Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Indicate by check mark whether the registrant
is large accelerated filer, and accelerated filer, or a non-accelerated filer. See definition of “accelerated filer”
and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
The aggregate market value of the shares
of Common Stock held by non-affiliates of the Company, based upon the closing price of the Common Stock on February 28, 2015 as
reported on the Nasdaq National Market, was approximately $30,000,000. Shares of Common Stock held by each executive officer and
director and by each person who owned 10% or more of the outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
The determination of who was a 10% stockholder and the number of shares held by such person is based on Schedule 13G filings with
the Securities and Exchange Commission, or SEC, as of February 28, 2015.
As of August 31, 2015, there were 175,187,683
shares of the Registrant’s Common Stock outstanding.
The Annual Report on Form 10-K contains
forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on Wholehealth
Products, Inc.’s current expectations, assumptions, estimates and projections about its business and industry. Words such
as “believe,” “expect,” “intend,” “plan,” “may” and other similar expressions
identify forward-looking statements. In addition, any statements referring to expectations, projections or other characterizations
of future events or circumstances are forward-looking statements. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from those stated in the forward-looking statements. Investors
should further understand these forward-looking statements are based on the limited knowledge currently available to everyone concerned.
Since many assumptions herein are likely to vary from what will actually occur, investors should treat all forward-looking statements
only as illustrations based upon the assumptions and not as the operating results of Wholehealth Products, Inc. Therefore, investors
are cautioned not to place undue reliance on forward-looking statements, which relate only to the beliefs, expectations or intentions
as of the date on which the statements are made. Wholehealth Products, Inc. undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances arising after the date hereof. Thus, investors should refer to and carefully review
information in future documents Wholehealth Products, Inc. files with the Securities and Exchange Commission.
PART I
ITEM 1. BUSINESS
Corporate History
Wholehealth Products, Inc. formerly
Gulf Western Petroleum Corporation (the Company) was incorporated on February 21, 2006 in the State of Nevada as Georgia Exploration,
Inc. The name was originally changed on March 8, 2007 and recently in July 2012 to WholeHealth Products, Inc. The Company was engaged
in the acquisition, exploration and development of oil and natural gas reserves in the United States.
General Overview
The Company today is in the business
of developing, manufacturing and marketing in vitro diagnostic (IVD) tests for over-the-counter (OTC or consumer) and point-of-care
(POC or professional) use markets. The Company currently manufactures and markets a range of diagnostic test kits for consumer
use through over-the-counter (OTC) sales, and for use by health professionals, generally located at medical clinics, physician
offices and hospitals known as Points-of-Care (POC), in the United States. These test kits are known as in vitro diagnostic test
kits or “IVD” products.
Research and Development
Our business plan is focused on expanding in the medical
field but we do not anticipate that we will expend any significant funds on research and development.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over
the next twelve months, other than in the ordinary course of business.
Employees
We currently have three full-time and
part-time employees. We generally utilize short term contractors, consultants and professional service providers, as necessary.
Our directors and officers provide services on a month to month basis pursuant to contractual and oral arrangements, and have signed
both employment and consulting agreements covering their activities. We do not expect any material changes in the number of employees
over the next twelve months subject to business conditions and activity. We expect to utilize contractors and consultants as needed
to meet our staffing needs, and will continue to periodically evaluate costs and benefits of staffing our resource requirements
externally or internally. We expect the level of success of our business will drive the timing and level of employees that we may
retain in the future.
Going Concern
Our financial statements have been prepared
assuming we will continue as a going concern. We are in our development stage and, accordingly, have several capital initiatives
but no revenues. We have raised limited financing and have incurred operating losses since our inception. These factors raise substantial
doubt about our ability to continue as a going concern, and our ability to achieve and maintain profitability and positive cash
flows are dependent on our ability to secure sufficient financing to fund our business activities. We are actively pursuing financing
options which we believe would allow us to continue to expand our business opportunities. There are no assurances that we will
be able to obtain additional financing from investors or private lenders and, if available, such financing may not be on commercial
terms acceptable to us or our stockholders. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty. We intend to raise financing sufficient to fund our capital expenditure and working capital requirements
for the next twelve months principally through private placements and possibly public offerings.
ITEM 1A. RISK FACTORS
You should carefully consider these
factors that may affect future results, together with all of the other information included in this Form 10-K, in evaluating the
business and the Company. The risks and uncertainties described below are those that the Company currently believes may materially
affect its business and results of operation. Additional risks and uncertainties that the Company is unaware of or that it currently
deems immaterial also may become important factors that affect its business and result of operations. The Company’s common
shares involve a high degree of risk and should be purchased only by investors who can afford a loss of their entire investment.
Prospective investors should carefully consider the following risk factors concerning the Company’s business before making
an investment.
In addition, you should carefully
consider these risks when you read “forward-looking” statements elsewhere in this Form 10-K. These are statements that
relate to the Company’s expectations for future events and time periods. Generally, the words “anticipate,” “expect,”
“intends,” and similar expressions identify forward-looking statements. Forward-looking statements involve risks and
uncertainties, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements.
Early Revenue Stage Company: Generation of Revenues
The Company is an early revenue stage
company and an investor cannot readily determine if the Company will become profitable. The Company is likely to continue to experience
financial difficulties during this early revenue stage and beyond. The Company may be unable to operate profitably, even if it
generates additional revenues. The Company may not obtain the necessary working capital to continue developing and marketing its
products. Furthermore, the present products may not receive sufficient interest to generate revenues or achieve profitability.
