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 February 28, 2013
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 000-54522
GLOBAL STEVIA CORP.
(Exact name of registrant as specified in its charter)
Nevada 27-1833279
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
84 Crosswell Court, Hammonds Plains, Nova Scotia B3Z 0M5
(Address of principal executive offices) (Zip Code)
(902) 832-0808
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] NO
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). [X] YES [ ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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 Exchange Act [X] YES [ ] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after 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 issuer's classes of
common stock, as of the latest practicable date. 299,300,000 common shares
issued and outstanding as of April 12, 2013.
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 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
Item 4. Controls and Procedures 19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Mine Safety Disclosures 20
Item 5. Other Information 20
Item 6. Exhibits 20
SIGNATURES 22
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and the Securities and Exchange
Commission instructions to Form 10-Q. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
Operating results for the interim period ended February 28, 2013 are not
necessarily indicative of the results that can be expected for the full year.
3
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Condensed Consolidated Balance Sheets
(Expressed in US dollars)
February 28, May 31,
2013 2012
-------- --------
$ $
(unaudited)
ASSETS
Cash -- 74,874
Prepaid expenses and deposits 1,510 45,000
-------- --------
TOTAL CURRENT ASSETS 1,510 119,874
Property and equipment 3,145 --
-------- --------
TOTAL ASSETS 4,655 119,874
======== ========
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 63,982 5,613
Due to related parties 13,100 8,000
-------- --------
TOTAL CURRENT LIABILITIES 77,082 13,613
Convertible debentures, less unamortized discount
of $58,583 and nil, respectively 231,417 125,000
-------- --------
TOTAL LIABILITIES 308,499 138,613
-------- --------
STOCKHOLDERS' DEFICIT
Common Stock
Authorized: 975,000,000 common shares with a par
value of $0.001 per share 299,300 299,000
Issued and outstanding: 299,300,000 and 299,000,000 common
shares, respectively
Additional paid-in capital (137,659) (243,059)
Accumulated deficit during the development stage (465,485) (74,680)
-------- --------
TOTAL STOCKHOLDERS' DEFICIT (303,844) (18,739)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 4,655 119,874
======== ========
(The accompanying notes are an integral part of these
condensed consolidated financial statements)
4
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Expressed in US dollars)
(unaudited)
For the For the For the For the For the period from
three months three months nine months nine months February 3, 2010
ended ended ended ended (Date of Inception) to
February 28, February 29, February 28, February 29, February 28,
2013 2012 2013 2012 2013
------------ ------------ ------------ ------------ ------------
$ $ $ $ $
REVENUES -- -- -- -- --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Depreciation 327 -- 823 -- 823
General and administrative 24,401 6,031 181,882 29,029 217,597
Management fees -- -- 40,000 -- 48,000
Professional fees 5,900 -- 81,960 -- 112,925
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 30,628 6,031 304,665 29,029 379,345
------------ ------------ ------------ ------------ ------------
Net Loss before other expense (30,628) (6,031) (304,665) (29,029) (379,345)
OTHER EXPENSE
Interest expense (14,928) -- (36,140) -- (36,140)
Write down of acquisition costs (50,000) -- (50,000) -- (50,000)
------------ ------------ ------------ ------------ ------------
NET LOSS (95,556) (6,031) (390,805) (29,029) (465,485)
============ ============ ============ ============ ============
NET EARNINGS PER SHARE
- BASIC AND DILUTED -- -- -- --
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING -
BASIC AND DILUTED 299,300,000 299,000,000 299,278,022 262,823,730
============ ============ ============ ============
(The accompanying notes are an integral part of these
condensed consolidated financial statements)
5
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
(Expressed in US dollars)
(unaudited)
For the For the For the period from
nine months nine months February 3, 2010
ended ended (Date of Inception) to
February 28, February 29, February 28,
2013 2012 2013
-------- -------- --------
$ $ $
OPERATING ACTIVITIES
Net loss for the period (390,805) (29,029) (465,485)
Adjustments to reconcile net loss to net cash
used in operating activities:
Accretion of discounts on convertible debt 17,117 -- 17,117
Depreciation 823 -- 823
Write down of acquisition costs 50,000 -- 50,000
Changes in operating assets and liabilities:
Prepaid expenses and deposits 43,490 -- (1,510)
Accounts payable (654) 1,310 4,959
Accrued liabilities 59,023 -- 59,023
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES (221,006) (27,719) (335,073)
-------- -------- --------
INVESTING ACTIVITIES
Deposit payment for acquisition of company (50,000) -- (50,000)
Acquisition of property and equipment (3,968) -- (3,968)
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (53,968) -- (53,968)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from convertible debentures 165,000 -- 290,000
