Nevada
|
4911
|
20-5854735
|
||
(State of Incorporation)
|
(Primary Standard Industrial Classification Number)
|
(IRS Employer Identification Number)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
x
|
(Do not check if a smaller reporting company)
|
Title of Each Class of
securities to be registered
|
Amount of
shares of
common
stock to be
registered(1)
|
Proposed
Maximum
Offering
Price Per
Share(2)
|
Proposed
Maximum
Aggregate
Offering
Price
|
Amount of
Registration
Fee (3)
|
||||||||||||
Common Stock, par value $$0.001 per share
|
15,000,000
|
$
|
.21
|
$
|
3,000,000
|
$
|
522.90
|
(1)
|
Consists of (i) up to 15,000,000 shares of common stock to be sold by Kodiak Capital Group, LLC (“Kodiak”) pursuant to an Equity Purchase Agreement dated October 10, 2014. In accordance with Rule 416(a), this registration statement shall also cover an indeterminate number of shares that may be issued and resold resulting from stock splits, stock dividends or similar transactions.
|
(2)
|
Based on the average of the high and low transactions prices on October 24, 2014. The shares offered, hereunder, may be sold by the selling stockholder from time to time in the open market, through privately negotiated transactions, or a combination of these methods at market prices prevailing at the time of sale or at negotiated prices.
|
(3)
|
Calculated under Section 6(b) of the Securities Act of 1933 as $.00012880 of the aggregate offering price.
|
Summary Information
|
3
|
Risk Factors
|
5
|
Dilution
|
10
|
Selling Shareholder
|
10
|
Plan Of Distribution
|
15
|
Legal Proceedings
|
17
|
Directors, Executive Officers, Promoters, And Control Persons
|
17
|
Security Ownership Of Certain Beneficial Owners And Management
|
19
|
Description Of Securities
|
20
|
Interest Of Named Experts
|
21
|
Disclosure Of Commission Position On Indemnification For Securities Liabilities
|
22
|
Description Of Business
|
22
|
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
|
27
|
Certain Relationships And Related Transactions
|
34
|
Market For Common Equity And Related Stockholder Matters
|
36
|
Executive Compensation
|
38
|
Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
|
39
|
Financial Statements Index
|
F-1
|
●
|
Our registration statement with respect to the resale of the shares of common stock delivered in connection with the applicable Put shall have been declared effective.
|
●
|
We shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the registrable securities.
|
●
|
We shall in a timely manner have filed with the SEC all reports, notices, and other documents required.
|
Shares currently outstanding:
|
90,547,200 common shares.
|
|
Shares being offered:
|
The selling stockholder identified in this prospectus may offer and sell up to 15,000,000 shares of our common stock, which will consists of up to 15,000,000 shares of common stock to be sold by Kodiak pursuant to the Equity Purchase Agreement. If issued presently, the 15,000,000 shares of common stock registered for resale by Kodiak would represent 16.57 % of our issued and outstanding shares of common stock as of October 21, 2014.
|
|
Offering Price per share:
|
The selling stockholders may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices.
|
|
Use of Proceeds:
|
We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders. However, we will receive proceeds from our initial sale of shares to Kodiak pursuant to the Equity Purchase Agreement. We will pay for expenses of this offering, except that the selling stockholders will pay any broker discounts or commissions or equivalent expenses applicable to the sale of their shares.
|
|
OTC Markets Symbol:
|
DNRG
|
|
Risk Factors:
|
See “Risk Factors” beginning on page 5 and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock.
|
Quarter ended
November 30, 2014
|
Year End
August 31, 2014
|
|||||||
Cash
|
$ | 1,049 | $ | 5,096 | ||||
Total Assets
|
$ | 19,615 | $ | 37,037 | ||||
Total Liabilities
|
$ | 1,786,651 | $ | 1,346,846 | ||||
Total Stockholder’s Equity (Deficit)
|
$ | (1,559,991 | ) | $ | (1,116,903 | ) |
Quarter ended
November 30, 2014
|
Year End
August 31. 2014
|
|||||||
Revenue
|
$ | 0 | $ | 0 | ||||
Total Expenses
|
$ | 483,427 | $ | 1,953,707 | ||||
Net Loss for the Period
|
$ | (469,288 | ) | $ | (1,953,707 | ) | ||
Net Loss per Share
|
$ | (0.00 | ) | $ | (0.0808 | ) |
Stock Price (Kodiak Purchase Price)
|
Shares Issued
|
Percentage of
Outstanding
Shares (1)
|
|||||
$0.3125 ($0.25) +25%
|
12,000,000
|
13.3
|
%
|
||||
$0.25 ($0.20)
|
15,000,000
|
16.6
|
%
|
||||
$0.1875 ($0.15) – 25%
|
20,000,000
|
22.15
|
%
|
||||
$0.125 ($0.10) – 50%
|
30,000,000
|
33.1
|
%
|
||||
$0.0625 ($0.05) – 75%
|
60,000,000
|
66.3
|
%
|
·
|
the trading volume of our shares;
|
·
|
the number of securities analysts, market-makers and brokers following our common stock;
|
·
|
new products or services introduced or announced by us or our competitors;
|
·
|
actual or anticipated variations in quarterly operating results;
|
·
|
conditions or trends in our business industries;
|
·
|
announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; additions or departures of key personnel;
|
·
|
sales of our common stock and
|
·
|
general stock market price and volume fluctuations of publicly-traded, and particularly microcap, companies.