Need for Future Capital: Long-Term Viability of Company
The Company will need additional capital to continue its
operations.
There can be no assurance that the Company
will generate revenues from present operations of obtain sufficient capital on acceptable terms, if at all. Failure to obtain such
capital or generate such operating revenues would have an adverse impact on the Company’s financial position, operations
and ability to continue as a going concern. The Company’s operating and capital requirements during the next fiscal year
and thereafter will vary based on a number of factors, including the level of sales and marketing activities for its services and
products. There can be no assurance that additional private or public financing, including debt or equity financing may be dilutive
to stockholders present ownership levels and such additional equity securities may have rights, preferences, or privileges that
are senior to those of the Company’s existing common stock.
Furthermore, debt financing, if
available, may require payment of interest and potentially involve restrictive covenants that could impose limitations on the
flexibility of the Company to operate. The Company’s difficulty or failure to successfully obtain additional financing
may jeopardize its ability to continue the business and its operations.
Unpredictability of Future Revenues: Potential Fluctuation
in Operating Results
As a result of the Company’s limited
operating history; the Company is currently unable to accurately forecast its revenues. Current and future expense levels are based
largely on the Company’s marketing and development plans and estimates of future revenue. Sales and operating results generally
depend on the volume and timing of orders and on the Company’s ability to fulfill such orders, both of which are difficult
to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall.
Accordingly, any significant shortfall in revenues in relation to planned expenditures could have an adverse response to changes
in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions that could
have a material adverse effect on its business, prospects, financial condition and results of operations.
Flaws and Defects in Products
Products offered by the Company may contain undetected flaws
or defects when first introduced or as new versions are released. Any inaccuracy or defects may result in adverse product reviews
and a loss or delay in market acceptance. There can be no assurance that flaws or defects will not be found in the Company’s
products. Flaws and defects, if found, could have a materially adverse effect upon the business operations and financial condition
of the Company. Marketing of any of the Company’s potential products may expose the Company to liability claims resulting
from the use of the Company’s products. These claims might be made by consumers, health care providers, sellers of the Company’s
products or others. A claim, particularly resulting from a clinical trial, or a product recall could harm the Company’s business,
results of operations, financial condition, cash flow and future prospects.
Stock Price Volatility
The market price of the Company’s
stock has fluctuated in the past and may continue to fluctuate in the future. The Company believes such fluctuations will continue
as a result of many factors, including US and World markets, financing plans, future announcements concerning the Company, the
Company’s competitors, principal customers regarding financial results or expectations, industry supply or demand dynamics,
new product introductions, governmental regulations, the commencement or results of litigation or changes in earnings estimates
by analysts. In addition, in recent years the stock market has experienced significant price and volume fluctuations often for
reasons outside the control of the particular companies. These fluctuations as well as general economic, political and market conditions
may have an adverse affect on the market price of the Company’s common stock.
Worldwide Economic Conditions
The Company’s financial performance
depends significantly on worldwide economic conditions and the related impact on levels of consumer spending, which has recently
deteriorated significantly in many countries and regions, including the U.S., and may remain depressed for the foreseeable future.
Demand for the Company’s products may be adversely affected by negative macroeconomic factors affecting consumer spending.
Substantial tightening of consumer credit, low consumer liquidity, and extreme volatility in credit and equity markets have weakened
consumer confidence and decreased consumer spending. These and other economic factors can reduce demand for the Company’s
products and harm the Company’s business, financial condition and results of operations, and to the extent such economic
conditions continue, they could cause further harm to the Company’s business, financial condition and operations.
Dependence on Sales through Retailers and Distributors
The Company’s business that
depends significantly upon sales through retailers and distributors may be affected if the Company’s retailers and
distributors are not successful. As a result, the Company could experience reduced sales, substantial product returns or
increased price protection, any of which would negatively impact the Company’s business, financial condition and
results of operations. A significant portion of the Company’s sales are made through retailers, either directly or
through distributors. If the Company’s retailers and distributors are not successful, due to weak consumer retail
demand caused by the current worldwide economic downturn, decline in consumer confidence, or other factors, the Company could
continue to experience reduced sales as well as substantial product returns or price protection claims, which could harm the
Company’s business, financial condition and operations.
Limited Management Personnel
Under the Company’s business plan,
significant and material matters of business must be conducted and concluded in a timely fashion. The execution of the Company’s
business plan places a significant strain on the Company’s management while providing little or no immediate compensation.
There can be no assurance that the Company’s
planned personnel, systems, procedures and controls will be adequate to support its future operations, management will be able
to hire, train, retain, motivate and manage personnel or that its management will be able to successfully identify, manage and
exploit existing and potential market opportunities. If the Company is unable to manage growth effectively, the Company’s
business, prospects, financial condition, results and operations could be adversely affected.
Competition
The market in which Wholehealth Products, Inc. competes is
highly competitive, and the Company has no assurance that it will be able to compete effectively, especially against established
industry competitors with significantly greater financial resources. The Company expects it may face competition from a few competitors
with potentially greater financial resources, well-established brand names and large, pre-existing customer base.