Proceeds from related party, net 5,100 -- 13,100
Proceeds from notes payable from a related party -- 12,800 22,941
Proceeds from issuance of common stock 30,000 20,000 63,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 200,100 32,800 389,041
-------- -------- --------
Increase (Decrease) in Cash (74,874) 5,081 --
Cash - Beginning of Period 74,874 226 --
-------- -------- --------
CASH - END OF PERIOD -- 5,307 --
======== ======== ========
SUPPLEMENTAL DISCLOSURES
Interest paid -- -- --
Income tax paid -- -- --
======== ======== ========
(The accompanying notes are an integral part of these
condensed consolidated financial statements)
6
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
(unaudited)
1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS
Global Stevia Corp. (the "Company") was incorporated in the state of Nevada on
February 3, 2010. The Company is a development stage company, as defined by
Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 915, DEVELOPMENT STAGE ENTITIES. The Company has incorporated a
wholly-owned subsidiary, Sharelink International Inc ("Sharelink"), a British
Virgin Islands company.
GOING CONCERN
These financial statements have been prepared on a going concern basis, which
implies that the Company will continue to realize its assets and discharge its
liabilities in the normal course of business. As of February 28, 2013, the
Company has not recognized any revenue, and has an accumulated deficit of
$465,485. The continuation of the Company as a going concern is dependent upon
the continued financial support from its management, and its ability to identify
future investment opportunities and obtain the necessary debt or equity
financing, and generating profitable operations from the Company's future
operations. These factors raise substantial doubt regarding the Company's
ability to continue as a going concern. These financial statements do not
include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation and Consolidation
The financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States ("US GAAP") and
are expressed in U.S. dollars. The Company's fiscal year end is May 31.
The consolidated financial statements include the accounts of our company and
its wholly-owned subsidiary, Sharelink. All significant intercompany accounts
and transactions have been eliminated, and Sharelink had no operations to date
other than incorporation fees.
b) Use of Estimates
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The Company regularly evaluates estimates
and assumptions related to the deferred income tax asset valuation allowances.
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 not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the
Company's estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be affected.
c) Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260, EARNINGS PER
SHARE. ASC 260 requires presentation of both basic and diluted earnings per
share ("EPS") on the face of the income statement. Basic EPS is computed by
dividing net loss available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. As of February 28, 2013, the
Company had 2,900,000 (May 31, 2012 - 1,250,000) potentially dilutive common
shares from the issuance of convertible debentures.
7
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
(unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Reclassification
Certain balances in previously issued financial statements have been
reclassified to be consistent with the current period presentation.
e) Interim Financial Statements
These interim unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information. They do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Therefore, these financial statements should be read in conjunction
with the Company's audited financial statements and notes thereto for the year
ended May 31, 2012.
The financial statements included herein are unaudited; however, they contain
all normal recurring accruals and adjustments that, in the opinion of
management, are necessary to present fairly the Company's financial position at
February 28, 2013, and the results of its operations and cash flows for the nine
month period ended February 28, 2013. The results of operations for the period
ended February 28, 2013 are not necessarily indicative of the results to be
expected for future quarters or the full year.
f) Cash and cash equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
g) Financial Instruments
Pursuant to ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES, an entity is
required to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. ASC 820 establishes a fair value
hierarchy based on the level of independent, objective evidence surrounding the
inputs used to measure fair value. A financial instrument's categorization
within the fair value hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. ASC 820 prioritizes the inputs into
three levels that may be used to measure fair value:
LEVEL 1
Level 1 applies to assets or liabilities for which there are quoted prices in
active markets for identical assets or liabilities.
LEVEL 2
Level 2 applies to assets or liabilities for which there are inputs other than
quoted prices that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for
identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
LEVEL 3
Level 3 applies to assets or liabilities for which there are unobservable inputs
to the valuation methodology that are significant to the measurement of the fair
value of the assets or liabilities.
