam & China
|
|
Register in other countries
|
|
by 2014
|
|
negligible
|
Fertilizer Product approvals
|
|
Approved in Vietnam & China
|
|
Register in other countries
|
|
by 2014
|
|
negligible
|
Stevia ingredient approvals
|
|
Pending Approval in
Vietnam & Indonesia
|
|
Provide Technical Data
|
|
2013 (est)
|
|
negligible
|
Hire Additional Full Time Staff
|
|
Staff are Identified
|
|
Adequate working capital
|
|
1st Quarter
2013 (est)
|
|
$50,000/month
|
Scale Commercial Operations
|
|
Begun in August 2012
|
|
Adequate working capital
|
|
1st Quarter
2013 (est)
|
|
$3,000,000 **
|
* These goals have initially been completed but improvements
are ongoing and the costs will depend on opportunities to make such improvements as they arise.
** This is what the Company is targeting through a combination
of revenue generation and external financing.
PROPERTIES
Our international corporate office is located
at 14 Chin Bee Road, Singapore 619824. We also maintain an office in Vietnam at No. 602, CC2A, Thanh Ha‘s building, Bac
Linh Dam, Hoang Mai district, Hanoi, Vietnam and in Hong Kong, at 19/F Kam Chung Comm Bldg 19-21, Hennessy Rd, Hong Kong and in
the United States, at 7117 US 31 South, Indianapolis, IN 46227.
We have also developed a research facility
on 10 Ha (25 Acres) of land leased by Stevia Ventures Corporation and have prepaid the first year lease payment of $30,000 and
the six month lease payment of $15,000 as security deposit.
LEGAL PROCEEDINGS
None.
MARKET FOR COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
Market Information
Our common stock is quoted on the OTCQB
under the symbol STEV. The closing bid price for our stock as of October 31, 2012 was $0.24.
The following is the range of high and
low bid prices for our common stock for the periods indicated. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not represent actual transactions.
Interim Period From June 1, 2012 to August 30, 2012
|
|
High
|
|
|
Low
|
|
First Quarter (June 30, 2012)
|
|
$
|
1.69
|
|
|
$
|
.75
|
|
Second Quarter (September 30, 2012)
|
|
$
|
.83
|
|
|
$
|
.26
|
|
Third Quarter (October 1, 2012 to October 31, 2012)
|
|
$
|
.34
|
|
|
$
|
.24
|
|
Fiscal Year Ended March 31, 2012
|
|
High
|
|
|
Low
|
|
First Quarter (June 30, 2011)
|
|
$
|
1.60
|
|
|
$
|
.25
|
|
Second Quarter (September 30, 2011)
|
|
$
|
1.00
|
|
|
$
|
.85
|
|
Third Quarter (December 31, 2011)
|
|
$
|
1.05
|
|
|
$
|
.56
|
|
Fourth Quarter (March 31, 2012)
|
|
$
|
2.75
|
|
|
$
|
.667
|
|
Fiscal Year Ended March 31, 2011
|
|
High
|
|
|
Low
|
|
First Quarter (June 30, 2010)
|
|
$
|
.005714
|
|
|
$
|
.005714
|
|
Second Quarter (September 30, 2010)
|
|
$
|
.009143
|
|
|
$
|
.009143
|
|
Third Quarter (December 31, 2010)
|
|
$
|
.010286
|
|
|
$
|
.010286
|
|
Fourth Quarter (March 31, 2011)
|
|
$
|
.012571
|
|
|
$
|
.012571
|
|
Stockholders
As of August 29, 2012, there were 66,555,635
shares of common stock issued and outstanding held by sixteen (16) stockholders of record (including street name holders).
Dividends
We have not paid dividends to date and
do not anticipate paying any dividends in the foreseeable future. Our Board of Directors intends to follow a policy of retaining
earnings, if any, to finance our growth. The declaration and payment of dividends in the future will be determined by our Board
of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements and other
factors.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis
of the results of operations and financial condition for the period from inception (April 11, 2011) to March 30, 2012, and the
three months ended June 30, 2012, should be read in conjunction with the financial statements and related notes and the other financial
information that are included elsewhere in this Prospectus. This discussion includes forward-looking statements based upon current
expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and
the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number
of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business
sections in this registration statement on Form S-1. We use words such as “anticipate,” “estimate,” “plan,”
“project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,”
“may,” “will,” “should,” “could,” and similar expressions to identify forward-looking
statements.
The following discussion should be read
in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Registration Statement on
Form S-1. Forward looking statements are statements not based on historical information and which relate to future operations,
strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions
that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are
beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking
statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements.
Overview
We were incorporated on May 21, 2007 in
the State of Nevada under the name Interpro Management Corp. On March 4, 2011, we changed our name to Stevia Corp. and effectuated
a 35 for 1 forward stock split of all of our issued and outstanding shares of common stock.
We are a development stage company that
has yet to generate significant revenue. We plan to generate revenues by (i) providing farm management services, which will provide
plant breeding, agricultural protocols, post-harvest techniques and other services to stevia growers, (ii) the sale of agriculture
inputs such as fertilizer to stevia growers, (iii) the sale of stevia and intercrops grown on our own farmed property and (iv)
the sale of products derived from the stevia plant.
During the past fiscal year, we have
begun our first commercial trials of stevia production in Vietnam. In connection with such production we have entered into supply
agreements for the off-take of the stevia we produce and entered into an agreement with Growers Synergy Pte Ltd to assist in the
management of our Vietnam day-to-day operations. We have also begun to explore commercial applications of stevia derived products
and have developed and acquired certain proprietary technology relating to stevia development which we can integrate into our
own stevia production and our farm management services. In connection with our intellectual property development efforts we have
engaged TechNew Technology Limited (“TechNew), as our technology partner in Vietnam and on July 5, 2012 we entered into
a Cooperative Agreement (the “Cooperative Agreement”) through our subsidiary Stevia Asia Limited (“Stevia Asia”),
with Technew and Zhang Ji, a Chinese citizen (together with Technew, the “Partners”) pursuant to which Stevia Asia
and Partners have agreed to engage in a joint venture to develop certain intellectual property related to stevia development,
such joint venture to be owned 70% by Stevia Asia and 30% by Technew (the “Joint Venture”). Pursuant to the Cooperative
Agreement Stevia Asia has agreed to contribute $200,000 per month, up to a total of $2,000,000 in financing, subject to the performance
of the Joint Venture and Stevia Asia’s financial capabilities.
We have also continued to establish research
and production relationships with local institutions and companies in Vietnam. In April, 2012 we announced plans to begin field
trials in Indonesia.
Results of Operations
Our operations to-date have primarily consisted
of securing purchase and supply contracts and office space and developing relationships with potential partners. We have earned
nominal revenues since inception.
Our auditors have issued a going concern
opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless
we obtain additional capital.
The following discussion of the financial
condition, results of operations, cash flows, and changes in our financial position should be read in conjunction with our audited
consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012,
filed June 29, 2012. Such financial statements have been prepared in conformity with U.S. GAAP and are stated in United States
dollars.
Comparison of Three Month Periods Ended
June 30, 2012 With the Period from Inception April 11, 2011) to June 30, 2011
For the three month periods ended June
30, 2012 we incurred a net loss of $413,937, compared to a net loss of $13,842 for the period from inception (April 11, 2011) to
June 30, 2011. The increase was largely attributed to increases in management fees, director and professional fees and research
and development expenses.
General and administration expenses
and professional fees for the three month period ended June 30, 2012 amounted to $44,713 and $116,728 respectively, compared to
$100 and $13,071 during the period from inception (April 11, 2011) to June 30, 2011. Directors’ fees for the three month
period ended June 30, 2012 were $93,750 compared to $0 during the period from inception (April 11, 2011) to June 30, 2011. Research
and development cost for the three month period ended June 30, 2012 were $78,984 compared to $0 during the period from inception
(April 11, 2011) to June 30, 2011.
Results of Operations for the Period
from Inception (April 11, 2011) to March 31, 2012
For the period from inception (April 11,
2011) to March 31, 2012, we incurred a net loss of $2,323,551.
General and administration expenses
for such period, amounted to $113,742. Salary and compensation expenses were $750,000 and professional fees were $255,959. Directors’
fees and research and development cost were $187,500 and $206,191, respectively.
Liquidity and Capital Resources
As at June 30, 2012 we have $17,062 in
cash. As at June 30, 2012 we have $33,950 in current assets, and $1,167,970 in current liabilities. Our net working capital deficiency
as at June 30, 2012 was $1,134,020.
During the three month period ended June
30, 2012, we used cash of $199,413 in operating activities and $1,323 in investing activities, respectively. During the three month
period ended June 30, 2012, we funded our operations from the proceeds of private sales of equity and/or convertible notes. During
the three month period ended June 30, 2012, we raised $200,000 through the issuance of convertible promissory notes and $2,100
through advances from our President, or $202,100 net cash provided by financing activities.
Subsequent to the three month period
ended June 30, 2012, on August 1, 2012, we entered into a Securities Purchase Agreement with certain accredited investors (the
“Financing Stockholders”) to raise $500,000 in a private placement financing (the “Offering”). On August
6, 2012, after the satisfaction of certain closing conditions, the Offering closed and the Company issued to the Financing Stockholders:
(i) an aggregate of 1,066,667 shares of the Company’s common stock at a price per share of $0.46875 and (ii) warrants to
purchase an equal number of shares of the Company’s common stock at an exercise price of $0.6405 with a term of five (5)
years, for gross proceeds of $500,000. Garden State Securities, Inc. (“GSS”) served as the placement agent for such
equity financing. Per the engagement agreement signed between GSS and the Company on June 18, 2012, in consideration for services
rendered as the placement agent, the Company agreed to: (i) pay GSS cash commissions equal to $40,000, or 8.0% of the gross proceeds
received in the equity financing, and (ii) issue to GSS or its designee, a warrant to purchase up to 85,333 shares of the Company’s
common stock representing 8% of the Shares sold in the Offering) with an exercise price of $0.6405 per share and a term of five
(5) years.
In July, 2012 outstanding convertible promissory
notes in the principal amount of $500,000 were converted into an aggregate of 634,193 shares of our common stock.
We are currently seeking further financing
and we believe that will provide sufficient working capital to fund our operations for at least the next six months. Changes in
our operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing
in the future.
Our current cash requirements are significant
due to the planned development and expansion of our business. The successful implementation of our business plan is dependent upon
our ability to develop valuable intellectual property relating to stevia cultivation through our research programs, as well as
our ability to develop and manage our own stevia production operations. These planned research and agricultural development activities
require significant cash expenditures. We do not expect to generate the necessary cash from our operations during the next 6 to
12 months to carry out these business objectives. As such, in order to fund our operations during the next 6 to 12 months, we anticipate
that we will have to raise additional capital through debt and/or equity financings, which may result in substantial dilution to
our existing stockholders. There are no assurances that we will be able to raise the required working capital on terms favorable,
or that such working capital will be available on any terms when needed. In addition, the terms of the Securities Purchase Agreement
contain certain restrictions on our ability to engage in financing transactions. Specifically, the Securities Purchase Agreement
prohibits us from engaging in any issuance of Common Stock for a period of 90 days after the effective date of the Securities Purchase
Agreement, and for a period of two years thereafter, contains additional restrictions on certain types of financing transactions.
The Securities Purchase Agreement contains carveouts to such financing restrictions for certain exempted transactions including
(i) issuances pursuant to a stock option plan, (ii) securities issued upon the conversion of outstanding securities, (iii) securities
issued pursuant to acquisitions or other strategic transactions, (iv) up to $500,000 in stock and warrants on the same terms as
set forth in the Securities Purchase Agreement, and (v) securities issued pursuant to the Southridge Equity Purchase Agreement.
The terms of the Equity Purchase Agreement with Southridge also contain a prohibition on us entering into any equity line of credit
with terms substantially comparable to the Equity Purchase Agreement for a period of 36 months following the date of such Equity
Purchase Agreement, without Southridge’s consent.
Off-Balance Sheet Arrangements
We have not entered into any other
financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected
in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred
to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable
interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing,
hedging or research and development services with us.
Critical Accounting Estimates
The preparation of financial statements
in conformity with generally accepted accounting principles of the United States (GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas
requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases
its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual
results may differ from the estimates.
The discussion and analysis of our financial
condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP.
We believe certain critical accounting policies affect our more significant judgments and estimates used in the preparation of
the financial statements. A description of our critical accounting policies is set forth in our Annual Report on Form 10-K for
the fiscal year ended March 31, 2012, filed on June 29, 2012. As of, and for the three months ended June 30, 2012, there have been
no material changes or updates to our critical accounting policies.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of our current
directors and executive officers, the principal offices and positions held by each person:
Person
|
|
Age
|
|
Position
|
George Blankenbaker
|
|
47
|
|
Director, President, Secretary and Treasurer
|
Dr. Pablo Erat
|
|
41
|
|
Director
|
Rodney L. Cook
|
|
59
|
|
Director
|
The information below with respect to our directors includes
such director’s experience, qualifications, attributes, and skills that led us to the conclusion that they should serve
as a director.
George Blankenbaker - President, Secretary, Treasurer and
Director
Mr. Blankenbaker became our
President, Secretary, Treasurer and Director in June, 2011. Since November 2008, Mr. Blankenbaker has been working to develop
high Reb-A stevia farming in Vietnam. During the past five years, Mr. Blankenbaker has been: the managing director of Growers
Synergy, a position he has held since June 2009; the managing director of Blankenbaker Ventures (Asia), an investment holding
company, a position he has held since July 2006; and the President of Alternate Meats, a farm management
(live stock) company, a position he has held since April 2005. Mr. Blankenbaker was raised on a farm and became involved in
large scale commercial agriculture in Asia in 2002 when the Agri-Food Veterinary Authority of Singapore (AVA) selected his
company to commercialize a government to government project between Singapore and Indonesia with the aim to provide
strategically important food supplies to Singapore and has experience managing agriculture projects in South East Asia. Mr.
Blankenbaker received a Bachelors of Science in Business Finance from Indiana University in 1988, where he also studied Asian
Political Science. Mr. Blankenbaker’s recent activities and experience in Vietnam have laid the groundwork for the
Company’s current business strategy, and his in-depth knowledge of such matters are invaluable to our board of
directors.
Dr. Pablo Erat - Director
Dr. Erat was elected to our board of
directors on October 4, 2011. Since January 2009, Dr. Erat has served as CEO of Pal & Partners AG, a Swiss-based group domiciled
in Zug with offices in Zurich and Mumbai and with a focus on the Indian agriculture industry. Prior to joining Pal & Partners
AG, in 2008 Dr. Erat served as a consultant to corporations and start-up companies in various industries to assist in the development
and implementation of innovative strategies. In April 2001, he co-founded Executive Insight, a strategy consulting firm and in
January 2003, he co-founded DocsLogic, a company specialized on the development of knowledge applications, where he remained through
2007. Dr. Erat is also Assistant Professor at the ETH Zurich and regularly delivers speeches and workshops on strategic management
principles for educational and business communities. Dr. Erat received a Doctorate from the University of St. Gallen in Switzerland
in June 2003. Dr. Erat’s extensive knowledge and experience working for and advising early stage companies as well as his
experience in the agriculture industry will be extremely relevant to the board.
Rodney L. Cook - Director
Mr. Cook was elected to the board of
directors on October 6, 2011. Mr. Cook has an extensive background in agribusiness and is a practicing horticulturist with twenty
years experience in grower education, technology transfer from university to field, research and project development. In 2009,
he founded Ag-View Consulting, a horticulture and market development consulting firm, where he remained until 2011. From 2008
to 2009, Mr. Cook has served as Chief Executive Officer and President of Naturipe Foods, LLC a multinational partnership of fruit
growers. Prior to joining Naturipe, Mr. Cook was with Producer Marketing Company from 1995 to 2008, where he served as Chief Executive
Officer and President. Producer Maketing was a grower owned corporation marketing blueberries for a group of growers. Mr. Cook
received a Masters of Science, with Honor, in Horticulture from Michigan State University and a Bachelors of Science, with Honor,
in Resource Development from Michigan State University. Mr. Cook’s experience in the agriculture industry will provide critical
experience and perspective to the Company’s board of directors.
Involvement In Certain Legal Proceedings
No director, executive officer, significant
employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in
the past 10 years.
Term of Office
Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our stockholders 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, absent an employment
agreement.
EXECUTIVE COMPENSATION
Executive Compensation
The summary compensation table below shows
certain compensation information for services rendered in all capacities to us by our principal executive officer and principal
financial officer and by each other executive officer whose total annual salary and bonus exceeded $100,000 during the fiscal periods
ended March 31, 2011 and March 31, 2012. Other than as set forth below, no executive officer’s total annual compensation
exceeded $100,000 during our last fiscal period.
Summary Compensation Table
Name and Principal Position (a)
|
|
Year
(b)
|
|
|
Salary
($)
(c)
|
|
|
Bonus
($)
(d)
|
|
|
Stock
Awards
($)
(e)
|
|
|
Option
Awards
($)
(f)
|
|
|
Non
Equity
Incentive
Plan
Compensation
($)
(g)
|
|
|
Non-qualified
Deferred
Compensation
Earnings
($)
(h)
|
|
|
All Other
Compensation
($)
(i)
|
|
|
Total
($)
(j)
|
|
George Blankenbaker
|
|
|
2012
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
750,000
|
|
|
$
|
750,000
|
|
President, Secretary, Treasurer, Director
(Principal Executive Officer and Principal Financial Officer)
|
|
|
2011
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
On June 23, 2011, as a result of the
Share Exchange Agreement, the sole stockholder of Stevia Ventures International Ltd. (“Stevia Ventures”) received
12,000,000 shares of our common stock in exchange for 100% of the issued and outstanding common stock of Stevia Ventures. Mr.
Blankenbaker, our President and director, was the sole stockholder and officer of Stevia Ventures. Accordingly, he was a recipient
of 12,000,000 shares of our common stock issued in connection with the Share Exchange Transaction, 6,000,000 of which were to
be held in escrow pending the achievement by the Company of certain business milestones (the “Escrow Shares”). On
December 23, 2011, 3,000,000 of the 6,000,000 Escrow Shares were earned and released to Mr. Blankenbaker upon achievement of certain
business objectives by the Company. Those shares were valued at $0.25 per share or $750,000 on the date of release and recorded
as compensation. The remaining 3,000,000 Escrow Shares will be held in escrow until achievement of the applicable business milestones,
on or before June 2013, relating to the Company achieving 100 Ha field trials and the Company’s first test shipment of dry
leaf meeting minimum contracted specifications.
Other than as set forth above, none of
our executive officers received, nor do we have any arrangements to pay out, any bonus, stock awards, option awards, non-equity
incentive plan compensation, or non-qualified deferred compensation.
Director Compensation
The following table sets forth compensation paid to our
non-executive directors for the fiscal year ended March 31, 2012.
Name
|
|
Fees earned or
paid in cash
($)
|
|
|
Stock awards
($)
|
|
|
Option awards
($)
|
|
|
Non-equity incentive plan
compensation
($)
|
|
|
Nonqualified deferred
compensation earnings
($)
|
|
|
All other
compensation
($)
|
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
Dr. Pablo Erat(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
375,000
|
|
|
$
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney L. Cook(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
375,000
|
|
|
$
|
375,000
|
|
|
(1)
|
On October 14, 2011 we issued
1,500,000 shares to each of Rodney L. Cook and Pablo Erat, as
newly appointed members of our Board of Directors, as compensation
for future services. These shares shall vest with respect to
750,000 shares of restricted stock for each director on each
of the first two anniversaries of the date of grant, subject
to the director’s continuous service to the Company. These
shares were valued at $0.25 per share, or an aggregate of $750,000,
on the date of grant and are being amortized over the vesting
period of two (2) years or $93,750 per quarter.
|
We recorded $187,500 in directors’
fees for the period from April 11, 2011 (inception) through March 31, 2012.
We have no standard arrangement to compensate
directors for their services in their capacity as directors. Except as set forth above, directors are not paid for meetings attended.
All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.
Employment Agreements
None of our executive officers currently
have employment agreements with us and the manner and amount of compensation for the above-referenced new officer and director
has not yet been determined.
Potential Payments Upon Termination
or Change-in-Control
We currently have no employment agreements
with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any
other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s
responsibilities following a change-in-control. As a result, we have omitted this table.
Compensation Committee Interlocks and
Insider Participation
No interlocking relationship exists between
our Board of Directors and the Board of Directors or compensation committee of any other company, nor has any interlocking relationship
existed in the past.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain
information as of August 29, 2012 with respect to the beneficial ownership of our common stock for (i) each director and officer,
(ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially 5% or more of the outstanding
shares of our common stock. To our knowledge, except as indicated in any footnotes to this table or pursuant to applicable community
property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock
indicated.
Name and Address of Beneficial
Owner (1)
|
|
Amount and Nature of
Beneficial Ownership
|
|
|
Percentage of Class
(2)
|
|
George Blankenbaker(3)
|
|
|
12,500,000
|
|
|
|
18.78
|
%
|
President, Secretary, Treasurer,
|
|
|
|
|
|
|
|
|
and Director
|
|
|
|
|
|
|
|
|
6451 Buck Creek Pkwy
|
|
|
|
|
|
|
|
|
Indianapolis, IN 46227
|
|
|
|
|
|
|
|
|
Rodney L Cook
|
|
|
1,500,000
|
|
|
|
2.25
|
%
|
Director
|
|
|
|
|
|
|
|
|
1720 Medallion Loop NW
|
|
|
|
|
|
|
|
|
Olympia, WA 98502
|
|
|
|
|
|
|
|
|
Pablo Erat
|
|
|
1,500,000
|
|
|
|
2.25
|
%
|
Director
|
|
|
|
|
|
|
|
|
Ludretikonerstrasse 53
|
|
|
|
|
|
|
|
|
880 Thalwil
|
|
|
|
|
|
|
|
|
Switzerland
|
|
|
|
|
|
|
|
|
All Officers and Directors as a Group
|
|
|
15,500,000
|
|
|
|
23.28
|
%
|
(1) Beneficial ownership has been determined
in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual
or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for
the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and
outstanding for the purpose of computing the percentage ownership of any other person shown in the table.