Dependence on Management
The Company’s performance will
be substantially dependent on the continued services and on the performance of the current senior management and other key personnel
of the Company. The Company’s performance will also depend on the Company’s ability to retain and motivate its other
officers and key employees. The Company’s inability to retain its executive officers or other key employees could have a
material adverse effect on the Company’s business, prospects, financial condition and results of operations. The Company’s
future success depends to a great extent on its ability to identify, attract, hire, train, retain and motivate other highly skilled
technical, managerial, merchandising, marketing and customer service personnel. Competition for such personnel can be intense and
there is no assurance the Company will be able to successfully attract, assimilate and retain sufficiently qualified personnel.
The failure to retain and attract the necessary technical and managerial personnel could have a material adverse effect on the
Company’s business, prospects, financial condition and results of operations.
Development of Brand Awareness
For certain market segments that the
Company plans to pursue, the development of its brand awareness is essential for it to reduce its marketing expenditures over time
and realize greater benefits from marketing expenditures. If the Company’s brand-marketing efforts are unsuccessful, growth
prospects, financial condition and results of operations would be adversely affected. Wholehealth Products, Inc. brand awareness
efforts have required, and will most likely continue to require additional expenditures.
Intellectual Property Protection: Uncertainty of Protection
of Proprietary Rights
Wholehealth Products, Inc. currently
relies on a combination of patents, trademarks, trade secret protection, non-disclosure agreements and licensing arrangements to
establish and protect its proprietary rights. Despite efforts to safeguard and maintain the Company’s proprietary rights,
there can be no assurance the Company will be successful in doing so or its competitors will not independently develop products
substantially equivalent or superior.
The Company also relies on trade
secrets and proprietary know-how, which the Company seeks to protect by confidentiality and non-disclosure agreements with
its employees, consultants, and third parties. There can be no assurance that these agreements will not be breached, that the
Company will have adequate remedies for any breach, or that certain of the Company’s trade secrets and proprietary
know-how will not otherwise become known or be discovered by competitors.
Protecting or defending the Company’s IP rights, to
protect trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of
infringement or invalidity may require litigation. Such litigation, whether successful or unsuccessful, could result in substantial
costs and diversions of management resources, either of which could have a materially adverse effect on the Company’s business,
prospects, financial condition or operating results.
Availability and Coverage of Insurance
For certain risks, the Company does not maintain insurance
coverage because of cost and/or availability. Because the Company retains some portion of its insurable risks, and in some cases
self-insures completely, unforeseen or catastrophic losses in excess of insured limits could have a material adverse effect on
the Company’s financial condition and operating results.
Penny Stock Regulation
The Company’s securities sold as part of financing
provided to the Company may be subject to “penny stock rules” that impose additional sales requirements on broker-dealers
who sell such securities to persons other than established customers and accredited investors, the latter of which are generally
people with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly. For transactions covered by
these rules, the Company and/or broker-dealer must make a special suitability determination for the purchase of such securities
and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the “penny stock rules” require the delivery, prior to the transaction, of
a disclosure schedule prescribed by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer
must also disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for
the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks.
Consequently, the “penny stock rules” may restrict the ability of broker-dealers to sell the Company’s securities.
The foregoing required penny stock restrictions will not apply to the Company’s common stock if such securities maintain
a market price of $5.00 or greater. Therefore the challenge for the Company is that the market price of the Company’s common
stock may not reach or remain at such a level.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
The Company is located in Anaheim Hills, California.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. MINING SAFETY DISCLOSURES
None
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES.
During the year ended August 31, 2015 and 2014, shares
of the Company’s common stock are quoted on the OTC Markets (www.otcmarkets.com) via the trading symbol
“GWPC.”
The following table sets forth the high and low bid prices
for the Company’s shares for each quarter during the two fiscal years ended August 31, 2015 and 2014. The prices reflect
inter-dealer prices, without retail mark-up, mark-down or commission and are not intended to represent actual transactions.
|
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Date
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|
Bid Price
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|
|
|
|
|
|
|
|
|
FY 2015
|
HIGH
|
|
LOW
|
|
|
|
|
|
|
|
First Quarter
|
|
.28
|
|
.03
|
|
|
|
|
|
|
|
Second Quarter
|
|
.05
|
|
.00
|
|
|
|
|
|
|
|
Third Quarter
|
|
.01
|
|
.00
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
.02
|
|
.00
|
|
|
|
|
|
|
|
|
FY 2014
|
HIGH
|
|
LOW
|
|
|
|
|
|
|
|
First Quarter
|
|
.65
|
|
.12
|
|
|
|
|
|
|
|
Second Quarter
|
|
.25
|
|
.07
|
|
|
|
|
|
|
|
Third Quarter
|
|
.25
|
|
.04
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
.25
|
|
.05
|
As of August 31, 2015, the market price of the Company’s
common stock was .00 per share.
As of August 31, 2015, there were 175,187,683 issued and
outstanding shares of common stock held by an estimated 170 holders of record.
DIVIDEND POLICY. The Company has not paid and does not plan
to pay cash dividends at this time.
ISSUER PURCHASE OF EQUITY SECURITIES. The Company did not
repurchase any of its securities during the year ended August 31, 2015
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS. The Company currently does not maintain any equity compensation plans.