The Company's financial instruments consist principally of cash, accounts
payable and accrued liabilities, convertible debentures, and amount due to
related parties. Pursuant to ASC 820 and 825, the fair value of our cash is
determined based on "Level 1" inputs, which consist of quoted prices in active
markets for identical assets. We believe that the recorded values of all of our
other financial instruments approximate their current fair values because of
their nature and respective maturity dates or durations.
8
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
(unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h) Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and the Company does not believe that
there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or results of operations.
3. PROPERTY AND EQUIPMENT
February 28, 2013 May 31, 2012
Accumulated Net Carrying Net Carrying
Cost Amortization Value Value
---- ------------ ----- -----
$ $ $ $
(unaudited)
Computer equipment 3,968 823 3,145 --
4. CONVERTIBLE DEBENTURE
a) On May 18, 2012 the Company issued a convertible debenture in the amount of
$125,000. The convertible debenture is unsecured, bears interest at 10% per
annum, is due on May 18, 2014 and is convertible at the holder's discretion
into shares of the Company's common stock at $0.10 per share. As of
February 28, 2013, $9,829 (May 31, 2012 - $nil) was included in accrued
interest.
b) On July 10, 2012 the Company issued a convertible debenture in the amount
of $100,000. The convertible debenture is unsecured, bears interest at 10%
per annum, is due on July 10, 2014 and is convertible at the holder's
discretion into shares of the Company's common stock at $0.10 per share. As
of February 28, 2013, $6,384 (May 31, 2012 - $nil) was included in accrued
interest.
In accordance with ASC 470-20, "Debt with Conversion and Other Options",
the Company recognized the intrinsic value of the embedded beneficial
conversion feature of $44,000 as additional paid-in capital and an
equivalent discount which will be charged to operations over the term of
the convertible note up to its face value of $100,000 using the effective
interest method. As at February 28, 2013, the Company recorded accretion
expense of $12,575, and as at February 28, 2013, the book value of the
convertible debenture was $68,575.
c) On September 7, 2012 the Company issued a convertible debenture in the
amount of $35,000. The convertible debenture is unsecured, bears interest
at 10% per annum, is due on September 7, 2014 and is convertible at the
holder's discretion into shares of the Company's common stock at $0.10 per
share. As of February 28, 2013, $1,668 (May 31, 2012 - $nil) was included
in accrued interest.
In accordance with ASC 470-20, "Debt with Conversion and Other Options",
the Company recognized the intrinsic value of the embedded beneficial
conversion feature of $7,700 as additional paid-in capital and an
equivalent discount which will be charged to operations over the term of
the convertible note up to its face value of $35,000 using the effective
interest method. As at February 28, 2013, the Company recorded accretion
expense of $1,820, and as at February 28, 2013, the book value of the
convertible debenture was $29,119.
9
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
(unaudited)
4. CONVERTIBLE DEBENTURE (continued)
d) On October 12, 2012 the Company issued a convertible debenture in the
amount of $30,000. The convertible debenture is unsecured, bears interest
at 10% per annum, is due on October 12, 2014 and is convertible at the
holder's discretion into shares of the Company's common stock at $0.10 per
share. As of February 28, 2013, $1,143 (May 31, 2012 - $nil) was included
in accrued interest.
In accordance with ASC 470-20, "Debt with Conversion and Other Options",
the Company recognized the intrinsic value of the embedded beneficial
conversion feature of $24,000 as additional paid-in capital and an
equivalent discount which will be charged to operations over the term of
the convertible note up to its face value of $30,000 using the effective
interest method. As at February 28, 2013, the Company recorded accretion
expense of $2,722, and as at February 28, 2013, the book value of the
convertible debenture was $8,723.
5. RELATED PARTY TRANSACTIONS
a) During the period ended February 28, 2013, the Company incurred $40,000
(February 29, 2012 - $nil) of management fees to the former President and
Director of the Company.
b) As at February 28, 2013, the Company owes $13,100 (May 31, 2012 - $nil) to
the President and Director of the Company, which is unsecured, non-interest
bearing, and due on demand.
