UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2012
(Name
Colorado |
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(State or other jurisdiction of incorporation Identification No.) | 84-1227328 (I.R.S. Employer of |
| Incorporation |
Identification No.) |
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[X]
Number The number of Shares of Common Stock Outstanding $.01 par value as of March 31, 2011, 5,021,764
2012, was 13,521,568.
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Unaudited
2012
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Report of Independent Registered Public Accounting Firm |
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Consolidated Interim Balance Sheets as of March 31, 2012, March 31, 2011 and December 31, |
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Consolidated Interim Statements of Changes in Stockholders’ Deficit | 3 | ||
| Consolidated Interim Statements of Operations for the |
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Consolidated Interim Statements of Cash Flows for the |
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Notes to the Consolidated Interim Financial Statements |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders of:
I
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.
My responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require me to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. I believe that the results of my procedures provide a reasonable basis for my report.
/s/ Eddy Chin Chartered Accountant
Licensed Public Accountant
Thornhill, Ontario
April 15, 2011
NOVA NATURAL RESOURCES CORPORATION | |||||||
Consolidated Statements of Cash Flows Unaudited | |||||||
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| Three Months Ended March 31, | ||||
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| 2011 |
| 2010 | ||
Operating activities |
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| Net loss | $ | (231,235) |
| $ | (5,855) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
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| Depreciation |
| 23,366 |
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| - |
| Changes in operating assets and liabilities: |
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| Accounts receivable |
| (65,018) |
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| - |
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| Prepaid expenses |
| (1,885) |
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| - |
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| Other current assets |
| (342) |
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| - |
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| Accounts payable and accrued liabilities |
| 111,498 |
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| (728) |
Net cash used in operating activities |
| (163,616) |
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| (6,583) | ||
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Investing activities |
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| Purchase of fixed assets |
| (27,473) |
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| - |
Net cash provided by investing activities |
| (27,473) |
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| - | ||
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Financing activities |
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| Repayment of bank overdraft |
| (15) |
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| - |
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| Proceeds from notes payable |
| 489,759 |
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| - |
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| Proceeds from related party payables |
| (103,202) |
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| 7,990 |
Net cash used in financing activities |
| 386,542 |
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| 7,990 | ||
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| Effect of exchange rate on cash |
| 702 |
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| - | |
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Net change in cash |
| 196,155 |
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| 1,407 | ||
Beginning cash balance |
| 48,376 |
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| 5,550 | ||
Ending cash balance | $ | 244,531 |
| $ | 6,957 | ||
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Supplemental cash flow information |
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| Cash paid for interest | $ | - |
| $ | - |
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| Cash paid for income taxes | $ | - |
| $ | - |
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See accompanying notes to the financial statements | |||||||
8
| March 31, | March 31, | December 31, | ||||||||||
| 2012 | 2011 | 2011 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash | $ | - | $ | 244,531 | $ | - | ||||||
| Accounts receivable | 316,551 | 105,925 | 188,423 | |||||||||
| Harmonized sales tax receivable | - | - | 5,933 | |||||||||
| Prepaid expenses | 128,682 | 54,321 | 83,724 | |||||||||
| Inventory | 12,015 | 11,307 | 11,784 | |||||||||
| Total current assets | 457,248 | 416,084 | 289,864 | |||||||||
| Fixed assets, net of accumulated depreciation (note 6) | 662,782 | 346,802 | 641,052 | |||||||||
| Total assets | $ | 1,120,030 | $ | 762,886 | $ | 930,916 | ||||||
| LIABILITIES AND STODCKHOLDERS' DEFICIT | ||||||||||||
| Current liabilities | ||||||||||||
| Bank indebtedness | $ | 95,546 | $ | - | $ | 28,281 | ||||||
| Accounts payable and accrued liabilities | 524,167 | 410,027 | 632,497 | |||||||||
