UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2016
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 000-51736
DOMINOVAS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 20-5854735 | |
| (State or other jurisdiction | (I.R.S. Employer Identification No.) | |
| of incorporation or organization) | ||
1170 Peachtree Street, 12th Fl., Atlanta, GA | 30309 | |
| (Address of principal executive offices) | (Zip Code) |
Tel: (800) 679-1249
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act
Common Stock, par value $0.001 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Non-accelerated filer [ ] | Smaller reporting company [X] |
| (Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 237,304,383 shares of common stock outstanding as of May 31, 2016.
DOCUMENTS INCORPORATED BY REFERENCE
Not Applicable
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | ||
| ITEM 1. | FINANCIAL STATEMENTS | 3 |
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 13 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 16 |
| ITEM 4T. | CONTROLS AND PROCEDURES | 16 |
| PART II - OTHER INFORMATION | ||
| ITEM 1. | LEGAL PROCEEDINGS | 17 |
| ITEM 1A. | RISK FACTORS | 17 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 17 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 21 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 21 |
| ITEM 5. | OTHER INFORMATION | 21 |
| ITEM 6. | EXHIBITS | 22 |
| SIGNATURES | 23 | |
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOMINOVAS ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
| May 31, 2016 | August 31, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 5,723 | $ | 64,157 | ||||
| 5,723 | 64,157 | |||||||
| Prepaid - non current | 15,410 | 15,410 | ||||||
| $ | 21,133 | $ | 79,567 | |||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 540,083 | $ | 443,310 | ||||
| Accrued liabilities | 715,124 | 577,576 | ||||||
| Convertible debt | 1,249,086 | 627,349 | ||||||
| Notes payable | 75,000 | 75,000 | ||||||
| 2,579,293 | 1,723,235 | |||||||
| Lease inducement | 65,835 | 72,821 | ||||||
| Total liabilities | 2,645,128 | 1,796,056 | ||||||
| Stockholders' deficit | ||||||||
| Common stock $0.001 par value, 700,000,000 common shares authorized, 237,304,383 issued and outstanding at May 31, 2016 and 169,106,668 at August 31, 2015 | 237,301 | 169,104 | ||||||
| Additional paid in capital | 13,477,389 | 11,931,347 | ||||||
| Accumulated deficit | (16,338,685 | ) | (13,816,940 | ) | ||||
| (2,623,995 | ) | (1,716,489 | ) | |||||
| $ | 21,133 | $ | 79,567 | |||||
The accompanying notes are an integral part of these interim consolidated financial statements
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DOMINOVAS ENERGY CORPORATION
CONDOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended May 31, 2016 | Three Months Ended May 31, 2015 | Nine Months Ended May 31, 2016 | Nine Months Ended May 31, 2015 | |||||||||||||
| EXPENSES | ||||||||||||||||
| Advertising and marketing | $ | 13,746 | $ | 110 | $ | 42,097 | $ | 110 | ||||||||
| Audit and accounting fees | 3,569 | 12,862 | 40,602 | 49,152 | ||||||||||||
| Consulting fees | - | 32,500 | - | 197,500 | ||||||||||||
| Financing fees | 20,425 | 31,200 | 92,685 | 196,200 | ||||||||||||
| Foreign exchange loss | - | 113 | - | - | ||||||||||||
| Interest expense | 36,610 | 1,727 | 55,338 | 1,727 | ||||||||||||
| Investor communications and transfer agent | 3,528 | 15,656 | 34,091 | 26,139 | ||||||||||||
| Legal fees | 11,185 | 4,500 | 27,225 | 20,355 | ||||||||||||
| Office and general administration | 70,721 | 50,362 | 211,987 | 151,790 | ||||||||||||
| Salaries and management fees | 279,866 | 110,189 | 511,491 | 350,937 | ||||||||||||
| Subcontractor fees | - | - | 65,350 | - | ||||||||||||
| Travel and entertainment | 66,454 | 14,812 | 219,241 | 18,950 | ||||||||||||
| Total operating expenses | (506,104 | ) | (274,031 | ) | (1,300,107 | ) | (1,012,860 | ) | ||||||||
| Other items | ||||||||||||||||
| Loss on debt conversion | (337,988 | ) | (340,000 | ) | (885,688 | ) | (340,000 | ) | ||||||||
| Loss on fair value of convertible debt | (69,882 | ) | - | (335,950 | ) | - | ||||||||||
| (407,870 | ) | (340,000 | ) | (1,221,638 | ) | (340,000 | ) | |||||||||
| Comprehensive loss | $ | (913,974 | ) | $ | (614,031 | ) | $ | (2,521,745 | ) | $ | (1,352,860 | ) | ||||
| Loss per share, basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 222,881,107 | 92,748,439 | 191,493,990 | 92,748,439 | ||||||||||||
The accompanying notes are an integral part of these interim consolidated financial statements
4
DOMINOVAS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended May 31, 2016 | Nine Months Ended May 31, 2015 | |||||||
| Cash flows used in operating activities | ||||||||
| Net loss | $ | (2,521,745 | ) | $ | (1,352,860 | ) | ||
| Non-cash items | ||||||||
| Financing costs | 92,685 | 190,000 | ||||||
| Consulting costs | - | 196,200 | ||||||
| Interest Expense | 55,338 | 1,727 | ||||||
| Lease inducement | (6,985 | ) | 22,573 | |||||
| Loss on debt conversion | 885,688 | 340,000 | ||||||
| Change in fair value of debt | 335,950 | - | ||||||
| Salaries and management fees paid by shares | 89,500 | - | ||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid | - | 16,531 | ||||||
| Accounts payable and accrued liabilities | 234,319 | 456,519 | ||||||
| Net cash used in operating activities | (835,250 | ) | (129,310 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of convertible loans | 776,816 | 84,500 | ||||||
| Issuance of common stock | - | 48,697 | ||||||
| Net cash provided by financing activities | 776,816 | 133,197 | ||||||
| Net (decrease) increase in cash | (58,434 | ) | 3,887 | |||||
| Cash, beginning | 64,157 | 5,096 | ||||||
| Cash, ending | $ | 5,723 | $ | 8,983 | ||||
The accompanying notes are an integral part of these interim consolidated financial statements
5
DOMINOVAS ENERGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
May 31, 2016
1. ORGANIZATION AND BASIS OF PRESENTATION
Dominovas Energy Corporation (the "Company") was incorporated on February 2, 2005 under the laws of the State of Nevada and is in the business of developing fuel cell and alternative energy projects.
