UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MAY 31, 2014
Commission file number 000-53707
TRIDENT BRANDS INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
200 South Executive Drive, Suite 101
Brookfield, WI 53005
(Address of principal executive offices, including zip code)
(262) 789-6689
(Telephone number, including area code)
Third Floor, Olde Towne Marina
Sandyport, Nassau, Bahamas SP-63777
(Former Address of principal executive offices, including zip code)
Resident Agents of Nevada
711 S. Carson Street, Suite 4
Carson City, NV 89701
(Name and Address of Agent for Service)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 last 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 (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). 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,"
"non-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]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [X] NO []
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 28,000,000 shares as of July 10, 2014
ITEM 1. FINANCIAL STATEMENTS
The un-audited financial statements for the quarter ended May 31, 2014
immediately follow.
2
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Balance Sheet
--------------------------------------------------------------------------------
(unaudited) (audited)
As of As of
May 31, 2014 November 30, 2013
------------ -----------------
ASSETS
CURRENT ASSETS
Cash $ 75,867 $ 131
Prepaid 898 --
---------- ----------
TOTAL CURRENT ASSETS 76,765 131
---------- ----------
TOTAL ASSETS $ 76,765 $ 131
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 1,815 $ 11,385
Accrued Liability 21,333 --
Loan Payable - Related Party 56,776 49,483
Loan Payable - Third Party 200,000 --
---------- ----------
TOTAL CURRENT LIABILITIES 279,924 60,868
---------- ----------
TOTAL LIABILITIES 279,924 60,868
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 300,000,000 shares
authorized; 28,000,000 shares issued and outstanding
as of May 31, 2014 and November 30, 2013 28,000 28,000
Additional paid-in capital 47,000 47,000
Deficit accumulated during exploration stage (278,159) (135,738)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (203,159) (60,738)
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 76,765 $ 131
========== ==========
See Notes to Financial Statements
3
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
November 5, 2007
Three Months Three Months Six Months Six Months (inception)
Ended Ended Ended Ended through
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013 May 31, 2014
------------ ------------ ------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
TOTAL REVENUES -- -- -- -- --
Professional Fees 31,083 3,745 33,333 6,745 93,369
Mineral Expenditures -- -- -- -- 24,540
General & Administrative Expenses 3,214 20,742 5,355 20,885 55,439
Marketing Expenses 23,400 -- 23,400 -- 23,400
Management Salary 14,000 -- 14,000 -- 14,000
Director's Fees 12,000 -- 12,000 -- 12,000
Rent - Related Party 1,500 -- 3,000 -- 24,200
Interest Expense 1,333 -- 1,333 -- 2,615
------------ ------------ ------------ ------------ ------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES (86,531) (24,487) (92,421) (27,630) (249,563)
Other Income (Expenses)
Royalty Fees (50,000) -- (50,000) -- (50,000)
Other Income -- -- 123
Gain on Note Payable Forgiveness -- -- -- -- 21,281
------------ ------------ ------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSES) (50,000) -- (50,000) -- (28,596)
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (136,531) $ (24,487) $ (142,421) $ (27,630) $ (278,159)
============ ============ ============ ============ ============
BASIC EARNING (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 28,000,000 28,000,000 28,000,000 28,000,000
============ ============ ============ ============
See Notes to Financial Statements
4
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Statement of Cash Flows (unaudited)
--------------------------------------------------------------------------------
November 5, 2007
Six Months Six Months (inception)
Ended Ended through
May 31, 2014 May 31, 2013 May 31, 2014
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (142,421) $ (27,630) $ (278,159)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Pre-paid Rent (898) -- (898)
Accounts Payable and Accrued Liabilities 11,763 (2,435) 23,148
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (131,556) (30,065) (255,909)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Loan Payable - Related Party 7,293 25,873 56,776
Loan Payable - Third Party 200,000 200,000
Issuance of common stock -- -- 75,000
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 207,293 25,873 331,776
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 75,737 (4,193) 75,867
CASH AT BEGINNING OF PERIOD 131 4,503 --
---------- ---------- ----------
CASH AT END OF PERIOD $ 75,867 $ 310 $ 75,867
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
========== ========== ==========
Income Taxes $ -- $ -- $ --
========== ========== ==========
See Notes to Financial Statements
5
TRIDENT BRANDS INCORPORATED
(f/k/a SANDFIELD VENTURES CORP.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2014
--------------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Trident Brands
Incorporated have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission, and should be read in conjunction with the
audited financial statements and notes thereto contained in Trident's Form 10-K
filed with SEC. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year. Notes to
the financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for fiscal 2013 as reported in the
Form 10-K have been omitted.