(2) Based on 66,555,635 shares of
our common stock
outstanding as of August 29, 2012.
(3) Mr. Blakenbaker is the beneficial
owner of 12,500,000 shares of common stock. Mr. Blakenbaker owns 12,000,000 shares of common stock directly and 500,000 shares
of common stock are owned by Growers Synergy Pte Ltd. (“Growers Synergy”). Mr. Blankenbaker is the managing director
of Growers Synergy. Growers Fresh Pte Ltd (“Growers Fresh) owns a 51% interest in Growers Synergy and the Reporting
Person controls a 49% interest in Growers Fresh. Mr. Blankenbaker may be deemed to be the indirect beneficial owner of the
shares held by Growers Synergy under Rule 13d-3(a) promulgated under the Securities Exchange Act of 1934 (the “Exchange
Act”). However, pursuant to Rule 13d-4 promulgated under the Exchange Act, Mr. Blankenbaker disclaims that he is a beneficial
owner of such shares, except to the extent of his pecuniary interest herein.
CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Party Transactions
Effective November 1, 2011, the Company
engaged Growers Synergy Pte Ltd. (“Growers Synergy”) to provide farm management consulting services on a month-to-month
basis. George Blankenbaker, our president, director and stockholder is the managing director of Growers Synergy. Growers Fresh
Pte Ltd (“Growers Fresh) owns a 51% interest in Growers Synergy and Mr. Blankenbaker controls a 49% interest in Growers
Fresh. During the fiscal year ended March 31, 2012, Growers Synergy received $180,000 for consulting services rendered to the
Company. Minimum payments due from the Company to Growers Synergy during the fiscal years ending March 31, 2013 and March 31,
2014 are $240,000 and $140,000 respectively. Mr. Blankenbaker devotes approximately 40 hours per week to the Company’s business.
On July 5, 2012, the Company issued 500,000
shares of its common stock (the “Growers Synergy Shares”) to Growers Synergy as consideration for services rendered
by Growers Synergy to the Company.
On June 23, 2011, as a result of the
Share Exchange Agreement, the sole stockholder of Stevia Ventures International Ltd. (“Stevia Ventures”) received
12,000,000 shares of our common stock in exchange for 100% of the issued and outstanding common stock of Stevia Ventures. Mr.
Blankenbaker, our President and director, was the sole stockholder and officer of Stevia Ventures. Accordingly, he was a recipient
of 12,000,000 shares of our common stock issued in connection with the Share Exchange Transaction, 6,000,000 of which were to
be held in escrow pending the achievement by the Company of certain business milestones (the “Escrow Shares”). On
December 23, 2011, 3,000,000 of the 6,000,000 Escrow Shares were earned and released to Mr. Blankenbaker upon achievement of certain
business objectives by the Company. Those shares were valued at $0.25 per share or $750,000 on the date of release and recorded
as compensation.
Review, Approval or Ratification of Transactions with Related
Persons
Although we have adopted a Code of Ethics,
we still rely on our Board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our Board
reviews a transaction in light of the affiliations of the director, officer or employee and the affiliation’s of such person’s
immediate family. Transactions are presented to our Board for approval before they are entered into or, if this is not possible,
for ratification after the transaction has occurred. If our Board finds that a conflict of interest exists, then it will determine
the appropriate remedial action, if any. Our Board approves or ratifies a transaction if it determines that the transaction is
consistent with the best interests of the Company.
Director Independence
During the year ended March 31, 2012, we
had two independent directors on our Board, Dr. Erat and Mr. Cook. Mr. Blankenbaker is not independent. We evaluate independence
by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation,
the standards for independent directors established by The New York Stock Exchange, Inc., the NASDAQ National Market, and the SEC.
Subject to some exceptions, these standards
generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee
of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of
ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct
compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director
or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity
by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of
the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where
one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate
family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month
period during the past three years, exceeds the greater of $1,000,000 or 2% of that other company’s consolidated gross revenues.
DISCLOSURE OF COMMISSION POSITION OF
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Sections 78.7502 and 78.751 of the Nevada
Revised Statutes authorizes a court to award, or a corporation’s board of directors to grant indemnity to directors and officers
in terms sufficiently broad to permit indemnification, including reimbursement of expenses incurred, under certain circumstances
for liabilities arising under the Securities Act of 1933, as amended. In addition, the registrant’s Bylaws provide
that the registrant has the authority to indemnify the registrant’s directors and officers and may indemnify the registrant’s
employees and agents (other than officers and directors) against liabilities to the fullest extent permitted by Nevada law. The
registrant is also empowered under the registrant’s Bylaws to purchase insurance on behalf of any person whom the registrant
is required or permitted to indemnify.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions,
or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement
on Form S-1, together with all amendments and exhibits, with the SEC. This Prospectus, which forms a part of that registration
statement, does not contain all information included in the registration statement. Certain information is omitted and you should
refer to the registration statement and its exhibits. With respect to references made in this Prospectus to any of our contracts
or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration
statement for copies of the actual contracts or documents. You may read and copy any document that we file at the Commission’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference rooms. Our filings and the registration statement can also be reviewed by accessing the
SEC’s website at http://www.sec.gov. We maintain a website at http://www.steviacorp.us
FINANCIAL STATEMENTS
Our interim consolidated financial
statements as of and for the three months ended June 30, 2012 and audited financial statements for the period from April 11, 2011
(inception) to March 31, 2012 are included herewith.
Stevia Corp.
Index to the Consolidated Financial
Statements
Contents
|
|
Page(s)
|
|
|
|
Consolidated Balance Sheets at June 30, 2012 (Unaudited) and March 31, 2012
|
|
40
|
|
|
|
Consolidated Statements of Operations for the Three Months Ended June 30, 2012, for the
Period from April 11, 2011 (Inception) through June 30, 2011 and for the Period from April 11, 2011 (Inception) through June
30, 2012 (Unaudited)
|
|
41
|
|
|
|
Consolidated Statement of Stockholders’ Equity (Deficit) for the Period from April 11,
2011 (Inception) through June 30, 2012 (Unaudited)
|
|
42
|
|
|
|
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2012, for the
Period from April 11, 2011 (Inception) through June 30, 2011 and for the Period from April 11, 2011 (Inception) through June
30, 2012 (Unaudited)
|
|
43
|
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
|
|
44
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
67
|
|
|
|
Consolidated Balance Sheet at March 31, 2012
|
|
68
|
|
|
|
Consolidated Statement of Operation for the Period from April 11, 2011 (Inception) through
March 31, 2012
|
|
69
|
|
|
|
Consolidated Statement of Stockholders’ Equity (Deficit) for the Period from April 11,
2011 (Inception) through March 31, 2012
|
|
70
|
|
|
|
Consolidated Statement of Cash Flows for the Period from April 11, 2011 (Inception) through
March 31, 2012
|
|
71
|
|
|
|
Notes to the Consolidated Financial Statements
|
|
72
|
Stevia Corp.
(A Development Stage Company)
Consolidated Balance Sheets
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
17,062
|
|
|
$
|
15,698
|
|
Accounts receivable
|
|
|
280
|
|
|
|
—
|
|
Prepaid expenses
|
|
|
16,608
|
|
|
|
168,874
|
|
Total current assets
|
|
|
33,950
|
|
|
|
184,572
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
4,359
|
|
|
|
3,036
|
|
Accumulated depreciation
|
|
|
(218
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
4,141
|
|
|
|
3,036
|
|
|
|
|
|
|
|
|
|
|
Website development costs
|
|
|
|
|
|
|
|
|
Website development costs
|
|
|
5,315
|
|
|
|
5,315
|
|
Accumulated amortization
|
|
|
(1,068
|
)
|
|
|
(801
|
)
|
Website development costs, net
|
|
|
4,247
|
|
|
|
4,514
|
|
|
|
|
|
|
|
|
|
|
Security Deposit
|
|
|
|
|
|
|
|
|
Security deposit
|
|
|
15,000
|
|
|
|
15,000
|
|
Security deposit
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
57,338
|
|
|
$
|
207,122
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
190,713
|
|
|
$
|
237,288
|
|
Accounts payable - President and CEO
|
|
|
20,220
|
|
|
|
20,220
|
|
Accrued expenses
|
|
|
8,840
|
|
|
|
5,400
|
|
Accrued interest
|
|
|
26,959
|
|
|
|
15,521
|
|
Advances from president and significant stockholder
|
|
|
21,238
|
|
|
|
19,138
|
|
Convertible notes payable
|
|
|
900,000
|
|
|
|
700,000
|
|
Total current liabilities
|
|
|
1,167,970
|
|
|
|
997,567
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
Common stock at $0.001 par value: 100,000,000 shares
authorized, 58,354,775 shares issued and outstanding
|
|
|
58,355
|
|
|
|
58,355
|
|
Additional paid-in capital
|
|
|
1,568,501
|
|
|
|
1,474,751
|
|
Deficit accumulated during the development stage
|
|
|
(2,737,488
|
)
|
|
|
(2,323,551
|
)
|
Total stockholders’ deficit
|
|
|
(1,110,632
|
)
|
|
|
(790,445
|
)
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
57,338
|
|
|
$
|
207,122
|
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statements of Operations
|
|
For the Period from
|
|
|
For the Period from
|
|
|
|
|
|
|
For the
|
|
|
April 11, 2011
|
|
|
April 11, 2011
|
|
|
|
Three Months
|
|
|
(inception)
|
|
|
(inception)
|
|
|
|
Ended
|
|
|
through
|
|
|
through
|
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
June 30, 2012
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Revenues earned during the development stage
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
1,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services during the development stage
|
|
|
|
|
|
|
|
|
|
|
|
|
Farm expenses
|
|
|
7,500
|
|
|
|
—
|
|
|
|
538,746
|
|
Farm management services - related party
|
|
|
60,000
|
|
|
|
—
|
|
|
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of services during
the development stage
|
|
|
67,500
|
|
|
|
—
|
|
|
|
780,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
|
|
(67,220
|
)
|
|
|
—
|
|
|
|
(777,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors’ fees
|
|
|
93,750
|
|
|
|
—
|
|
|
|
281,250
|
|
Professional fees
|
|
|
116,728
|
|
|
|
13,071
|
|
|
|
372,687
|
|
Research and development
|
|
|
78,984
|
|
|
|
—
|
|
|
|
285,175
|
|
Salary and compensation - officer
|
|
|
—
|
|
|
|
—
|
|
|
|
750,000
|
|
General and administrative expenses
|
|
|
44,713
|
|
|
|
100
|
|
|
|
158,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
334,175
|
|
|
|
13,171
|
|
|
|
1,847,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(401,395
|
)
|
|
|
(13,171
|
)
|
|
|
(2,624,733
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing cost
|
|
|
—
|
|
|
|
—
|
|
|
|
70,500
|
|
Foreign currency transaction gain (loss)
|
|
|
1,101
|
|
|
|
—
|
|
|
|
1,101
|
|
Interest expense
|
|
|
11,441
|
|
|
|
671
|
|
|
|
41,198
|
|
Interest income
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other (income) expense
|
|
|
12,542
|
|
|
|
671
|
|
|
|
112,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax provision
|
|
|
(413,937
|
)
|
|
|
(13,842
|
)
|
|
|
(2,737,488
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(413,937
|
)
|
|
$
|
(13,842
|
)
|
|
$
|
(2,737,488
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share - Basic and diluted:
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - basic and diluted
|
|
|
58,354,775
|
|
|
|
55,800,000
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statement of Stockholders’
Equity (Deficit)
For the Period from April 11, 2011 (Inception)
through June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
Common Stock,
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
$0.001 Par Value
|
|
|
Additional
|
|
|
during the
|
|
|
Stockholders’
|
|
|
|
Number
|
|
|
|
|
|
paid-in
|
|
|
Development
|
|
|
Equity
|
|
|
|
of Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 11, 2011 (inception)
|
|
|
6,000,000
|
|
|
$
|
6,000
|
|
|
$
|
(5,900
|
)
|
|
$
|
—
|
|
|
$
|
100
|
|
Common shares deemed issued in reverse acquisition
|
|
|
79,800,000
|
|
|
|
79,800
|
|
|
|
(198,088
|
)
|
|
|
|
|
|
|
(118,288
|
)
|
Common shares cancelled in reverse acquisition
|
|
|
(33,000,000
|
)
|
|
|
(33,000
|
)
|
|
|
33,000
|
|
|
|
|
|
|
|
—
|
|
Common shares issued for cash at $0.25 per share on October 4, 2011
|
|
|
400,000
|
|
|
|
400
|
|
|
|
99,600
|
|
|
|
|
|
|
|
100,000
|
|
Common shares issued for notes conversion at $0.25
per share on October 4, 2011
|
|
|
1,400,000
|
|
|
|
1,400
|
|
|
|
348,600
|
|
|
|
|
|
|
|
350,000
|
|
Common shares issued for conversion of accrued interest
at $0.25 per share on October 4, 2011
|
|
|
74,850
|
|
|
|
75
|
|
|
|
18,638
|
|
|
|
|
|
|
|
18,713
|
|
Common shares cancelled by significant stockholder
on October 4, 2011
|
|
|
(3,000,000
|
)
|
|
|
(3,000
|
)
|
|
|
3,000
|
|
|
|
|
|
|
|
—
|
|
Common shares issued for future director services
on October 4, 2011
|
|
|
3,000,000
|
|
|
|
3,000
|
|
|
|
747,000
|
|
|
|
|
|
|
|
750,000
|
|
Common shares issued for future director services
on October 4, 2011
|
|
|
|
|
|
|
|
|
|
|
(750,000
|
)
|
|
|
|
|
|
|
(750,000
|
)
|
Common shares issued for future director services
on October 4, 2011 earned during the period
|
|
|
|
|
|
|
|
|
|
|
187,500
|
|
|
|
|
|
|
|
187,500
|
|
Make good shares released to officer for achieving
the first milestone on December 23, 2011
|
|
|
3,000,000
|
|
|
|
3,000
|
|
|
|
747,000
|
|
|
|
|
|
|
|
750,000
|
|
Common shares issued for notes conversion at $0.25
per share on January 18, 2012
|
|
|
600,000
|
|
|
|
600
|
|
|
|
149,400
|
|
|
|
|
|
|
|
150,000
|
|
Common shares issued for conversion of accrued interest
at $0.25 per share on January 18, 2012
|
|
|
17,425
|
|
|
|
17
|
|
|
|
4,339
|
|
|
|
|
|
|
|
4,356
|
|
Common shares issued for financing services upon
agreement at $1.50 per share on January 26, 2012
|
|
|
35,000
|
|
|
|
35
|
|
|
|
52,465
|
|
|
|
|
|
|
|
52,500
|
|
Common shares issued for consulting services at
$1.39 per share on March 31, 2012
|
|
|
27,500
|
|
|
|
28
|
|
|
|
38,197
|
|
|
|
|
|
|
|
38,225
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,323,551
|
)
|
|
|
(2,323,551
|
)
|
Balance, March 31, 2012
|
|
|
58,354,775
|
|
|
|
58,355
|
|
|
|
1,474,751
|
|
|
|
(2,323,551
|
)
|
|
|
(790,445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for future director services
on October 4, 2011 earned during the period
|
|
|
|
|
|
|
|
|
|
|
93,750
|
|
|
|
|
|
|
|
93,750
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(413,937
|
)
|
|
|
(413,937
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2012
|
|
|
58,354,775
|
|
|
$
|
58,355
|
|
|
$
|
1,568,501
|
|
|
$
|
(2,737,488
|
)
|
|
$
|
(1,110,632
|
)
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statements of Cash Flows
|
|
|
|
|
For the Period from
|
|
|
For the Period from
|
|
|
|
For the
|
|
|
April 11, 2011
|
|
|
April 11, 2011
|
|
|
|
Three Months
|
|
|
(inception)
|
|
|
(inception)
|
|
|
|
Ended
|
|
|
through
|
|
|
through
|
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
June 30, 2012
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(413,937
|
)
|
|
$
|
(13,842
|
)
|
|
$
|
(2,737,488
|
)
|
Adjustments to reconcile net loss to net cash used
in operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
218
|
|
|
|
—
|
|
|
|
218
|
|
Amortization expense
|
|
|
267
|
|
|
|
—
|
|
|
|
1,068
|
|
Common shares issued for compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
750,000
|
|
Common shares issued for director services earned
during the period
|
|
|
93,750
|
|
|
|
—
|
|
|
|
281,250
|
|
Common shares issued for outside services
|
|
|
—
|
|
|
|
—
|
|
|
|
90,725
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(280
|
)
|
|
|
—
|
|
|
|
(280
|
)
|
Prepaid expenses
|
|
|
152,266
|
|
|
|
—
|
|
|
|
(16,608
|
)
|
Security deposit
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,000
|
)
|
Accounts payable
|
|
|
(46,575
|
)
|
|
|
9,926
|
|
|
|
94,955
|
|
Accounts payable - related parties
|
|
|
—
|
|
|
|
—
|
|
|
|
20,220
|
|
Accrued expenses
|
|
|
3,440
|
|
|
|
(5,690
|
)
|
|
|
2,150
|
|
Accrued interest
|
|
|
11,438
|
|
|
|
9,506
|
|
|
|
50,027
|
|
Net cash used in operating
activities
|
|
|
(199,413
|
)
|
|
|
(100
|
)
|
|
|
(1,478,763
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(1,323
|
)
|
|
|
—
|
|
|
|
(4,359
|
)
|
Website development costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,315
|
)
|
Cash received from reverse
acquisition
|
|
|
—
|
|
|
|
3,198
|
|
|
|
3,199
|
|
Net cash provided by (used
in) investing activities
|
|
|
(1,323
|
)
|
|
|
3,198
|
|
|
|
(6,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances from president and stockholder
|
|
|
2,100
|
|
|
|
—
|
|
|
|
2,300
|
|
Proceeds from issuance of convertible notes
|
|
|
200,000
|
|
|
|
350,000
|
|
|
|
1,400,000
|
|
Proceeds from sale of common
stock
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000
|
|
Net cash provided by financing
activities
|
|
|
202,100
|
|
|
|
350,000
|
|
|
|
1,502,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
|
|
|
1,364
|
|
|
|
353,098
|
|
|
|
17,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
15,698
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
17,062
|
|
|
$
|
353,098
|
|
|
$
|
17,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flows information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income tax paid
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock
for conversion of convertible notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
Issuance of common stock
for conversion of accrued note interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,068
|
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
June 30, 2012 and 2011
Notes to the Consolidated Financial Statements
(Unaudited)
NOTE 1 - ORGANIZATION AND OPERATIONS
STEVIA CORP. (FORMERLY INTERPRO MANAGEMENT
CORP.)
Interpro Management
Corp (“Interpro”) was incorporated under the laws of the State of Nevada on May 21, 2007. Interpro focused on developing
and offering web based software that was designed to be an online project management tool used to enhance an organization’s efficiency
through planning and monitoring the daily operations of a business. The Company discontinued its web-based software business upon
the acquisition of Stevia Ventures International Ltd. on June 23, 2011.
On March 4, 2011, Interpro
amended its Articles of Incorporation, and changed its name to Stevia Corp. (“Stevia” or the “Company”) and
effectuated a 35 for 1 (1:35) forward stock split of all of its issued and outstanding shares of common stock (the “Stock
Split”).
All shares and per
share amounts in the consolidated financial statements have been adjusted to give retroactive effect to the Stock Split.
STEVIA VENTURES INTERNATIONAL LTD.
Stevia Ventures International
Ltd. (“Ventures”) was incorporated on April 11, 2011 under the laws of the Territory of the British Virgin Islands (“BVI”).
Ventures owns certain rights relating to stevia production, including certain assignable exclusive purchase contracts and an assignable
supply agreement related to stevia.
ACQUISITION OF STEVIA VENTURES INTERNATIONAL
LTD. RECOGNIZED AS A REVERSE ACQUISITION
On June 23, 2011 (the
“Closing Date”), the Company closed a voluntary share exchange transaction with Stevia Ventures International Ltd. (“Ventures”)
pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Ventures and George
Blankenbaker, the stockholder of Ventures (the “Ventures Stockholder”).
Immediately prior
to the Share Exchange Transaction on June 23, 2011, the Company had 79,800,000 common shares issued and outstanding. Simultaneously
with the Closing of the Share Exchange Agreement, on the Closing Date, Mohanad Shurrab, a shareholder and, as of the Closing Date,
the Company’s former Director, President, Treasurer and Secretary, surrendered 33,000,000 shares of the Company’s common stock
to the Company for cancellation.
As a result of
the Share Exchange Agreement, the Company issued 12,000,000 common shares for the acquisition of 100% of the issued and outstanding
shares of Ventures. Of the 12,000,000 common shares issued 6,000,000 shares are being held in escrow pending the achievement by
the Company of certain post-Closing business milestones (the “Milestones”), pursuant to the terms of the Make Good Escrow
Agreement, between the Company, Greenberg Traurig, LLP, as escrow agent and the Ventures’ Stockholder (the “Escrow Agreement”).
Even though the shares issued only represented approximately 20.4% of the issued and outstanding common stock immediately after
the consummation of the Share Exchange Agreement the stockholder of Ventures completely took over and controlled the board of
directors and management of the Company upon acquisition.
As a result of
the change in control to the then Ventures Stockholder, for financial statement reporting purposes, the merger between the Company
and Ventures has been treated as a reverse acquisition with Ventures deemed the accounting acquirer and the Company deemed the
accounting acquiree under the purchase method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards
Codification. The reverse merger is deemed a capital transaction and the net assets of Ventures (the accounting acquirer) are
carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination. The
acquisition process utilizes the capital structure of the Company and the assets and liabilities of Ventures which are recorded
at historical cost. The equity of the Company is the historical equity of Ventures retroactively restated to reflect the number
of shares issued by the Company in the transaction.