The following interim unaudited financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission ("SEC").
Accordingly, these financial statements do not include all of the disclosures required by United States Generally Accepted Accounting Principles (“US GAAP”) for complete financial statements. These interim unaudited financial statements should be read in conjunction with the Company's audited financial statements for the year ended August 31, 2015. In the opinion of management, the interim unaudited financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results of the interim period presented. Operating results for the nine-month period ended May 31, 2016 are not necessarily indicative of the results that may be expected for the year ending August 31, 2016.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of May 31, 2016, the Company has not achieved profitable operations and has accumulated a deficit of $16,338,685. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. These adjustments could be material. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and convertible debt and/or a private placement of common stock.
2. RECENT ACCOUNTING PRONOUNCEMENTS
Recent pronouncements with future effective dates are either not applicable or are not expected to be significant to the financial statement of the Company.
3. RELATED PARTY TRANSACTIONS
During the nine months ended May 31, 2016, the Company incurred wages of $Nil (May 31, 2015 - $84,000), $84,000 (May 31, 2015 - $56,188), $97,500 (May 31, 2015 - $78,000) and $165,938 (May 31, 2015 - $132,750) to the Executive Vice President of Business Operations, the Executive Vice President of Fuel Cell Operations, the Chief Operating Officer and the President and Chief Executive Officer of the Company, respectively. As of May 31, 2016, unpaid wages of $704,002 (August 31, 2015 - $577,576) were owed to the related parties and are included in accrued liabilities.
4. NOTES PAYABLE
As of May 31, 2016, the Company has notes payable of $75,000 (August 31, 2015 - $75,000). The notes are non-interest bearing, unsecured and due on demand.
5. CONVERTIBLE DEBT
Details of the Company’s convertible notes, which are measured at their fair value are as follows:
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| a) | On October 27, 2014, the Company issued a convertible note in the amount of $165,000 in exchange for consulting services rendered. The note is non-interest bearing, was due on October 27, 2015, and is unsecured. |
The loan may be converted into the Company's common stock, at a conversion price for each share equal to the lowest closing bid price for the common stock for the thirty trading days ending on the trading day immediately before the conversion date multiplied by 50% at any time after April 28, 2015.
During the year ended August 31, 2015, $106,650 was converted into 43,314,479 common shares of the Company.
As at May 31, 2016, the principal remaining of this note was $58,250 with a fair value of $129,444 based on the value of the common shares that would be issued if converted on May 31, 2016.
| b) | On March 19, 2015, the Company entered into an agreement for two convertible notes in the amount of $26,500 each. The first note was issued in March 2015, for proceeds of $25,000 (net of $1,500 of financing fees), carried an interest at 8%, and was due on March 19, 2016. The second note was paid for by the issuance of an offsetting $26,500 secured note issued to the Company. The second $26,500 note was issued and received in cash on November 13, 2015. |
The lender could convert the entire note amount into shares of the Company's common stock, at a conversion price for each share equal to the lowest closing bid price for the common stock for the twenty trading days ending on the trading day immediately before the conversion date multiplied by 50% at any time. The first note was convertible into shares after the second note has been received by the Company.
The Company issued 2,453,467 common stock with a fair value of $147,769 on conversion of the notes issued in March 2015 and November 2015.
| c) | On April 30, 2015, the Company issued a convertible unsecured note in the amount of $62,000 (including $7,000 of financing fees). The note carries an interest rate of 12% (22% default rate), and was due on January 30, 2016. |
During the year ended August 31, 2015, $2,507 of interest was accrued on this note. The fair value of the note as at August 31, 2015 was $92,407.
During the period ended May 31, 2016, the Company issued 3,373,329 common stock with a fair value of $222,578 on conversion of this convertible debt.
| d) | On June 10, 2015, the Company issued a convertible unsecured note in the amount of $58,000 (including $8,000 of financing fees). The note carries an interest rate of 12% (22% default rate), and was due on March 10, 2016. |
During the year ended August 31, 2015, $1,565 of interest was accrued on this note. The fair value of the note as at August 31, 2015 was $79,865.