6. COMMON STOCK
a) On June 18, 2012, the Company and its Board of Directors authorized a
13-to-1 forward split of its common shares. The effects of the forward
stock split increased the Company's authorized capital from 75,000,000 to
975,000,000 shares of common stock and the Company's issued and outstanding
shares of common stock from 4,600,000 to 59,800,000 common shares, with a
par value of $0.001 per share. The effects of the forward stock split have
been retrospectively applied throughout these financial statements as if it
had occurred at the beginning of the first period presented.
b) On June 20, 2012, the Company issued 300,000 split-adjusted shares of the
Company's common stock for proceeds of $30,000.
c) On August 28, 2012, the Company and its Board of Directors authorized a
5-to-1 forward stock split of its common shares. The effect of the forward
stock split increased the Company's issued and outstanding shares of common
stock from 59,800,000 to 299,300,000 common shares, with a par value of
$0.001 per share. The effects of the forward stock split have been
retrospectively applied throughout these financial statements as if it had
occurred at the beginning of the first period presented.
7. COMMITMENTS
a) On August 1, 2012, the Company entered into a consulting agreement with a
non-related party, whereby the Company will pay a management fee of $8,000
per month during the term of the consulting agreement for a twelve month
period. The consulting agreement can be terminated by providing at least 90
days prior written notice to the other party.
10
GLOBAL STEVIA CORP.
(formerly Guru Health Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
(unaudited)
7. COMMITMENTS (continued)
b) On July 12, 2012, the Company entered into a stock purchase agreement with
Stevia Global Trading Joint Stock Company ("Stevia Global") pursuant to
which the Company agreed to acquire 95% of the issued and outstanding
capital in Stevia Global in consideration for $300,000 to be paid in six
equal installments of $50,000 each between the signing of the agreement and
June 15, 2013 as follows:
Cash consideration to be paid:
* $50,000 on or before July 12, 2012 (paid);
* a further $50,000 to be paid on or before September 15, 2012 (unpaid);
* a further $50,000 to be paid on or before November 15, 2012 (unpaid);
* a further $50,000 to be paid on or before February 15, 2013 (unpaid);
* a further $50,000 to be paid on or before April 15, 2013; and
* a further $50,000 to be paid on or before June 15, 2013.
The acquisition of Stevia Global will be finalized once the final
acquisition payment has been made. In addition to the acquisition
agreement, the Company entered in a services agreement with Stevia Global
whereby the Company agrees to purchase all stevia products produced by
Stevia Global for a period of one year from the date of the agreement.
For the period ended February 28, 2013, management has elected not to
continue with the stock purchase agreement, and the $50,000 deposit payment
has been impaired.
8. SUBSEQUENT EVENTS
We have evaluated subsequent events through the date of issuance of the
financial statements, and did not have any material recognizable subsequent
events.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly 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, but are not limited to,
those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "US$" refer to United
States dollars and all references to "common stock" refer to the common shares
in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean Global Stevia Corp., and our wholly owned subsidiary, Sharelink
International Ltd., a British Virgin Islands company, unless otherwise
indicated.
CORPORATE OVERVIEW
We were incorporated under the name Guru Health Inc. in the State of Nevada on
February 3, 2010. We are a development-stage company and we have no revenues and
minimal assets. As a result we have incurred losses since inception.
Effective June 18, 2012, we changed our name from Guru Health Inc., to Global
Stevia Corp., and gave effect to a forward split of our authorized and issued
and outstanding shares of common stock on a 13 new for 1 old basis,
consequently, our authorized capital increased from 75,000,000 to 975,000,000
and our issued and outstanding increased from 4,600,000 to 59,800,000 shares of
common stock, all with a par value of $0.001.
We were incorporated with the intent to commence operations in the business of
online health and sport supplement marketing, sales and distribution to the
Canadian market with possible expansion into international markets in the
future. We were not able to secure financing for this business plan and have
consequently experienced a change of control and a change of business focus.
On May 31, 2012, Matthew Christopherson, our former director and officer,
acquired a total of 169,000,000 split-adjusted shares of our common stock from
Vanessa Gillis and Jessica Bradshaw, our former directors and officers, in a
private transaction for an aggregate total of $30,000.
12
On July 10, 2012, we entered into two separate agreements with Stevia Global
Trading Joint Stock Company ("Stevia Global Vietnam") for the acquisition of 95%
of Stevia Global Vietnam and the purchase of all stevia leaf product grown by
Stevia Global Vietnam for a period of one year. During the period ended February
28, 2013, our company cancelled its agreement with Stevia Global Vietnam and
expensed the initial $50,000 payment made on behalf of the agreement.
Effective September 11, 2012, we effected a forward split of our issued and
outstanding shares of common stock on a 1 old for 5 new basis such that, our
issued and outstanding shares of common stock increased from 59,860,000 to
299,300,000 shares of common stock, all with a par value of $0.001.