| Harmonized sales tax payable | 74,527 | - | - | |||||||||
| Withholding taxes payable | 464,604 | - | 270,118 | |||||||||
| Deferred revenue | 164,669 | - | 116,692 | |||||||||
| Convertible notes payable (note 7) | 2,751,837 | 935,360 | 2,498,975 | |||||||||
| Related party notes (note 8) | 315,250 | 301,693 | 330,302 | |||||||||
| Total liabilities | 4,390,600 | 1,647,080 | 3,876,865 | |||||||||
| Stockholders' deficit | ||||||||||||
| Common stock; $0.01 par value, 50,000,000 shares | ||||||||||||
| authorized; 13,521,568 shares issued and outstanding | ||||||||||||
| (note 10) | 135,216 | 50,218 | 135,216 | |||||||||
| Additional paid-in capital | 5,716,666 | 5,631,664 | 5,716,666 | |||||||||
| Other comprehensive loss | (33,061 | ) | (12,153 | ) | 21,718 | |||||||
| Accumulated deficit | (9,089,391 | ) | (6,553,923 | ) | (8,819,549 | ) | ||||||
| Total stockholders' deficit | (3,270,570 | ) | (884,194 | ) | (2,945,949 | ) | ||||||
| Total liabilities and stockholders' deficit | $ | 1,120,030 | $ | 762,886 | $ | 930,916 | ||||||
| Common Stock | ||||||||||||||||||||||||
| Shares | Amount | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | |||||||||||||||||||
| Balance, December 31, 2010 | 5,021,764 | 50,218 | 5,631,664 | (12,855 | ) | (6,322,688 | ) | (653,661 | ) | |||||||||||||||
| Common stock issued for convertible note (note 7) | 8,500,000 | 85,000 | 85,000 | - | - | 170,000 | ||||||||||||||||||
| Foreign currency translation | - | - | - | 34,573 | - | 34,573 | ||||||||||||||||||
| Adjustment | (196 | ) | (2 | ) | 2 | - | - | - | ||||||||||||||||
| Net loss, year ended December 31, 2011 | - | - | - | - | (2,496,861 | ) | (2,496,861 | ) | ||||||||||||||||
| Balance, December 31, 2011 | 13,521,568 | 135,216 | 5,716,666 | 21,718 | (8,819,549 | ) | (2,945,949 | ) | ||||||||||||||||
| Foreign currency translation | - | - | - | (54,779 | ) | - | (54,779 | ) | ||||||||||||||||
| Net loss, quarter ended March 31, 2012 | - | - | - | - | (269,842 | ) | (269,842 | ) | ||||||||||||||||
| Balance, March 31, 2012 | 13,521,568 | $ | 135,216 | $ | 5,716,666 | $ | (33,061 | ) | $ | (9,089,391 | ) | $ | (3,270,570 | ) | ||||||||||
| Quarter Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues | $ | 1,257,411 | $ | 223,788 | ||||
| Cost of services provided | 251,178 | 129,941 | ||||||
| Gross margin | 1,006,233 | 93,847 | ||||||
| Operating expenses | ||||||||
| Continuing education | 14,027 | - | ||||||
| Depreciation | 50,178 | 23,366 | ||||||
| General and administrative | 134,840 | 28,322 | ||||||
| Management fees (note 8) | 29,967 | - | ||||||
| Meals and entertainment | 484 | 1,960 | ||||||
| Medical records | 28,224 | 14,047 | ||||||
| Professional fees | 19,611 | 101,816 | ||||||
| Rent (note 8) | 165,049 | 114,609 | ||||||
| Salaries and wages | 772,89 | 540,712 | ||||||
| Subcontract fees | 8,626 | - | ||||||
| Supplies | 43,372 | - | ||||||
| Travel | 8,802 | 250 | ||||||
| Total operating expenses | 1,276,075 | 325,082 | ||||||
| Net loss applicable to common shareholders | $ | (269,842 | ) | $ | (231,235 | ) | ||
| Accumulated other comprehensive loss | ||||||||
| Foreign currency translation adjustment | (54,779 | ) | (702 | ) | ||||
| Total comprehensive loss | $ | (215,063 | ) | $ | (231,937 | ) | ||
| Basic and diluted loss per common share | $ | (0.02 | ) | $ | (0.05 | ) | ||
| Weighted average shares outstanding | 13,521,568 | 5,021,764 | ||||||
| Quarter EndedMarch 31, | ||||||||
| 2012 | 2011 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (269,842 | ) | $ | (231,235 | ) | ||
| Adjustment to reconcile net loss to net cash used in | ||||||||
operating activities: Depreciation | 50,178 | 23,366 | ||||||
Changes in operating assets and liabilities Accounts receivable | (128,128 | ) | (65,018 | ) | ||||
| Harmonized sales tax | 80,460 | |||||||
| Prepaid expenses | (44,958 | ) | (1,885 | ) | ||||
| Inventory | (231 | ) | (342 | ) | ||||
| Accounts payable and accrued liabilities | (108,330 | ) | 111,498 | |||||
| Withholding taxes payable | 194,486 | |||||||
| Deferred revenue | 47,977 | |||||||
| Net cash used in operating activities | (178,388 | ) | (163,616 | ) | ||||
| Investing activities | ||||||||
| Purchase of fixed assets | (71,908 | ) | (27,473 | ) | ||||
| Net cash provided by investing activities | (71,908 | ) | (27,473 | ) | ||||
| Financing activities | ||||||||
| Proceeds from (advances to) bank indebtedness | - | (15 | ) | |||||
| Proceeds from convertible notes payable | 252,862 | 489,759 | ||||||
| Repayment of related party notes | (15,052 | ) | (103,202 | ) | ||||
| Net cash used in financing activities | 237,810 | 386,542 | ||||||
| Effect of exchange rate on cash | (54,779 | ) | 702 | |||||
| Net change in cash | (67,265 | ) | 196,155 | |||||
| Beginning cash balance (deficiency) | (28,281 | ) | 48,376 | |||||
| Ending cash balance (deficiency) | $ | (95,546 | ) | $ | 244,531 | |||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | 12,501 | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
business
presentation.
Estimates
accounting policies
| i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. | |
| ii) | Equity at historical rates. | |
| iii) | Revenue and expense items at the average rate of exchange prevailing during the period. |
| i) | The transaction lacks commercial substance; | |
| ii) | The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange; | |
| �� | iii) | Neither the fair value of the asset received nor the fair value of the asset given up is reliably measurable; or |
| iv) | The transaction is a non-monetary non-reciprocal transfer to owners that represents a spin-off or other form of restructuring or liquidation. |
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of March 31, 2011.