During the period ended May 31, 2016, the Company issued 2,981,396 common stock with a fair value of $137,144 on conversion of this convertible debt.
| e) | On July 6, 2015, the Company issued a convertible unsecured note in the amount of $85,500 (including $10,500 of financing fees). The note carries an interest rate of 12% (22% default rate), and was due on April 6, 2016. |
During the year ended August 31, 2015, $1,574 of interest was accrued on this note. The fair value of the note as at August 31, 2015 was $112,724.
During the period ended May 31, 2016, the Company issued 9,694,291 common stock with a fair value of $238,360 on conversion of this convertible debt.
| f) | On August 10, 2015, the Company issued a convertible unsecured note in the amount of $85,500 (including $10,500 of financing fees). The note carries an interest rate of 12% (22% default rate), and is due on May 10, 2016. |
7
During the year ended August 31, 2015, $590 of interest was accrued on this note. The fair value of the note as at August 31, 2015 was $107,465.
During the period ended May 31, 2016, the Company issued 11,210,437 common stock with a fair value of $228,369 on conversion of this convertible debt.
The loans c) – f) above were convertible into shares of the Company's common stock, at a conversion price for each share equal to the average of the three lowest closing bid prices for the common stock for the ten trading days ending on the trading day immediately before the conversion date multiplied by 50% at any time after each respective maturity date.
| g) | On September 11, 2015, the Company issued a convertible unsecured note in the amount of $95,000 (including $11,000 of finance fees). The note carries an interest rate of 12% (22% default rate), and is due on June 11, 2016. |
The Company may prepay the note up to 180 days after its issuance with the following penalties:
| Number of days after issuance | Penalty | |
| < 30 days | 125% of principal plus accrued interest | |
| 31 – 60 days | 130% of principal plus accrued interest | |
| 61 – 90 days | 135% of principal plus accrued interest | |
| 91 – 120 days | 140% of principal plus accrued interest | |
| 121 – 150 days | 145% of principal plus accrued interest | |
| 151 – 180 days | 150% of principal plus accrued interest |
The lender may convert the note at a conversion price equal to the average of the three lowest closing bid prices for the common stock for twenty trading days ending on the trading day immediately before conversion multiplied by 50% at any time after the maturity day.
During the period ended May 31, 2016, the Company issued 9,850,000 common stock with a fair value of $134,050 on conversion of $63,514 of principal of this convertible debt.
During the period ended May 31, 2016, $2,722 of interest was accrued on this note. As at May 31, 2016, the remaining principal of this note of $31,486 has a fair value of $69,116 determined based on the fair value of the shares would be converted at May 31, 2016.
| h) | On December 9, 2015, the Company issued a convertible unsecured note in the amount of $100,000 (including $10,000 of finance fees). The note carries an interest rate of 12% (22% default rate), and is due on September 9, 2016. |
During the period ended May 31, 2016, $5,721 of interest was accrued on this note. As at May 31, 2016, the remaining principal of this note of $100,000 has a fair value of $207,087 determined based on the fair value of the shares would be converted at May 31, 2016.
| i) | On February 19, 2016, the Company issued a convertible unsecured note in the amount of $108,000 (including $8,000 of finance fees). The note carries an interest rate of 12% (22% default rate), and is due on November 19, 2016. |
During the period ended May 31, 2016, $3,622 of interest was accrued on this note. As at May 31, 2016, this note had a fair value of $223,654 determined based on the fair value of the shares would be converted at May 31, 2016.
| j) | On April 1, 2016, the Company issued a convertible unsecured note in the amount of $108,000 (including $8,000 of finance fees). The note carries an interest rate of 12% (22% default rate), and is due on January 1, 2017. |
During the period ended May 31, 2016, $2,130 of interest was accrued on this note. As at May 31, 2016, this note had a fair value of $223,654 determined based on the fair value of the shares would be converted at May 31, 2016.
8
The Company may prepay the loans h) – j) above up to 180 days after its issuance with the following penalties:
| Number of days after issuance | Penalty | |
| < 30 days | 125% of principal plus accrued interest | |
| 31 – 60 days | 130% of principal plus accrued interest | |
| 61 – 90 days | 135% of principal plus accrued interest | |
| 91 – 120 days | 140% of principal plus accrued interest | |
| 121 – 150 days | 145% of principal plus accrued interest | |
| 151 – 180 days | 150% of principal plus accrued interest |
The lender may convert the note h) –j) after 90 days following issuance at a conversion price equal to the average of the three lowest closing bid prices for the common stock for twenty trading days ending on the trading day immediately before conversion multiplied by 53% at any time after the maturity day.
| k) | On June 26, 2015, the Company issued a convertible unsecured note in the amount of $50,000. The note carried an interest rate of 10% (18% default rate), and was due on March 26, 2016. |
The lender could convert the entire note amount into shares of the Company's common stock, at a conversion price for each share equal to the three (3) lowest closing bid prices for the common stock for the ten trading days ending on the trading day immediately before the conversion date multiplied by 65%.
During the year ended August 31, 2015, $904 of interest was accrued on this note. The fair value of the note as at August 31, 2015, was determined based on the amount the Company would settle the note by prepayment, was $65,904
During the period ended May 31, 2016, the Company issued 3,405,845 common stock with a fair value of $97,878 on conversion of this convertible debt.
| l) | On September 29, 2015, the Company issued a convertible unsecured note in the amount of $150,000 (including $14,760 of finance fees). The note carries an interest rate of 10% (18% default rate), and is due on March 29, 2016. |
The entire note was convertible into shares of the Company's common stock, at a conversion price for each share equal to the three lowest closing bid prices for the common stock for the twenty trading days ending on the trading day immediately before the conversion date multiplied by 60% at any time after the Maturity Date.