We maintain our business offices at 84 Crosswell Court, Hammonds Plains, Nova
Scotia, B3Z 0M5, and our telephone number is (902) 832-0808. Our ticker symbol
is "GSTV". Our CUSIP number is 397989 208.
OUR CURRENT BUSINESS
We are a development-stage company and we have no revenues and minimal assets.
On July 10, 2012, we entered into two separate agreements with Stevia Global
Vietnam for the acquisition of 95% of Stevia Global Vietnam and the purchase of
all stevia leaf product grown by Stevia Global Vietnam for a period of one year.
During the period ended February 28, 2013, we cancelled the proposed acquisition
agreement with Stevia Global Vietnam.
Effective February 7, 2013, Tran Hong Phuong resigned as president, chief
executive officer, secretary, treasurer, chief financial officer and director of
our company. Mr. Phuong's resignation was not the result of any disagreements
with our company regarding our operations, policies, practices or otherwise.
Concurrently with Mr. Phuong's resignation, our company appointed David C. J.
Bennett as president, chief executive officer, secretary, treasurer, chief
financial officer and director.
Effective February 18, 2013, Dinh Long Tran resigned as chief scientific officer
and Lan Dung Nguyen resigned as chief agronomy officer of our company. Mr.
Tran's and Mr. Nguyen's resignations were not the result of any disagreements
with our company regarding our operations, policies, practices or otherwise
As at the date of this report, due to our inability to raise sufficient
financing, we have suspended our business activities related to the research,
development and prospective production and sale of stevia leaf . Our management
is currently engaged in the evaluation of available opportunities to enhance
shareholder value, including joint venture, merger or acquisition opportunities
for our company.
On September 7, 2012, we issued a convertible debenture in the amount of $35,000
to one investor. The convertible debenture carries an interest rate of 10% per
annum, is due on September 7, 2014 and is convertible at the investor's
discretion into shares of our common stock at $0.10 per share.
On October 12, 2012 we issued a convertible debenture in the amount of $30,000.
The convertible debenture is unsecured, bears interest at 10% per annum, is due
on October 12, 2014 and is convertible at the holder's discretion into shares of
our company's common stock at $0.10 per share.
Effective November 27, 2012, we entered into a research agreement with Plant
Resource Center, a Vietnamese governmental agency that specializes in the
research and development of agriculture techniques of planting. Pursuant to the
terms of the research agreement, Plant Center shall complete all research and
development activities by December 12, 2013 and deliver a completed report,
intellectual property and plant seedling to our company by December 25, 2013.
The agreement was suspended during the period ended February 28, 2013.
13
RESULTS OF OPERATIONS
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation. We expect we
will require additional capital to meet our long-term operating requirements. We
expect to raise additional capital through, among other things, the sale of
equity or debt securities.
THREE-MONTH PERIOD ENDED FEBRUARY 28, 2013 COMPARED WITH THE THREE MONTHS ENDED
FEBRUARY 29, 2012.
DIFFERENCE BETWEEN
Three Month Period
Ended
Three Months Three Months February 28, 2013
Ended Ended and
February 28, February 29, February 29,
2013 2012 2012
-------- -------- --------
($) ($) ($)
Revenue $ Nil $ Nil $ Nil
Total operating expenses $ 30,628 $ 6,031 $ 24,597
Interest expense $ 14,928 $ Nil $ 14,928
Write down of acquisition costs $ 50,000 $ Nil $ 50,000
Net Loss $(95,556) $ (6,031) $ 89,525
REVENUES AND COST OF GOODS SOLD
We have not earned any revenues nor have we incurred cost of goods sold since
inception. We do not expect to earn revenue during the upcoming year.
OPERATING EXPENSES
The increase in operating expenses for the three month period ended February 28,
2013 of $24,597 was attributed to increases of $327 for depreciation expenses,
$18,370 for general and administrative costs, and $5,900 for professional fees
as our company incurred additional costs for legal fees, consulting fees, and
travel costs relating to the Company's proposed acquisition of Global Stevia
Vietnam, which has since been cancelled.
Our net loss during the three months ended February 28, 2013 was $95,556 or $Nil
loss per share compared to $6,031 or $Nil loss per share for the nine months
ended February 29, 2012.