FORMATION OF STEVIA ASIA LIMITED
On March 19, 2012,
the Company formed Stevia Asia Limited (“Stevia Asia”) under the laws of the Hong Kong Special Administrative Region
(“HK SAR”) of the People’s Republic of China (“PRC”), a wholly-owned subsidiary. Stevia Asia is currently
inactive.
FORMATION OF STEVIA TECHNEW LIMITED
(FORMERLY HERO TACT LIMITED)
On April 28, 2012,
Stevia Asia formed Hero Tact Limited, a wholly-owned subsidiary, under the laws of HK SAR, which subsequently changed its name
to Stevia Technew Limited (“Stevia Technew”). Stevia Technew is intended to facilitate a joint venture relationship
with the Company’s technology partner, Guangzhou Health China Technology Development Company Limited, operating under the trade
name Tech-New Bio-Technology (“TechNew”) and its affiliates Technew Technology Limited.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BASIS OF PRESENTATION - UNAUDITED INTERIM
FINANCIAL INFORMATION
The accompanying
unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations
of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited
interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily
indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the financial
statements of the Company for the period from April 11, 2011 (inception) through March 31, 2012 and notes thereto contained in
the Company’s Current Report on Form 10-K as filed with the SEC on June 29, 2012.
PRINCIPLES OF CONSOLIDATION
The consolidated
financial statements include all accounts of the Company as of June 30, 2012 and for the period from June 23, 2011 (date of acquisition)
through June 30, 2012; Stevia Ventures International Ltd. as of June 30, 2012 and for the period from April 11, 2011 (inception)
through June 30, 2012; Stevia Asia Limited as of June 30, 2012 and for the period from March 19, 2012 (inception) through June
30, 2012; and Stevia Technew Limited as of June 30, 2012 and for the period from May 9, 2012 (inception) through June 30, 2012
as follows:
|
|
Jurisdiction or
|
|
|
Attributable
|
|
Entity
|
|
Place of Incorporation
|
|
|
Interest
|
|
Stevia Ventures International Ltd.
|
|
BVI
|
|
|
|
100
|
%
|
Stevia Asia Limited
|
|
Hong Kong SAR
|
|
|
|
100
|
%
|
Stevia Technew Limited
|
|
Hong Kong SAR
|
|
|
|
100
|
%
|
All inter-company balances
and transactions have been eliminated.
DEVELOPMENT STAGE COMPANY
The Company is a development
stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification. Although the Company has recognized some nominal amount of revenues since inception, the Company is still devoting
substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company. All
losses accumulated since inception have been considered as part of the Company’s development stage activities.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period.
The Company’s significant
estimates and assumptions include the fair value of financial instruments; the carrying value, recoverability and impairment of
long-lived assets, including the values assigned to and the estimated useful lives of website development costs; interest rate;
revenue recognized or recognizable; sales returns and allowances; foreign currency exchange rate; income tax rate, income tax provision,
deferred tax assets and valuation allowance of deferred tax assets; and the assumption that the Company will continue as a going
concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties
attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases
its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources.
Management regularly
evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts
and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates
are adjusted accordingly.
Actual results could
differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows
paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value
of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair
value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase
consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three
(3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
|
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the
reporting date.
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either
directly or indirectly observable as of the reporting date.
|
|
Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
Financial assets are
considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority
to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial
assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, approximate
their fair values because of the short maturity of these instruments.
The Company’s convertible
notes payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would
be available to the Company for similar financial arrangements at June 30, 2012 and March 31, 2012.
Transactions involving
related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.
It is not, however,
practical to determine the fair value of advances from president and significant stockholder, if any, due to their related party
nature.
CARRYING VALUE, RECOVERABILITY AND
IMPAIRMENT OF LONG-LIVED ASSETS
The Company has
adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived
assets, which include property and equipment, website development costs, and security deposit are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company assesses
the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related
long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets
are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated,
the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers
the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance
or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner
or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the
Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures;
(v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company
evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such
events.
The key assumptions
used in management’s estimates of projected cash flow deal largely with forecasts of sales levels and gross margins. These forecasts
are typically based on historical trends and take into account recent developments as well as management’s plans and intentions.
Other factors, such as increased competition or a decrease in the desirability of the Company’s products or services, could lead
to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could
result in an impairment of long lived assets.
The impairment
charges, if any, is included in operating expenses in the accompanying consolidated statements of income and comprehensive income
(loss).
FISCAL YEAR END
The Company elected
March 31 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers
all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment
is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to
operations as incurred. Depreciation of furniture and fixture is computed by the straight-line method (after taking into account
their respective estimated residual values) over the assets estimated useful life of five (5) years. Upon sale or retirement of
property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected
in the statements of operations.
WEBSITE DEVELOPMENT COSTS
Website development
costs are stated at cost less accumulated amortization. The cost of the website development is amortized on a straight-line basis
over its estimated useful life of five (5) years. Upon becoming fully amortized, the related cost and accumulated amortization
are removed from the accounts.
RELATED PARTIES
The Company follows
subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section
850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to
be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements
shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature
of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for
each of the periods for which income statements are presented and the effects of any change in the method of establishing the
terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows
subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist
as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only
be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such
assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are
pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits
of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be
sought therein.
If the assessment
of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated,
then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates
that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would
be disclosed.
Loss contingencies considered remote
are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not
believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s
consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not
materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
REVENUE RECOGNITION
The Company follows
paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when
it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following
criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been
rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
RESEARCH AND DEVELOPMENT
The Company follows
paragraph 730-10-25-1 of the FASB Accounting Standards Codification (formerly Statement of Financial Accounting Standards No.
2 “ACCOUNTING FOR RESEARCH AND DEVELOPMENT COSTS”) and paragraph 730-20-25-11 of the FASB Accounting Standards Codification
(formerly Statement of Financial Accounting Standards No. 68 “RESEARCH AND DEVELOPMENT ARRANGEMENTS”) for research and
development costs. Research and development costs are charged to expense as incurred. Research and development costs consist primarily
of remuneration for research and development staff, depreciation and maintenance expenses of research and development equipment,
material and testing costs for research and development as well as research and development arrangements with unrelated third
party research and development institutions. The research and development arrangements usually involve specific research and development
projects. Often times, the Company makes non-refundable advances upon signing of these arrangements. The Company adopted paragraph
730-20-25-13 and 730-20-35-1 of the FASB Accounting Standards Codification (formerly Emerging Issues Task Force Issue No. 07-3
“ACCOUNTING FOR NONREFUNDABLE ADVANCE PAYMENTS FOR GOODS OR SERVICES TO BE USED IN FUTURE RESEARCH AND DEVELOPMENT ACTIVITIES”)
for those non-refundable advances. Non-refundable advance payments for goods or services that will be used or rendered for future
research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods
are delivered or the related services are performed. The management continues to evaluate whether the Company expect the goods
to be delivered or services to be rendered. If the management does not expect the goods to be delivered or services to be rendered,
the capitalized advance payment are charged to expense.
STOCK-BASED COMPENSATION FOR OBTAINING
EMPLOYEE SERVICES
The Company accounts
for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the
recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards
Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods
or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement
date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete
or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices
established in the Company’s most recent private placement memorandum (PPM”), or weekly or monthly price observations would
generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a
larger spread between the bid and asked quotes and lack of consistent trading in the market.
The fair value
of each option award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions
for inputs are as follows:
|
*
|
Expected term of share options and
similar instruments: The expected life of options and similar instruments
represents the period of time the option and/or warrant are expected
to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the
FASB Accounting Standards Codification the expected term of share options
and similar instruments represents the period of time the options and
similar instruments are expected to be outstanding taking into consideration
of the contractual term of the instruments and employees’ expected exercise
and post-vesting employment termination behavior into the fair value
(or calculated value) of the instruments. Pursuant to paragraph 718-50-S99-1,
it may be appropriate to use the SIMPLIFIED METHOD, if (i) A company
does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate expected term due to the limited period
of time its equity shares have been publicly traded; (ii) A company significantly
changes the terms of its share option grants or the types of employees
that receive share option grants such that its historical exercise data
may no longer provide a reasonable basis upon which to estimate expected
term; or (iii) A company has or expects to have significant structural
changes in its business such that its historical exercise data may no
longer provide a reasonable basis upon which to estimate expected term.
The Company uses the simplified method to calculate expected term of
share options and similar instruments as the company does not have sufficient
historical exercise data to provide a reasonable basis upon which to
estimate expected term.
|
|
*
|
Expected volatility of the entity’s
shares and the method used to estimate it. Pursuant to ASC Paragraph
718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the
calculated value method shall disclose the reasons why it is not practicable
for the Company to estimate the expected volatility of its share price,
the appropriate industry sector index that it has selected, the reasons
for selecting that particular index, and how it has calculated historical
volatility using that index. The Company uses the average historical
volatility of the comparable companies over the expected contractual
life of the share options or similar instruments as its expected volatility.
If shares of a company are thinly traded the use of weekly or monthly
price observations would generally be more appropriate than the use of
daily price observations as the volatility calculation using daily observations
for such shares could be artificially inflated due to a larger spread
between the bid and asked quotes and lack of consistent trading in the
market.
|
|
*
|
Expected annual rate of quarterly
dividends. An entity that uses a method that employs different dividend
rates during the contractual term shall disclose the range of expected
dividends used and the weighted-average expected dividends. The expected
dividend yield is based on the Company’s current dividend yield as the
best estimate of projected dividend yield for periods within the expected
term of the share options and similar instruments.
|
|
*
|
Risk-free rate(s). An entity that
uses a method that employs different risk-free rates shall disclose the
range of risk-free rates used. The risk-free interest rate is based on
the U.S. Treasury yield curve in effect at the time of grant for periods
within the expected term of the share options and similar instruments.
|
The Company’s policy
is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis
over the requisite service period for the entire award.
EQUITY INSTRUMENTS ISSUED TO PARTIES
OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES
The Company accounts
for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Subtopic 505-50
of the FASB Accounting Standards Codification (“Subtopic 505-50”).
Pursuant to ASC
Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever
is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier
of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of
the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (PPM”),
or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares
could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.
The fair value
of option or warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges
of assumptions for inputs are as follows:
|
*
|
Expected term of share options and
similar instruments: Pursuant to Paragraph 718-10-50-2 of the FASB Accounting
Standards Codification the expected term of share options and similar
instruments represents the period of time the options and similar instruments
are expected to be outstanding taking into consideration of the contractual
term of the instruments and holder’s expected exercise behavior into
the fair value (or calculated value) of the instruments. The Company
uses historical data to estimate holder’s expected exercise behavior.
If the Company is a newly formed corporation or shares of the Company
are thinly traded the contractual term of the share options and similar
instruments is used as the expected term of share options and similar
instruments as the Company does not have sufficient historical exercise
data to provide a reasonable basis upon which to estimate expected term.
|
|
*
|
Expected volatility of the entity’s
shares and the method used to estimate it. An entity that uses a method
that employs different volatilities during the contractual term shall
disclose the range of expected volatilities used and the weighted-average
expected volatility. A thinly-traded or nonpublic entity that uses the
calculated value method shall disclose the reasons why it is not practicable
for the Company to estimate the expected volatility of its share price,
the appropriate industry sector index that it has selected, the reasons
for selecting that particular index, and how it has calculated historical
volatility using that index. The Company uses the average historical
volatility of the comparable companies over the expected contractual
life of the share options or similar instruments as its expected volatility.
If shares of a company are thinly traded the use of weekly or monthly
price observations would generally be more appropriate than the use of
daily price observations as the volatility calculation using daily observations
for such shares could be artificially inflated due to a larger spread
between the bid and asked quotes and lack of consistent trading in the
market.
|
|
*
|
Expected annual rate of quarterly
dividends. An entity that uses a method that employs different dividend
rates during the contractual term shall disclose the range of expected
dividends used and the weighted-average expected dividends. The expected
dividend yield is based on the Company’s current dividend yield as the
best estimate of projected dividend yield for periods within the expected
contractual life of the option and similar instruments.
|
|
*
|
Risk-free rate(s). An entity that
uses a method that employs different risk-free rates shall disclose the
range of risk-free rates used. The risk-free interest rate is based on
the U.S. Treasury yield curve in effect at the time of grant for periods
within the contractual life of the option and similar instruments.
|
Pursuant to Paragraphs
505-50-25-8, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an
agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then,
because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date
has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is
entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized
as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to
ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return
for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement
for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such
an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof)
of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in
which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides
guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.
Pursuant to Paragraphs
505-50-25-8 and 505-50-25-9,an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee
only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves
specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same
manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with,
or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that
the counterparty has the right to exercise expires unexercised.
Pursuant to ASC
paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity
instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that
is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement
date and no entry should be recorded.
INCOME TAX PROVISION
The Company accounts
for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred
tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not
that the assets will not be realized. 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. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income and comprehensive income
(loss) in the period that includes the enactment date.
The Company adopted
section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that
has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance
on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased
disclosures.
The estimated future
tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.
Management makes
judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates
of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.
In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction
varies from estimates, additional allowances or reversals of reserves may be necessary.
UNCERTAIN TAX POSITIONS
The Company did
not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions
of Section 740-10-25 for the interim period ended June 30, 2012 or for the period from April 11, 2011 (Inception) through June
30, 2011.
LIMITATION ON UTILIZATION OF NOLS DUE
TO CHANGE IN CONTROL
Pursuant to the
Internal Revenue Code Section 382 (“Section 382”), certain ownership changes may subject the NOL’s to annual limitations
which could reduce or defer the NOL. Section 382 imposes limitations on a corporation’s ability to utilize NOLs if it experiences
an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of
certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. In the event of
an ownership change, utilization of the NOLs would be subject to an annual limitation under Section 382 determined by multiplying
the value of its stock at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation
may be carried over to later years. The imposition of this limitation on its ability to use the NOLs to offset future taxable
income could cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect and could cause
such NOLs to expire unused, reducing or eliminating the benefit of such NOLs.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss)
per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss)
per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential
dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
The following table
shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per common share calculation
for the interim period ended June 30, 2012 and for the period from April 11, 2011 (inception) through June 30, 2011 as they were
anti-dilutive:
Potentially Outstanding Dilutive
|
|
Common Shares
|
|
|
|
|
|
|
For the Period
|
|
|
|
For the Interim
|
|
|
from April 11, 2011
|
|
|
|
Period Ended
|
|
|
(inception) through
|
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
|
|
|
|
|
|
Make Good Escrow Agreement shares issued and held with the
escrow agent in connection with the Share Exchange Agreement consummated on June 23, 2011 pending the achievement by the Company
of certain post-Closing business milestones(the “Milestones”).
|
|
|
3,000,000
|
|
|
|
6,000,000
|
|
Total potentially outstanding dilutive common shares
|
|
|
3,000,000
|
|
|
|
6,000,000
|
|
CASH FLOWS REPORTING
The Company adopted
paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and
uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting
Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals
of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating
cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current
exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported
as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides
information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph
830-230-45-1 of the FASB Accounting Standards Codification.
SUBSEQUENT EVENTS
The Company follows
the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company
will evaluate subsequent events through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB
Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely
distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-05
In June 2011, the
FASB issued the FASB Accounting Standards Update No. 2011-05 “COMPREHENSIVE INCOME” (“ASU 2011-05”), which
was the result of a joint project with the IASB and amends the guidance in ASC 220, COMPREHENSIVE INCOME, by eliminating the option
to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance
now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous statement
of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive
income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present
all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.
The amendments
in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within
those years, beginning after December 15, 2011.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-08
In September 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-08 “INTANGIBLES—GOODWILL AND OTHER: TESTING GOODWILL
FOR IMPAIRMENT” (“ASU 2011-08”). This Update is to simplify how public and nonpublic entities test goodwill for
impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not
that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required
to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value
is less than its carrying amount.
The guidance is
effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-10
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-10 “PROPERTY, PLANT AND EQUIPMENT: DERECOGNITION OF IN SUBSTANCE
REAL ESTATE-A SCOPE CLARIFICATION” (“ASU 2011-09”). This Update is to resolve the diversity in practice as to how
financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling financial
interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse
debt of the subsidiaries.
The amended guidance
is effective for annual reporting periods ending after June 15, 2012 for public entities. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-11
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-11 “BALANCE SHEET: DISCLOSURES ABOUT OFFSETTING ASSETS AND
LIABILITIES” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related
arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.
The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on
the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.
The amended guidance
is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-12
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-12 “COMPREHENSIVE INCOME: DEFERRAL OF THE EFFECTIVE DATE FOR
AMENDMENTS TO THE PRESENTATION OF RECLASSIFICATIONS OF ITEMS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME IN ACCOUNTING STANDARDS
UPDATE NO. 2011-05” (“ASU 2011-12”). This Update is a deferral of the effective date pertaining to reclassification
adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits
of those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time
required to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary
to reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were
in place before the issuance of Update 2011-05.
All other requirements
in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements
for fiscal years, and interim periods within those years, beginning after December 15, 2011.
OTHER RECENTLY ISSUED, BUT NOT YET
EFFECTIVE ACCOUNTING PRONOUNCEMENTS
Management does
not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying financial statements.
NOTE 3 - GOING CONCERN
The accompanying
consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates
continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in
the accompanying consolidated financial statements, the Company had a deficit accumulated during the development stage at June
30, 2012, a net loss and net cash used in operating activities for the interim period then ended. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.
While the Company
is attempting to commence operations and generate sufficient revenues, the Company’s cash position may not be sufficient enough
to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering.
Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues
provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy
to commence operations and generate sufficient revenues and in its ability to raise additional funds, there can be no assurances
to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement
its business plan and generate sufficient revenues.
The consolidated
financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts
or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 - PREPAID EXPENSES
Prepaid expenses
at June 30, 2012 and March 31, 2012, consisted of the following:
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
Prepaid research and development
|
|
$
|
1,615
|
|
|
$
|
128,445
|
|
Prepaid rent
|
|
|
14,384
|
|
|
|
21,250
|
|
Retainer
|
|
|
—
|
|
|
|
15,000
|
|
Other
|
|
|
609
|
|
|
|
4,179
|
|
|
|
$
|
16,608
|
|
|
$
|
168,874
|
|
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment,
stated at cost, less accumulated depreciation at June 30, 2012 and March 31, 2012 consisted of the following:
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
|
|
|
|
Life (Years)
|
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
Property and equipment
|
|
|
5
|
|
|
$
|
4,359
|
|
|
$
|
3,036
|
|
|
|
|
|
|
|
|
4,359
|
|
|
|
3,036
|
|
Less accumulated depreciation
|
|
|
|
|
|
|
(218
|
)
|
|
|
—
|
|
|
|
|
|
|
|
$
|
4,141
|
|
|
$
|
3,036
|
|
DEPRECIATION EXPENSE
The Company acquired
furniture and fixture near the end of February 2012 and started to depreciate as of April 1, 2012. Additional equipment was purchased
and depreciated during the interim period ended June 30, 2012. Depreciation expense for the interim period ended June 30, 2012
was $218.
NOTE 6 - WEBSITE DEVELOPMENT COSTS
Website development
costs, stated at cost, less accumulated amortization at June 30, 2012 and March 31, 2012, consisted of the following:
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
Website development costs
|
|
$
|
5,315
|
|
|
$
|
5,315
|
|
Accumulated amortization
|
|
|
(1,068
|
)
|
|
|
(801
|
)
|
|
|
$
|
4,247
|
|
|
$
|
4,514
|
|
AMORTIZATION EXPENSE
Amortization expense
was $267 and $0 for the interim period ended June 30, 2012 and for the period from April 11, 2011 (inception) through June 30,
2011.
NOTE 7 - RELATED PARTY TRANSACTIONS
RELATED PARTIES
Related parties
with whom the Company had transactions are:
Related Parties
|
|
Relationship
|
|
|
|
George Blankenbaker
|
|
President and significant stockholder of the Company
|
|
|
|
Leverage Investments LLC
|
|
An entity owned and controlled by the president and significant stockholder of the Company
|
|
|
|
Growers Synergy Pte Ltd.
|
|
An entity owned and controlled by the president and significant stockholder of the Company
|
ADVANCES FROM STOCKHOLDER
From time to time,
stockholders of the Company advance funds to the Company for working capital purpose. Those advances are unsecured, non-interest
bearing and due on demand.
LEASE OF CERTAIN OFFICE SPACE FROM
LEVERAGE INVESTMENTS, LLC
The Company leases
certain office space with Leverage Investments, LLC for $500 per month on a month-to-month basis since July 1, 2011. For the interim
period ended June 30, 2012, the Company recorded $1,500 in rent expenses due Leverage Investment LLC.
CONSULTING SERVICES, MANAGEMENT AND
OFF-TAKE AGREEMENT WITH GROWERS SYNERGY PTE LTD.
Prior to November
1, 2011, the Company engaged Growers Synergy Pte Ltd. to provide farm management consulting services on a month-to-month basis,
at $20,000 per month as of July 1, 2011.
On November 1,
2011, the Company entered into a Management and Off-Take Agreement (the “Agreement”) with Growers Synergy Pte Ltd. (“GSPL”),
a Singapore corporation owned and controlled by the president and major stockholder of the Company. Under the terms of the Agreement,
the Company will engage GSPL to supervise the Company’s farm management operations, recommend quality farm management programs
for stevia cultivation, assist in the hiring of employees and provide training to help the Company meet its commercialization
targets, develop successful models to propagate future agribusiness services, and provide back-office and regional logistical
support for the development of proprietary stevia farm systems in Vietnam, Indonesia and potentially other countries. GSPL will
provide services for a term of two (2) years from the date of signing, at $20,000 per month. The Agreement may be terminated by
the Company upon 30 day notice. In connection with the Agreement, the parties agreed to enter into an off-take agreement whereby
GSPL agreed to purchase all of the non-stevia crops produced at the Company’s GSPL supervised farms.