During the period ended May 31, 2016, the Company issued 20,228,950 common stock with a fair value of $318,879 on conversion of this convertible debt.
| m) | On January 14, 2016, the Company issued a convertible unsecured note in the amount of $57,000 (including $7,000 of finance fees). The note carries an interest of 10% (18% default rate), and is due on October 14, 2016 (“Maturity Date”). |
The Company may repay the note up to 180 days after its issuance, with approval from the lender, with the following penalties:
| Number of days after issuance | Penalty | |
| < 90 days | 135% of principal plus accrued interest | |
| 91 – 120 days | 140% of principal plus accrued interest | |
| 121 – 180 days | 145% of principal plus accrued interest | |
| > 180 days | 150% of principal plus accrued interest |
The entire note may be converted into shares of the Company’s common stock, at a conversion price for each share equal to the three lowest closing bid prices for the common stock for the twenty trading days ending on the trading day immediately before the conversion date multiplied by 53% at any time after the Maturity Date.
9
During the period ended May 31, 2016, $2,155 of interest was accrued on this note. As at May 31, 2016, this note has a fair value of $82,650 determined based on the amount the Company would settle this note by prepayment.
| n) | On January 25, 2016, the Company issued a convertible unsecured note in the amount of $555,000. The note carries an original interest discount (“OID”) of $50,000 and the Company agrees to pay $5,000 of the finance fees. The Company receives the payments in five tranches, of which the initial tranche equals to the amount of $115,000 (including OID of $10,000 and finance fees of $5,000) and the remainder is delivered in four instalments in the amount of $110,000 (including OID of $10,000) each. The note carries an interest rate of 10% (22% default rate), and is due on May 25, 2017. |
As of May 31, 2016, the Company received the initial tranche of $115,000 (including OID and finance fees) and the second tranche of $110,000 (including OID and finance fees).
The lender may convert the note at a conversion price equal to the average of the three lowest closing bid prices for the common stock for twenty trading days ending on the trading day immediately before conversion multiplied by 60% at any time after 180 days after the cash was delivered.
The Company may prepay any outstanding balance of note, upon delivering an optional prepayment notice; provided that, the date of prepayment is not less the five trading days for the optional prepayment notice.
| Number of days after issuance | Penalty | |
| Any time after determined date of prepayment | 125% of principal plus accrued interest |
During the period ended May 31, 2016, $7,829 of interest was accrued on this note. As at May 31, 2016, this note has a fair value of $281,250 determined based on the amount the Company would settle this note by prepayment.
6. COMMON STOCK
Authorized: 700,000,000 common shares.
Issued and outstanding: 237,304,383 common shares.
On August 14, 2015, the Company increased its authorized common shares to 700,000,000 shares from 200,000,000 share.
The Company has a stock option plan (the “2010 Plan”) allowing the Company's directors to grant up to 5,000,000 stock options. The 2010 Plan allows the Company to grant options to its officers, directors and employees. In addition, the Company may grant options to individuals who act as consultants to the Company. Pursuant to the terms and conditions of the 2010 Plan, the exercise price for the stock options must be no less than: 100% of the fair market value of the common stock on the date of grant for participants that hold less than 10% of the Company's outstanding common stock; and 110% of the fair market value of the common stock on the date of grant for participants that hold 10% or more of the Company's outstanding common stock. Options will vest at the discretion of the plan administrator.
As of May 31, 2016, no options have been granted.
During the period ended May 31, 2016, the company had the following share transactions:
| a) | Issued 63,197,705 shares with a fair value of $1,525,028 to extinguish convertible debt of 607,514 plus accrued interest of $31,826. |
| b) | Issued 5,000,000 shares with a fair value of $89,500 for salaries and management fees. |
7. COMMITMENTS
The Company entered into a lease agreement for a term of five years ending October 31, 2019. Under the agreement, the Company is committed to the following rent payments:
10
| Dates | Amount | |||
| March 1, 2016 to August 31, 2016 | $ | 41,327 | ||
| September 1, 2016 to August 31, 2017 | 169,441 | |||
| September 1, 2017 to August 31, 2018 | 174,524 | |||
| September 1, 2018 to August 31, 2019 | 179,760 | |||
| September 1, 2019 to October 31, 2019 | 30,160 | |||
| Total | $ | 595,212 | ||
Under the agreement, the Company also had to incur $125,000 in leasehold improvements by September 30, 2014. As of the date of these financial statements, the Company has not yet incurred the required expenditures and the lease is in default.
On March 1, 2014, the Company entered into an employment agreement with the President and Chief Executive Officer of the Company. Under the agreement, the Company will pay an annual salary of $177,000 for 18 months with a 25% increase after 18 months. The agreement will be in effect for 3 years.
On March 1, 2014, the Company entered into an employment agreement with the Chief Operating Officer of the Company. Under the agreement, the Company will pay an annual salary of $104,000 for 18 months with a 25% increase after 18 months. The agreement will be in effect for 3 years.