NOTE 2. GOING CONCERN
As of May 31, 2014, Trident has not generated revenues and has accumulated
losses since inception. The continuation of Trident as a going concern is
dependent upon the continued financial support from its shareholders, its
ability to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. These factors raise substantial doubt
regarding Trident's ability to continue as a going concern.
NOTE 3. LOAN PAYABLE - RELATED PARTY
As of May 31, 2014, there is a loan payable due to Mark Holcombe, sole officer
and director of the Company, for $56,776 that is non-interest bearing with no
specific repayment terms.
NOTE 4. LOAN PAYABLE - THIRD PARTY
On May 1, 2014, Trident obtained a short term loan of $200,000 from Rene
Arseneault. The loan bears interest at the rate of 8.0% per annum, payable on
maturity, calculated on the principle amount of the loan outstanding. Unless
paid earlier, the loan and accrued and unpaid interest shall be payable in full
on April 30, 2015. As of May 31, 2014, the full amount of the loan is
outstanding and the accrued interest expense is $1,333.
NOTE 5. WARRANTS AND OPTIONS
On May 5, 2014, Trident granted an aggregate of 2,875,000 stock options to
directors, officers, employees and consultants of the Company pursuant to
Trident's 2013 Stock Plan. The stock options are exercisable for five years from
the date of grant at exercise prices of $0.75 per share for shares vesting 12
months from the date of issuance, $1.00 per share for shares vesting 24 months
from the date of issuance and $1.50 for shares vesting 36 months from the date
of issuance. Of the 2,875,000 stock options granted, Trident granted 1,125,000
stock options to its president, Michael Brown; 300,000 stock options to each of
its directors, Donald MacPhee, Scott Chapman, Mark Holcombe; 150,000 stock
options to its controller, Peter Salvo; and 350,000 stock options to each of its
special advisors, Robert Campbell and Karen Arsenault.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing and actual results may differ materially from historical
results or our predictions of future results.
GENERAL
Trident Brands Incorporated was incorporated in the State of Nevada on November
5, 2007 as Sandfield Ventures Corp. to engage in the acquisition, exploration
and development of natural resource properties. The principal executive offices
are located at 200 South Executive Drive, Suite 101, Brookfield, WI 53005. The
telephone number is (262)789-6689.
We are a development stage company with no revenues and a limited operating
history. Our independent auditor has issued an audit opinion which includes a
statement expressing substantial doubt as to our ability to continue as a going
concern.
We completed a Registration Statement on Form S-1 under the Securities Act of
1933 with the U.S. Securities and Exchange Commission registering 4,000,000
shares at a price of $0.015 per share. The offering was completed for total
proceeds to the company of $60,000.
On June 12, 2013, our board of directors approved an agreement and plan of
merger to merge with our wholly-owned subsidiary Trident Brands Incorporated, a
Nevada corporation, to effect a name change from Sandfield Ventures Corp. to
Trident Brands Incorporated. Our company remains the surviving company. Trident
Brands Incorporated was formed solely for the change of name.
Articles of Merger to effect the merger and change of name were filed with the
Nevada Secretary of State on June 21, 2013, with an effective date of July 8,
2013.
These amendments have been reviewed by the Financial Industry Regulatory
Authority ("FINRA") and have been approved for filing with an effective date of
July 8, 2013.
The forward split and name change became effective with the Over-the-Counter
Bulletin Board at the opening of trading on July 8, 2013 under the symbol
"TDNT".
Effective July 30, 2013, our company filed a Certificate of Change with the
Nevada Secretary of State to give effect to a forward split of our authorized,
issued and outstanding shares of common stock on a four (4) new for one (1) old
basis and, consequently, our authorized share capital shall increase from
75,000,000 to 300,000,000 common shares and our issued and outstanding common
stock shall increase from 7,000,000 to 28,000,000 shares, all with a par value
of $0.001.
7
On August 1, 2013, the directors of Trident Brands Incorporated (the "Company")
approved the adoption of a 2013 Stock Option Plan which permits the Company to
issue up to 4,200,000 shares of its common stock to directors, officers,
employees and consultants of the Company.