Income Taxes
The Company accounts for income taxes under ASC 740"Income Taxes" which codified SFAS 109,"Accounting for Income Taxes" and FIN 48“Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax ratesreversal is recognized in net income. The Company recognizes its transaction costs in net income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than notincurred. However, financial instruments that the Company will not realize tax assets through future operations.
Fair Value of Financial Instruments
The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, trade accounts receivable, and accounts payable and accrued expenses. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximatesbe subsequently measured at fair value at March 31, 2011.
are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption.
Level 1. Observable inputs such as quoted prices in active markets;
| Level 1. | Observable inputs such as quoted prices in active markets; | |
| Level 2. | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
| Level 3. | Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. |
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
2012.
| Computer equipment | 30% | |
| Computer software | 100% | |
| Furniture and equipment | 30% | |
| Medical equipment | 25% |
9
2012
accounting policies (cont’d)
per share information
based expenses
equity.
Going Concern
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company have minimal cash and no material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the Company.
Principals of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated.
The Company’s subsidiary’s functional currency is the Canadian dollar (CAD), while the Company’s reporting currency is the U.S. dollar (USD). All transactions initiated in Canadian dollars are translated into U.S. dollars in accordance with ASC 830, "Foreign Currency Translation" as follows:
i) Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.
ii) Equity at historical rates.
iii) Revenue and expense items at the average rate of exchange prevailing during the period.
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net loss but reported as other comprehensive income.
10
2012
Principals of Consolidation (continued)
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
Recent4 – Recently Issued Accounting Pronouncements
On September 9, 2009,
On February 25, 2010, the FASB issued ASU No. 2010-09 Subsequent Events Topic 855“Amendments to Certain Recognition and Disclosure Requirements,” effective immediately. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of US GAAP. The FASB believes these amendments remove potential conflicts with the SEC’s literature. The adoption of this ASU did not have a material impact on the Company’sconsolidated interim financial statements.
On March 5, 2010,
In April 2010, the FASB codified the consensus reached in Emerging Issues Task Force Issue No. 08-09,“Milestone Method of Revenue Recognition.” FASB ASU No. 2010-17 provides guidance on defining a milestoneannual and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions. FASB ASU No. 2010-17 is effectiveinterim goodwill impairment tests performed for fiscal years beginning on or after JuneDecember 15, 2010, and is effective on a prospective basis for milestones achieved after the adoption date.2011. The Company does not expect this ASU willadoption of the new guidance to have a material impact on the consolidated interim financial statements.
the Company's risk exposure and concentrations at the balance sheet date, March 31, 2012:
| (a) | Credit risk |
| Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of cash, accounts receivable and bank indebtedness. | |
| Credit risk associated with cash and bank indebtedness is minimized by ensuring these financial assets and liabilities are placed with financial institutions with high credit ratings. | |
| With respect to accounts receivable, concentration of credit risk is minimal as the Company receives all of its revenues from the Ontario Ministry of Health and Long-Term Care, a provincially regulated program. Allowances are provided for potential losses that have been incurred at the balance sheet date. Concentration of credit risk has not changed from the prior reporting period, December 31, 2011. | |
| (b) | Liquidity risk |
| Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is subject to this risk given its working capital deficiency of $3,933,352 and accumulated deficit of $9,089,391. As disclosed in note 2, the Company will be dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. There has been no change to liquidity risk since the prior reporting period, December 31, 2011. |
Common Stock
5 – Financial instruments (cont’d)
| (c) | Market risk | |
| Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, and other price risk. The Company is exposed to interest rate risk and currency risk. | ||
| i. | Interest rate risk | |
| Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consistent with the prior reporting period, December 31, 2011, the Company is exposed to interest rate risk on its bank indebtedness as this liability is based on floating rates of interest. | ||
| ii. | Currency risk | |
| Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is subject to currency risk as its subsidiaries operate in Canada and are subject to fluctuations in the Canadian dollar. The Company is exposed to currency risk through cash, accounts receivable, harmonized sales taxes receivable, bank indebtedness, accounts payable and accrued liabilities, withholding taxes payable, convertible notes payable and related party notes denominated in Canadian dollars. During the quarter ended March 31, 2012, the Company recognized a loss of $54,779 on foreign exchange. Based on the net exposures at March 31, 2012, a 10% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $10,000 increase or decrease in the Company’s after-tax net earnings, respectively. The Company has not entered into any hedging agreements to mediate this risk. There has been no change to the Company’s susceptibility to currency risk since the last reporting period, December 31, 2011. | ||
| iii. | Other price risk | |
| Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. As consistent with the prior reporting period, December 31, 2011, the Company is not exposed to this risk. | ||
| Net Book Value | ||||||||||||||||||||
| Cost | Accumulated Amortization | March 31, 2012 | March 31,2011 | December 31, 2011 | ||||||||||||||||
| Computer equipment | $ | 13,127 | $ | 1,895 | $ | 11,232 | $ | - | $ | 11,910 | ||||||||||
| Computer software | 27,629 | 8,513 | 19,116 | - | 14,315 | |||||||||||||||
| Furniture and equipment | 385,088 | 71,959 | 313,129 | 47,160 | 322,282 | |||||||||||||||
| Leasehold improvements | 103,885 | 36,858 | 67,026 | 65,230 | 61,353 | |||||||||||||||
| Medical equipment | 367,848 | 115,569 | 252,279 | 234,412 | 231,192 | |||||||||||||||
| $ | 897,577 | $ | 234,795 | $ | 662,782 | $ | 346,802 | $ | 641,052 | |||||||||||
| Note | Amount | Issuance Date | Conversion Price in USD | Number of Shares | Effect on Dilution | Maturity | ||||||||||||||
| 1 | $ | 50,500 | April 1, 2010 | $ | 0.01 | 5,050,000 | 20.30 | % | n/a | |||||||||||
| 2 | 25,000 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 3 | 10,025 | December 1, 2010 | $ | 0.10 | 100,000 | 0.40 | % | December 1, 2012 | ||||||||||||
| 4 | 27,036 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 5 | 25,063 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 6 | 25,063 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 7 | 50,125 | December 1, 2010 | $ | 0.10 | 500,000 | 2.01 | % | December 1, 2012 | ||||||||||||
| 8 | 10,025 | December 1, 2010 | $ | 0.10 | 100,000 | 0.40 | % | December 1, 2012 | ||||||||||||
| 9 | 10,585 | December 1, 2010 | $ | 0.10 | 105,590 | 0.42 | % | December 1, 2012 | ||||||||||||
| 10 | 15,038 | December 1, 2010 | $ | 0.10 | 150,000 | 0.60 | % | December 1, 2012 | ||||||||||||
| 11 | 150,375 | December 1, 2010 | $ | 0.10 | 1,500,000 | 6.03 | % | December 1, 2012 | ||||||||||||
| 12 | 25,063 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 13 | 25,063 | December 1, 2010 | $ | 0.10 | 250,000 | 1.01 | % | December 1, 2012 | ||||||||||||
| 14 | 50,125 | December 1, 2010 | $ | 0.10 | 500,000 | 2.01 | % | December 1, 2012 | ||||||||||||
| 15 | 48,120 | January 31, 2011 | $ | 0.10 | 480,000 | 1.93 | % | January 31, 2013 | ||||||||||||
| 16 | 25,063 | March 30, 2011 | $ | 0.15 | 166,667 | 0.67 | % | March 30, 2013 | ||||||||||||
| 17 | 50,000 | March 30, 2011 | $ | 0.15 | 333,333 | 1.34 | % | March 30, 2013 | ||||||||||||
| 18 | 15,000 | March 30, 2011 | $ | 0.15 | 100,000 | 0.40 | % | March 30, 2013 | ||||||||||||
| 19 | 30,075 | March 30, 2011 | $ | 0.15 | 200,000 | 0.80 | % | March 30, 2013 | ||||||||||||
| 20 | 10,025 | March 31, 2011 | $ | 0.15 | 66,667 | 0.27 | % | March 31, 2013 | ||||||||||||
| 21 | 100,250 | March 31, 2011 | $ | 0.15 | 666,667 | 2.68 | % | March 31, 2013 | ||||||||||||
| 22 | 10,025 | March 31, 2011 | $ | 0.15 | 66,667 | 0.27 | % | March 31, 2013 | ||||||||||||
| 23 | 10,025 | March 31, 2011 | $ | 0.15 | 66,667 | 0.27 | % | March 31, 2013 | ||||||||||||
| 24 | 100,250 | March 31, 2011 | $ | 0.15 | 666,667 | 2.68 | % | March 31, 2013 | ||||||||||||
| 25 | 50,125 | March 31, 2011 | $ | 0.15 | 333,333 | 1.34 | % | March 31, 2013 | ||||||||||||
| 26 | 30,075 | March 31, 2011 | $ | 0.15 | 200,000 | 0.80 | % | March 31, 2013 | ||||||||||||
| 27 | 20,050 | March 31, 2011 | $ | 0.15 | 133,333 | 0.54 | % | March 31, 2013 | ||||||||||||
| 28 | 5,013 | March 31, 2011 | $ | 0.15 | 33,333 | 0.13 | % | March 31, 2013 | ||||||||||||
| 29 | 25,063 | April 15, 2011 | $ | 0.10 | 250,000 | 1.01 | % | April 15, 2013 | ||||||||||||
| 30 | 6,015 | June 15, 2011 | $ | 0.10 | 60,000 | 0.24 | % | June 15, 2013 | ||||||||||||
| 31 | 8,020 | June 15, 2011 | $ | 0.10 | 80,000 | 0.32 | % | June 15, 2013 | ||||||||||||
| 32 | 4,010 | June 15, 2011 | $ | 0.10 | 40,000 | 0.16 | % | June 15, 2013 | ||||||||||||
conversion.