ITEM 6. SELECT FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES
Total revenue was $0 for the year ended August 31, 2015 and
2014.
Investor Relations
For the twelve month period ended
August 31, 2015 investor relation costs were $1,970,058 compared to $2,465,118 for the preceding twelve month period ended August
31, 2014 an decrease of $495,060. The reason for the decrease was the fact that the company issued less shares for services.
Consulting Expenses
For the twelve month period ended August 31, 2015 the
Company incurred $59,499 consulting fees as opposed to the twelve months ended August 31, 2014 in which $312,487 was incurred,
a reduction of $252,988. The reduction was due to the Company not employing outside services in the period to implement their product.
General and Administrative Expenses
General and Administrative costs for the twelve months
was $512,006 compared to $69,978 for the period ended August 31, 2014, an increase of $442,028. The main areas of increase were
officer accrued consulting fees.
Net Loss
During the twelve months ended August 31, 2015 compared
to 2014 the Company lost $2,593,668 as compared to $2,871,673, a reduction of $278,005. The lost was predominately caused by stock
for services expense for investor relations and consulting.
Liquidity and Capital Resources
As of August 31, 2015, the
Company had a deficiency in working capital of $1,042,674, with no cash or assets which was an increase in the period from $553,237
or $489,437.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet
arrangements, special purpose entities, financing partnerships or guarantees.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company
and supplementary data are included beginning immediately before the signature page to this report.
ITEM 9A. CONTROLS AND PROCEDURES
The Company’s upper Management,
including the Chief Executive, Chief Financial, and Chief Operating Officers, as of the end of the period covered by this Annual
Report on Form 10-K, have concluded our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934) were not effective as described in the act, although efforts were made to do so and to ensure
information required to be disclosed in reports we file or submit under the Exchange Act are recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms. As we continue to expand, we aim to become effective in the
areas of disclosure controls and procedures in order to move the Company forward successfully.
Management, including the Chief Executive
Officer, Chief Financial Officer and Chief Operating Officer, do not expect its present disclosure controls and procedures nor
will its internal controls allow nor prevent all error or fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute assurance the objectives of the control system are met. Further, the design of a control
system must reflect the fact that resource constraints and the benefits of controls must be considered relative to their costs.
Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance all control issues
and instances of fraud, if any, have been detected. To address the material weaknesses, management performed additional analysis
and other post-closing procedures in an effort to ensure its consolidated financial statements included in this annual report have
been prepared in accordance with generally accepted accounting principles and are as free of fraud as best can be determined. Accordingly,
management believes the financial statements included in this report fairly present in all material respects our financial condition,
results of operations and cash flows for the periods presented.
Changes in Internal Controls.
There were no significant changes in our internal controls
or other factors that could significantly affect these controls subsequent to the date of their evaluation. There were no deficiencies
or material weaknesses recognized as of August 31, 2015, and therefore no corrective actions were deemed necessary. However, the
design of any system of controls is based in part upon certain assumptions about the likelihood of future events and there is no
certainty that any design will succeed in achieving its stated goal under all potential future considerations, regardless of how
remote. It is management’s plan, however, to work toward better assessment of any and all necessary internal controls and
thereby to increase the capability to recognize errors and prevent fraud as the Company strives for bettering itself from this
point. We have already initiated discussions to study, assess and create everything necessary throughout the remainder of the year
to achieve effective disclosure controls and procedures. Nonetheless, this will remain a potential material weakness until such
activities have been fully integrated.
Management’s Report on Internal Control Over Financial
Reporting.
Management is responsible for establishing
and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act,
as amended. Internal control over financial reporting refers to a process designed by, or under the supervision of, our Chief Executive,
Chief Financial and Chief Operating Officers, effected by our Board, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in connection
with GAAP, including those policies and procedures that:
|
|
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;
|
|
|
·
|
Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
|
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.
|
Because of its inherent limitations, internal control over
financial reporting cannot provide absolute assurance of the prevention or detection of misstatements. In addition, projections
of any evaluation of effectiveness to future periods are subject to risk that controls may have become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In connection with the
preparation of this Annual Report on Form 10-K for the year ended August 31, 2015, management, with the participation of our
Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, have evaluated the effectiveness of our
internal controls over financial reporting, pursuant to Rule 13a-15 under the Exchange Act, as of August 31, 2015 in order to
determine the potential for or the existence of material weaknesses, defined as a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such that there is a reasonable possibility a material
misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely
basis. Our Chief Executive, Chief Financial, and Chief Operating Officers, have concluded the design and operation of our
internal controls and procedures are not effective as of August 31, 2015.
Because of these material weaknesses,
Management has concluded the Company did not maintain effective internal control over financial reporting as of August 31, 2015,
based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO, criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.
It is the intention of the present Management to continue to study and establish COSO Control-Integrated Framework within Wholehealth
Products, Inc. during the coming year as we begin to expand our present number of personnel and activities.
There were no significant changes previously in our internal
controls over financial reporting that occurred during the fourth fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.