On March 1, 2014, the Company entered into an employment agreement with the Executive Vice President of Fuel Cell Operations of the Company. Under the agreement, the Company will pay an annual salary of $112,000. The agreement will be in effect for 5 years. The Executive shall vest 25,000 shares of the Company stock annually and is only fully vested and fully deliverable after 5 years of continuous and satisfactory employment.
On December 23, 2015, the Company entered into an employment agreement with the President of a division of the Company to be formed. Under the agreement, the Company will pay an annual salary of $115,000 and the Executive shall be granted 200,000 restricted common shares of the Company upon execution of the employment contract. The Executive shall also be granted the following Company stock:
| - | 50,000 shares of the Company monthly for year one. |
| - | 75,000 shares of the Company monthly for year two. |
| - | 150,000 shares of the Company monthly for year three. |
| - | 120,000 shares of the Company monthly for year four. |
| - | 300,000 shares of the Company monthly for year five. |
All stock as granted is only fully vested and fully deliverable to Executive after 5 years of continuous and satisfactory employment.
On January 15, 2016, the Company entered into an employment agreement with the Managing director of a division of the Company to be formed. Under the agreement, the Company will pay an annual salary of $55,000 and the Executive shall be granted 5,000 restricted common shares of the Company upon execution of the employment contract. The Executive shall also be granted the following Company stock:
| - | 1,000 shares of the Company monthly for year one. |
| - | 2,500 shares of the Company monthly for year two. |
| - | 5,000 shares of the Company monthly for year three. |
All stock as granted is only fully vested and fully deliverable to Executive after 3 years of continuous and satisfactory employment.
On January 21, 2016, the Company entered into an employment agreement with the Managing Director of the Africa division of the Company. Under the agreement, the Company will pay an annual salary of $80,000 and the Executive shall also be granted the following Company stock:
11
| - | 8,333 shares of the Company monthly for year one. |
| - | 12,500 shares of the Company monthly for year two. |
| - | 16,666 shares of the Company monthly for year three. |
All stock as granted is only fully vested and fully deliverable to Executive after 3 years of continuous and satisfactory employment.
8. SUBSEQUENT EVENTS
Subsequent to period ended May 31, 2016, the Company issued 18,447,790 common shares on conversion of $66,363 of principal convertible debt.
Subsequent to period ended May 31, 2016, the Company issued 4,945,599 common shares for gross proceeds of $20,000.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this interim report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this interim report on Form 10-Q.
Our interim financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Since we are a development stage company, there is no assurance that a commercially viable business will be identified in the near term. Our plan of operation is to seek for opportunities in the green and renewable energy industry.
LIQUIDITY
ANTICIPATED CASH REQUIREMENTS
For the nine months ended May 31, 2016, we recorded a net operating loss of $2,521,745. As of May 31, 2016, we had a cash balance of $5,723. We do not have sufficient funds for working capital and will need to obtain further financing.
Our financial condition as of May 31, 2016 and May 31, 2015 and cash flows for the nine months then ended are summarized as follows:
| Nine months ended | ||||||||
| May 31, 2016 | May 31, 2015 | |||||||
| Net cash used in operating activities | $ | (835,250 | ) | $ | (129,310 | ) | ||
| Net cash provided by financing activities | 776,816 | 133,197 | ||||||
| Net (decrease) increase in cash | (58,434 | ) | 3,887 | |||||
| Cash, beginning | 64,157 | 5,096 | ||||||
| Cash, ending | $ | 5,723 | $ | 8,983 | ||||
WORKING CAPITAL
Our working capital position as of May 31, 2016 compared to May 31, 2015 and the cash flows for the nine months then ended are summarized below:
| May 31, 2016 | May 31, 2015 | |||||||
| Current Assets | $ | 5,723 | $ | 24,393 | ||||
| Current Liabilities | 2,579,293 | 1,378,711 | ||||||
| Working Capital Deficiency | $ | 2,573,570 | $ | 1,354,318 | ||||
The increase in our working capital deficiency was primarily due to an increase in accounts payable and accrued liabilities.
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RESULTS OF OPERATIONS
The following is a summary of our results of operations for the three months ended May 31, 2016 and May 31, 2015:
Nine Months Ended May 31, 2016 | Nine Months Ended May 31, 2015 | |||||||
| EXPENSES | ||||||||
| Advertising and marketing | $ | 42,097 | $ | 110 | ||||
| Audit and accounting fees | 40,602 | 49,152 | ||||||
| Consulting fees | - | 197,500 | ||||||
| Financing fees | 92,685 | 196,200 | ||||||
| Foreign exchange loss | - | - | ||||||
| Interest expense | 55,338 | 1,727 | ||||||
| Investor communications and transfer agent | 34,091 | 26,139 | ||||||
| Legal fees | 27,225 | 20,355 | ||||||
| Office and general administration | 211,987 | 151,790 | ||||||
| Salaries and management fees | 511,491 | 350,937 | ||||||
| Subcontractor fees | 65,350 | - | ||||||
| Travel and entertainment | 219,241 | 18,950 | ||||||
| Total operating expenses | (1,300,107 | ) | (1,012,860 | ) | ||||
| Other items | ||||||||
| Loss on debt conversion | (885,688 | ) | (340,000 | ) | ||||
| Loss on fair value of convertible debt | (335,950 | ) | - | |||||
| (1,221,638 | ) | (340,000 | ) | |||||
| Comprehensive loss | $ | (2,521,745 | ) | $ | (1,352,860 | ) | ||
| Loss per share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average shares outstanding, basic and diluted | 191,493,990 | 92,748,439 | ||||||
REVENUE
We have not earned any revenues since our inception and we do not anticipate earning revenues until such time as we manufacture and deploy RUBICON(TM) fuel cell power plants under Power Purchase Agreements.