Consulting services
provided by Growers Synergy Pte Ltd. is as follows:
|
|
|
|
|
For the Period
|
|
|
|
For the Interim
|
|
|
from April 11, 2011
|
|
|
|
Period Ended
|
|
|
(inception) through
|
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
|
|
|
|
|
|
Consulting services received and consulting fees booked
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
|
$
|
60,000
|
|
|
$
|
—
|
|
Future minimum payments required under
this agreement at June 30, 2012 were as follows:
Fiscal Year Ending March 31:
|
|
|
|
2013 (remainder of the fiscal year)
|
|
$
|
180,000
|
|
2014
|
|
|
140,000
|
|
|
|
$
|
320,000
|
|
NOTE 8 - CONVERTIBLE NOTES PAYABLE
On February 14,
2011, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance. On October 4, 2011, the note holder converted the entire principal of $250,000 and accrued interest through
the date of conversion of $15,890.41 to 1,000,000 and 63,561 shares of the Company’s common stock at $0.25 per share, respectively.
On June 23, 2011,
the Company issued a convertible note in the amount of $100,000 with interest at 10% per annum due one (1) year from the date
of issuance. On October 4, 2011, the note holder converted the entire principal of $100,000 and accrued interest through the date
of conversion of $2,821.92 to 400,000 and 11,288 shares of the Company’s common stock at $0.25 per share.
On October 4, 2011,
the Company issued a convertible note in the amount of $150,000 with interest at 10% per annum due one (1) year from the date
of issuance. On January 18, 2012, the note holder converted the entire principal of $150,000 and accrued interest through the
date of conversion of $4,356 to 617,425 shares of the Company’s common stock at $0.25 per share.
On November 16,
2011, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance. The note may be converted into common shares of the Company should the Company complete a private placement
with gross proceeds of at least $100,000. The conversion price shall be the same as the private placement price on a per share
basis.
On January 16,
2012, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance.
On March 7, 2012,
the Company issued a convertible note in the amount of $200,000 with interest at 10% per annum due one (1) year from the date
of issuance.
On May 30, 2012,
the Company issued a convertible note in the amount of $200,000 with interest at 10% per annum due one (1) year from the date
of issuance.
Convertible notes
payable at June 30, 2012 and March 31, 2012 consisted of the following:
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
On November 16, 2011, the Company issued a convertible note in the amount of
$250,000 with interest at 10% per annum due one (1) year from the date of issuance. The note may be converted into common
shares of the Company should the Company complete a private placement with gross proceeds of at least $100,000. The conversion
price shall be the same as the private placement price on a per share basis
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
|
|
|
|
|
|
|
|
On January 16, 2012, the Company issued a convertible note in the amount of $250,000 with
interest at 10% per annum due one (1) year from the date of issuance
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
On March 7, 2012, the Company issued a convertible note in the amount of $200,000 with
interest at 10% per annum due one (1) year from the date of issuance.
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
On May 30, 2012, the Company issued a convertible note in the amount
of $200,000 with interest at 10% per annum due one (1) year from the date of issuance.
|
|
|
200,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
900,000
|
|
|
$
|
700,000
|
|
NOTE 9 - STOCKHOLDERS’ DEFICIT
SHARES AUTHORIZED
Upon formation
the total number of shares of common stock which the Company is authorized to issue is One Hundred Million (100,000,000) shares,
par value $0.001 per share.
COMMON STOCK
REVERSE ACQUISITION TRANSACTION
Immediately prior
to the Share Exchange Transaction on June 23, 2011, the Company had 79,800,000 common shares issued and outstanding. Simultaneously
with the Closing of the Share Exchange Agreement, on the Closing Date, Mohanad Shurrab, a shareholder and, as of the Closing Date,
the Company’s former Director, President, Treasurer and Secretary, surrendered 33,000,000 shares of the Company’s common stock
to the Company for cancellation.
As a result of
the Share Exchange Agreement, the Company issued 12,000,000 common shares for the acquisition of 100% of the issued and outstanding
shares of Stevia Ventures International Ltd. Of the 12,000,000 common shares issued in connection with the Share Exchange Agreement,
6,000,000 of such shares are being held in escrow (“Escrow Shares”) pending the achievement by the Company of certain
post-Closing business milestones (the “Milestones”), pursuant to the terms of the Make Good Escrow Agreement, between
the Company, Greenberg Traurig, LLP, as escrow agent and the Ventures’ Stockholder (the “Escrow Agreement”).
MAKE GOOD AGREEMENT SHARES
(I) DURATION OF ESCROW AGREEMENT
The Make Good Escrow Agreement
shall terminate on the sooner of (i) the distribution of all the escrow shares, or (ii) December 31, 2013.
(II) DISBURSEMENT OF MAKE
GOOD SHARES
Upon achievement of any Milestone
on or before the date associated with such Milestone on Exhibit A, the Company shall promptly provide written notice to the Escrow
Agent and the Selling Shareholder of such achievement (each a “COMPLETION NOTICE”). Upon the passage of any Milestone
date set forth on Exhibit A for which the Company has not achieved the associated Milestone, the Company shall promptly provide
written notice to the Escrow Agent and the Selling Shareholder of such failure to achieve the milestone (each a “NONCOMPLETION
NOTICE”).
(III) EXHIBIT A - SCHEDULE
OF MILESTONES
|
|
Milestones
|
|
Completion
Date
|
|
Number of
Escrow Shares
|
|
|
|
|
|
|
|
I.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Enter into exclusive international license agreement for all Agro Genesis intellectual
property and products as it applies to stevia
|
|
|
|
|
(2)
|
|
Enter into cooperative agreements to work with Vietnam Institutes (a) Medical Plant Institute
in Hanoi; (b) Agricultural Science Institute of Northern Central Vietnam
|
|
|
|
3,000,000
shares only
if and when
|
(3)
|
|
Enter into farm management agreements with local growers including the Provincial and National
projects;
|
|
Within 180
days of the
|
|
ALL four (4)
milestones
|
(4)
|
|
Take over management of three existing nurseries
|
|
Closing Date
|
|
reached
|
|
|
|
|
|
|
|
II.
|
|
Achieve 100 Ha field trials and first test shipment of dry leaf
|
|
Within two (2) years of the Closing Date
|
|
1,500,000
shares
|
|
|
|
|
|
|
|
III.
|
|
Test shipment of dry leaf to achieve minimum specs for contracted base price (currently
$2.00 per kilogram)
|
|
Within two (2) years of the Closing Date
|
|
1,500,000
shares
|
On December 23, 2011, 3,000,000 out
of the 6,000,000 Escrow Shares have been earned and released to Ventures stockholder upon achievement of the First Milestone within
180 days of June 23, 2011, the Closing Date associated with the First Milestone. Those shares were valued at $0.25 per share or
$750,000 on the date of release and recorded as compensation.
COMMON SHARES SURRENDERED FOR CANCELLATION
On October 4, 2011,
a significant stockholder of the Company, Mohanad Shurrab, surrendered another 3,000,000 shares of the Company’s common stock
to the Company for cancellation. The Company recorded this transaction by debiting common stock at par of $3,000 and crediting
additional paid-in capital of the same.
COMMON SHARES ISSUED FOR CASH
On October 4, 2011
the Company sold 400,000 shares of its common stock to one investor at $0.25 per share or $100,000.
COMMON SHARES ISSUED FOR OBTAINING
EMPLOYEE AND DIRECTOR SERVICES
On October 14,
2011 the Company issued 1,500,000 shares each to two (2) newly appointed members of the board of directors or 3,000,000 shares
of its common stock in aggregate as compensation for future services. These shares shall vest with respect to 750,000 shares of
restricted stock on each of the first two anniversaries of the date of grant, subject to the director’s continuous service to
the Company as directors. These shares were valued at $0.25 per share or $750,000 on the date of grant and are being amortized
over the vesting period of two (2) years or $93,750 per quarter. The Company recorded $187,500 in directors’ fees for the period
from April 11, 2011 (inception) through March 31, 2012. The Company recorded $93,750 in directors’ fees for the interim period
ended June 30, 2012.
COMMON SHARES ISSUED TO PARTIES OTHER
THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES
EQUITY PURCHASE AGREEMENT AND RELATED
REGISTRATION RIGHTS AGREEMENT
(I) EQUITY PURCHASE AGREEMENT
On January 26,
2012, the Company entered into an equity purchase agreement (“Equity Purchase Agreement”) with Southridge Partners II,
LP, a Delaware limited partnership (The “Investor”). Upon the terms and subject to the conditions contained in the agreement,
the Company shall issue and sell to the Investor, and the Investor shall purchase, up to Twenty Million Dollars ($20,000,000)
of its common stock, par value $0.001 per share.
At any time and from time to time during the Commitment Period, the period commencing on the effective
date, and ending on the earlier of (i) the date on which investor shall have purchased put shares pursuant to this agreement for
an aggregate purchase price of the maximum commitment amount, or (ii) the date occurring thirty six (36) months from the date of
commencement of the commitment period. the Company may exercise a put by the delivery of a put notice, the number of put shares
that investor shall purchase pursuant to such put shall be determined by dividing the investment amount specified in the put notice
by the purchase price with respect to such put notice. However, that the investment amount identified in the applicable put notice
shall not be greater than the maximum put amount and, when taken together with any prior put notices, shall not exceed the maximum
commitment The purchase price shall mean 93% of the market price on such date on which the purchase price is calculated in accordance
with the terms and conditions of this Agreement.
(II) REGISTRATION RIGHTS AGREEMENT
In connection with
the Equity Purchase Agreement, on January 26, 2012, the Company entered into a registration rights agreement (“Registration
Rights Agreement”) with Southridge Partners II, LP, a Delaware limited partnership (the “Investor”). To induce
the investor to execute and deliver the equity purchase agreement which the Company has agreed to issue and sell to the investor
shares (the “put shares”) of its common stock, par value $0.001 per share (the “common stock”) from time to
time for an aggregate investment price of up to twenty million dollars ($20,000,000) (the “registrable securities”),
the company has agreed to provide certain registration rights under the securities act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, “securities act”), and applicable state securities
laws with respect to the registrable securities.
(III) COMMON SHARES ISSUED UPON SIGNING
As a condition
for the execution of this agreement by the investor, the company issued to the investor 35,000 shares of restricted common stock
(the “restricted shares”) upon the signing of this agreement. The restricted shares shall have no registration rights.
These shares were valued at $1.50 per share or $52,500 on the date of issuance and recorded as financing cost.
MARKETING SERVICE AGREEMENT - EMPIRE
RELATIONS GROUP, INC.
On March 14, 2012
the Company entered into a consulting agreement (the “Consulting Agreement”) with Empire Relations Group, Inc. (“Empire”).
(I) SCOPE OF SERVICES
Under the terms
of the Consulting Agreement, the Company engaged Empire to introduce interested investors to the Company, advise the Company on
available financing options, provide periodic updates on the stevia sector and provide insights and strategies for the Company
to undertake.
(II) TERM
The term of this
agreement were consummated from the date hereof, and automatically terminated on May 30, 20 12.
(III) COMPENSATION
For the term of
this agreement, the consultant shall be paid an upfront, non-refundable, non-cancellable retainer fee of 27,500 restricted shares.
For the purposes of this agreement, these shares shall be considered to be fully earned by March 31, 2012. These shares were valued
at $1.39 per share or $38,225 on March 31, 2012, the date when they were earned.
NOTE 10 - RESEARCH AND DEVELOPMENT
AGRIBUSINESS DEVELOPMENT AGREEMENT
- AGRO GENESIS PTE LTD.
ENTRY INTO AGRIBUSINESS DEVELOPMENT
AGREEMENT
On July 16, 2011,
the Company entered into an Agribusiness Development Agreement (the “Agribusiness Development Agreement”) with Agro
Genesis Pte Ltd. (“AGPL”), a corporation organized under the laws of the Republic of Singapore expiring two (2) years
from the date of signing.
Under the terms
of the Agreement, the Company engaged AGPL to be the Company’s technology provider consultant for stevia propagation and cultivation
in Vietnam, and potentially other countries for a period of two (2) years. AGPL will be tasked with developing stevia propagation
and cultivation technology in Vietnam, recommend quality agronomic programs for stevia cultivation, harvest and post harvest,
alert findings on stevia propagation and cultivation that may impact profitability and develop a successful model in Vietnam that
can be replicated elsewhere (the “Project”). The Project will be on-site at stevia fields in Vietnam and will have a
term of at least two (2) years. For its services, AGPL could receive a fee of up to 275,000 Singapore dollars, plus related expenses
estimated at $274,000 as specified in Appendix A to the Agribusiness Development Agreement. Additionally, the Company will be
AGPL’s exclusive distributor for AGPL’s g’farm system (a novel crop production system) for stevia growing resulting from the Project.
AGPL will receive a commission of no less than 2% of the price paid for crops other than stevia, from cropping systems that utilize
the g’farm system resulting from the Project. All technology-related patents resulting from the Project will be jointly owned
by AGPL and the Company, with the Company holding a right of first offer for the use and distribution rights to registered patents
resulting from the Project.
ADDENDUM TO AGRIBUSINESS DEVELOPMENT
AGREEMENT
On August 26, 2011,
in accordance with Appendix A , 3(a), the Company and AGPL have mutually agreed to add to the current Project budget $100,000
per annum for one, on-site resident AGPL expert for 2 (two) years effective September 1, 2011, or $200,000 in aggregate for the
term of the contract as specified in Appendix C. In-country accommodation for the resident expert will be born separately by the
Company and is excluded from the above amount. The expert, Dr. Cho, Young-Cheol, Director, Life Sciences has been appointed and
commenced on September 1, 2011.
TERMINATION OF AGRIBUSINESS DEVELOPMENT
AGREEMENT
On March 31, 2012,
the Company and AGPL mutually agreed to terminate the Agribusiness Development Agreement, effective immediately.
LEASE OF AGRICULTURAL LAND
On December 14,
2011, the Company and Stevia Ventures Corporation (“Stevia Ventures”) entered into a Land Lease Agreement with Vinh
Phuc Province People’s Committee Tam Dao Agriculture & Industry Co., Ltd. pursuant to which Stevia Ventures has leased l0
hectares of land (the “Leased Property”) for a term expiring five (5) years from the date of signing.
The Company has
begun development of a research facility on the Leased Property and has prepaid (i) the first year lease payment of $30,000 and
(ii) the six month lease payment of $15,000 as security deposit, or $45,000 in aggregate upon signing of the agreement.
Future minimum
payments required under this agreement at June 30, 2012 were as follows:
Fiscal Year Ending March 31:
|
|
|
|
|
|
|
|
2013
|
|
$
|
30,000
|
|
2014
|
|
|
30,000
|
|
2015
|
|
|
30,000
|
|
2016
|
|
|
30,000
|
|
|
|
$
|
120,000
|
|
SUPPLY AND COOPERATIVE AGREEMENT -
GUANGZHOU HEALTH TECHNOLOGY DEVELOPMENT COMPANY LIMITED
ENTRY INTO SUPPLY AGREEMENT
On February 21,
2012, the Company entered into a Supply Agreement (the “Supply Agreement”) with Guangzhou Health China Technology Development
Company Limited, a foreign-invested limited liability company incorporated in the People’s Republic of China (the “Guangzhou
Health”).
Under the terms
of the Supply Agreement, the Company will sell dry stevia plant materials, including stems and leaves (“Product”) exclusively
to Guangzhou Health. For the first two years of the agreement, Guangzhou Health will purchase all Product produced by the Company.
Starting with the third year of the agreement, the Company and Guangzhou Health will review and agree on the quantity of Product
to be supplied in the forthcoming year, and Guangzhou Health will be obliged to purchase up to 130 percent of that amount. The
specifications and price of Product will also be revised annually according to the mutual agreement of the parties. The term of
the Supply Agreement is five years with an option to renew for an additional four years.
ENTRY INTO COOPERATIVE AGREEMENT
On February 21,
2012, the Company also entered into Cooperative Agreement (the “Cooperative Agreement”) with Guangzhou Health Technology
Development Company Limited.
Under the terms
of the Cooperative Agreement, the parties agree to explore potential technology partnerships with the intent of formalizing a
joint venture to pursue the most promising technologies and businesses. The parties also agree to conduct trials to test the efficacy
of certain technologies as applied specifically to the Company’s business model as well as the marketability of harvests produced
utilizing such technologies. Guangzhou Health will share all available information of its business structure and technologies
with the Company, subject to the confidentiality provisions of the Cooperative Agreement. Guangzhou Health will also permit the
Company to enter its premises and grow-out sites for purposes of inspection and will, as reasonably requested by the Company,
supply without cost, random samples of products and harvests for testing.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
SUPPLY AGREEMENT - BETWEEN STEVIA VENTURES
INTERNATIONAL LTD. AND ASIA STEVIA INVESTMENT DEVELOPMENT COMPANY LTD.
On April 12, 2011,
Stevia Ventures International Ltd, the subsidiary of the Company entered into a Supply Agreement (the “Supply Agreement”)
with Asia Stevia Investment Development Company Ltd (“ASID”), a foreign-invested limited liability company incorporated
in Vietnam.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged ASID to plant the Stevia Seedlings and supply the Products only to the Company to the exclusion
of other customers and the Company is desirous to purchase the same, on the terms and conditions as set out in this Agreement
produce Products and the Company purchase the Products from ASID.
(II) TERM
This Agreement
shall come into force on the Effective Date and, subject to earlier termination pursuant to certain clauses specified in the Agreement,
shall continue in force for a period of three (3) years (“Term”) and thereafter automatically renew on its anniversary
each year for an additional period of one (1) year (“Extended Term”).
(III) PURCHASE PRICE
ASID and the Company
shall review and agree on or before September 30th of each Year on the quantity of the Products to be supplied by the Supplier
to the Company in the forthcoming year and ASID shall provide the Company with prior written notice at any time during the year
following the revision if it has reason to believe that it would be unable to fulfill its forecast volumes under this clause.
SUPPLY AGREEMENT - BETWEEN STEVIA VENTURES
INTERNATIONAL LTD. AND STEVIA VENTURES CORPORATION
On April 12, 2011,
Stevia Ventures International Ltd, the subsidiary of the Company also entered into a Supply Agreement (the “Supply Agreement”)
with Stevia Ventures Corporation (“SVC”), a foreign-invested limited liability company incorporated in Vietnam.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged SVC to plant the Stevia Seedlings and supply the Products only to the Company to the exclusion
of other customers and the Company is desirous to purchase the same, on the terms and conditions as set out in this Agreement
produce Products and the Company purchase the Products from SVC.
(II) TERM
This Agreement
shall come into force on the Effective Date and, subject to earlier termination pursuant to certain clauses specified in the Agreement,
shall continue in force for a period of three (3) years (“Term”) and thereafter automatically renew on its anniversary
each year for an additional period of one (1) year (“Extended Term”).
(III) PURCHASE PRICE
SVC and the Company
shall review and agree on or before September 30th of each Year on the quantity of the Products to be supplied by the Supplier
to the Company in the forthcoming year and SVC shall provide the Company with prior written notice at any time during the year
following the revision if it has reason to believe that it would be unable to fulfill its forecast volumes under this clause.
CONSULTING AGREEMENT - DORIAN BANKS
ENTRY INTO CONSULTING AGREEMENT
On July 1, 2011
the Company entered into a consulting agreement (the “Consulting Agreement”) with Dorian Banks (“Banks”).
(I) SCOPE OF SERVICES
Under the terms
of the Consulting Agreement, the Company engaged the Consultant to provide advice in general business development, strategy, assistance
with new business and land acquisition, introductions, and assistance with Public Relations (“PR”) and Investor Relations
(“IR”).
(II) TERM
The term of this
Agreement shall be six (6) months, commencing on July 1, 2011 and continue until December 31, 2011. This Agreement may be terminated
by either the Company or the Consultant at any time prior to the end of the Consulting Period by giving thirty (30) days written
notice of termination. Such notice may be given at any time for any reason, with or without cause. The Company will pay Consultant
for all Service performed by Consultant through the date of termination.
(III) COMPENSATION
The Company shall
pay the Consultant a fee of $3,000 per month.
EXTENSION OF THE CONSULTING AGREEMENT
On December 30,
2011, the Consulting Agreement was extended with the same terms and conditions to December 31, 2012.
SUMMARY OF THE CONSULTING FEES
For the interim
period ended June 30, 2012 and for the period from April 11, 2011 (inception) through June 30, 2011, The Company recorded $9,000
and $0 in consulting fees under the Consulting Agreement, respectively.
FINANCING CONSULTING AGREEMENT - DAVID
CLIFTON
ENTRY INTO FINANCIAL CONSULTING AGREEMENT
On July 1, 2011
the Company entered into a consulting agreement (the “Consulting Agreement”) with David Clifton ( “Clifton”).
(I) SCOPE OF SERVICES
Under the terms
of the Consulting Agreement, the Company engaged Clifton to introduce interested investors to the Company, advise the Company
on available financing options and provide periodic updates on the stevia sector and provide insights and strategies for the Company
to undertake.
(II) TERM
The term of this
Agreement shall be six (6) months, commencing on July 1, 2011 and continuing until December 31, 2011. This Agreement may be terminated
by either the Company or Clifton at any time prior to the end of the consulting period by giving thirty (30) days written notice
of termination. Such notice may be given at any time for any reason, with or without cause. The Company will pay Clifton for all
service performed by him through the date of termination. On December 31, 2011, the financial consulting agreement expired.
(III) COMPENSATION
The Company shall
pay Clifton a fee of $3,000 per month.
SUMMARY OF THE CONSULTING FEES
The financial consulting
agreement expired on December 31, 2011. For the period from April 11, 2011 (inception) through June 30, 2011, The Company recorded
no financing cost under this Financing Consulting Agreement.
ENTRY INTO ENGAGEMENT AGREEMENT - GARDEN
STATE SECURITIES INC.
On June 18, 2012,
the Company entered into an engagement agreement (the “Agreement”) with Garden State Securities Inc. (“GSS”)
with respect to the engagement of GSS to act as a selling/placement agent for the Company.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged GSS to review the business and operations of the Company and its historical and projected
financial condition, advise the Company of “best efforts” Private Placement offering of debt or equity securities to
fulfill the Company’s business plan, and contacts for the Company possible financing sources.