December 23, 2013, the Company entered into a Deed of Assignment Agreement with
Everlast World's Boxing Headquarters Corp., International Brand Management &
Licensing, Sports Nutrition Products, Inc. and Manchester Capital, Inc. wherein
Everlast, International Brand, Sports Nutrition and Manchester Capital are
parties to a trade mark license and Sports Nutrition, a New York corporation,
has assigned its interest in the trade mark license to the Company.
Pursuant to the terms of the assignment agreement, Sports Nutrition assigns all
of its rights, title, interest and benefit to the trade mark license to the
Company effective December 23, 2013 and the Company will assume all of the
obligations of Sports Nutrition under the license agreement through Sports
Nutrition's wholly owned subsidiary, Sports Nutrition Products Inc., a Nevada
corporation. The Company shall remain responsible to Everlast and International
Brand for all acts and omissions of the subsidiary, Sports Nutrition Products
Inc.
We have a total of 300,000,000 authorized common shares with a par value of
$0.001 per share and 28,000,000 common shares issued and outstanding as of May
31, 2014.
On May 5, 2014, Trident granted an aggregate of 2,875,000 stock options to
directors, officers, employees and consultants of the Company pursuant to
Trident's 2013 Stock Plan. The stock options are exercisable for five years from
the date of grant at exercise prices of $0.75 per share for shares vesting 12
months from the date of issuance, $1.00 per share for shares vesting 24 months
from the date of issuance and $1.50 for shares vesting 36 months from the date
of issuance. Of the 2,875,000 stock options granted, Trident granted 1,125,000
stock options to its president, Michael Brown; 300,000 stock options to each of
its directors, Donald MacPhee, Scott Chapman, Mark Holcombe; 150,000 stock
options to its controller, Peter Salvo; and 350,000 stock options to each of its
special advisors, Robert Campbell and Karen Arsenault.
RESULTS OF OPERATIONS
We are still in our development stage and have generated no revenues to date.
We incurred operating expenses of $136,531 and $24,487 for the three months
ended May 31, 2014 and 2013, respectively. These expenses consisted of general
operating expenses, rent and professional fees incurred in connection with the
day to day operation of our business and the preparation and filing of our
required reports with the U.S. Securities and Exchange Commission.
We incurred operating expenses of $142,421 and $27,630 for the six months ended
May 31, 2014 and 2013, respectively. These expenses consisted of general
operating expenses, rent and professional fees incurred in connection with the
day to day operation of our business and the preparation and filing of our
required reports with the U.S. Securities and Exchange Commission. Our net loss
from inception (November 5, 2007) through May 31, 2014 was $278,159.
8
We have sold $75,000 in equity securities to date. We sold $15,000 in equity
securities to our officer and director and $60,000 to independent investors.
The following table provides selected financial data about our company for the
quarter ended May 31, 2014.
Balance Sheet Data: 5/31/14
------------------- -------
Cash $ 75,867
Total assets $ 76,765
Total liabilities $ 279,924
Shareholders' equity $(203,159)
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at May 31, 2014 was $75,867 with $279,924 in outstanding
liabilities. Of the liabilities there is a $56,776 note payable to Mark
Holcombe, a director, for funds he has loaned the Company and a short term loan
of $200,000 from Rene Arseneault. The loan bears interest at the rate of 8.0%
per annum, payable on maturity, calculated on the principle amount of the loan
outstanding. Unless paid earlier, the loan and accrued and unpaid interest shall
be payable in full on April 30, 2015. As of May 31, 2014, the full amount of the
loan is outstanding and the accrued interest expense is $1,333.
Management believes the current funds available to the company will not be
sufficient to fund our operations for the next twelve months. The company is
currently exploring bridge financing options. We are a development stage company
and have generated no revenue to date.
PLAN OF OPERATION
Our objective is the creation of value through strategic investments high growth
early stage consumer brands businesses. We intend to focus on control
investments in companies within the segment/sectors which are currently
experiencing long term growth. Our goal is to provide our shareholders with
private equity like returns through strategic investments in multiple branded
platforms. The platforms we will be focusing on are:
* Brand Licenses or Consolidated Licenses
* Consumer hard and soft goods
* Functional Food and Beverage
* Life Science technology that have applications in consumer products
* Natural and Organic food and beverage Intellectual Property and/or
licenses in recognized brand platforms
9
INVESTMENT STRATEGY
Trident will seek to acquire majority and/or control positions through common
and preferred equity, senior secured, unsecured, and convertible debt in
organizations who meet our investment hurdles. Through our management and
directors vast expertise in both the consumer branded segment and investment
experience, we seek to provide our shareholders with near term value and
liquidity. Through strategic investment and controlled organic growth, Trident
Brands will seek to provide their investments with solid short and long term
returns and yields.