This Annual Report on Form 10-K does not include an attestation
report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10K.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The Company’s directors and executive officers and
their ages as of August 31, 2015 are as follows:
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|
|
|
|
|
|
Name
|
|
Age
|
|
Position(s)
|
|
Charles A. Strongo
|
|
54
|
|
Chairman of the Board of Directors, Chief Executive Officer and President
|
|
Richard A. Johnson
|
|
83
|
|
Chief Financial Officer and Director
|
|
Shujie Cui, M.D.
|
|
51
|
|
Director
|
|
Nancy Strongo, M. Ed., J.D.
|
|
63
|
|
Vice President Business Development, Director and Secretary
|
|
F. Rene Alvarez, Jr.,
|
|
76
|
|
Director
|
|
Wolfgang Groeters, BS
|
|
78
|
|
Director
|
Charles A. Strongo, Chief Executive Officer, President,
Chairman
–
Mr. Strongo has superior knowledge and
business relationships, exceeding 25 years experience in business management, operations, and increasing profitability, with particularity
in the in vitro diagnostic business. Mr. Strongo has been in the in vitro diagnostic business for the past fifteen years, having
begun in 1995, the beginning of the “over-the counter” in-vitro diagnostic industry. He has served as President and
Chief Executive Officer of EarlyDETECT, Inc. (EDI) since March, 2004. He was a member of the EDI Board of Directors from June 2002
until June 2009. Prior to that, Mr. Strongo served as the Chief Financial Officer for two years. Mr. Strongo has a comprehensive
knowledge of ISO and FDA regulations and has prepared several companies for the ISO inspections. Mr. Strongo has filed more than
twenty FDA 510K filings; he has also worked on countless pharmaceutical filings.
Mr. Strongo has prepared EDI as well
as several other companies for FDA inspections, under FDA regulatory guidelines. He cleared EarlyDETECT for the ISO 13485 CDM in
less than 6 weeks, a process that usually takes six months to a year. His dynamic personality and solid business model, along with
his keen understanding, extensive professional consultation and expertise, have increased profitability for multiple companies
here and abroad. He has also opened businesses in foreign countries, including Russia, Taiwan, Mexico, Malaysia, Thailand, and
the Philippines. Mr. Strongo holds a BA/MBA in Business Management from National University.
Richard A. Johnson – Chief Financial Officer, Director
To
the position of Chief Financial Officer Richard Johnson brings a wealth of experience at the senior executive levels in the areas
of Corporate Finance, Business Planning & Operations, R&D and Administration. His considerable strengths in the areas
of Finance and Corporate Administration will greatly assist the Company as it advances towards planned sales volume and expansion
of the Company strategic goals.
Mr.
Johnson’s enviable record of achievements at the executive level includes, latterly, CFO at Early Detect Inc. where he supervised
the financial activities of the Company and its subsidiaries over a span of 4.5 years. Previously, he held positions of Chief
Financial Officer, General Manager and Director in industry and also was a Senior Management and Finance Consultant to the manufacturing,
retail, agriculture and service industries for fifteen years as well as Program Control Director and Management Consultant with
a major international Engineering and Construction Corporation. Early in his career, Mr. Johnson spent eleven years with the U.S.
Department of Energy, Las Vegas, where he had the responsibilities of financial analysis, budgeting and Safety analysis in the
areas of nuclear explosives internationally.
Shujie Cui, M.D., Ph.D., Director
–
Dr. Cui has over 30 years of experience
in the Medical Diagnostic Industry and was instrumental in the testing for the H1N1 bird test and vaccine used in China. Dr. Cui
worked with the Chinese government on the SARS project and was the diagnostic company chosen to lead the research with the University
of Beijing Medical School. Dr. Cui is noted as the father of the “Strep A” test and the perfection of the development
of lateral flow rapid diagnostics and sandwich flow rapid diagnostics. Dr. Cui developed the only multi result Ng PSA test using
1 strip to determine the PSA level. Dr. Cui holds several patents in the medical diagnostic industry and is considered a foremost
expert in the medical diagnostic industry in the US and in China.
Nancy Strongo, M. Ed., J.D., Vice President Business Development,
Director and Secretary –
Ms. Strongo holds a Master’s degree in cross-cultural
communication, studied international law at the University of Strasburg, France, and received her law degree from Trinity Law &
Graduate School. Ms. Strongo was the first woman to do business as a sole proprietor in South Korea, importing several products.
She owned an import company for several years; and has over 20 years experience in international and domestic business development,
having developed several successful businesses from inception. Her experience in corporate law includes responsibility and oversight
for hundreds of corporate filings for over 15 years, through to the present. She has work with the Orange County District Attorney’s
Office. She has several years’ experience in Real Estate and Mortgage Law. Prior to obtaining her law degree, Ms. Strongo
managed a family law practice in Beverly Hills; and worked in corporate law and insurance subrogation in two of Los Angeles’
largest law firms for several years. She is a member of the Federalist Society, and Orange County Christian Lawyers Association.
F. Rene Alvarez, Jr., Director
Mr. Alvarez holds a law degree and has
been admitted to the New York State Bar Association. He also has a Bachelor’s degree in Accounting from Canisius College
in New York. He held a variety of audit positions with a variety of Ford Motor Company subsidiaries with titles such as Senior
Vice President, CFO and Director of Internal America and South Africa. Since retiring from Ford, he has served in high level positions
in several diverse companies, serving in such capacities as Corporate Vice President and Board Member.
Wolfgang Groeters,
BS, Director
Wolfgang
brings several decades of experience in health care and diagnostics as an engineer. He started Bentley Labs which was sold to
American Hospital Supply, then to Baxter International, Ellay, Inc and from there to Meditronic Inc. At one time Edwards and Bentley
were together under Baxter. He then became President of Orange Empire Building Services from 1975 to 1980.