EXPENSES
Our operating expenses for the nine months ended May 31, 2016 compared to the same period in 2015 increased by the net amount of $287,247 primarily due to other SG&A expenses.
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APPLICATION OF CRITICAL ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements and related notes are presented in accordance with Generally Accepted Accounting Principles in the United States of America ("US") and are expressed in US dollars. The Company is a development stage company as defined by Statement of Financial Accounting Standard ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises" and has not realized any revenues from its planned operations to date.
USE OF ESTIMATES AND ASSUMPTIONS
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. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are readily apparent from other sources. The actual results experienced by the Company may differ materially from the Company's estimates. To the extent there are material differences, future results may be affected.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts payable, notes payable and convertible debentures. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values due to the relatively short maturity of these instruments.
FOREIGN CURRENCY TRANSLATION
The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated into United States Dollars at the period-end exchange rates. Non-monetary assets and liabilities are translated at the historical rates in effect when the assets were acquired or obligations incurred. Transactions occurring during the period are translated at rates in effect at the time of the transaction. The resulting foreign exchange gains and losses are included in operations.
INCOME TAXES
Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities, and the reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount that is more likely than not to be realized. For each tax position taken or expected to be taken in a tax return, the Company determine whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement.
LOSS PER SHARE
The Company computes net loss per share of both basic and diluted loss per share ("LPS") on the face of the statement of operations. Basic LPS is computed by dividing the net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted LPS gives effect to all potentially dilutive common shares outstanding during the period, including convertible debt, stock options and warrants, using the treasury stock method. The computation of diluted LPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on LPS.
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STOCK-BASED COMPENSATION
The Company has adopted the fair value recognition policy, whereby compensation expense is recognized for all share-based payments based on the fair value at monthly vesting dates, estimated in accordance with the provisions of SFAS 123R.
All transactions in which goods and services are the consideration received for the issuance of equity instruments are accounted for based on fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to Advisory Board members and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
On April 14, 2010, our shareholders approved our 2010 Equity Compensation Plan. Under the 2010 Plan, options may be granted to our directors, officers, employees and consultants as determined by our board of directors. Pursuant to the 2010 Plan, we reserved for issuance up to 5,000,000 shares of our outstanding common stock under the 2010 plan. However, no options have been granted as of May 31, 2016 and therefore no stock-based compensation has been recorded to date for stock options.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent pronouncements with future effective dates are either not applicable or are not expected to be significant to the financial statement of the Company.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial position, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4T. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, as amended, we are required to maintain and our management is required to evaluate the effectiveness of our Company's disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15(e) of the Exchange Act). Our management with the participation of our principal executive officer and principal financial officer evaluated the effectiveness of our Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly report on Form 10-Q. Based on this evaluation, our management determined that our Company's disclosure controls and procedures were effective as of May 31, 2016.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company's reports filed under the Exchange Act is accumulated and communicated to our principal executive officer and our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
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CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
The term internal control over financial reporting is defined as a process designed by, or under the supervision of, our principal executive and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with Generally Accepted Accounting Principles and includes those policies and procedures that:
| 1. | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
| 2. | provide reasonable assurance that 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, |
| 3. | 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 financial statements. |
CERTIFICATIONS
Certifications with respect to disclosure controls and procedures and internal control over financial reporting under Rules 13a-14(a) or 15d-14 of the Exchange Act are attached to this quarterly report on Form 10-Q.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, existing, or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On October 17, 2014, the Company issued 20,000 shares at $0.25 per share for gross proceeds of $5,000.
On December 10, 2014, the Company issued 70,000 shares at $0.25 per share for gross proceeds of $18,000.
On December 10, 2014, the Company issued 2,000 shares at $0.35 per share for gross proceeds of $700.
On April 7, 2015, the Company issued 34,000 shares of its common stock at $0.25 per share for gross proceeds of $8,500.
On April 7, 2015, the Company issued 6,667 shares of its common stock at $0.30 per share for gross proceeds of $2,000.
On April 7, 2015, the Company issued 8,572 shares of its common stock at $0.35 per share for gross proceeds of $3,000.
On April 7, 2015, the Company issued 80,000 shares of its common stock at $0.15 per share for gross proceeds of $12,000.
On April 30, 2015, the Company issued 2,000,000 shares of its common stock at $0.005 per share to extinguish convertible debt for $10,000.
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On June 4, 2015, the Company issued 2,343,750 shares of its common stock at $0.011 per share for gross proceeds of $26,157.
On June 5, the Company issued 4,544,674 shares of its common stock at $0.003 per share to extinguish convertible debt for $11,589.
On June 11, 2015 the Company issued 4,659,517 shares of its common stock at $0.002 per share to extinguish convertible debt for $8,154.
On June 12, 2015 the Company issued 3,000,000 shares of its common stock at $0.002 per share to extinguish convertible debt for $6,750.
On June 19, 2015 the Company issued 3,003,965 shares of its common stock at $0.002 per share to extinguish convertible debt for $5,257.