NINE-MONTH PERIOD ENDED FEBRUARY 28, 2013 COMPARED WITH THE NINE MONTHS ENDED
FEBRUARY 29, 2012.
DIFFERENCE BETWEEN
Nine Month Period
Ended
Nine Months Nine Months February 28, 2013
Ended Ended and
February 28, February 29, February 29,
2013 2012 2012
---------- ---------- ----------
($) ($) ($)
Revenue $ Nil $ Nil $ Nil
Total Operating Expenses $ 304,665 $ 29,029 $ 275,636
Interest expense $ 36,140 $ Nil $ 36,140
Write down of acquisition costs $ 50,000 $ Nil $ 50,000
Net Loss $(390,805) $ (29,029) $ 361,776
---------- ---------- ----------
14
OPERATING EXPENSES
The increase in operating expenses for the nine month period ended February 28,
2013 of $275,636 was attributed to increases of $823 for depreciation expenses,
$152,853 for general and administrative costs, $40,000 for management fees, and
$81,960 for professional fees as our company incurred more operating
transactions during the current period as compared to prior year from additional
consulting costs and out-of-pocket costs incurred with our company's proposed
acquisition of Stevia Global Vietnam, which has since been cancelled.
Our net loss during the nine months ended February 28, 2013 was $390,805 or $Nil
loss per share compared to $29,029 or $Nil loss per share for the nine months
ended February 29, 2012. In addition to operating expenses in the current year,
our company also incurred $36,140 of accretion and interest expense relating to
our convertible debentures, and $50,000 for the impairment of acquisition costs
relating to costs paid to Stevia Global Vietnam which agreement has been
cancelled.
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL
At At
February 28, May 31,
2013 2012
---------- ----------
Current Assets $ 1,510 $ 119,874
Current Liabilities $ 77,082 $ 13,613
Working Capital Surplus (Deficit) $ (75,572) $ 106,261
CASH FLOWS
February 3, 2010
Nine Months Nine Months (Inception)
Ended Ended to
February 28, February 29, February 28,
2013 2012 2013
---------- ---------- ----------
Net Cash Used in Operating Activities $ (221,006) $ (27,719) $ (335,073)
Net Cash Used In Investing Activities $ (53,968) $ Nil $ (53,968)
Net Cash Provided by Financing Activities $ 200,100 $ 32,800 $ 389,041
Net Increase (Decrease) in Cash and Cash Equivalents $ (74,874) $ 5,081 $ Nil
As at February 28, 2013, our company had current assets of $1,510 comprised of
prepaid expenses and deposits. Our company had total current liabilities of
$77,082 comprised of $63,982 of accounts payable and accrued liabilities and
$13,100 owed to related parties for payment of expenditures on our company's
behalf. Our company had a working capital deficit of $75,572 compared with a
working capital surplus of $106,261 at May 31, 2012. The decrease in working
capital was attributed to the use of cash for operating activities as we
incurred $221,006 of operating expenditures and $53,968 of investing
expenditures which was financed by $200,100 received from convertible
debentures, issuance of common shares, and advances from related parties.
CASH FLOWS FROM OPERATING ACTIVITIES
During the nine months ended February 28, 2013, our company used cash of
$221,006 for operating activities compared with $27,719 during the nine months
ended February 29, 2012. The increase in the cash used for operating activities
was attributed to increased costs incurred with the day-to-day operations of our
company, including costs incurred with respect to legal, consulting, travel, and
other general costs with respect to our planned acquisition of Global Stevia
Vietnam.
15
CASH FLOWS FROM INVESTING ACTIVITIES
During the nine months ended February 28, 2013, our company used $53,968 of cash
for investing activities compared to $Nil for the nine months ended February 29,
2012. Our company spent $50,000 for its first installment of the acquisition of
Global Stevia Vietnam and $3,968 for the acquisition of computer hardware to be
used in our company's operations.
CASH FLOWS FROM FINANCING ACTIVITIES
During the nine months ended February 28, 2013, our company received $200,100 of
cash from financing activities comprised of $165,000 in proceeds from
convertible notes, $30,000 in proceeds from the issuance of common shares, and
$5,100 in advances from related parties.
PLAN OF OPERATIONS
CASH REQUIREMENTS
We expect that working capital requirements will continue to be funded through a
combination of our existing funds and further issuances of securities. Our
working capital requirements are expected to increase in line with the growth of
our business.