11
2012
Net Loss Per Common Share
Net loss per common share is computed using the basic and diluted weighted average number of common shares outstanding during the period. 7 – Convertible notes payable (cont’d)
| Note | Amount | Issuance Date | Conversion Price in USD | Number of Shares | Effect on Dilution | Maturity | ||||||||||||||
| 33 | 78,195 | June 15, 2011 | $ | 0.10 | 780,000 | 3.14 | % | June 15, 2013 | ||||||||||||
| 34 | 200,500 | June 24, 2011 | $ | 0.15 | 1,333,333 | 5.36 | % | June 24, 2013 | ||||||||||||
| 35 | 30,075 | June 30, 2011 | $ | 0.15 | 200,000 | 0.80 | % | June 30, 2013 | ||||||||||||
| 36 | 16,040 | June 30, 2011 | $ | 0.15 | 106,667 | 0.43 | % | June 30, 2013 | ||||||||||||
| 37 | $ | 32,080 | June 30, 2011 | $ | 0.15 | 213,333 | 0.86 | % | June 30, 2013 | |||||||||||
| 38 | 66,165 | June 30, 2011 | $ | 0.15 | 440,000 | 1.77 | % | June 30, 2013 | ||||||||||||
| 39 | 60,150 | June 30, 2011 | $ | 0.15 | 400,000 | 1.61 | % | June 30, 2013 | ||||||||||||
| 40 | 70,175 | June 30, 2011 | $ | 0.15 | 466,667 | 1.88 | % | June 30, 2013 | ||||||||||||
| 41 | 14,536 | June 30, 2011 | $ | 0.15 | 96,667 | 0.39 | % | June 30, 2013 | ||||||||||||
| 42 | 150,375 | June 30, 2011 | $ | 0.15 | 1,000,000 | 4.02 | % | June 30, 2013 | ||||||||||||
| 43 | 50,125 | June 30, 2011 | $ | 0.15 | 333,333 | 1.34 | % | June 30, 2013 | ||||||||||||
| 44 | 145,363 | June 30, 2011 | $ | 0.15 | 966,667 | 3.89 | % | June 30, 2013 | ||||||||||||
| 45 | 5,013 | July 30, 2011 | $ | 0.15 | 33,333 | 0.13 | % | July 30, 2013 | ||||||||||||
| 46 | 5,013 | July 30, 2011 | $ | 0.15 | 33,333 | 0.13 | % | July 30, 2013 | ||||||||||||
| 47 | 5,013 | July 30, 2011 | $ | 0.15 | 33,333 | 0.13 | % | July 30, 2013 | ||||||||||||
| 48 | 10,000 | July 30, 2011 | $ | 0.15 | 66,667 | 0.27 | % | July 30, 2013 | ||||||||||||
| 49 | 10,025 | July 30, 2011 | $ | 0.15 | 66,667 | 0.27 | % | July 30, 2013 | ||||||||||||
| 50 | 9,023 | July 30, 2011 | $ | 0.15 | 60,000 | 0.24 | % | July 30, 2013 | ||||||||||||
| 51 | 2,256 | July 30, 2011 | $ | 0.15 | 15,000 | 0.06 | % | July 30, 2013 | ||||||||||||
| 52 | 5,013 | August 26, 2011 | $ | 0.15 | 33,333 | 0.13 | % | August 26, 2013 | ||||||||||||
| 53 | 50,125 | August 26, 2011 | $ | 0.15 | 333,333 | 1.34 | % | August 26, 2013 | ||||||||||||
| 54 | 50,125 | October 26, 2011 | $ | 0.10 | 500,000 | 2.01 | % | October 26, 2013 | ||||||||||||
| 55 | 100,250 | October 31, 2011 | $ | 0.15 | 666,667 | 2.68 | % | October 31, 2013 | ||||||||||||
| 56 | 70,175 | November 24, 2011 | $ | 0.15 | 466,667 | 1.88 | % | November 24, 2013 | ||||||||||||
| 57 | 15,038 | November 30, 2011 | $ | 0.15 | 100,000 | 0.40 | % | November 30, 2013 | ||||||||||||
| 58 | 15,038 | November 30, 2011 | $ | 0.15 | 100,000 | 0.40 | % | November 30, 2013 | ||||||||||||
| 59 | 23,659 | November 30, 2011 | $ | 0.15 | 157,333 | 0.63 | % | November 30, 2013 | ||||||||||||
| 60 | 25,160 | December 31, 2011 | $ | 0.15 | 167,733 | 0.67 | % | December 31, 2013 | ||||||||||||
| 61 | 20,050 | December 31, 2011 | $ | 0.15 | 133,333 | 0.54 | % | December 31, 2013 | ||||||||||||
| 62 | 10,025 | December 31, 2011 | $ | 0.15 | 66,667 | 0.27 | % | December 31, 2013 | ||||||||||||
| 63 | 45,113 | December 31, 2011 | $ | 0.15 | 300,000 | 1.21 | % | December 31, 2013 | ||||||||||||
| 64 | 50,125 | December 31, 2011 | $ | 0.15 | 333,333 | 1.34 | % | December 31, 2013 | ||||||||||||
| 65 | 20,050 | December 31, 2011 | $ | 0.15 | 133,333 | 0.54 | % | December 31, 2013 | ||||||||||||
| 66 | 15,038 | December 31, 2011 | $ | 0.15 | 100,000 | 0.40 | % | December 31, 2013 | ||||||||||||
| 67 | 22,556 | December 31, 2011 | $ | 0.15 | 150,000 | 0.60 | % | December 31, 2013 | ||||||||||||
| 68 | 50,000 | January 15, 2012 | $ | 0.20 | 250,000 | 1.01 | % | January 15, 2014 | ||||||||||||
| 69 | 10,025 | January 24, 2012 | $ | 0.20 | 50,000 | 0.20 | % | January 24, 2014 | ||||||||||||
| 70 | 7,519 | January 26, 2012 | $ | 0.20 | 37,500 | 0.15 | % | January 26, 2014 | ||||||||||||
| 71 | 30,075 | January 31, 2012 | $ | 0.20 | 150,000 | 0.60 | % | January 31, 2014 | ||||||||||||
| 72 | 10,025 | February 10, 2012 | $ | 0.20 | 50,000 | 0.20 | % | February 10, 2014 | ||||||||||||
| 73 | 100,250 | March 4, 2012 | $ | 0.20 | 500,000 | 2.01 | % | March 4, 2014 | ||||||||||||
| $ | 2,751,837 | 24,873,157 | ||||||||||||||||||
Note 4 -Income Taxes
Current or deferred U.S. federal income tax provision or benefits have not been provided2012, the Company issued $177,819 of Series G convertible debentures for anycash consideration. These debentures bear no interest and are convertible into common shares of the periods presented becauseCompany at the company has experienced operating losses since inception. Under ACS 740“Income Taxes,” when it is more likely than not that a tax asset cannot be realized through future incomerate of $0.20 per share between six months after their date of issuance and their maturity date of two years from their date of issuance. All convertible debentures still outstanding as at their date of maturity will automatically convert into common stock at the Company must allow for this future tax benefit. The company has provided a full valuation allowance onrate of $0.20 per share.