Compliance With Section 16(a) of the Exchange Act
The Company does not have a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. Accordingly, the Company’s executive
officers and directors and persons who own more than 10% of its equity securities are not subject to the beneficial ownership reporting
requirements of Section 16(a) of that Act. However, although not required, certain of such persons voluntarily file beneficial
ownership reports with the Securities and Exchange Commission.
Code of Ethics and Corporate Policies
WholeHealth Products, Inc. has created and adopted a Code
of Ethics and Corporate Policy. Since its inception, the policy has been updated and the current policy is presented below:
In all societies, the opportunity to
be a successful member of the community is an important role we must all be a part of. Any company must, therefore, understand
its critical role and how to be a good member of that Community. Like a three-legged stool, of which all three legs must exist
in order for it to stand, we at Wholehealth Products, Inc. see three critical components for our success and ability to be a good
member of our community at large, both here and abroad: The Company, Investors & Shareholders, and our Customers & Patients.
In no particular order do these responsibilities preside, since all are critical, required for success, and important to the Company
and our communities in which we reside, work and play.
Therefore, one of those stool legs stands
for our responsibility to the Company, including employees, near and far, in house and out, research, development, sales, and marketing
members through to our vendors. We recognize their merit and aim for all to engender a sense of well-being and security in their
jobs through good working conditions, relationships, and compensation for a job well done and helping them address and fulfill
their family responsibilities. Furthermore, there is equal opportunity for employment, development, advancement, and allowance
for suggestions to advance the Company. Lastly, we provide management and guidance, through being good leaders and enabling opportunities
for redressing issues.
Another leg of the stool stands for
the responsibility to our investors and stockholders. Although the Company must experiment with new ideas and plans, it is tantamount
to being to being successful, for through our success, we are able to return this to our investors and shareholders, without whom
we would not exist as a Company. We will, therefore, utilize research as a means to an end, developing innovative programs and
advancing the state of the Company as a result, with the clear intention to ensure success and appreciation of those who believe
in us and in our dreams, research, plans and our provision of ultimately useful products for the community.
The final leg of the stool represents
how we must always be cognizant of those who use our products and services. In meeting their expectations, for whom we ultimately
work, our customers and patients.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth
information about all cash and non-cash compensation awarded to, earned by, or paid to (i) all persons serving as the
Company’s principle executive officer during the last two fiscal years; (ii) all persons serving as the Company’s
principle financial officer during the last two fiscal years; (iii) the Company’s three most highly compensated
executive officers (other than principle executive officers and principle financial officers) serving as such at the end of
the last two fiscal years; and (iv) up to two additional persons for whom disclosure would have been provided pursuant to
clause (iii) above but for the fact that the person was not serving as an executive officer of the Company at the end of the
last fiscal year, and each current director of the Company during fiscal years ended August 31, 2015 and 2014.
|
Name
|
Principal Position
|
Date
|
Salary
|
Shares of Stock Awarded
|
Stock Value
|
Total Compensation
|
|
|
|
|
|
|
|
|
|
Charles Strongo
|
CEO
|
FY 2015
|
150,000
|
30,000,000
|
30,000
|
180,000
|
|
Richard Johnson
|
CFO
|
FY 2015
|
129,996
|
-
|
-
|
129,996
|
The Company accrued salary for its CEO and CFO of $150,000
and 129,996 for the year ended August 31, 2015.
During the fiscal year ended August
31, 2014, the chief executive officer accrued $87,452 in salary and the chief financial officer accrued $85,719 in salary.
The Company’s Directors are compensated
for their participation on the Board of Directors for performance of their duties as directed by the Chairman of the Company. The
Board of Directors has not set a fixed compensation fee plan for Directors, but chooses to review Board and individual Director
performance on an annual basis and compensation is earned on a merit-system.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of August 31, 2015 certain
information with respect to the beneficial ownership of the Company’s common stock by each person known by us to be the beneficial
owner of more than five percent (5%) of the Company’s common stock; by each of the Company’s current directors and
named executive officers; and by all executive officers and directors as a group.
|
Name and Address
|
Number of Shares Beneficially
Owned
(1)
|
Percentage of Common Stock
|
|
Charles Strongo
6761 E. Leafwood Dr
Anaheim Hills, CA 92807
|
51,728,290
|
30%
|
|
Richard Johnson
612 Wood Lake Dr
Brea, CA 92821
|
14,300,000
|
8%
|
|
American Estates and Trust FBO
Roger Thomas IRA
1636 Anita Ln
Newport Beach, CA 92660
|
12,186,666
|
7%
|
|
Eric Garofano
550 N Brand Blvd #600
Glendale, CA 91203
|
10,000,000
|
6%
|
|
|
(1)
|
Percentages based on 175,187,683 shares of common stock issued and outstanding as of August 31, 2015.
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
None.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2015
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Wholehealth Products, Inc. formerly Gulf Western Petroleum
Corporation (the Company) was incorporated on February 21, 2006 in the State of Nevada as Georgia Exploration, Inc. The name was
originally changed on March 8, 2007 and recently in July 2012 to Wholehealth Products, Inc.