The Company strategic objective is:
* Make strategic controlled investments in high growth companies
* Merge brands/business lines into larger multi-national Companies
* Build and grow strategic brands organically
* Mitigate risk by creating a diverse portfolio of companies in the
growth sectors listed above.
COMPANIES & STRATEGIC PARTNERSHIPS
EVERLAST NUTRITION
Trident Brands finalized documentation to acquire Sports Nutrition Products Inc.
the company has obtained a 15 year exclusive North American license for
Everlast's functional and nutritional product brand segment from IBML (a
worldwide leader in Brand licensing). This transaction closed in December 2013.
PRODUCT PRODUCTION
Trident Brands is currently in negotiations with vendors to outsource the
manufacture of the products currently under the Everlast brand. These vendors
would be responsible for the private label production of our products.
PRODUCT DEVELOPMENT
On May 5, 2014, Trident Brands Incorporated (the "Company") entered into a
Product Development Agreement with Continental Ingredients Canada Inc.
("Continental Ingredients") with respect to the Company's plan to commercialize
nutritional supplements and functional food and beverage products for sales in
North America (the "Agreement").
Under the Agreement the Company has engaged Continental Ingredients on an
exclusive basis to provide services for the development, manufacture and supply
of the Company's products for a period of five years commencing on May 5, 2014
and ending on May 5, 2019, such term to renew automatically for a further 12
months unless either party delivers written termination notice six months prior
to the expiration of the initial term or renewal period.
Continental Ingredients will submit for approval by the Company, proposals for
the production of any products. Once product specifications have been approved
by the Company, the parties will enter into separate production agreements for
the manufacturing, pricing and distribution of the products (the "Production
10
Agreements"). The pricing of the products under the Production Agreements will
result in a gross margin to Continental Ingredients of between 20 to 30 percent,
as more particularly described in the Agreement.
The Company will remain the sole owner or licensee of all intellectual property
rights associated with the products.
On May 5, 2014, the Company appointed Robert Campbell and Karen Arsenault as
special advisors.
ROBERT CAMPBELL - SPECIAL ADVISOR
Rob Campbell is a seasoned food and beverage industry professional. He is the
Co-Founder of Continental Ingredients, based in Oakville, Ontario, a major food
ingredient manufacturer and distributor. Rob holds a B.A., Business from Western
University. He will be advising the Company on opportunities in the North
American food and beverage industry.
KAREN ARSENAULT - SPECIAL ADVISOR
Karen Arsenault has been involved in the food and beverage industry in a
financial capacity for over 25 years. She is currently the VP Finance at
Continental Ingredients and has previously held senior finance positions at
Ontario Pork Producers and Canada Malting. Karen is a Certified Management
Accountant and will provide guidance to the Company on the financial
implications of opportunities it will be pursuing.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any 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 investors.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is accumulated and communicated to our management, including our
11
principal executive and financial officer, recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms relating to
our company, particularly during the period when this report was being prepared.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter ended May 31, 2014 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Chief Executive Officer
31.2 Sec. 302 Certification of Chief Financial Officer
32.1 Sec. 906 Certification of Chief Executive Officer
32.2 Sec. 906 Certification of Chief Financial Officer
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
----------
* Document is incorporated by reference and can be found in its entirety in
our Registration Statement on Form SB-2, SEC File Number 333-148710, at the
Securities and Exchange Commission website at www.sec.gov.
13
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.
July 10, 2014 Trident Brands Incorporated
/s/ Mike Browne
--------------------------------------------------
By: Mike Browne
(President & Secretary)
/s/ Peter Salvo
--------------------------------------------------
By: Peter Salvo
(Controller)
/s/ Mark Holcombe
--------------------------------------------------
By: Mark Holcombe
(Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer, Director &
Chairman of the Board)
/s/ Donald MacPhee
--------------------------------------------------
By: Donald MacPhee
(Director)
/s/ Scott Chapman
--------------------------------------------------
By: Scott Chapman
(Director)
14