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the three month periodquarter ended March 31, 2011 or 2010, applicable under ACS 740. As2012, the Company issued a result$30,075 Series G convertible in satisfaction of liabilities related to services provided to the Company. This debenture bears no interest and is convertible into common shares of the adoption of ACS 740, the company did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficitCompany at $0.20 per share on the balance sheet.
The componentconvertible debenture between six months after the date of issuance and the Company’s deferred tax asset asmaturity date of March 31, 2011 and December 31, 2010two years from the date of issuance. If the convertible debenture is as follows:
| March 31, 2011 |
| December 31, 2010 | |||
Net operating loss carry forward | $ | 6,553,923 |
| $ | 6,322,688 | |
Valuation allowance |
| (6,553,923) |
|
| (6,322,688) | |
Net deferred tax asset | $ | - |
| $ | - | |
A reconciliation of income taxes computedstill outstanding at the 35% statutorydate of its maturity, it will automatically convert into common stock at the rate to the income tax recorded is as follows:
| March 31, 2011 |
| December 31, 2010 | ||
Tax at statutory rate | $ | 80,932 |
| $ | 163,544 |
Valuation allowance |
| (80,932) |
|
| (163,544) |
Net deferred tax asset | $ | - |
| $ | - |
The Company did not pay any income taxes during the three months ended March 31, 2011 or 2010.
The net federal operating loss carry forward will expire in 2023. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
8 –Related party transactions the adoption of ACS 740, the Company did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. and December 31, 2011 is as follows: 10 -Stockholders’ deficit Company to "Greenestone Heathcare Corporation." The Company has Secretary of State pending approval. Note Amount Currency Date Conversion Price in USD Number of Shares Effect on Dilution 1 $ 50,500.00 U.S. 04/1/2010 $ 0.01 5,050,000 21.93% 2 170,000.00 U.S. 10/1/2010 0.02 8,500,000 36.91% 3 10,000.00 CDN 12/1/2010 0.10 100,000 * 0.43% 4 25,000.00 CDN 12/1/2010 0.10 250,000 * 1.09% 5 25,000.00 CDN 12/1/2010 0.10 250,000 * 1.09% 6 25,000.00 CDN 12/1/2010 0.10 250,000 * 1.09% 7 50,000.00 CDN 12/1/2010 0.10 500,000 * 2.17% 8 10,000.00 CDN 12/1/2010 0.10 100,000 * 0.43% 9 10,559.00 CDN 12/1/2010 0.10 105,590 * 0.46% 10 15,000.00 CDN 12/1/2010 0.10 150,000 * 0.65% 11 150,000.00 CDN 12/1/2010 0.10 1,500,000 * 6.51% 12 25,000.00 CDN 12/1/2010 0.10 250,000 * 1.09% 13 25,000.00 CDN 12/1/2010 0.10 250,000 * 1.09% 14 50,000.00 CDN 12/1/2010 0.10 500,000 * 2.17% 15 25,000.00 U.S. 12/1/2010 0.10 250,000 1.09% 16 50,000.00 U.S. 03/30/2011 0.15 333,333 1.45% 17 15,000.00 U.S. 03/30/2011 0.15 100,000 0.43% 18 25,000.00 CDN 03/31/2011 0.15 166,667 * 0.73% 19 30,000.00 CDN 03/31/2011 0.15 200,000 * 0.86% 20 10,000.00 CDN 03/31/2011 0.15 66,667 * 0.29% 21 100,000.00 CDN 03/31/2011 0.15 666,667 * 2.89% 22 10,000.00 CDN 03/31/2011 0.15 66,667 * 0.29% 23 10,000.00 CDN 03/31/2011 0.15 66,667 * 0.29% 24 100,000.00 CDN 03/31/2011 0.15 666,667 * 2.89% 25 50,000.00 CDN 03/31/2011 0.15 333,333 * 1.45% Our objective is to present readers with a view of Nova through the eyes of management. The amount for the first quarter of 2012 increased by 95% over the first quarter of 2011. This increase was due mainly to internal growth and development including the performance of endoscopy procedures in the new facilities leased from the Albany Clinic. The total volume of procedures is still well under the overall capacity of the current facilities and equipment. Procedures at the new Albany Clinic were only performed one day per week starting in January 2012. $251,178 and direct costs of $125,169 the Treatment Centre at the Company’s Bala, Ontario location. During the the end of the first quarter. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. given to the day to day cash balances. The Board of the Company has reviewed these statements and approved them . The board is a small board and two of the three board members are considered to be independent. There is no formal audit committee since the Board is small and the financial statements are reviewed by the whole board. May 15, 20125 -Related Party Transactionsneither owns nor leases any real or personal property from ais related party. During the year, an officer or resident agentto Greenestone Clinic Inc. as it is controlled by one of the corporation provided office administration services without chargingCompany’s directors. The balance owing is non interest bearing with no specified terms of repayment.company. Such costs are immaterialquarter ended March 31, 2012 to the financial statements and accordingly,director for services which are included in management fees.reflected therein. The officers and directorsprovided for any of the periods presented because the Company are involved in other business activities and opportunitieshas experienced operating losses since inception. Under ACS 740 “Income Taxes,” when it is more likely than not that ina tax asset cannot be realized through future income the Company must allow for this future tax benefit. The Company has provided a full valuation allowance on the net future tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that they will not earn income sufficient to realize the future may result in potential conflicts of interest betweentax assets during the Company and their other business interest. carry forward period.formulatedtaken a policytax position that, if challenged, would have a material effect on the financial statements for the resolutionquarter ended March 31, 2012, applicable under ACS 740. As a result of such conflicts. 