(II) TERM
GSS shall act as
the Company’s exclusive placement agent for the period of the later of; (i) 60 days from the execution of the term sheet; or (ii)
the final termination date of the securities financing (the “Exclusive Period”). GSS shall act as the Company’s non-exclusive
placement agent after the Exclusive Period until terminated.
(III) COMPENSATION
The Company agrees
to pay to GSS at each full or incremental closing of any equity financing, convertible debt financing, debt conversion or any
instrument convertible into the Company’s common stock (the “Securities Financing”) during the Exclusive Period; (i)
a cash transaction fee in the amount of 8% of the amount received by the Company under the Securities Financing; and (ii) warrants
(the “Warrants”) with “piggy back” registration rights, equal to 8% of the stock issued in the Securities
Financing at an exercise price equal to the investor’s warrant exercise price of the Securities Financing or the price of the
Securities Financing if no warrants are issued to investors. The Company will also pay, at closing, the expense of GSS’s legal
counsel pursuant to the Securities Financing and/or Shelf equal to $25,000 for Securities Financing and/or Shelf resulting in
equal to or greater than $500,000 of gross proceeds to the Company, and $18,000 for a Securities Financing and/or Shelf resulting
in less than $500,000 of gross proceeds to the Company. In addition, the Company shall cause, at its cost and expense, the “Blue
sky filing” and Form D in due and proper form and substance and in a timely manner.
NOTE 12 - CONCENTRATIONS AND CREDIT
RISK
VENDORS AND ACCOUNTS PAYABLE CONCENTRATIONS
Vendor purchase
concentrations for the interim period ended June 30, 2012 and for the period from April 11, 2011 (inception) through June 30,
2011 and accounts payable concentration at June 30, 2012 and March 31, 2012 are as follows:
|
|
Net Purchases
|
|
|
Accounts Payable at
|
|
|
|
|
|
|
For the Period from
|
|
|
|
|
|
|
|
|
|
|
|
|
April 11, 2011
|
|
|
|
|
|
|
|
|
|
For the Interim
|
|
|
(inception)
|
|
|
|
|
|
|
|
|
|
Period Ended
|
|
|
through
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
March 31, 2012
|
|
Asia Stevia Investment Development Limited
|
|
|
0.9
|
%
|
|
|
—
|
%
|
|
|
0.5
|
%
|
|
|
—
|
%
|
Growers Synergy Pte. Ltd. - related party
|
|
|
50.4
|
%
|
|
|
—
|
%
|
|
|
43.3
|
%
|
|
|
16.4
|
%
|
Stevia Ventures Corporation
|
|
|
8.6
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
54.1
|
%
|
|
|
|
58.9
|
%
|
|
|
—
|
%
|
|
|
43.3
|
%
|
|
|
70.5
|
%
|
CREDIT RISK
Financial instruments
that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.
As of June 30,
2012, substantially all of the Company’s cash and cash equivalents were held by major financial institutions, and the balance
at certain accounts exceeded the maximum amount insured by the Federal Deposits Insurance Corporation (“FDIC”). However,
the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant
risks on such accounts.
NOTE 13 - SUBSEQUENT EVENTS
The Company has
evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to
determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events
to be disclosed as follows:
ENTRY INTO COOPERATIVE AGREEMENT
On July 5, 2012,
Stevia Asia Limited (“Stevia Asia”), a wholly-owned subsidiary of the Company entered into a Cooperative Agreement (the
“Cooperative Agreement”) with Technew Technology Limited (“Technew”), a company incorporated under the companies
ordinance of Hong Kong, and Zhang Jia, a Chinese citizen (together with Technew, the “Partners”) pursuant to which Stevia
Asia and Partners have agreed to engage in a joint venture to be owned 70% by Stevia Asia and 30% by Technew (the “Joint
Venture”). The Partners will be responsible for managing the Joint Venture and Stevia Asia has agreed to contribute $200,000
per month, up to a total of $2,000,000 in financing, subject to the performance of the Joint Venture and Stevia Asia’s financial
capabilities.
The Cooperative
Agreement shall automatically terminate upon either Stevia Asia or Technew ceasing to be a shareholder in the Joint Venture, or
may be terminated by either Stevia Asia or Technew upon a material breach by the other party which is not cured within 30 days
of notice of such breach.
ISSUANCE OF COMMON SHARES IN CONNECTION
WITH ENTRY INTO TECHNOLOGY AGREEMENT
On July 5, 2012,
the Company entered into a Technology Acquisition Agreement (the “Technology Agreement”) with Technew Technology Limited
(“Technew”), pursuant to which the Company acquired the rights to certain technology from Technew in exchange for 3,000,000
shares of the Company’s common stock.
ISSUANCE OF COMMON SHARES TO A RELATED
PARTY
On July 5, 2012,
the Company issued 500,000 shares of its common shares to Growers Synergy Pte Ltd., a corporation organized under the laws of
Singapore and owned and controlled by George Blankenbaker, the president, director and a stockholder of the Company (“Growers
Synergy”), as consideration for services rendered by Growers Synergy to the Company.
ISSUANCE OF COMMON SHARES IN CONNECTION
WITH CONVERTIBLE NOTES CONVERSION
On November 16,
2011, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance. On July 6, 2012, the note holder converted the entire principal of $250,000 and accrued interest through the
date of conversion of $15,959 to 319,607 shares of the Company’s common stock at $0.83 per share
On January 16,
2012, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance. On July 6, 2012, the note holder converted the entire principal of $250,000 and accrued interest through the
date of conversion of $11,781 to 314,586 shares of the Company’s common stock at $0.83 per share.
ISSUANCE OF COMMON SHARES IN CONNECTION
WITH ENTRY INTO SECURITIES PURCHASE AGREEMENT
On August 1, 2012,
the Company entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (the “Purchasers”)
to raise $500,000 in a private placement financing. On August 6, 2012, after the satisfaction of certain closing conditions, the
Offering closed and the Company issued to the Purchasers: (i) an aggregate of 1,066,667 shares of the Company’s common stock at
a price per share of $0.46875 (the “Shares”) and (ii) warrants to purchase an equal number of shares of the Company’s
common stock at an exercise price of $0.6405 with a term of five (5) years (the “Warrants”), for gross proceeds of $500,000.
The Company intends to use the net proceeds from this offering to advance the Company’s ability to execute its growth strategy
and to aid in the commercial development of the recently announced launch of the Company’s majority-owned subsidiary, Stevia Technew
Limited.
ENTRY INTO REGISTRATION RIGHTS AGREEMENT
In connection with
the equity financing on August 1, 2012, the Company also entered into a registration rights agreement with the Purchasers (the
“rights agreement”). The Rights Agreement requires the Company to file a registration statement (the “registration
statement”) with the Securities and Exchange Commission (the “SEC”) within thirty (30) days of the Company’s entrance
into the rights agreement (the “filing date”) for the resale by the Purchasers of all of the Shares and all of the shares
of common stock issuable upon exercise of the Warrants (the “registrable securities”).
The registration
statement must be declared effective by the SEC within one hundred and twenty (120) days of the closing date of the Offering (the
“effectiveness date”) subject to certain adjustments. If the registration statement is not filed prior to the filing
date, the Company will be required to pay certain liquidated damages, not to exceed in the aggregate 6% of the purchase price
paid by the Purchasers pursuant to the SPA.
ISSUANCE OF WARRANTS TO THE PLACEMENT
AGENT AS COMPENSATION PER THE ENGAGEMENT AGREEMENT ON JUNE 18, 2012
Garden State Securities,
Inc. (the “GSS”) served as the placement agent of the Company for the equity financing on August 1, 2012. Per the engagement
agreement signed between GSS and the Company on June 18, 2012, in consideration for services rendered as the placement agent,
the Company agreed to: (i) pay GSS cash commissions equal to $40,000, or 8.0% of the gross proceeds received in the equity financing,
and (ii) issue to GSS or its designee, a warrant to purchase up to 85,333 shares of the Company’s common stock representing 8%
of the Shares sold in the Offering) with an exercise price of $0.6405 per share and a term of five (5) years (the “agent
warrants”). The agent warrants also provide for the same registration rights and obligations as set forth in the Rights Agreement
with respect to the Warrants and Warrant Shares.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Stevia Corp.
(A Development Stage Company)
Indianapolis, Indiana
We have audited
the accompanying consolidated balance sheet of Stevia Corp., a development stage company, (the “Company”) as of March
31, 2012, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the period
from April 11, 2011 (inception) through March 31, 2012. These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our
audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining
on a test basis, evidence supporting the amount and disclosures in the consolidated 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 audit provide a reasonable basis for our opinion.
In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of March 31, 2012, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows
for the period from April 11, 2011 (inception) through March 31, 2012 in conformity with accounting principles generally accepted
in the United States of America.
The accompanying
consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates
continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As discussed
in Note 3 to the consolidated financial statements, the Company had a deficit accumulated during the development stage at March
31, 2012 and a net loss and net cash used in operating activities for the period from April 11, 2011 (inception) through March
31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans
in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Li & Company, PC
|
|
Li & Company, PC
|
|
Skillman, New Jersey
|
|
June 29, 2012
|
|
Stevia Corp.
(A Development Stage Company)
Consolidated Balance Sheet
|
|
March 31, 2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
|
$
|
15,698
|
|
Prepaid expenses
|
|
|
168,874
|
|
Total current assets
|
|
|
184,572
|
|
Furniture and fixture
|
|
|
|
|
Furniture and fixture
|
|
|
3,036
|
|
Accumulated depreciation
|
|
|
—
|
|
Furniture and fixture, net
|
|
|
3,036
|
|
|
|
|
|
|
Website development costs
|
|
|
|
|
Website development costs
|
|
|
5,315
|
|
Accumulated amortization
|
|
|
(801
|
)
|
Website development costs, net
|
|
|
4,514
|
|
Security Deposit
|
|
|
|
|
Security deposit
|
|
|
15,000
|
|
Security deposit
|
|
|
15,000
|
|
|
|
|
|
|
Total assets
|
|
$
|
207,122
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
237,288
|
|
Accounts payable - President and CEO
|
|
|
20,220
|
|
Accrued expenses
|
|
|
5,400
|
|
Accrued interest
|
|
|
15,521
|
|
Advances from president and significant stockholder
|
|
|
19,138
|
|
Convertible notes payable
|
|
|
700,000
|
|
Total current liabilities
|
|
|
997,567
|
|
Stockholders’ deficit:
|
|
|
|
|
Common stock at $0.001 par value: 100,000,000 shares
authorized, 58,354,775 shares issued and outstanding
|
|
|
58,355
|
|
Additional paid-in capital
|
|
|
1,474,751
|
|
Deficit accumulated during
the development stage
|
|
|
(2,323,551
|
)
|
Total stockholders’ deficit
|
|
|
(790,445
|
)
|
|
|
|
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
207,122
|
|
See accompanying notes to the consolidated
financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statements of Operations
|
|
For the Period from
|
|
|
|
April 11, 2011
|
|
|
|
(inception)
|
|
|
|
through
|
|
|
|
March 31, 2012
|
|
|
|
|
|
Revenues eaarned during the development stage
|
|
$
|
1,300
|
|
|
|
|
|
|
Cost of services during the development stage
|
|
|
|
|
Farm expenses
|
|
|
531,246
|
|
Farm management services - related party
|
|
|
180,000
|
|
Total cost of services during the development stage
|
|
|
711,246
|
|
|
|
|
|
|
Gross profit (loss)
|
|
|
(709,946
|
)
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Directors’ fees
|
|
|
187,500
|
|
Professional fees
|
|
|
255,959
|
|
Research and development
|
|
|
206,191
|
|
Salary and compensation - officer
|
|
|
750,000
|
|
General and administrative expenses
|
|
|
113,742
|
|
Total operating expenses
|
|
|
1,513,392
|
|
|
|
|
|
|
Loss from operations
|
|
|
(2,223,338
|
)
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
Financing cost
|
|
|
70,500
|
|
Interest expense
|
|
|
29,757
|
|
Interest income
|
|
|
(44
|
)
|
Total other (income) expense
|
|
|
100,213
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(2,323,551
|
)
|
|
|
|
|
|
Income tax provision
|
|
|
—
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,323,551
|
)
|
|
|
|
|
|
Net loss per common share
|
|
|
|
|
- Basic and diluted:
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
Weighted average common shares
|
|
|
|
|
- basic and diluted
|
|
|
45,093,271
|
|
See accompanying notes to the consolidated
financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statement of Stockholders’
Equity (Deficit)
For the Period from April 11, 2011 (Inception)
through March 31, 2012
|
|
Common Stock,
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
$0.001 Par Value
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
during the
|
|
|
Stockholders’
|
|
|
|
Number
|
|
|
|
|
|
paid-in
|
|
|
Development
|
|
|
Equity
|
|
|
|
of Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 11, 2011 (inception)
|
|
|
6,000,000
|
|
|
$
|
6,000
|
|
|
$
|
(5,900
|
)
|
|
$
|
—
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares deemed issued in reverse acquisition
|
|
|
79,800,000
|
|
|
|
79,800
|
|
|
|
(198,088
|
)
|
|
|
|
|
|
|
(118,288
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares cancelled in reverse acquisition
|
|
|
(33,000,000
|
)
|
|
|
(33,000
|
)
|
|
|
33,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for cash at $0.25 per share on October 4, 2011
|
|
|
400,000
|
|
|
|
400
|
|
|
|
99,600
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for notes conversion at $0.25
per share on October 4, 2011
|
|
|
1,400,000
|
|
|
|
1,400
|
|
|
|
348,600
|
|
|
|
|
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for conversion of accrued interest
at $0.25 per share on October 4, 2011
|
|
|
74,850
|
|
|
|
75
|
|
|
|
18,638
|
|
|
|
|
|
|
|
18,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares cancelled by significant stockholder
on October 4, 2011
|
|
|
(3,000,000
|
)
|
|
|
(3,000
|
)
|
|
|
3,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for future director services
on October 4, 2011
|
|
|
3,000,000
|
|
|
|
3,000
|
|
|
|
747,000
|
|
|
|
|
|
|
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for future director services
on October 4, 2011
|
|
|
|
|
|
|
|
|
|
|
(750,000
|
)
|
|
|
|
|
|
|
(750,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of director services earned during
the period
|
|
|
|
|
|
|
|
|
|
|
187,500
|
|
|
|
|
|
|
|
187,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Make good shares released to officer for achieving
the first milestone on December 23, 2011
|
|
|
3,000,000
|
|
|
|
3,000
|
|
|
|
747,000
|
|
|
|
|
|
|
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for notes conversion at $0.25
per share on January 18, 2012
|
|
|
600,000
|
|
|
|
600
|
|
|
|
149,400
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for conversion of accrued interest
at $0.25 per share on January 18, 2012
|
|
|
17,425
|
|
|
|
17
|
|
|
|
4,339
|
|
|
|
|
|
|
|
4,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for financing services upon
agreement at $1.50 per share on January 26, 2012
|
|
|
35,000
|
|
|
|
35
|
|
|
|
52,465
|
|
|
|
|
|
|
|
52,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for consulting services at
$1.39 per share on March 31, 2012
|
|
|
27,500
|
|
|
|
28
|
|
|
|
38,197
|
|
|
|
|
|
|
|
38,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,323,551
|
)
|
|
|
(2,323,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2012
|
|
|
58,354,775
|
|
|
$
|
58,355
|
|
|
$
|
1,474,751
|
|
|
$
|
(2,323,551
|
)
|
|
$
|
(790,445
|
)
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
Consolidated Statement of Cash Flows
|
|
For the Period from
|
|
|
|
April 11, 2011
|
|
|
|
(inception)
|
|
|
|
through
|
|
|
|
March 31, 2012
|
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(2,323,551
|
)
|
Adjustments to reconcile net loss to net cash used
in operating activities
|
|
|
|
|
Amortization expense
|
|
|
801
|
|
Common shares issued for compensation
|
|
|
750,000
|
|
Common shares issued for director services earned during the period
|
|
|
187,500
|
|
Common shares issued for outside services
|
|
|
90,725
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(168,874
|
)
|
Security deposit
|
|
|
(15,000
|
)
|
Accounts payable
|
|
|
141,530
|
|
Accounts payable - related parties
|
|
|
20,220
|
|
Accrued expenses
|
|
|
(1,290
|
)
|
Accrued interest
|
|
|
38,589
|
|
Net cash used in operating activities
|
|
|
(1,279,350
|
)
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(3,036
|
)
|
Website development costs
|
|
|
(5,315
|
)
|
Cash received from reverse acquisition
|
|
|
3,199
|
|
Net cash used in investing activities
|
|
|
(5,152
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Advances from president and stockholder
|
|
|
200
|
|
Proceeds from issuance of convertible notes
|
|
|
1,200,000
|
|
Proceeds from sale of common stock
|
|
|
100,000
|
|
Net cash provided by financing activities
|
|
|
1,300,200
|
|
|
|
|
|
|
Net change in cash
|
|
|
15,698
|
|
Cash at beginning of period
|
|
|
—
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
15,698
|
|
Supplemental disclosure of cash flows information:
|
|
|
|
|
Interest paid
|
|
$
|
—
|
|
Income tax paid
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
Issuance of common stock for conversion of convertible
notes
|
|
$
|
500,000
|
|
Issuance of common stock for conversion of accrued
note interest
|
|
$
|
23,068
|
|
See accompanying notes to the consolidated financial statements.
Stevia Corp.
(A Development Stage Company)
March 31, 2012
Notes to the Consolidated Financial
Statements
NOTE 1 - ORGANIZATION AND OPERATIONS
STEVIA CORP. (FORMERLY INTERPRO MANAGEMENT CORP.)
Interpro Management
Corp (“Interpro”) was incorporated under the laws of the State of Nevada on May 21, 2007. Interpro focused on developing
and offering web based software that was designed to be an online project management tool used to enhance an organization’s efficiency
through planning and monitoring the daily operations of a business. The Company discontinued its web-based software business upon
the acquisition of Stevia Ventures International Ltd. on June 23, 2011.
On March 4, 2011,
Interpro amended its Articles of Incorporation, and changed its name to Stevia Corp. (“Stevia” or the “Company”)
and effectuated a 35 for 1 (1:35) forward stock split of all of its issued and outstanding shares of common stock (the “Stock
Split”).
All shares and
per share amounts in the consolidated financial statements have been adjusted to give retroactive effect to the Stock Split.
STEVIA VENTURES INTERNATIONAL LTD.
Stevia Ventures
International Ltd. (“Ventures”) was incorporated on April 11, 2011 under the laws of the Territory of the British Virgin
Islands (“BVI”). Ventures owns certain rights relating to stevia production, including certain assignable exclusive
purchase contracts and an assignable supply agreement related to stevia.
ACQUISITION OF STEVIA VENTURES INTERNATIONAL
LTD. RECOGNIZED AS A REVERSE ACQUISITION
On June 23, 2011
(the “Closing Date”), the Company closed a voluntary share exchange transaction with Stevia Ventures International Ltd.
(“Ventures”) pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company,
Ventures and George Blankenbaker, the stockholder of Ventures (the “Ventures Stockholder”).
Immediately prior
to the Share Exchange Transaction on June 23, 2011, the Company had 79,800,000 common shares issued and outstanding. Simultaneously
with the Closing of the Share Exchange Agreement, on the Closing Date, Mohanad Shurrab, a shareholder and, as of the Closing Date,
the Company’s former Director, President, Treasurer and Secretary, surrendered 33,000,000 shares of the Company’s common stock
to the Company for cancellation.
As a result of
the Share Exchange Agreement, the Company issued 12,000,000 common shares for the acquisition of 100% of the issued and outstanding
shares of Ventures. Of the 12,000,000 common shares issued 6,000,000 shares are being held in escrow pending the achievement by
the Company of certain post-Closing business milestones (the “Milestones”), pursuant to the terms of the Make Good Escrow
Agreement, between the Company, Greenberg Traurig, LLP, as escrow agent and the Ventures’ Stockholder (the “Escrow Agreement”).
Even though the shares issued only represented approximately 20.4% of the issued and outstanding common stock immediately after
the consummation of the Share Exchange Agreement the stockholder of Ventures completely took over and controlled the board of
directors and management of the Company upon acquisition.
As a result of
the change in control to the then Ventures Stockholder, for financial statement reporting purposes, the merger between the Company
and Ventures has been treated as a reverse acquisition with Ventures deemed the accounting acquirer and the Company deemed the
accounting acquiree under the purchase method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards
Codification. The reverse merger is deemed a capital transaction and the net assets of Ventures (the accounting acquirer) are
carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination. The
acquisition process utilizes the capital structure of the Company and the assets and liabilities of Ventures which are recorded
at historical cost. The equity of the Company is the historical equity of Ventures retroactively restated to reflect the number
of shares issued by the Company in the transaction.
FORMATION OF STEVIA ASIA LIMITED
On March 19, 2012,
the Company formed Stevia Asia Limited (“Stevia Asia”) under the laws of the Hong Kong Special Administrative Region
(“HK SAR”) of the People’s Republic of China (“PRC”), a wholly-owned subsidiary. Stevia Asia is currently
inactive.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BASIS OF PRESENTATION
The Company’s
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“U.S. GAAP”).
PRINCIPLES OF CONSOLIDATION
The consolidated
financial statements include all accounts of the Company as of March 31, 2012 and for the period from June 23, 2011 (date of acquisition)
through March 31, 2012; Stevia Ventures International Ltd. as of March 31, 2012 and for the period from April 11, 2011 (inception)
through March 31, 2012; and Stevia Asia Limited as of March 31, 2012 and for the period from March 19, 2012 (inception) through
March 31, 2012 as follows:
|
|
Jurisdiction or
|
|
|
Attributable
|
|
Entity
|
|
Place of Incorporation
|
|
|
Interest
|
|
Stevia Ventures International Ltd.
|
|
BVI
|
|
|
100
|
%
|
Stevia Asia Limited
|
|
Hong Kong SAR
|
|
|
100
|
%
|
All inter-company
balances and transactions have been eliminated.