The Company today is in the business of developing, manufacturing
and marketing in vitro diagnostic (IVD) tests for over-the-counter (OTC or consumer), and point-of-care (POC or professional) use
markets. The Company currently manufactures and markets a range of diagnostic test kits for consumer use through over-the-counter
(OTC) sales, and for use by health care professionals, generally located at medical clinics, physician offices and hospitals known
as Points-of-Care (POC), in the United States. These test kits are known as in vitro diagnostic test kits or “IVD”
products.
Starting September 1, 2008, after its change in business
direction from oil and gas revenue company, it entered the development stage which is in effect to the present day.
The Company’s financial statements for generated by management.
The Company has not engaged a qualified PCAOB firm to render an opinion on the financial statements.
The Company is currently suspended from trading and is seeking
to be reinstated.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).The pr
e
p
aration
of f
i
nancial stat
e
m
ents
in confor
m
ity with accounting principles g
e
n
e
r
a
lly
accepted in the United States of A
m
erica r
e
quir
e
s
m
anage
m
ent to
m
ake
est
i
m
a
tes
and
a
ssu
m
p
ti
o
n
s
t
h
at a
ff
ect t
h
e
r
e
p
o
rted a
m
ounts
of assets a
n
d lia
b
i
lities
a
n
d
d
iscl
o
sure
o
f c
on
tin
g
e
n
t
assets a
n
d lia
b
ili
t
ies
at t
h
e
d
ate
o
f
the f
i
n
a
n
cial
stateme
n
ts and t
h
e re
p
o
rt
e
d
a
m
o
u
nts
o
f
r
e
v
e
nu
e
s
a
n
d e
x
p
e
ns
e
s
d
u
ri
n
g
t
h
e
r
ep
o
rti
n
g
p
e
ri
o
d
.
Act
u
al r
e
s
u
lts
could di
f
f
e
r
f
rom
those est
i
m
ates.
M
anage
m
ent
f
u
r
t
her
a
ck
n
o
w
l
edg
e
s
t
h
at it is solely res
po
nsible
f
o
r
ad
opti
n
g
s
o
un
d
acc
ou
nti
n
g practices, esta
b
lis
h
ing
and
m
aintaining a syst
e
m of internal accounting
control and pr
e
v
e
n
ting
and d
e
tecting fraud. The Co
m
p
any
'
s
syst
e
m of
i
n
ternal
ac
c
o
u
nti
n
g
c
o
nt
ro
l is design
e
d
t
o as
s
u
r
e
,
a
m
ong oth
e
r ite
m
s
,
t
h
at
1
) re
c
o
r
d
ed
t
ransact
i
o
ns
are vali
d
;
2
) valid transactions
a
re
re
c
o
rded; and 3) tr
an
sactions
are r
e
c
o
r
d
ed
in t
h
e pro
p
er
p
er
i
o
d
in a t
i
mely
m
a
nn
er
to prod
u
ce fi
n
a
n
cial
stateme
n
ts w
h
ich
p
rese
n
t
fa
i
rly t
h
e fi
n
a
n
cial
c
o
n
d
iti
o
n,
res
u
lts
o
f o
p
erati
on
s
and cash flows
o
f
t
h
e
Co
m
p
any for
t
h
e
respective periods being presented
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 from September
1, 2008 to present. 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 September 1, 2008 have been considered as part of
the Company’s development stage activities
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property
and equipment. Actual results could differ from those estimates.
Cash equivalents
The Company considers all highly liquid investments with
a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting
Standards Codification for disclosures about fair value of its financial instruments and 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. 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 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.
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.
|
The carrying amount of the Company’s financial
assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short
maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments based upon
management’s best estimate of interest rates that would be available to the Company for similar financial arrangements
at August 31, 2015.
The Company does not have any assets or liabilities measured
at fair value on a recurring or a non-recurring basis.
Equipment
Equipment is recorded at cost. Expenditures for major additions
and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed
by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful
life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed
from the accounts and any gain or loss is reflected in statements of operations.
Impairment of long-lived assets
The Company follows paragraph 360-10-05-4 of the FASB Accounting
Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes computer equipment is reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of the 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 determined that there were no impairments of
long-lived assets as of August 31, 2015.
Commitments and contingencies
The Company follows subtopic 450-20
of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies
arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability
has been incurred and the amount of the assessment can be reasonably estimated.
Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting
Standards Codification for revenue recognition. The Company will recognize 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.
Income taxes
The Company follows 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 fiscal 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 fiscal 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 Statements of Income and Comprehensive Income 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”) with regards to uncertainty income taxes. 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 percent (50%) 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 Company had no material adjustments to its liabilities for unrecognized income tax benefits
according to the provisions of Section 740-10-25.
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. The weighted average number of common shares outstanding and potentially
outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were no potentially dilutive shares outstanding as
of August 31, 2015.
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.
Advertising Costs
The Company expenses the cost of advertising and promotional
materials when incurred. Total Advertising costs were $0 for years ended August 31, 2015 and 2014.
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 were 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
The following accounting standards were issued as
of December 26, 2011:
ASU 2010-06,
Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements.
This
ASU affects all entities that are required to make disclosures about recurring and nonrecurring fair value measurements under
FASB ASC Topic 820, originally issued as FASB Statement No. 157,
Fair Value Measurements
. The ASU requires certain new
disclosures and clarifies two existing disclosure requirements. The new disclosures and clarifications of existing disclosures
are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective
for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.