12 Net operating loss carry forward $ 9,089,391 $ 6,553,923 $ 8,819,549 Valuation allowance (9,089,391 ) (6,553,923 ) (8,819,549 ) Net future tax asset $ - $ - $ - Tax at statutory rate $ 94,445 $ 80,932 $ 873,901 Valuation allowance (94,445 ) (80,932 ) (873,901 ) Net future tax asset $ - $ - $ - 5 -Related Party Transactions (continued)2012 $ 551,876 2013 786,461 2014 661,650 2015 661,650 2016 165,413 $ 2,827,050 repaid advancestwo reportable segments: gastrointestinal clinical services and in-patient addiction treatments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profit or loss from related parties totaling $103,202 during the period to fund operations.operations before income taxes not including nonrecurring gains and losses and foreign exchange gains and losses. The net advances have been converted to notesCompany’s reportable segments are strategic business units that offer different services. They are non-interest bearing, due on demandmanaged separately because each business requires different technology, specialists and as such are included in current liabilities. Imputed interest has been considered, but is immaterialmarketing strategies. Total Revenue from External customers $ 436,804 $ 820,607 $ 1,257,411 Interest Expense 4,263 8,238 12,501 Depreciation and fixed Assets 21,492 28,686 50,178 Segment loss (41,529 ) (228,313 ) (269,842 ) Segment assets 624,482 495,548 1,120,030 financial statements asquarter ended March 31, 2012, $100,250 of Series I convertible debentures were issued at a whole. Theseconversion price in CDN of $0.45. The notes are convertible to common stock at the option of the holder at rates of $0.01 or $0.02 per share.Note 6 -Warrants and OptionsThere were 1,533 stock options previously outstanding that were rescinded during the year ended December 31, 2010.Note 7 – Convertible DebenturesThe Series A convertible debentures were issued on December 1, 2010 for cash consideration. These debentures bear no interest and are convertible into common shares of Nova at the rate of $0.10 per share between June 1, 2011 and their maturity date of December 1, 2012. All convertible debentures still outstanding as at their date of maturity will automatically be converted into common stock at the rate of $0.10 per share.On March 1, 2011 the Trust issued $48,000 of Series B convertible debentures in satisfaction of liabilities related to services provide to Nova. These debentures bear no interest and are convertible into common shares of Nova at the rate of $0.10 per share between six months after their date of issuance and their maturity date of two years from their date of issuance. AllThe convertible debentures still outstanding as at their date of maturity will automatically be convertedconvert into common stock at $0.45 per common stock.ratequarter ended March 31, 2012, the Company filed a Certificate of $0.10Amendment with the Colorado Secretary of State to increase the aggregate number of shares which the Company has authority to issue to one hundred million (100,000,000) shares all being common stock, issued at $0.01 par value per share.On March 30 and 31, 2011Trust issued $400,000 of Series C convertible debentures for cash consideration. These debentures bear no interest and are convertible into common shares of Nova atCompany namerate of $0.15 per share between September 30, 2011 and their maturity date ofquarter ended March 31, 2013. All convertible debentures still outstanding as at2012, the Company has considered it expedient and in their dateinterest to change the name of maturity will automatically be converted into common stock at the rate of $0.15 per shareNote 8 – Commitments and Contingenciesentered into an operating sub-leaseapplied for office space that expiresthe name change and the requested name has been reserved in July 31, 2013. The rental payments are approximately $247,000 in 2011, $269,000 in 2012 and $169,000 in 2013. Total rental payments through the lifeoffice of the lease are approximately $763,000.Company entered into an agreement to lease premises in Bala, Ontario at market terms and conditions with a company controlled by a directorpresentation of certain amounts on the Companyfinancial statements for the operation of Nova’s second medical facility.13NOVA NATURAL RESOURCES CORPORATIONNotesprevious periods have been changed to conform with the Consolidated Financial StatementsMarch 31, 2011Note 9 – Convertible DebtDuringfinancial statement presentation adopted for 2012. The net loss for the year ended December 31, 2010, the Company issued a total of $245,500 USD and $420,559 CAD of convertible notes. During the three months ended March 31, 2011 the Company issued a total of $65,000 USD and $335,000 CDN of convertible notes. The notesprevious periods are convertible at the option of the holder up to the mandatory conversion date. The Company has adequate common shares in its treasury to cover the conversions if all notes are exercised. There are the following convertible notes issued at the conversion rate indicated.