DEVELOPMENT STAGE COMPANY
The Company is
a development stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification. Although the Company has recognized some nominal amount of revenues since inception, the Company is still
devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage
company. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period.
The Company’s
significant estimates and assumptions include the fair value of financial instruments; the carrying value, recoverability and
impairment of long-lived assets, including the values assigned to and the estimated useful lives of website development costs;
interest rate; revenue recognized or recognizable; sales returns and allowances; foreign currency exchange rate; income tax rate,
income tax provision, deferred tax assets and valuation allowance of deferred tax assets; and the assumption that the Company
will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact
that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to
measure or value.
Management bases
its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources.
Management regularly
evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in
facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those
estimates are adjusted accordingly. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows
paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair
value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about
fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes
a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.
The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities
as of the reporting date.
|
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are
either directly or indirectly observable as of the reporting date.
|
|
|
Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
Financial assets
are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar
techniques and at least one significant model assumption or input is unobservable.
The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than
one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement
of the instrument.
The carrying amounts
of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate
their fair values because of the short maturity of these instruments.
The Company’s
convertible notes payable approximates the fair value of such instrument based upon management’s best estimate of interest rates
that would be available to the Company for similar financial arrangements at March 31, 2012.
Transactions involving
related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.
It is not, however,
practical to determine the fair value of advances from stockholders due to their related party nature.
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED
ASSETS
The Company has adopted
paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets,
which include website development costs, are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable.
The Company assesses
the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related
long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets
are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated,
the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers
the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance
or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner
or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the
Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures;
(v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company
evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such
events.
The key assumptions
used in management’s estimates of projected cash flow deal largely with forecasts of sales levels and gross margins. These forecasts
are typically based on historical trends and take into account recent developments as well as management’s plans and intentions.
Other factors, such as increased competition or a decrease in the desirability of the Company’s products or services, could lead
to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could
result in an impairment of long lived assets.
The impairment charges,
if any, is included in operating expenses in the accompanying consolidated statements of income and comprehensive income (loss).
FISCAL YEAR END
The Company elected
March 31 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers
all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
FURNITURE AND FIXTURE
Furniture and
fixture is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged
to operations as incurred. Depreciation of furniture and fixture is computed by the straight-line method (after taking into account
their respective estimated residual values) over the assets estimated useful life of five (5) years. Upon sale or retirement of
furniture and fixture, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected
in the statements of operations.
WEBSITE DEVELOPMENT COSTS
Website development
costs are stated at cost less accumulated amortization. The cost of the website development is amortized on a straight-line basis
over its estimated useful life of five (5) years. Upon becoming fully amortized, the related cost and accumulated amortization
are removed from the accounts.
RELATED PARTIES
The Company follows
subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section
850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to
be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial
statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances,
and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature
of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for
each of the periods for which income statements are presented and the effects of any change in the method of establishing the
terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows
subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist
as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only
be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment
inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against
the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings
or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment
of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated,
then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that
a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then
the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be
disclosed.
Loss contingencies
considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Management does not believe, based upon information available at this time, that these matters will have a material adverse effect
on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such
matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash
flows.
REVENUE RECOGNITION
The Company follows
paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when
it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following
criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been
rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
RESEARCH AND DEVELOPMENT
The Company follows
paragraph 730-10-25-1 of the FASB Accounting Standards Codification (formerly Statement of Financial Accounting Standards No. 2
“ACCOUNTING FOR RESEARCH AND DEVELOPMENT COSTS”) and paragraph 730-20-25-11 of the FASB Accounting Standards Codification
(formerly Statement of Financial Accounting Standards No. 68 “RESEARCH AND DEVELOPMENT ARRANGEMENTS”) for research and
development costs. Research and development costs are charged to expense as incurred. Research and development costs consist primarily
of remuneration for research and development staff, depreciation and maintenance expenses of research and development equipment,
material and testing costs for research and development as well as research and development arrangements with unrelated third party
research and development institutions. The research and development arrangements usually involve specific research and development
projects. Often times, the Company makes non-refundable advances upon signing of these arrangements. The Company adopted paragraph
730-20-25-13 and 730-20-35-1 of the FASB Accounting Standards Codification (formerly Emerging Issues Task Force Issue No. 07-3
“ACCOUNTING FOR NONREFUNDABLE ADVANCE PAYMENTS FOR GOODS OR SERVICES TO BE USED IN FUTURE RESEARCH AND DEVELOPMENT ACTIVITIES”)
for those non-refundable advances. Non-refundable advance payments for goods or services that will be used or rendered for future
research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods
are delivered or the related services are performed. The management continues to evaluate whether the Company expect the goods
to be delivered or services to be rendered. If the management does not expect the goods to be delivered or services to be rendered,
the capitalized advance payment are charged to expense.
STOCK-BASED COMPENSATION FOR OBTAINING EMPLOYEE SERVICES
The Company accounts
for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the
recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards
Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods
or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement
date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete
or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices
established in the Company’s most recent private placement memorandum (PPM”), or weekly or monthly price observations would
generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a
larger spread between the bid and asked quotes and lack of consistent trading in the market.
The fair value of each option award is estimated on the date
of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:
|
*
|
Expected term of share options and
similar instruments: The expected life of options and similar instruments
represents the period of time the option and/or warrant are expected
to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the
FASB Accounting Standards Codification the expected term of share options
and similar instruments represents the period of time the options and
similar instruments are expected to be outstanding taking into consideration
of the contractual term of the instruments and employees’ expected exercise
and post-vesting employment termination behavior into the fair value
(or calculated value) of the instruments. Pursuant to paragraph 718-50-S99-1,
it may be appropriate to use the SIMPLIFIED METHOD, if (i) A company
does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate expected term due to the limited period
of time its equity shares have been publicly traded; (ii) A company
significantly changes the terms of its share option grants or the types
of employees that receive share option grants such that its historical
exercise data may no longer provide a reasonable basis upon which to
estimate expected term; or (iii) A company has or expects to have significant
structural changes in its business such that its historical exercise
data may no longer provide a reasonable basis upon which to estimate
expected term. The Company uses the simplified method to calculate expected
term of share options and similar instruments as the company does not
have sufficient historical exercise data to provide a reasonable basis
upon which to estimate expected term.
|
|
*
|
Expected volatility of the entity’s
shares and the method used to estimate it. Pursuant to ASC Paragraph
718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses
the calculated value method shall disclose the reasons why it is not
practicable for the Company to estimate the expected volatility of its
share price, the appropriate industry sector index that it has selected,
the reasons for selecting that particular index, and how it has calculated
historical volatility using that index. The Company uses the average
historical volatility of the comparable companies over the expected
contractual life of the share options or similar instruments as its
expected volatility. If shares of a company are thinly traded the use
of weekly or monthly price observations would generally be more appropriate
than the use of daily price observations as the volatility calculation
using daily observations for such shares could be artificially inflated
due to a larger spread between the bid and asked quotes and lack of
consistent trading in the market.
|
|
*
|
Expected annual rate of quarterly
dividends. An entity that uses a method that employs different dividend
rates during the contractual term shall disclose the range of expected
dividends used and the weighted-average expected dividends. The expected
dividend yield is based on the Company’s current dividend yield as the
best estimate of projected dividend yield for periods within the expected
term of the share options and similar instruments.
|
|
*
|
Risk-free rate(s). An entity that
uses a method that employs different risk-free rates shall disclose
the range of risk-free rates used. The risk-free interest rate is based
on the U.S. Treasury yield curve in effect at the time of grant for
periods within the expected term of the share options and similar instruments.
|
The Company’s policy
is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis
over the requisite service period for the entire award.
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR
ACQUIRING GOODS OR SERVICES
The Company accounts
for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Subtopic 505-50
of the FASB Accounting Standards Codification (“Subtopic 505-50”).
Pursuant to ASC
Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever
is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier
of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of
the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (PPM”),
or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares
could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.
The fair value
of option or warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges
of assumptions for inputs are as follows:
|
*
|
Expected term of share options and
similar instruments: Pursuant to Paragraph 718-10-50-2 of the FASB Accounting
Standards Codification the expected term of share options and similar
instruments represents the period of time the options and similar instruments
are expected to be outstanding taking into consideration of the contractual
term of the instruments and holder’s expected exercise behavior into
the fair value (or calculated value) of the instruments. The Company
uses historical data to estimate holder’s expected exercise behavior.
If the Company is a newly formed corporation or shares of the Company
are thinly traded the contractual term of the share options and similar
instruments is used as the expected term of share options and similar
instruments as the Company does not have sufficient historical exercise
data to provide a reasonable basis upon which to estimate expected term.
|
|
*
|
Expected
volatility of the entity’s
shares and the method used
to estimate it. An entity
that uses a method that employs
different volatilities during
the contractual term shall
disclose the range of expected
volatilities used and the
weighted-average expected
volatility. A thinly-traded
or nonpublic entity that uses
the calculated value method
shall disclose the reasons
why it is not practicable
for the Company to estimate
the expected volatility of
its share price, the appropriate
industry sector index that
it has selected, the reasons
for selecting that particular
index, and how it has calculated
historical volatility using
that index. The Company uses
the average historical volatility
of the comparable companies
over the expected contractual
life of the share options
or similar instruments as
its expected volatility. If
shares of a company are thinly
traded the use of weekly or
monthly price observations
would generally be more appropriate
than the use of daily price
observations as the volatility
calculation using daily observations
for such shares could be artificially
inflated due to a larger spread
between the bid and asked
quotes and lack of consistent
trading in the market.
|
|
*
|
Expected
annual rate of quarterly dividends.
An entity that uses a method
that employs different dividend
rates during the contractual
term shall disclose the range
of expected dividends used
and the weighted-average expected
dividends. The expected dividend
yield is based on the Company’s
current dividend yield as
the best estimate of projected
dividend yield for periods
within the expected contractual
life of the option and similar
instruments.
|
|
*
|
Risk-free
rate(s). An entity that uses
a method that employs different
risk-free rates shall disclose
the range of risk-free rates
used. The risk-free interest
rate is based on the U.S.
Treasury yield curve in effect
at the time of grant for periods
within the contractual life
of the option and similar
instruments.
|
Pursuant to Paragraphs
505-50-25-8, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an
agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then,
because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date
has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is
entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized
as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to
ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return
for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement
for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such
an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof)
of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in
which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides
guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.
Pursuant to Paragraphs
505-50-25-8 and 505-50-25-9,an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee
only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves
specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same
manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with,
or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that
the counterparty has the right to exercise expires unexercised.
Pursuant to ASC
paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity
instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that
is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement
date and no entry should be recorded.
INCOME TAX PROVISION
The Company accounts
for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred
tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not
that the assets will not be realized. 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. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income and comprehensive income
(loss) in the period that includes the enactment date.
The Company adopted
section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that
has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance
on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased
disclosures.
The estimated future
tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments
as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.
In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction
varies from estimates, additional allowances or reversals of reserves may be necessary.
UNCERTAIN TAX POSITIONS
The Company did
not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions
of Section 740-10-25 for the period from April 11, 2011 (Inception) through March 31, 2012.
LIMITATION ON UTILIZATION OF NOLS DUE TO CHANGE IN CONTROL
Pursuant to the Internal
Revenue Code Section 382 (“Section 382”), certain ownership changes may subject the NOL’s to annual limitations which
could reduce or defer the NOL. Section 382 imposes limitations on a corporation’s ability to utilize NOLs if it experiences an
“ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain
stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. In the event of an ownership
change, utilization of the NOLs would be subject to an annual limitation under Section 382 determined by multiplying the value
of its stock at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may
be carried over to later years. The imposition of this limitation on its ability to use the NOLs to offset future taxable income
could cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect and could cause such
NOLs to expire unused, reducing or eliminating the benefit of such NOLs.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss)
per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss)
per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential
dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
The following
table shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per common share calculation
for the period from April 11, 2011 (inception) through March 31, 2012 as they were anti-dilutive:
|
|
Potentially Outstanding
|
|
|
|
Dilutive Common Shares
|
|
|
|
For the
|
|
|
|
Period from
|
|
|
|
April 11, 2011
|
|
|
|
(inception)
|
|
|
|
through
|
|
|
|
March 31, 2012
|
|
The remainder
of the Make Good Escrow Agreement shares issued and held with the escrow agent in connection with the Share Exchange Agreement
consummated on June 23, 2011 pending the achievement by the Company of certain post-Closing business milestones (the “Milestones”).
|
|
|
3,000,000
|
|
|
|
|
|
|
Total potentially outstanding
dilutive common shares
|
|
|
3,000,000
|
|
CASH FLOWS REPORTING
The Company adopted
paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and
uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting
Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals
of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating
cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current
exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported
as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides
information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph
830-230-45-1 of the FASB Accounting Standards Codification.
SUBSEQUENT EVENTS
The Company follows
the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company
will evaluate subsequent events through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB
Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed
to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-05
In June 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-05 “COMPREHENSIVE INCOME” (“ASU 2011-05”), which
was the result of a joint project with the IASB and amends the guidance in ASC 220, COMPREHENSIVE INCOME, by eliminating the option
to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance
now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous statement
of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive
income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present
all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.
The amendments in
this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within
those years, beginning after December 15, 2011.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-08
In September 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-08 “INTANGIBLES—GOODWILL AND OTHER: TESTING GOODWILL
FOR IMPAIRMENT” (“ASU 2011-08”). This Update is to simplify how public and nonpublic entities test goodwill for
impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not
that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required
to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value
is less than its carrying amount.
The guidance is
effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-10
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-10 “PROPERTY, PLANT AND EQUIPMENT: DERECOGNITION OF IN SUBSTANCE
REAL ESTATE-A SCOPE CLARIFICATION” (“ASU 2011-09”). This Update is to resolve the diversity in practice as to how
financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling financial
interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse
debt of the subsidiaries.
The amended guidance
is effective for annual reporting periods ending after June 15, 2012 for public entities. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-11
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-11 “BALANCE SHEET: DISCLOSURES ABOUT OFFSETTING ASSETS AND
LIABILITIES” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related
arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.
The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on
the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.
The amended guidance
is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
FASB ACCOUNTING STANDARDS UPDATE NO.
2011-12
In December 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-12 “COMPREHENSIVE INCOME: DEFERRAL OF THE EFFECTIVE DATE FOR
AMENDMENTS TO THE PRESENTATION OF RECLASSIFICATIONS OF ITEMS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME IN ACCOUNTING STANDARDS
UPDATE NO. 2011-05” (“ASU 2011-12”). This Update is a deferral of the effective date pertaining to reclassification
adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits
of those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time
required to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary
to reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were
in place before the issuance of Update 2011-05.
All other requirements
in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements
for fiscal years, and interim periods within those years, beginning after December 15, 2011.
OTHER RECENTLY ISSUED, BUT NOT YET
EFFECTIVE ACCOUNTING PRONOUNCEMENTS
Management does not
believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect
on the accompanying financial statements.
NOTE 3 - GOING CONCERN
The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity
of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in
the accompanying consolidated financial statements, the Company had a deficit accumulated during the development stage at March
31, 2012, a net loss and net cash used in operating activities for the period from April 11, 2011 (inception) through March 31,
2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
While the Company
is attempting to commence operations and generate sufficient revenues, the Company’s cash position may not be sufficient enough
to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering.
Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues
provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy
to commence operations and generate sufficient revenues and in its ability to raise additional funds, there can be no assurances
to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement
its business plan and generate sufficient revenues.
The consolidated financial
statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 - PREPAID EXPENSES
Prepaid expenses
at March 31, 2012, consisted of the following:
|
|
March 31, 2012
|
|
|
|
|
|
Prepaid research and development
|
|
$
|
128,445
|
|
Prepaid rent
|
|
|
21,250
|
|
Retainer
|
|
|
15,000
|
|
Other
|
|
|
4,179
|
|
|
|
$
|
168,874
|
|
NOTE 5 - FURNITURE AND FIXTURE
Furniture and
fixture, stated at cost, less accumulated depreciation at March 31, 2012 consisted of the following:
|
|
Estimated
|
|
|
|
|
|
|
Useful Life
|
|
|
|
|
|
|
(Years)
|
|
|
March 31, 2012
|
|
Furniture and fixture
|
|
|
5
|
|
|
$
|
3,036
|
|
|
|
|
|
|
|
|
3,036
|
|
Less accumulated depreciation
|
|
|
|
|
|
|
(-
|
)
|
|
|
|
|
|
|
$
|
3,036
|
|
DEPRECIATION EXPENSE
The Company acquired
furniture and fixture near the end of February 2012 and started to depreciate as of April 1, 2012.
NOTE 6 - WEBSITE DEVELOPMENT COSTS
Website development
costs, stated at cost, less accumulated amortization at March 31, 2012, consisted of the following:
|
|
March 31, 2012
|
|
|
|
|
|
Website development costs
|
|
$
|
5,315
|
|
Accumulated amortization
|
|
|
(801
|
)
|
|
|
$
|
4,514
|
|
AMORTIZATION EXPENSE
Amortization expense was $801 for the
period from April 11, 2011 (inception) through March 31, 2012.
NOTE 7 - RELATED PARTY TRANSACTIONS
RELATED PARTIES
Related parties with
whom the Company had transactions are:
Related Parties
|
|
Relationship
|
|
|
|
George Blankenbaker
|
|
President and significant stockholder of the Company
|
|
|
|
Leverage Investments LLC
|
|
An entity owned and controlled by the president and significant stockholder of the Company
|
|
|
|
Growers Synergy Pte Ltd.
|
|
An entity owned and controlled by the president and significant stockholder of the Company
|
ADVANCES FROM STOCKHOLDER
From time to time,
stockholders of the Company advance funds to the Company for working capital purpose. Those advances are unsecured, non-interest
bearing and due on demand.
LEASE OF CERTAIN OFFICE SPACE FROM LEVERAGE
INVESTMENTS, LLC
The Company leases
certain office space with Leverage Investments, LLC for $500 per month on a month-to-month basis since July 1, 2011. For the period
from April 11, 2011 (inception) through March 31, 2012, the Company recorded $9,200 in rent expenses due Leverage Investment LLC.
CONSULTING SERVICES, MANAGEMENT AND
OFF-TAKE AGREEMENT WITH GROWERS SYNERGY PTE LTD.
Prior to November
1, 2011, the Company engaged Growers Synergy Pte Ltd. to provide farm management consulting services on a month-to-month basis,
at $20,000 per month as of July 1, 2011.
On November 1,
2011, the Company entered into a Management and Off-Take Agreement (the “Agreement”) with Growers Synergy Pte Ltd. (“GSPL”),
a Singapore corporation owned and controlled by the president and major stockholder of the Company. Under the terms of the Agreement,
the Company will engage GSPL to supervise the Company’s farm management operations, recommend quality farm management programs
for stevia cultivation, assist in the hiring of employees and provide training to help the Company meet its commercialization
targets, develop successful models to propagate future agribusiness services, and provide back-office and regional logistical
support for the development of proprietary stevia farm systems in Vietnam, Indonesia and potentially other countries. GSPL will
provide services for a term of two (2) years from the date of signing, at $20,000 per month. The Agreement may be terminated by
the Company upon 30 day notice. In connection with the Agreement, the parties agreed to enter into an off-take agreement whereby
GSPL agreed to purchase all of the non-stevia crops produced at the Company’s GSPL supervised farms.
Consulting services
provided by Growers Synergy Pte Ltd. for the period from April 11, 2011 (inception) through March 31, 2012 is as follows:
|
|
March 31, 2012
|
|
|
|
|
|
Consulting services received and consulting fees booked
|
|
$
|
180,000
|
|
|
|
$
|
180,000
|
|
Future minimum payments required under
this agreement at March 31, 2012 were as follows:
Fiscal Year Ending March 31:
|
|
|
|
|
2013
|
|
$
|
240,000
|
|
2014
|
|
|
140,000
|
|
|
|
$
|
380,000
|
|
NOTE 8 - CONVERTIBLE NOTES PAYABLE
On February 14, 2011,
the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the date of
issuance. On October 4, 2011, the note holder converted the entire principal of $250,000 and accrued interest through the date
of conversion of $15,890.41 to 1,000,000 and 63,561 shares of the Company’s common stock at $0.25 per share, respectively.
On June 23, 2011,
the Company issued a convertible note in the amount of $100,000 with interest at 10% per annum due one (1) year from the date of
issuance. On October 4, 2011, the note holder converted the entire principal of $100,000 and accrued interest through the date
of conversion of $2,821.92 to 400,000 and 11,288 shares of the Company’s common stock at $0.25 per share.
On October 4, 2011,
the Company issued a convertible note in the amount of $150,000 with interest at 10% per annum due one (1) year from the date of
issuance. On January 18, 2012, the note holder converted the entire principal of $150,000 and accrued interest through the date
of conversion of $4,356 to 617,425 shares of the Company’s common stock at $0.25 per share.
On November 16, 2011,
the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the date of
issuance. The note may be converted into common shares of the Company should the Company complete a private placement with gross
proceeds of at least $100,000. The conversion price shall be the same as the private placement price on a per share basis.
On January 16,
2012, the Company issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the
date of issuance.
On March 7, 2012,
the Company issued a convertible note in the amount of $200,000 with interest at 10% per annum due one (1) year from the date
of issuance.
Convertible notes
payable at March 31, 2012 consisted of the following:
|
|
March 31, 2012
|
|
|
|
|
|
On November 16, 2011, the Company
issued a convertible note in the amount of $250,000 with interest at 10% per annum due one (1) year from the date of issuance.