We estimate that our expenses over the next 12 months will be approximately
$630,000 as described in the table below. These estimates may change
significantly depending on the nature of our future business activities and our
ability to raise capital from shareholders or other sources.
Estimated Estimated
Description Completion Date Expenses
----------- --------------- --------
Legal and accounting fees 12 months $ 80,000
Contingency 12 months 200,000
Management and consulting costs 12 months 250,000
General and administrative expenses 12 months 100,000
--------
TOTAL $630,000
========
We have no lines of credit or other bank financing arrangements. Generally, we
have financed operations to date through the proceeds of the private placement
of equity and debt instruments. In connection with our business plan, management
anticipates additional increases in operating expenses and capital expenditures
relating to: (i) acquisition of land; (ii) developmental expenses associated
with a start-up business; and (iii) development of our cultivation and
propagation facilities. We intend to finance these expenses with further
issuances of securities, and debt issuances. Thereafter, we expect we will need
to raise additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We
currently do not have a specific plan of how we will obtain such funding;
however, we anticipate that additional funding will be in the form of equity
financing from the sale of our common stock. We have and will continue to seek
to obtain short-term loans from our directors, although no future arrangement
for additional loans has been made. We do not have any agreements with our
directors concerning these loans. We do not have any arrangements in place for
any future equity financing.
16
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
GOING CONCERN
The independent auditors' report accompanying our May 31, 2012 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenue, and expenses. These estimates and assumptions are affected by
management's application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the
following aspects of our financial statements is critical to an understanding of
our financial statements.
BASIS OF PRESENTATION AND CONSOLIDATION
The financial statements of our company have been prepared in accordance with
accounting principles generally accepted in the United States ("US GAAP") and
are expressed in U.S. dollars. Our company's fiscal year end is May 31.
The consolidated financial statements include the accounts of our company and
its wholly-owned subsidiary, Sharelink. All significant intercompany accounts
and transactions have been eliminated, and Sharelink had no operations to date
other than incorporation fees.
USE OF ESTIMATES
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Our company regularly evaluates estimates
and assumptions related to the deferred income tax asset valuation allowances.
Our 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 not readily apparent from other sources. The actual results
experienced by our company may differ materially and adversely from our
company's estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be affected.
17
BASIC AND DILUTED NET LOSS PER SHARE
Our company computes net loss per share in accordance with ASC 260, EARNINGS PER
SHARE. ASC 260 requires presentation of both basic and diluted earnings per
share ("EPS") on the face of the income statement. Basic EPS is computed by
dividing net loss available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. As of February 28, 2013, our
company had 2,900,000 (May 31, 2012 - 1,250,000) potentially dilutive common
shares for the issuance of convertible debentures.
RECLASSIFICATION
Certain balances in previously issued financial statements have been
reclassified to be consistent with the current period presentation.
INTERIM FINANCIAL STATEMENTS
These interim unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information. They do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Therefore, these financial statements should be read in conjunction
with our company's audited financial statements and notes thereto for the year
ended May 31, 2012.
The financial statements included herein are unaudited; however, they contain
all normal recurring accruals and adjustments that, in the opinion of
management, are necessary to present fairly our company's financial position at
February 28, 2013, and the results of its operations and cash flows for the nine
month period ended February 28, 2013. The results of operations for the period
ended February 28, 2013 are not necessarily indicative of the results to be
expected for future quarters or the full year.
CASH AND CASH EQUIVALENTS
Our company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
FINANCIAL INSTRUMENTS
Pursuant to ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES, an entity is
required to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. ASC 820 establishes a fair value
hierarchy based on the level of independent, objective evidence surrounding the
inputs used to measure fair value. A financial instrument's categorization
within the fair value hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. ASC 820 prioritizes the inputs into
three levels that may be used to measure fair value:
Level 1 - Level 1 applies to assets or liabilities for which there are quoted
prices in active markets for identical assets or liabilities.
Level 2 - Level 2 applies to assets or liabilities for which there are inputs
other than quoted prices that are observable for the asset or liability such as
quoted prices for similar assets or liabilities in active markets; quoted prices
for identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
18
Level 3 - Level 3 applies to assets or liabilities for which there are
unobservable inputs to the valuation methodology that are significant to the
measurement of the fair value of the assets or liabilities.