*Actual number of shares issued if converted will vary depending on the exchange rate at time of conversion.20112012 compared with the three month period ended March 31, 20102011, provides readers with an overview of the operations of Nova Natural Resources Corporation ("Nova"). The MD&A provides information that the management of Nova believes is important to access and understand the results of operations and the financial condition of the Company.This discussion and analysis should be read in conjunction with Nova's financial statements and accompanying notes to the financial statements for the here month period ended March 31, 2011.willwas to provide the technical assistance to ensure the clinics are in compliance with governmental policy and procedure requirements and the necessary detailed operational requirements to operate the clinics. At the time of entering into this agreement, Greenestone had an operational facility with some services Nova plansplanned to offer in its first Ontario facility.thirdfirst quarter of 2010,2011, the operations at the North York Clinic increased its medical services with 146437 medical procedures performed. The volume of operations continued to increase during the fourth quarter of 2010, such that 172 medical procedures were performed.Foryear and during the first quarter 2011, 437of 2012 968 endoscopy procedures were performed.givinggave rise to gross revenue of $46,804 compared to gross revenue of $223,788 substantiallyfor the first quarter of 2011. Substantially all of whichthis revenue was earned from the Ontario Health Insurance Plan (“OHIP”). As amounts owing from OHIP are backed by the government of Ontario, we see very little credit risk attributable to revenues billed to or owing from OHIP from time to time.quarterfirst ended March 31, 2010, 20102012 were as follows:60%approximately 58% of the amounts we receive from OHIP as payment for the procedure performed; included in operating expensescost of services provided of $434,983 for the first quarter 2011 is $129,941are Doctors fees of such amounts owing to doctors(primarily)for the 3 month period ending March 31, 2012 were $772,895 which are broken down to medical supportbe $81,798 for the Toronto Clinic staff (e.g. nurses, technicians, etc.)and $691,027 for the Muskoka Clinic staffamountfirst.$40,712-premises rentoperation of $59,710.82, and-professional and management fees to third-party executive level service providers (in Canada) of $101,816firstthird quarter the company completed its site inspection byNova’s new Albany Clinic in downtown Toronto went through the College of Physicians and Surgeons of Ontarioinspection process. The College passed the premises subsequent to the quarter end and was given a pass. This is an intensive review by the CollegeCompany began to ensure quality and safety for all patients seenperform endoscopy procedures at the clinic. The company agreed to operateAlbany Clinic in January of 2012. This lease is based on a second endoscopy clinic withinper diem of use and only stipulates a Medical center in downtown Toronto. It is anticipated that this clinic at 807 Broadview Avenue will be operational in the fourth quarter 2011.the owned by Greenestone that were used for the operation of the Bala property. The new subsidiary will operate all private medical services provided to clients of the company including private executive medicals, coaching, counciling, and addiction treatment. The addiction treatment center is expected to be operational in the third quarter of 2011. Greenestone Muskokacompany raised $400,000an additional $177,819 through the issue of convertible notes during the first quarter to finance the asset purchases and the operational shortfalls priorand an additional $100,250 subsequent to opening. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Our management made an internal assessment of the effectiveness of our internal control over financial reporting as of 3/31/2011.09/30/211. In making this assessment, it used the experience ofCompany’s new auditor and management staff and the President and CEO.Company’s bank account management team. Based on this evaluation, our management concluded that the internal control has become more effective since there has been a qualified internal accountant hired to prepare the Company’s financial statements in conjunction with the input of the President and CEO. Restrictions on Bank accounts have tightened and more oversight is effective.isbeen no claim filed during the first quarter of 2012 or subsequent to the quarter end.ITEMExhibit No.DescriptionExhibit 31.1Section 302 Certification of the CEO/CFOExhibit 32.1Certification of the CEO/CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003CORP.
CORPORATIONJuly 25, 201118