The note may be converted into common shares of the Company should the Company complete a private placement with gross proceeds
of at least $100,000. The conversion price shall be the same as the private placement price on a per share basis
|
|
$
|
250,000
|
|
|
|
|
|
|
On January 16, 2012, the Company issued a convertible
note in the amount of $250,000 with interest at 10% per annum due one (1) year from the date of issuance
|
|
|
250,000
|
|
|
|
|
|
|
On March 7, 2012, the Company
issued a convertible note in the amount of $200,000 with interest at 10% per annum due one (1) year from the date of issuance.
|
|
|
200,000
|
|
|
|
$
|
700,000
|
|
NOTE 9 - STOCKHOLDERS’ DEFICIT
SHARES AUTHORIZED
Upon formation
the total number of shares of common stock which the Company is authorized to issue is One Hundred Million (100,000,000) shares,
par value $0.001 per share.
COMMON STOCK
REVERSE ACQUISITION TRANSACTION
Immediately prior
to the Share Exchange Transaction on June 23, 2011, the Company had 79,800,000 common shares issued and outstanding. Simultaneously
with the Closing of the Share Exchange Agreement, on the Closing Date, Mohanad Shurrab, a shareholder and, as of the Closing Date,
the Company’s former Director, President, Treasurer and Secretary, surrendered 33,000,000 shares of the Company’s common stock
to the Company for cancellation.
As a result of
the Share Exchange Agreement, the Company issued 12,000,000 common shares for the acquisition of 100% of the issued and outstanding
shares of Stevia Ventures International Ltd. Of the 12,000,000 common shares issued in connection with the Share Exchange Agreement,
6,000,000 of such shares are being held in escrow (“Escrow Shares”) pending the achievement by the Company of certain
post-Closing business milestones (the “Milestones”), pursuant to the terms of the Make Good Escrow Agreement, between
the Company, Greenberg Traurig, LLP, as escrow agent and the Ventures’ Stockholder (the “Escrow Agreement”).
MAKE GOOD AGREEMENT SHARES
|
(I)
|
DURATION OF ESCROW AGREEMENT
|
The Make Good Escrow Agreement
shall terminate on the sooner of (i) the distribution of all the escrow shares, or (ii) December 31, 2013.
|
(II)
|
DISBURSEMENT OF MAKE GOOD SHARES
|
Upon achievement of any Milestone
on or before the date associated with such Milestone on Exhibit A, the Company shall promptly provide written notice to the Escrow
Agent and the Selling Shareholder of such achievement (each a “COMPLETION NOTICE”). Upon the passage of any Milestone
date set forth on Exhibit A for which the Company has not achieved the associated Milestone, the Company shall promptly provide
written notice to the Escrow Agent and the Selling Shareholder of such failure to achieve the milestone (each a “NONCOMPLETION
NOTICE”).
|
(III)
|
EXHIBIT A - SCHEDULE OF MILESTONES
|
|
Milestones
|
|
Completion
Date
|
|
Number of
Escrow Shares
|
|
|
|
|
|
|
I.
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Enter into exclusive international license agreement for all Agro
Genesis intellectual property and products as it applies to stevia
|
|
|
|
|
(2)
|
Enter into cooperative agreements to work with Vietnam Institutes
(a) Medical Plant Institute in Hanoi; (b) Agricultural Science Institute of Northern Central Vietnam
|
|
|
|
3,000,000
shares only
if and when
|
(3)
|
Enter into farm management agreements with local growers including
the Provincial and National projects;
|
|
Within 180
days of the
|
|
ALL four (4)
milestones
|
(4)
|
Take over management of three existing nurseries
|
|
Closing Date
|
|
reached
|
|
|
|
|
|
|
II.
|
Achieve 100 Ha field trials and first test shipment of dry leaf
|
|
Within two (2)
years of the
Closing Date
|
|
1,500,000 shares
|
|
|
|
|
|
|
III.
|
Test shipment of dry leaf to achieve minimum specs for contracted
base price (currently $2.00 per kilogram)
|
|
Within two (2)
years of the
Closing Date
|
|
1,500,000 shares
|
On
December 23, 2011, 3,000,000 out of the 6,000,000 Escrow Shares have been earned and released to Ventures stockholder upon achievement
of the First Milestone within 180 days of June 23, 2011, the Closing Date associated with the First Milestone. Those shares were
valued at $0.25 per share or $750,000 on the date of release and recorded as compensation.
COMMON SHARES SURRENDERED FOR CANCELLATION
On October 4,
2011, a significant stockholder of the Company, Mohanad Shurrab, surrendered another 3,000,000 shares of the Company’s common
stock to the Company for cancellation. The Company recorded this transaction by debiting common stock at par of $3,000 and crediting
additional paid-in capital of the same.
COMMON SHARES ISSUED FOR CASH
On October 4,
2011 the Company sold 400,000 shares of its common stock to one investor at $0.25 per share or $100,000.
COMMON SHARES ISSUED FOR OBTAINING EMPLOYEE AND DIRECTOR
SERVICES
On October 14,
2011 the Company issued 1,500,000 shares each to two (2) newly appointed members of the board of directors or 3,000,000 shares
of its common stock in aggregate as compensation for future services. These shares shall vest with respect to 750,000 shares of
restricted stock on each of the first two anniversaries of the date of grant, subject to the director’s continuous service to
the Company as directors. These shares were valued at $0.25 per share or $750,000 on the date of grant and are being amortized
over the vesting period of two (2) years or $93,750 per quarter. The Company recorded $187,500 in directors’ fees for the period
from April 11, 2011 (inception) through March 31, 2012.
COMMON SHARES ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR
ACQUIRING GOODS OR SERVICES
EQUITY PURCHASE AGREEMENT AND RELATED REGISTRATION RIGHTS
AGREEMENT
(I) EQUITY PURCHASE AGREEMENT
On January 26,
2012, the Company entered into an equity purchase agreement (“Equity Purchase Agreement”) with Southridge Partners II,
LP, a Delaware limited partnership (The “Investor”). Upon the terms and subject to the conditions contained in the agreement,
the Company shall issue and sell to the Investor, and the Investor shall purchase, up to Twenty Million Dollars ($20,000,000)
of its common stock, par value $0.001 per share.
At any time and
from time to time during the Commitment Period, the period commencing on the effective date, and ending on the earlier of (i)
the date on which investor shall have purchased put shares pursuant to this agreement for an aggregate purchase price of the maximum
commitment amount, or (ii) the date occurring thirty six (36) months from the date of commencement of the commitment period. the
Company may exercise a put by the delivery of a put notice, the number of put shares that investor shall purchase pursuant to
such put shall be determined by dividing the investment amount specified in the put notice by the purchase price with respect
to such put notice. However, that the investment amount identified in the applicable put notice shall not be greater than the
maximum put amount and, when taken together with any prior put notices, shall not exceed the maximum commitment The purchase price
shall mean 93% of the market price on such date on which the purchase price is calculated in accordance with the terms and conditions
of this Agreement.
(II) REGISTRATION RIGHTS AGREEMENT
In connection
with the Equity Purchase Agreement, on January 26, 2012, the Company entered into a registration rights agreement (“Registration
Rights Agreement”) with Southridge Partners II, LP, a Delaware limited partnership (the “Investor”). To induce
the investor to execute and deliver the equity purchase agreement which the Company has agreed to issue and sell to the investor
shares (the “put shares”) of its common stock, par value $0.001 per share (the “common stock”) from time to
time for an aggregate investment price of up to twenty million dollars ($20,000,000) (the “registrable securities”),
the company has agreed to provide certain registration rights under the securities act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, “securities act”), and applicable state securities
laws with respect to the registrable securities.
(III) COMMON SHARES ISSUED UPON SIGNING
As a condition
for the execution of this agreement by the investor, the company issued to the investor 35,000 shares of restricted common stock
(the “restricted shares”) upon the signing of this agreement. The restricted shares shall have no registration rights.
These shares were valued at $1.50 per share or $52,500 on the date of issuance and recorded as financing cost.
MARKETING SERVICE AGREEMENT - EMPIRE RELATIONS GROUP INC.
On March 14, 2012
the Company entered into a consulting agreement (the “Consulting Agreement”) with Empire Relations Group, Inc. (“Empire”).
(I) SCOPE OF SERVICES
Under the terms
of the Consulting Agreement, the Company engaged Empire to introduce interested investors to the Company, advise the Company on
available financing options, provide periodic updates on the stevia sector and provide insights and strategies for the Company
to undertake.
(II) TERM
The term of this
agreement shall be consummated from the date hereof, and shall automatically terminate unless otherwise agreed upon in writing
by both parties on May 30, 20 12.
(III) COMPENSATION
For the term of
this agreement, the consultant shall be paid an upfront, non-refundable, non-cancellable retainer fee of 27,500 restricted shares.
For the purposes of this agreement, these shares shall be considered to be fully earned by March 31, 2012. These shares were valued
at $1.39 per share or $38,225 on March 31, 2012, the date when they were earned.
NOTE 10 - RESEARCH AND DEVELOPMENT
AGRIBUSINESS DEVELOPMENT AGREEMENT - AGRO
GENESIS PTE LTD.
ENTRY INTO AGRIBUSINESS DEVELOPMENT
AGREEMENT
On July 16, 2011,
the Company entered into an Agribusiness Development Agreement (the “Agribusiness Development Agreement”) with Agro Genesis
Pte Ltd. (“AGPL”), a corporation organized under the laws of the Republic of Singapore expiring two (2) years from the
date of signing.
Under the terms of
the Agreement, the Company engaged AGPL to be the Company’s technology provider consultant for stevia propagation and cultivation
in Vietnam, and potentially other countries for a period of two (2) years. AGPL will be tasked with developing stevia propagation
and cultivation technology in Vietnam, recommend quality agronomic programs for stevia cultivation, harvest and post harvest, alert
findings on stevia propagation and cultivation that may impact profitability and develop a successful model in Vietnam that can
be replicated elsewhere (the “Project”). The Project will be on-site at stevia fields in Vietnam and will have a term
of at least two (2) years. For its services, AGPL could receive a fee of up to 275,000 Singapore dollars, plus related expenses
estimated at $274,000 as specified in Appendix A to the Agribusiness Development Agreement. Additionally, the Company will be AGPL’s
exclusive distributor for AGPL’s g’farm system (a novel crop production system) for stevia growing resulting from the Project.
AGPL will receive a commission of no less than 2% of the price paid for crops other than stevia, from cropping systems that utilize
the g’farm system resulting from the Project. All technology-related patents resulting from the Project will be jointly owned by
AGPL and the Company, with the Company holding a right of first offer for the use and distribution rights to registered patents
resulting from the Project.
ADDENDUM TO AGRIBUSINESS DEVELOPMENT
AGREEMENT
On August 26, 2011,
in accordance with Appendix A , 3(a), the Company and AGPL have mutually agreed to add to the current Project budget $100,000 per
annum for one, on-site resident AGPL expert for 2 (two) years effective September 1, 2011, or $200,000 in aggregate for the term
of the contract as specified in Appendix C. In-country accommodation for the resident expert will be born separately by the Company
and is excluded from the above amount. The expert, Dr. Cho, Young-Cheol, Director, Life Sciences has been appointed and commenced
on September 1, 2011.
TERMINATION OF AGRIBUSINESS DEVELOPMENT
AGREEMENT
On March 31, 2012,
the Company and AGPL mutually agreed to terminate the Agribusiness Development Agreement, effective immediately.
LEASE OF AGRICULTURAL LAND
On December 14, 2011,
the Company and Stevia Ventures Corporation (“Stevia Ventures”) entered into a Land Lease Agreement with Vinh Phuc Province
People’s Committee Tam Dao Agriculture & Industry Co., Ltd. pursuant to which Stevia Ventures has leased l0 hectares of land
(the “Leased Property”) for a term expiring five (5) years from the date of signing.
The Company has begun
development of a research facility on the Leased Property and has prepaid (i) the first year lease payment of $30,000 and (ii)
the six month lease payment of $15,000 as security deposit, or $45,000 in aggregate upon signing of the agreement.
Future minimum
payments required under this agreement at March 31, 2012 were as follows:
Fiscal Year Ending March 31:
|
|
|
|
|
2013
|
|
$
|
30,000
|
|
2014
|
|
|
30,000
|
|
2015
|
|
|
30,000
|
|
2016
|
|
|
30,000
|
|
|
|
$
|
120,000
|
|
SUPPLY AND COOPERATIVE AGREEMENT - GUANGZHOU HEALTH TECHNOLOGY
DEVELOPMENT COMPANY LIMITED
ENTRY INTO SUPPLY AGREEMENT
On February 21,
2012, the Company entered into a Supply Agreement (the “Supply Agreement”) with Guangzhou Health China Technology Development
Company Limited, a foreign-invested limited liability company incorporated in the People’s Republic of China (the “Guangzhou
Health”).
Under the terms
of the Supply Agreement, the Company will sell dry stevia plant materials, including stems and leaves (“Product”) exclusively
to Guangzhou Health. For the first two years of the agreement, Guangzhou Health will purchase all Product produced by the Company.
Starting with the third year of the agreement, the Company and Guangzhou Health will review and agree on the quantity of Product
to be supplied in the forthcoming year, and Guangzhou Health will be obliged to purchase up to 130 percent of that amount. The
specifications and price of Product will also be revised annually according to the mutual agreement of the parties. The term of
the Supply Agreement is five years with an option to renew for an additional four years.
ENTRY INTO COOPERATIVE AGREEMENT
On February 21,
2012, the Company also entered into Cooperative Agreement (the “Cooperative Agreement”) with Guangzhou Health Technology
Development Company Limited.
Under the terms
of the Cooperative Agreement, the parties agree to explore potential technology partnerships with the intent of formalizing a
joint venture to pursue the most promising technologies and businesses. The parties also agree to conduct trials to test the efficacy
of certain technologies as applied specifically to the Company’s business model as well as the marketability of harvests produced
utilizing such technologies. Guangzhou Health will share all available information of its business structure and technologies
with the Company, subject to the confidentiality provisions of the Cooperative Agreement. Guangzhou Health will also permit the
Company to enter its premises and grow-out sites for purposes of inspection and will, as reasonably requested by the Company,
supply without cost, random samples of products and harvests for testing.
NOTE 11 - INCOME TAX PROVISION
DEFERRED TAX ASSETS
At March 31, 2012,
the Company has available for federal income tax purposes net operating loss (“NOL”) carry-forwards of $2,323,551 that
may be used to offset future taxable income through the fiscal year ending March 31, 2032. No tax benefit has been reported with
respect to these net operating loss carry-forwards in the accompanying financial statements since the Company believes that the
realization of its net deferred tax asset of approximately $790,007 was not considered more likely than not and accordingly, the
potential tax benefits of the net loss carry-forwards are fully offset by the full valuation allowance.
Deferred tax assets
consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred
tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $790,007 for
the period from April 11, 2011 (inception) through March 31, 2012.
Components of
deferred tax assets as of March 31, 2012 are as follows:
|
|
March 31, 2012
|
|
Net deferred tax assets - Non-current:
|
|
|
|
|
Expected income tax benefit from NOL carry-forwards
|
|
$
|
790,007
|
|
Less valuation allowance
|
|
|
(790,007
|
)
|
Deferred tax assets, net of valuation allowance
|
|
$
|
—
|
|
LIMITATION ON UTILIZATION OF NOLS DUE TO CHANGE IN CONTROL
The Company had
ownership changes as defined by the Internal Revenue Code Section 382 (“Section 382”), which may subject the NOL’s to
annual limitations which could reduce or defer the NOL. Section 382 imposes limitations on a corporation’s ability to utilize
NOLs if it experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing
the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period.
In the event of an ownership change, utilization of the NOLs would be subject to an annual limitation under Section 382 determined
by multiplying the value of its stock at the time of the ownership change by the applicable long-term tax-exempt rate. Any unused
annual limitation may be carried over to later years. The imposition of this limitation on its ability to use the NOLs to offset
future taxable income could cause the Company to pay U.S. federal income taxes earlier than if such limitation were not in effect
and could cause such NOLs to expire unused, reducing or eliminating the benefit of such NOLs.
INCOME TAX PROVISION IN THE CONSOLIDATED STATEMENT OF OPERATIONS
A reconciliation
of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as
follows:
|
|
For the
|
|
|
|
Period from
|
|
|
|
April 11, 2011
|
|
|
|
(inception)
|
|
|
|
through
|
|
|
|
March 31, 2012
|
|
|
|
|
|
Federal statutory income tax rate
|
|
|
34.0
|
%
|
Change in valuation allowance
on net operating loss carry-forwards
|
|
|
(34.0
|
)
|
Effective income tax rate
|
|
|
0.0
|
%
|
NOTE 12 - COMMITMENTS AND CONTINGENCIES
SUPPLY AGREEMENT - BETWEEN STEVIA VENTURES
INTERNATIONAL LTD. AND ASIA STEVIA INVESTMENT DEVELOPMENT COMPANY LTD.
On April 12, 2011,
Stevia Ventures International Ltd, the subsidiary of the Company entered into a Supply Agreement (the “Supply Agreement”)
with Asia Stevia Investment Development Company Ltd (“ASID”), a foreign-invested limited liability company incorporated
in Vietnam.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged ASID to plant the Stevia Seedlings and supply the Products only to the Company to the exclusion
of other customers and the Company is desirous to purchase the same, on the terms and conditions as set out in this Agreement
produce Products and the Company purchase the Products from ASID.
(II) TERM
This Agreement
shall come into force on the Effective Date and, subject to earlier termination pursuant to certain clauses specified in the Agreement,
shall continue in force for a period of three (3) years (“Term”) and thereafter automatically renew on its anniversary
each year for an additional period of one (1) year (“Extended Term”).
(III) PURCHASE PRICE
ASID and the Company
shall review and agree on or before 30th September of each Year on the quantity of the Products to be supplied by the Supplier
to the Company in the forthcoming year and ASID shall provide the Company with prior written notice at any time during the year
following the revision if it has reason to believe that it would be unable to fulfill its forecast volumes under this clause.
SUPPLY AGREEMENT - BETWEEN STEVIA VENTURES
INTERNATIONAL LTD. AND STEVIA VENTURES CORPORATION
On April 12, 2011,
Stevia Ventures International Ltd, the subsidiary of the Company also entered into a Supply Agreement (the “Supply Agreement”)
with Stevia Ventures Corporation (“SVC”), a foreign-invested limited liability company incorporated in Vietnam.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged SVC to plant the Stevia Seedlings and supply the Products only to the Company to the exclusion
of other customers and the Company is desirous to purchase the same, on the terms and conditions as set out in this Agreement
produce Products and the Company purchase the Products from SVC.
(II) TERM
This Agreement
shall come into force on the Effective Date and, subject to earlier termination pursuant to certain clauses specified in the Agreement,
shall continue in force for a period of three (3) years (“Term”) and thereafter automatically renew on its anniversary
each year for an additional period of one (1) year (“Extended Term”).
(III) PURCHASE PRICE
SVC and the Company
shall review and agree on or before 30th September of each Year on the quantity of the Products to be supplied by the Supplier
to the Company in the forthcoming year and SVC shall provide the Company with prior written notice at any time during the year
following the revision if it has reason to believe that it would be unable to fulfill its forecast volumes under this clause.
CONSULTING AGREEMENT - DORIAN BANKS
ENTRY INTO CONSULTING AGREEMENT
On July 1, 2011 the
Company entered into a consulting agreement (the “Consulting Agreement”) with Dorian Banks (“Banks”).
(I) SCOPE OF SERVICES
Under the terms of
the Consulting Agreement, the Company engaged the Consultant to provide advice in general business development, strategy, assistance
with new business and land acquisition, introductions, and assistance with Public Relations (“PR”) and Investor Relations
(“IR”).
(II) TERM
The term of this
Agreement shall be six (6) months, commencing on July 1, 2011 and continue until December 31, 2011. This Agreement may be terminated
by either the Company or the Consultant at any time prior to the end of the Consulting Period by giving thirty (30) days written
notice of termination. Such notice may be given at any time for any reason, with or without cause. The Company will pay Consultant
for all Service performed by Consultant through the date of termination.
(III) COMPENSATION
The Company shall
pay the Consultant a fee of $3,000.00 per month.
EXTENSION OF THE CONSULTING AGREEMENT
On December 30, 2011,
the Consulting Agreement was extended with the same terms and conditions to December 31, 2012.
SUMMARY OF THE CONSULTING FEES
For the period
from April 11, 2011 (inception) through March 31, 2012, The Company recorded $27,000 in consulting fees under the Consulting Agreement.
FINANCING CONSULTING AGREEMENT - DAVID
CLIFTON
ENTRY INTO FINANCIAL CONSULTING AGREEMENT
On July 1, 2011 the
Company entered into a consulting agreement (the “Consulting Agreement”) with David Clifton ( “Clifton”).
(I) SCOPE OF SERVICES
Under the terms of
the Consulting Agreement, the Company engaged Clifton to introduce interested investors to the Company, advise the Company on available
financing options and provide periodic updates on the stevia sector and provide insights and strategies for the Company to undertake.
(II) TERM
The term of this Agreement
shall be six (6) months, commencing on July 1, 2011 and continuing until December 31, 2011. This Agreement may be terminated by
either the Company or Clifton at any time prior to the end of the consulting period by giving thirty (30) days written notice of
termination. Such notice may be given at any time for any reason, with or without cause. The Company will pay Clifton for all service
performed by him through the date of termination.
(III) COMPENSATION
The Company shall
pay Clifton a fee of $3,000.00 per month.
SUMMARY OF THE CONSULTING FEES
For the period
from April 11, 2011 (inception) through March 31, 2012, The Company recorded $18,000 in financing cost under this Financing Consulting
Agreement.
NOTE 12 - CONCENTRATIONS AND CREDIT
RISK
VENDORS AND ACCOUNTS PAYABLE CONCENTRATIONS
Vendor purchase
concentrations for the period ended March 31, 2012 and accounts payable concentration at March 31, 2012 are as follows:
|
|
Net Purchases
|
|
|
|
|
|
|
for the
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
April 11, 2011
|
|
|
|
|
|
|
(inception)
|
|
|
Accounts
|
|
|
|
through
|
|
|
Payable at
|
|
|
|
March 31, 2012
|
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
Asia Stevia Investment Development Limited
|
|
|
38.0
|
%
|
|
|
—
|
%
|
Growers Synergy Pte. Ltd. - related party
|
|
|
13.5
|
%
|
|
|
16.4
|
%
|
Stevia Ventures Corporation
|
|
|
14.4
|
%
|
|
|
54.1
|
%
|
|
|
|
65.9
|
%
|
|
|
70.5
|
%
|
CREDIT RISK
Financial instruments
that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.