ASU
2011-04,
Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements
in U.S. GAAP and IFRSs
This ASU
supersedes most of the guidance in Topic 820, although many of the changes are clarifications of existing guidance or wording
changes to align with IFRS 13. In addition, certain amendments in ASU 2011-04 change a particular principle or requirement for
measuring fair value or disclosing information about fair value measurements. The amendments in ASU 2011-04 are effective for
public entities for interim and annual periods beginning after December 15, 2011.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the
Company had a net loss of $2,593,668 for the year ended August 31, 2015.
While the Company is attempting to commence operations and
generate revenues, the Company’s cash position may not be significant 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 revenues provide the opportunity for the Company to continue as
a going concern. While the Company believes in the viability of its strategy to generate 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 revenues.
The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
Included in general and administrative costs were amounts
accrued to its chief operating officer of $150,000 and its chief financial officer of $129,996.
Included in Accounts Payable and Accrued Expenses are amounts
owed to its officers and directors for salaries and benefits of $521,296.
Included in notes payable is an amount of $30,089 owed to
the CEO for a loan. The loan is without interest and is secured by a stock issuance of 30,000,000 shares in the event of nonpayment.
During the year ended August 31, 2015 the Company issued
3,928,290 shares of stock for services to its CEO and 500,000 shares to its CFO.
NOTE 5 - NOTE PAYABLE
The Company is obligated on eight short term loans, all past
due, with six bearing interest at 15% and two with interest at 5% totaling $319,603. A tenth note for $30,089 without interest
is owed to the Company’s CEO. The total note payable liability is $349,692 and is shown on the balance sheet under notes
payable. Interest owed at May 31, 2015 equals $80,668 and is shown on the balance sheet. Total interest expense for the year ended
August 31, 2015 was $52,105 which is shown on the statement of operations.
NOTE 6 - EQUITY
During the quarter ended November 30, 2013 the Company issued
10,200,000 shares of stock on October 10, 2013 valued at market which was 0.115 dollars per share for marketing services.
On May 5, 2014 the Company rescinded shares of 488,638 for
non performance of services. These shares were valued at market at .20 which resulted in a reduction to stock for services of $97,728.
Also in May 2014 the Company rescinded share agreements which
resulted in $98,820 of shares to be issued to be cancelled.
During the period June 2014 to August 2014 the Company issued
2,637,878 shares for cash of $80,500 and 13,533,334 shares for services valued at market for $1,488,666.
During the quarter ended November 30, 2014 the Company issued
40,986,100 shares of stock. Of this amount 30,000,000 was issued as security for a loan made by the CEO of the Company and valued
at present at par. 10,243,676 shares were issued for services valued at market which equaled $1,757,442. 742,242 shares were issued
for cash of $24,500. In addition the Company received $87,923 of cash for shares to be issued pursuant to subscription agreements.
Total shares to be issued for this amount will be approximately 2,664,333.
For the three months ended February 28, 2015 the Company
issued 11,375,580 shares of stock of which 7,087,200 shares were issued for services valued at $212,616. 1,201,157 shares were
issued for cash of $21,750 from 5 investors and the balance of 3,087,223 shares for cash of $87,923 previously contributed.
For the three months ending May 31, 2015 the Company
did not issue any new shares.
For the three months ending August 31, 2015 the Company did
not issue any new shares.
The Company as part and parcel of the
stock issued for cash attached 1 warrant for each stock issuance. The warrant has a strike price of .70 and is exercisable anytime
within 5 years of September 2012.
NOTE 7 – EMPLOYMENT AGREEMENTS
The Company has entered into employment contracts with the
CEO and CFO in November 2015 for $150,000 and $130,000 respectively for two years.
NOTE 8 – INCOME TAX
Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net deferred tax assets consist of the following components
as of August 31, 2015 and 2014:
|
|
|
August 31,
2015
|
|
August 31, 2014
|
|
Deferred Tax Assets – Non-current:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOL Carryover
|
|
$
|
(360,958
|
)
|
|
$
|
(360,958
|
)
|
|
|
|
|
|
|
|
|
—
|
|
|
Less valuation allowance
|
|
|
360,958
|
|
|
|
360,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets, net of valuation allowance
|
|
$
|
—
|
|
|
$
|
—
|
|
The income tax provision differs from the amount of income
tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended August
31, 2015 and 2014 due to the following:
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Book Income
|
|
|
(2,593,668
|
)
|
|
$
|
(2,871,673
|
)
|
|
Meals and Entertainment
|
|
|
—
|
|
|
|
—
|
|
|
Stock for Services
|
|
|
1,970,058
|
|
|
|
2,465,118
|
|
|
Accrued Payroll
|
|
|
406,141
|
|
|
|
190,173
|
|
|
Valuation allowance
|
|
|
217,469
|
|
|
|
216,382
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
At August 31, 2015, the Company had
net operating loss carry forwards of approximately $975,500 that may be offset against future taxable income from the year 2014
to 2034. No tax benefit has been reported in the August 31, 2012 financial statements since the potential tax benefit is offset
by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform
Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should
a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
NOTE 10 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the
requirements of ASC Topic 855 and has determined that other than listed below, no material subsequent events exist.