On June 26, 2015 the Company issued 5,503,988 shares of its common stock at $0.002 per share to extinguish convertible debt for $9,632.
On June 29, 2015 the Company issued 5,503,977 shares of its common stock at $0.002 per share to extinguish convertible debt for $9,632.
On June 30, 2015 the Company issued 3,277,749 shares of its common stock at $0.002 per share to extinguish convertible debt for $5,736.
On July 9, 2015, the Company issued 100,000 shares of its common stock to the legal representation of the Company for legal services rendered. The fair value of the shares is $6,000.
On July 9, 2015 the Company issued 6,104,716 shares of its common stock at $0.002 per share to extinguish convertible debt for $11,904.
On July 10, 2015, the Company issued 500,000 shares of its common stock of the Company for consulting services rendered. The fair value of shares is $30,000.
On August 11, 2015 the Company issued 6,104,716 shares of its common stock at $0.003 per share to extinguish convertible debt for $15,872.
On August 17, 2015 the Company issued 611,177 shares of its common stock at $0.020 per share to extinguish convertible debt for $12,224.
On August 17, 2015 the Company issued 18,100,000 shares of its common stock to the Chief Executive Officer of the Company for management services. The fair value of the shares is $1,629,000.
On August 17, 2015 the Company issued 8,500,000 shares of its common stock to the Chief Operating Officer of the Company for management services. The fair value of the shares is $765,000.
On August 17, 2015 the Company issued 4,500,000 shares of its common stock to a Director of the Company for management services. The fair value of the shares is $405,000.
On September 21, 2015 the Company issued 190,767 shares of its common stock at $0.078 per share to extinguish convertible debt for $5,500.
On October 7, 2015 the Company issued 341,690 shares of its common stock at $0.065 per share to extinguish convertible debt for $9,000.
On October 27, 2015 the Company issued 73,220 shares of its common stock at $0.1248 per share to extinguish convertible debt for $1,292.
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On October 29, 2015 the Company issued 1,602,068 shares of its common stock at $0.079 per share to extinguish convertible debt for $31,000.
On November 10, 2015 the Company issued 1,602,068 shares of its common stock at $0.055 per share to extinguish convertible debt for $31,000.
On November 13, 2015 the Company issued 609,004 shares of its common stock at $0.056 per share to extinguish convertible debt for $10,708.
On December 1, 2015 the Company issued 591,212 shares of its common stock at $0.057 per share to extinguish convertible debt for $13,250.
On December 14, 2015 the Company issued 647,574 shares of its common stock at $0.052 per share to extinguish convertible debt for $13,250.
On December 17, 2015 the Company issued 169,183 shares of its common stock at $0.045 per share to extinguish convertible debt for $3,863.
On December 21, 2015 the Company issued 1,389,887 shares of its common stock at $0.046 per share to extinguish convertible debt for $29,000.
On December 30, 2015 the Company issued 1,591,509 shares of its common stock at $0.046 per share to extinguish convertible debt for $32,785.
On January 6, 2016 the Company issued 980,000 shares of its common stock at $0.041 per share to extinguish convertible debt for $25,482.
On January 13, 2016 the Company issued 800,000 shares of its common stock at $0.033 per share to extinguish convertible debt for $14,692.
On January 19, 2016 the Company issued 800,000 shares of its common stock at $0.028 per share to extinguish convertible debt for $7,933.
On January 21, 2016 the Company issued 1,000,000 shares of its common stock at $0.025 per share to extinguish convertible debt for $9,917.
On January 27, 2016 the Company issued 1,000,000 shares of its common stock at $0.021 per share to extinguish convertible debt for $9,100.
On January 27, 2016 the Company issued 1,200,000 shares of its common stock at $0.021 per share to extinguish convertible debt for $14,196.
On February 2, 2016 the Company issued 1,000,000 shares of its common stock at $0.020 per share to extinguish convertible debt for $8,850.
On February 6, 2016 the Company issued 1,500,000 shares of its common stock at $0.027 per share to extinguish convertible debt for $11,895.
On February 8, 2016 the Company issued 1,225,845 shares of its common stock at $0.027 per share to extinguish convertible debt for $13,041.
On February 11, 2016 the Company issued 1,800,000 shares of its common stock at $0.022 per share to extinguish convertible debt for $14,274.
On February 16, 2016 the Company issued 1,794,291 shares of its common stock at $0.025 per share to extinguish convertible debt for $14,677.
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On February 24, 2016 the Company issued 1,900,000 shares of its common stock at $0.024 per share to extinguish convertible debt for $15,542.
On March 7, 2016, the Company issued 1,950,000 shares of its common stock at $0.020 per shares to extinguish convertible debt of $15,542.
On March 15, 2016, the Company issued 1,600,000 shares of its common stock at $0.018 per shares to extinguish convertible debt of $13,926.
On March 15, 2016, the Company issued 3,000,000 shares of its common stock for consultancy and advisory services provided of $3,000.
On March 15, 2016, the Company issued 2,000,000 shares of its common stock for consultancy and advisory services provided of $2,000.
On March 22, 2016, the Company issued 1,600,000 shares of its common stock at $0.018 per shares to extinguish convertible debt of $14,480.
On March 31, 2016, the Company issued 1,671,588 shares of its common stock at $0.017 per shares to extinguish convertible debt of $13,005.