As of March 31,
2012, substantially all of the Company’s cash and cash equivalents were held by major financial institutions, and the balance
at certain accounts exceeded the maximum amount insured by the Federal Deposits Insurance Corporation (“FDIC”). However,
the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant
risks on such accounts.
NOTE 14 - SUBSEQUENT EVENTS
The Company has evaluated
all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if
they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed
as follows:
FORMATION OF STEVIA TECHNEW LIMITED
On April 28, 2012,
Hero Tact Limited, a wholly-owned subsidiary of Stevia Asia which was incorporated under the laws of Hong Kong, changed its name
to Stevia Technew Limited (“Stevia Technew”). Stevia Technew is intended to facilitate a joint venture relationship
with the Company’s technology partner, Guangzhou Health China Technology Development Company Limited, operating under the trade
name Tech-New Bio-Technology (“TechNew”) and its affiliates Technew Technology Limited.
ISSUANCE OF CONVERTIBLE NOTE
On May 30, 2012,
the Company issued a convertible note in the amount of $200,000 with interest at 10% per annum due one (1) year from the date
of issuance.
ENTRY INTO ENGAGEMENT AGREEMENT - GARDEN
STATE SECURITIES INC.
On June 18, 2012,
the Company entered into an engagement agreement (the “Agreement”) with Garden State Securities Inc (“GSS”)
respect to the engagement of GSS to act as a selling/placement agent for the Company.
(I) SCOPE OF SERVICES
Under the terms
of the Agreement, the Company engaged GSS to review the business and operation of the Company and its historical and projected
financial condition, advise Company of “best efforts” Private Placement offering of debt or equity securities to fulfill
the Company’s business plan, and contact for the Company possible financing sources.
(II) TERM
GSS shall act
as the Company’s exclusive placement agent the later of; (i) 60 days from the execution of the term sheet; or (ii) the final termination
date of the securities financing (the “Exclusive Period”). GSS shall act as the Company’s non-exclusive placement agent
after the Exclusive Period until terminated.
(III) COMPENSATION
The Company agrees
to pay to GSS at each full or incremental closing of any equity financing, convertible debt financing, debt conversion or any
instrument convertible into the Company’s common stock (the “Securities Financing”) during the Exclusive Period; (i)
a cash transaction fee in the amount of 8% of the amount received by the Company under the Securities Financing; and (ii) warrants
(the “Warrants”) with “piggy back” registration rights, equal to 8% of the stock issued in the Securities
Financing at an exercise price equal to the investor’s warrant exercise price of the Securities Financing or the price of the
Securities Financing if no warrants are issued to investors. The Company will also pay, at closing, the expense of GSS’s legal
counsel pursuant to the Securities Financing and/or Shelf equal to $25,000 for Securities Financing and/or Shelf resulting in
equal to or greater than $500,000 of gross proceeds to the Company, and $18,000 for a Securities Financing and/or Shelf resulting
in less than $500,000 of gross proceeds to the Company. In addition, the Company shall cause, at its cost and expense, the “Blue
sky filing” and Form D in due and proper form and substance and in a timely manner.
PART II - INFORMATION NOT REQUIRED IN
PROSPECTUS
|
Item 13.
|
Other
Expenses of Issuance and Distribution
|
The following table sets forth the costs
and expenses payable by us in connection with the issuance and distribution of the securities being registered hereunder. No expenses
will be borne by Selling Security Holder. All of the amounts shown are estimates, except for the SEC registration fee.
SEC registration fee
|
|
$
|
2,411.49
|
|
Accounting fees and expenses
|
|
$
|
6,000.00
|
|
Legal fees and expenses
|
|
$
|
40,000.00
|
|
Total
|
|
$
|
48,411.49
|
|
|
Item 14.
|
Indemnification
of Directors and Officers
|
Nevada Law
Section 78.7502 of the Nevada Revised Statutes
permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he:
|
(a)
|
is not liable pursuant to Nevada
Revised Statute 78.138, or
|
|
(b)
|
acted in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
|
In addition, Section 78.7502 permits a
corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including
amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he:
|
(a)
|
is not liable pursuant to Nevada
Revised Statute 78.138; or
|
|
(b)
|
acted in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation.
|
To the extent that a director, officer,
employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him against expenses,
including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.
Section 78.751 of the Nevada Revised Statutes provides that
such indemnification may also include payment by the Company of expenses incurred in defending a civil or criminal action or proceeding
in advance of the final disposition of such action or proceeding upon receipt of an undertaking by the person indemnified to repay
such payment if he shall be ultimately found not to be entitled to indemnification under Section 78.751. Indemnification may be
provided even though the person to be indemnified is no longer a director, officer, employee or agent of the Company or such other
entities.
Section 78.752 of the Nevada Revised Statutes
allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf of any person who is or
was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted
against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out
of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses.
Other financial arrangements made by the
corporation pursuant to Section 78.752 may include the following:
|
(a)
|
the creation of a trust fund;
|
|
(b)
|
the establishment of a program
of self-insurance;
|
|
(c)
|
the securing of its obligation
of indemnification by granting a security interest or other lien
on any assets of the corporation; and
|
|
(d)
|
the establishment of a letter
of credit, guaranty or surety
|
No financial arrangement made pursuant
to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals,
to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses
or indemnification ordered by a court.
Any discretionary indemnification pursuant
to NRS 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined by a court
that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances.
The determination must be made:
|
(b)
|
by the board of directors by
majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding;
|
|
(c)
|
if a majority vote of a quorum
consisting of directors who were not parties to the action, suit
or proceeding so orders, by independent legal counsel in a written
opinion, or
|
|
(d)
|
if a quorum consisting of directors
who were not parties to the action, suit or proceeding cannot be
obtained, by independent legal counsel in a written opinion.
|
Charter Provisions and Other Arrangements
of the Registrant
Pursuant to the provisions of Nevada Revised
Statutes, the Registrant has adopted the following indemnification provisions in its Bylaws for its directors and officers:
The Company shall indemnify, to the
maximum extent permitted by the law, any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the
right of the Company, by reason of the fact that such person is or was a director, officer, employee, or agent of the Company,
or is or was serving at the request of the Company as a director, officer, employee, or agent of another company, partnership,
joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines, and amounts paid
in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding if such person
acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct
was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of
no lo contendere
or its equivalent, shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company,
and that, with respect to any criminal action or proceeding, such person had reasonable cause to believe that his conduct was
unlawful.
The Company shall indemnify, to the
maximum extent permitted by the law, any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as
a director, officer, employee or agent of another company, partnership, joint venture, trust, or other enterprise against expenses,
including attorneys’ fees, actually and reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Company, but no indemnification shall be made in respect of any claim, issue or matter as
to which such person has been adjudged to be liable for negligence or misconduct in the performance of such person’s duty
to the Company unless and only to the extent that the court in which such action or suit was brought determines upon application
that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
To the extent that a director, officer,
employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred
to in the prior two paragraphs, or in defense of any claim, issue or matter therein, such person shall be indemnified by the Company
against expenses, including attorneys’ fees, actually and reasonably incurred by such person in connection with such defense. Any
indemnification under the prior two paragraphs, unless ordered by a court, shall be made by the Company only as authorized in
the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances
because such person has met the applicable standard of conduct set forth in the prior two paragraphs. Such determination
shall be made:
|
(ii)
|
by the board of directors by
majority vote of a quorum consisting of directors who were not
parties to such act, suit or proceeding;
|
|
(iii)
|
if such a quorum of disinterested
directors so orders, by independent legal counsel in a written
opinion; or
|
|
(iv)
|
if such a quorum of disinterested
directors cannot be obtained, by independent legal counsel in
a written opinion.
|
Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding
as authorized by the board of directors unless it is ultimately determined that such director, officer, employee or agent is not
entitled to be indemnified by the Company as authorized in the Bylaws or as provided by law.
The indemnification provided by the Bylaws:
|
(i)
|
does not exclude any other rights
to which a person seeking indemnification may be entitled under
any bylaw, agreement, vote of stockholders, or disinterested directors
or otherwise, both as to action in such person’s official
capacity and as to action in another capacity while holding such
office; and
|
|
(ii)
|
shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors, and administrators
of such a person.
|
The Company may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or as serving at the request
of the Company as a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise
against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s
status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions
of the Bylaws.
|
Item 15.
|
Recent
Sales of Unregistered Securities
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Promissory Notes
On February 14, 2011 we issued a convertible
promissory note in the principal amount of $250,000 to Vantage Associates SA (“Vantage”) and on June 23, 2011, we
issued an additional convertible promissory note to Vantage in the principal amount of $100,000 (the “Original Notes”).
The Original Notes were convertible into shares of the Company’s common stock upon the closing by the Company of an equity financing
yielding aggregate gross proceeds of at least $100,000. The Original Notes convert at the price per share of the securities issued
in such financing. The Original Notes were issued in reliance upon exemption from registration under the Securities Act pursuant
to Regulation S thereof. The Original Notes were converted into common stock on October 4, 2011 and are no longer outstanding.
Share Exchange Transaction
In connection with the Share Exchange
Transaction, on June 23, 2011 we issued a total of 12,000,000 shares of our common stock in exchange for 100% of the issued and
outstanding common stock of BVI. The common stock was issued in reliance upon exemption from registration under the Securities
Act pursuant to Rule 506 of Regulation D thereof, and comparable exemptions under state securities laws. The common stock was
issued to “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act, based upon representations
made by such investor.
Sale of Common Stock and Additional
Promissory Notes
On October 6, 2011, we raised $100,000
through the sale of 400,000 shares of our common stock at a price of $0.25 per share (the “October Shares”).
On October 6, 2011, we raised $150,000
from the proceeds of a convertible note (the “October Note”). The October Note was based upon the Company’s
standard form of promissory note, accrues interest at the rate of ten percent per annum, simple interest and the principal balance
of the October Note and any accrued interest thereon is convertible into our common stock at a $0.25 per share conversion price.
The October Note was converted into common stock on January 18, 2012 and is no longer outstanding.
On November 16, 2011, we raised $250,000
from the proceeds of a convertible note (the “November Note”). The November Note was based upon the Company’s
standard form of promissory note, accrues interest at the rate of ten percent per annum, simple interest and the principal balance
of the November Note and any accrued interest thereon is convertible into our common stock at the lower of (a) the price per share
at which shares of capital stock are sold in our next equity financing, or (b) the closing price of our securities if traded on
a securities exchange, or if actively traded over-the-counter, the average closing bid price for the securities, in each case over
the thirty (30) day period prior to the date of conversion; provided however, that if no active trading market for the securities
exists at the time of the conversion, such conversion price shall be the fair market value of a share of our common stock as determined
in good faith by our board of directors. The November Note was converted into common stock on July 6, 2012 and is no longer outstanding.
On January 16, 2012, March 7, 2012 and
May 30, 2012, we raised $250,000, $200,000 and $200,000 respectively from the proceeds of convertible notes (the “Subsequent
Notes” and together with the October Note and November Note, the “Notes”). The Subsequent Notes were based upon
the Company’s standard form of promissory note, accrue interest at the rate of ten percent per annum, simple interest and
the principal balance of the Subsequent Notes and any accrued interest thereon is convertible into our common stock at the lower
of (a) the price per share at which shares of capital stock are sold in our next equity financing, or (b) the closing price of
our securities if traded on a securities exchange, or if actively traded over-the-counter, the average closing bid price for the
securities, in each case over the thirty (30) day period prior to the date of conversion; provided however, that if no active trading
market for the securities exists at the time of the conversion, such conversion price shall be the fair market value of a share
of our common stock as determined in good faith by our board of directors. The Note issued on January 16, 2012 was converted into
common stock on July 16, 2012 and is no longer outstanding. The other Subsequent Notes remain outstanding.
On January 26, 2012, we entered into an Equity Purchase Agreement
(the “Southridge Agreement”) with Southridge Partners II, LP, a Delaware limited partnership (“Southridge”).
Upon execution of the Southridge Agreement, we issued 35,000 shares of our common stock to Southridge as a commitment fee (the
“Southridge Shares”).
On March 19, 2012, we issued 27,500 shares
of our common stock to Empire Relations Group (“Empire”) as consideration for consulting services rendered by Empire
to the Company (the “Empire Shares”).
On July 5, 2012, we entered into a Technology
Acquisition Agreement (the “Technology Agreement”) with Technew, pursuant to which we acquired the rights to certain
technology from Technew in exchange for 3,000,000 shares of our common stock (the “Technew Shares”).
On July 5, 2012, we issued 500,000 shares
of our common stock (the “Growers Synergy Shares”) to Growers Synergy Pte Ltd., a corporation organized under the laws
of Singapore (“Growers Synergy”), as consideration for services rendered by Growers Synergy to the Company. George
Blankenbaker, our president, director and stockholder is the managing director of Growers Synergy. Growers Fresh Pte Ltd (“Growers
Fresh) owns a 51% interest in Growers Synergy and Mr. Blankenbaker controls a 49% interest in Growers Fresh. owned and controlled
by the president and major stockholder of the Company.
The issuance of the October Shares, the
Notes, the Technew Shares and the Growers Synergy Shares were conducted in reliance upon Regulation S of the Securities Act of
1933, as amended and the rules and regulations promulgated thereunder (the “Securities Act”), to investors who are
“accredited investors,” as such term is defined in Rule 501(a) under the Securities Act, in offshore transactions (as
defined in Rule 902 under Regulation S of the Securities Act), based upon representations made by such investors.
The issuance of the Southridge Shares and
the Empire Shares were conducted in reliance upon Regulation D of the Securities Act to investors who are “accredited investors,”
as such term is defined in Rule 501(a) under the Securities Act, based upon representations made by such investors.
2012 Financing
On August 6, 2012, we raised $500,000 in
a private placement financing (the “Offering”) through the sale of (i) an aggregate of 1,066,667 shares of common stock
at a price per share of $0.46875 and (ii) warrants to purchase an equal number of shares of the Company’s common stock at
an exercise price of $0.6405 with a term of 5 years (the “Financing Securities”). The Company intends to use the net
proceeds from this offering to advance the Company’s ability to execute its growth strategy and to aid in the commercial
development of the recently announced launch of the Company’s majority-owned subsidiary, Stevia Technew Limited.
Garden State Securities, Inc. (the “Placement
Agent”) served as the placement agent of the Company for the Offering. In consideration for services rendered as the Placement
Agent, the Company agreed to: (i) pay to the Placement Agent cash commissions equal to $40,000, or 8.0% of the gross proceeds received
in the Offering, and (ii) issue to the Placement Agent, or its designee, a Warrant to purchase up to 85,333 shares of the Company’s
common stock (representing 8% of the Shares sold in the Offering) with an exercise price of$0.6405 per share and a term of 5 years
(the “GSS Securities”).
The issuance of the Financing Securities and the GSS Securities
were conducted in reliance upon Regulation D of the Securities Act to investors who are “accredited investors,” as
such term is defined in Rule 501(a) under the Securities Act, based upon representations made by such investors.
The following exhibits are included as part of this registration
statement by reference:
Number
|
Description
|
|
|
2.1
|
Share Exchange Agreement, dated June 23, 2011 (incorporated by reference to Exhibit 2.1 of the Registrant’s Current
Report on Form 8-K filed on June 29, 2011)
|
|
|
3.1
|
Articles of Incorporation of the Registrant, dated May 18, 2007, including all amendments to date (Incorporated
by reference to the Form S-1 filed on July 16, 2008 and the Current Report on Form 8-K filed March 9, 2011)
|
|
|
3.2
|
Amended and Restated Bylaws of the Registrant, as amended, dated March 18, 2011 (incorporated by reference to Exhibit
3.2 of the Registrant’s Current Report on Form 8-K filed on March 22, 2011)
|
|
|
4.1
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement
on Form S-1 filed on July 16, 2008)
|
|
|
5.1
|
Opinion of Greenberg Traurig, LLP
†
|
|
|
10.1
|
Supply Agreement with Asia Stevia Investment Development Company Ltd, dated April 12, 2011 (incorporated by reference
to the registrant’s Form 8-K filed on June 29, 2011)
|
|
|
10.2
|
Supply Agreement with Stevia Ventures Corporation, dated April 12, 2011 (incorporated by reference to the registrant’s
Form 8-K filed on June 29, 2011)
|
|
|
10.3
|
Convertible Promissory Note, with Vantage Associates SA, dated February 14, 2011 (incorporated by reference to the registrant’s
Form 8-K filed on June 29, 2011)
|
|
|
10.4
|
Convertible Promissory Note, with Vantage Associates SA, dated June 23, 2011 (incorporated by reference to the registrant’s
Form 8-K filed on June 29, 2011)
|
|
|
10.5
|
Form of Convertible Promissory Note (incorporated by reference to the registrant’s Form 10-Q filed on November 21,
2011)
|
|
|
10.6
|
Stock Purchase Agreement (incorporated by reference to the registrant’s Form 10-Q filed on November 21, 2011)
|
|
|
10.7
|
Management and Off-Take Agreement with Growers Synergy Pte Ltd., effective November 1, 2011 (incorporated by reference
to the registrant’s Form 8-K filed on October 31, 2011)
|
|
|
10.8
|
Equity Purchase Agreement with Southridge Partners II, LP, dated January 26, 2012 (incorporated by reference to the registrant’s
Form 8-K filed on January 30, 2012)
|
|
|
10.9
|
Registration Rights Agreement with Southridge Partners II, LP, dated January 26, 2012 (incorporated by reference to the
registrant’s Form 8-K filed on January 30, 2012)
|
10.10
|
The Minutes for Land Transferring Agreement for New Crop Plants Variety, dated December 14, 2011 (incorporated
by reference to the registrant’s Form 10-Q filed on February 17, 2012)
|
|
|
10.11
|
Supply Agreement with Guangzhou Health China Technology Development Company Limited, dated February 21, 2012 (incorporated
by reference to the registrant’s Form 8-K filed on February 27, 2012)
|
|
|
10.12
|
Cooperative Agreement (incorporated by reference to the registrant’s Current Report on Form 8-K filed on July
11, 2012)
|
|
|
10.13
|
Technology Acquisition Agreement (incorporated by reference to the registrant’s Current Report on Form 8-K filed
on July 11, 2012)
|
|
|
10.14
|
Securities Purchase Agreement (incorporated by reference to the Current Report on Form 8-K filed on August 7, 2012)
|
|
|
10.15
|
Registration Rights Agreement (incorporated by reference to the Current Report on Form 8-K filed on August 7, 2012)
|
|
|
10.16
|
Form of Warrant (incorporated by reference to the Current Report on Form 8-K filed on August 7, 2012)
|
|
|
21
|
List of Subsidiaries
†
|
|
|
23.1
|
Consent of Li & Company, PC*
|
|
|
23.2
|
Consent of Greenberg Traurig, LLP (filed as part of Exhibit 5.1)
†
|
|
|
24
|
Power of Attorney (incorporated by reference to the Registration Statement on Form S-1 filed on February 27, 2012).
|
|
|
101
|
Interactive Data File*
|
*Filed Herewith
†
Previously Filed
The undersigned registrant hereby undertakes
to:
1. To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i. To include any
prospectus required by section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in
the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
(§ 230.424 of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement.
iii. To include any
material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement;
Provided, however, that:
(A) Paragraphs (a)(1)(i)
and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8 (§ 239.16b of this chapter), and
the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m or 78o(d)) that are incorporated by reference in the registration statement; and
(B) Paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 (§ 239.13 of this chapter)
or Form F-3 (§ 239.33 of this chapter) and the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained
in a form of prospectus filed pursuant to Rule 424(b) (§ 230.424(b) of this chapter) that is part of the registration statement.
(C) Provided further,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is for an offering of asset-backed
securities on Form S-1 (§ 239.11 of this chapter) or Form S-3 (§ 239.13 of this chapter), and the information required
to be included in a post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB (§ 229.1100(c)).
2. That, for the
purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
3. To remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
4. If the registrant
is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements
required by “Item 8.A. of Form 20–F (17 CFR 249.220f)” at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished,
provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required
pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at
least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements
on Form F–3 (§239.33 of this chapter), a post-effective amendment need not be filed to include financial statements
and information required by Section 10(a)(3) of the Act or §210.3–19 of this chapter if such financial statements and
information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F–3.
5. That, for the
purpose of determining liability under the Securities Act of 1933 to any purchaser:
i. If the registrant
is relying on Rule 430B (§230.430B of this chapter):
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) (§230.424(b)(3) of this chapter) shall be deemed to be part
of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement;
and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (§230.424(b)(2), (b)(5), or (b)(7) of this
chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii), or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to
the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
ii. If the registrant
is subject to Rule 430C (§230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document immediately prior to such date of first use.
6. That, for the
purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities:
The undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
i. Any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424
of this chapter);
ii. Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
iii. The portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
iv. Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Indianapolis, State of Indiana, on November 2, 2012
|
STEVIA CORP.
|
|
a Nevada corporation
|
|
|
Dated: November 2, 2012
|
/s/ George Blankenbaker
|
|
By: George Blankenbaker
|
|
Its: President, Secretary, Treasurer and Director
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated:
Dated: November 2, 2012
|
/s/ George Blankenbaker
|
|
George Blankenbaker
|
|
President, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer)
|
|
|
Dated: November 2, 2012
|
/s/ Pablo Erat*
|
|
Pablo Erat
|
|
Director
|
|
|
Dated: November 2, 2012
|
/s/ Rodney L. Cook*
|
|
Rodney L. Cook
|
|
Director
|
*/s/ George Blankenbaker
|
|
George Blankenbaker, Attorney-in-Fact
|
|
|
|
Dated: November 2, 2012
|
|
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