Our company's financial instruments consist principally of cash, accounts
payable and accrued liabilities, convertible debentures, and amount due to
related parties. Pursuant to ASC 820 and 825, the fair value of our cash is
determined based on "Level 1" inputs, which consist of quoted prices in active
markets for identical assets. We believe that the recorded values of all of our
other financial instruments approximate their current fair values because of
their nature and respective maturity dates or durations.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and our company does not believe that
there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit 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 and that such information is accumulated
and communicated to our management, including our president (our principal
executive officer, principal financial officer and principal accounting
officer), as appropriate to allow timely decisions regarding required
disclosure.
We carried out an evaluation, under the supervision and with the participation
of our management, including our president (our principal executive officer,
principal financial officer and principal accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the quarter covered by this report. Based on the evaluation of
these disclosure controls and procedures the president (our principal executive
officer, principal financial officer and principal accounting officer) concluded
that our disclosure controls and procedures were not effective, due to adjusting
entries required to be made to our accounting records.
CHANGES IN INTERNAL CONTROLS
During the quarter covered by this report there were no changes in our internal
control over financial reporting that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
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 shareholder, is an
adverse party or has a material interest adverse to our interest.
19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Effective February 7, 2013, Tran Hong Phuong resigned as president, chief
executive officer, secretary, treasurer, chief financial officer and director of
our company. Mr. Phuong's resignation was not the result of any disagreements
with our company regarding our operations, policies, practices or otherwise.
Concurrently with Mr. Phuong's resignation, our company appointed David C. J.
Bennett as president, chief executive officer, secretary, treasurer, chief
financial officer and director, effective February 7, 2013.
Effective February 18, 2013, Dinh Long Tran resigned as chief scientific officer
and Lan Dung Nguyen resigned as chief agronomy officer of our company. Mr.
Tran's and Mr. Nguyen's resignations were not the result of any disagreements
with our company regarding our operations, policies, practices or otherwise.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
(3) (I) ARTICLES OF INCORPORATION; AND (II) BYLAWS
3.1 Articles of Incorporation (incorporated by reference to our
registration statement on Form S-1filed on July 9, 2010)
3.2 Bylaws (incorporated by reference to our registration statement on
Form S-1filed on July 9, 2010)
3.3 Certificate of Change filed with the Nevada Secretary of State on June
14, 2012 (incorporated by reference to our current report on Form 8-K
filed on June 18, 2012)
(10) MATERIAL CONTRACTS
10.1 Share Purchase Agreement, dated July 10, 2012 with Stevia Global
Trading Joint Stock Company, et al (incorporated by reference to our
current report on Form 8-K filed on July 13, 2012)
10.2 Growing and Supply Agreement dated July 10, 2012 with Stevia Global
Trading Joint Stock Company (incorporated by reference to our current
report on Form 8-K filed on July 13, 2012)
10.3 Form of Convertible Debenture dated September 7, 2012 (incorporated by
reference to our current report on Form 8-K filed on September 27,
2012)
10.4 Research Agreement dated November 27, 2012 with Plant Resource Center
(incorporated by reference to our current report on Form 8-K filed on
December 3, 2012)
(14) CODE OF ETHICS
14.1 Code of Ethics (incorporated by reference to our current report on
Form 8-K filed on July 13, 2012)
20
(21) LIST OF SUBSIDIARIES
21.1 Sharelink International Ltd. - Wholly owned, a British Virgin Islands
company
(31) 302 CERTIFICATION
31.1* Section 302 Certification under Sarbanes-Oxley Act of 2002 of the
Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer
(31) 302 CERTIFICATION
32.1* Section 906 Certification under Sarbanes-Oxley Act of 2002 of the
Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer
(101)** INTERACTIVE DATA FILE
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
----------
* Filed herewith.
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the
Interactive Data Files on Exhibit 101 hereto are deemed not filed or part
of any registration statement or prospectus for purposes of Sections 11 or
12 of the Securities Act of 1933, are deemed not filed for purposes of
Section 18 of the Securities and Exchange Act of 1934, and otherwise are
not subject to liability under those sections.
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GLOBAL STEVIA CORP.
(Registrant)
Dated: April 22, 2013 /s/ David C. J. Bennett
-----------------------------------------
David C. J. Bennett
President, Chief Executive Officer, Chief
Financial Officer, Secretary, Treasurer
and Director (Principal Executive Officer,
Principal Financial Officer and Principal
Accounting Officer)
22