On April 13, 2016, the Company issued 2,488,849 shares of its common stock at $0.023 per shares to extinguish convertible debt of $19,164.
On April 15, 2016, the Company issued 3,439,972 shares of its common stock at $0.018 per shares to extinguish convertible debt of $30,000.
On April 22, 2016, the Company issued 4,586,630 shares of its common stock at $0.017 per shares to extinguish convertible debt of $40,000.
On April 25, 2016, the Company issued 2,000,000 shares of its common stock at $0.018 per shares to extinguish convertible debt of $15,400.
On April 29, 2016, the Company issued 2,000,000 shares of its common stock at $0.013 per shares to extinguish convertible debt of $14,167.
On April 29, 2016, the Company issued 4,048,583 shares of its common stock at $0.013 per shares to extinguish convertible debt of $30,000.
On May 4, 2016, the Company issued 4,048,583 shares of its common stock at $0.016 per shares to extinguish convertible debt of $30,000.
On May 5, 2016, the Company issued 4,105,182 shares of its common stock at $0.015 per shares to extinguish convertible debt of $28,079.
On May 6, 2016, the Company issued 2,100,000 shares of its common stock at $0.015 per shares to extinguish convertible debt of $13,055.
On May 11, 2016, the Company issued 2,000,000, shares of its common stock at $0.013 per shares to extinguish convertible debt of $12,000.
On May 25, 2016, the Company issued 1,000,000, shares of its common stock at $0.013 per shares to extinguish convertible debt of $5,092.
On May 26, 2016, the Company issued 750,000 shares of its common stock at $0.011 per shares to extinguish convertible debt of $3,800.
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On June 1, 2016, the Company issued 1,500,000 shares of its common stock at $0.011 per shares to extinguish convertible debt of $7,650.
On June 6, 2016, the Company issued 3,000,000 shares of its common stock at $0.010 per shares to extinguish convertible debt of $14,400.
On June 14, 2016, the Company issued 2,273,893 shares of its common stock at $0.008 per shares to extinguish convertible debt of $9,437.
On June 20, 2016, the Company issued 2,173,897 shares of its common stock at $0.008 per shares to extinguish convertible debt of $7,609.
On June 24, 2016, the Company issued 3,000,000 shares of its common stock at $0.007 per shares to extinguish convertible debt of $7,000.
On June 29, 2016, the Company issued 3,000,000 shares of its common stock at $0.007 per shares to extinguish convertible debt of $9,650.
On July 6, 2016, the Company issued 3,500,000 shares of its common stock at $0.007 per shares to extinguish convertible debt of $10,617
The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTCQB, investors should consider any secondary market for the Company's securities to be a limited one. We intend to seek coverage and publication of information regarding the Company in an accepted publication which permits a "manual exemption”. This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors; and, (2) an issuer's balance sheet, and a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.
We currently do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our shareholders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
Exhibits required by Item 601 of Regulation S-K:
| Exhibit | |
| No. | Description |
| 3.1 | Articles of Incorporation. (attached as an exhibit to our Registration Statement on Form SB-2, filed on November 2, 2005). |
| 3.2 | Bylaws (attached as an exhibit to our Registration Statement on Form SB-2, filed on November 2, 2005). |
| 3.3 | Articles of Merger (attached as an exhibit to our current report on Form 8-K filed on June 28, 2006). |
| 3.4 | Certificate of Change dated June 8, 2006 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014). |
| 3.5 | Certificate of Change dated August 27, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014). |
| 3.6 | Articles of Merger dated August 27, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014). |
| 3.7 | Articles of Merger dated November 28, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014). |
| 3.8 | Certificate of Amendment to Articles of Incorporation filed February 24, 2014 (attached as an exhibit to our current report on Form 8-K filed on February 28, 2014) |
| 10.1 | Equity Purchase Agreement, dated as of February 20, 2014 among Western Standard Energy Corp., Dominovas Energy, LLC and the Members of Dominovas Energy, LLC 2014 (attached as an exhibit to our current report on Form 8-K filed on February 28, 2014). |
| 10.2 | Employment Agreement of Neal Allen dated February 20, 2014 2014 (attached as an exhibit to our current report on Form 8-K filed on February 28, 2014). |
| 10.3 | Employment Agreement of Michael Watkins dated February 20, 2014 2014 (attached as an exhibit to our current report on Form 8-K filed on February 28, 2014). |
| 10.4 | Equity Purchase Agreement between the Company and Kodiak Capital Group, LLC (attached as an exhibit to our current report on Form 8-K filed on October 21, 2014). |
| 10.5 | Registration Rights Agreement between the Company and Kodiak Capital Group, LLC (attached as an exhibit to our current report on Form 8-K filed on October 21, 2014). |
| 10.6 | Note by the Company to Kodiak Capital Group, LLC (attached as an exhibit to our Registration Statement on Form S-1 filed on November 13, 2014). |
| 10.7 | Dominovas Energy was accepted as a member of the Power Africa Initiative. (attached as an exhibit to our current report on Form 8-K filed on May 6, 2015). |
| 31.1 | Certification Statement pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 |
| 32.1 | Certification Statement pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101 | Interactive Data Files pursuant to Rule 405 of Regulation S-T. * |
* To be filed by amendment
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed n accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DOMINOVAS ENERGY CORPORATION
/s/ Neal Allen
Neal Allen President, Treasurer and Director
Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer
Dated: July 20, 2016
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