|
Shares
Owned by
the Selling
Stockholders
|
Shares of
Common
Stock
|
Number of Shares to
be Owned by Selling
Stockholder After the
Offering and Percent
of Total Issued and
Outstanding Shares
|
||||||||||||||
Name of Selling Stockholder
|
before the
Offering(1)
|
Being
Offered
|
# of
Shares(2)
|
% of
Class(2)
|
||||||||||||
Kodiak Capital Group, LLC(3)
|
0
|
15,000,000
|
(4)
|
0
|
0
|
|||||||||||
Kodiak Capital Group, LLC(3)
|
0
|
|
1,100,000
|
(5)
|
0
|
0
|
(1)
|
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules and generally includes voting or investment power with respect to shares of common stock. Shares of common stock subject to options, warrants and convertible debentures currently exercisable or convertible, or exercisable or convertible within 60 days, are counted as outstanding. The actual number of shares of common stock issuable upon the conversion of the convertible debentures is subject to adjustment depending on, among other factors, the future market price of our common stock, and could be materially less or more than the number estimated in the table.
|
(2)
|
Because the selling stockholders may offer and sell all or only some portion of the 15,000,000 shares of our common stock being offered pursuant to this prospectus and may acquire additional shares of our common stock in the future, we can only estimate the number and percentage of shares of our common stock that any of the selling stockholders will hold upon termination of the offering.
|
|
|
(3)
|
Ryan Hodson exercises voting and dispositive power with respect to the shares of our common stock that are beneficially owned by Kodiak Capital Group, LLC.
|
|
|
(4)
|
Consists of up to 15,000,000 shares of common stock to be sold by Kodiak pursuant to the Equity Purchase Agreement.
|
(5)
|
Consists of up to 1,100,000 shares of common stock to be issued to Kodiak pursuit to the conversion of the Convertible Note. Promissory Note if Company decides not to pay the Note prior to October 27, 2015.
|
·
|
Our registration statement with respect to the resale of the shares of common stock delivered in connection with the applicable Put shall have been declared effective.
|
·
|
We shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the registrable securities.
|
·
|
We shall have filed with the SEC in a timely manner all reports, notices and other documents required.
|
·
|
Access to all our books and records.
|
·
|
Access to all material contracts and documents relating to our operations.
|
·
|
The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
·
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
·
|
privately negotiated transactions;
|
·
|
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
|
·
|
a combination of any such methods of sale; or
|
·
|
any other method permitted pursuant to applicable law.
|
Name
|
Age
|
Position
|
Term
|
|||
Neal Allen
|
57
|
President, Chief Executive Officer and Director
|
Since February 20, 2014
|
|||
Emilio De Jesus
|
37
|
President, Dominovas Energy Africa and Director
|
Since October 21, 2014
|
|||
Michael Watkins
|
4 7
|
Chief Operating Officer
|
Since October 21, 2014
|
|||
Kerry Stewart
|
46
|
Executive VP Operations
|
Since February 20, 2014
|
|||
Dr. Shamiul Islam
|
36
|
Executive VP Fuel Cell Operations
|
Since May 1, 2014
|
·
|
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
·
|
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
·
|
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
|
·
|
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
·
|
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity;
|
·
|
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity; and/or
|
·
|
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
|
Title of Class
|
Name and Address
of Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership
|
Percent
of Class
|
|||||||
Common
|
Neal Allen
|
|||||||||
Atlanta, GA
|
13,680,333
|
15.11
|
%
|
|||||||
Common
|
Spero Plavoukos
|
|||||||||
West Hollywood, CA
|
14,764,332
|
16.31
|
%
|
|||||||
Common
|
Michael Watkins
|
|||||||||
Grapevine, TX
|
13,764,333
|
15.20
|
%
|
|||||||
Common
|
Kerry Stewart
|
|||||||||
Atlanta, GA
|
1,092,507
|
1.16
|
% | |||||||
Common
|
Emilio De Jesus
|
300,000
|
0.33
|
%
|
||||||
Atlanta, GA*
|
·
|
Includes 300,000 shares owned by Guazenhe, LLC
|
·
|
the transaction is approved by a majority of disinterested directors before the shareholder becomes an interested shareholder;
|
·
|
the interested shareholder has owned at least 80% of the corporation’s outstanding voting shares for at least five years preceding the announcement date of any such business combination;
|
·
|
the interested shareholder is the beneficial owner of at least 90% of the outstanding voting shares of the corporation, exclusive of shares acquired directly from the corporation in a transaction not approved by a majority of the disinterested directors; or
|
·
|
the consideration paid to the holders of the corporation’s voting stock is at least equal to certain fair price criteria.
|
2014
|
2013
|
|||||||
Current Assets
|
$ | 19,615 | $ | 34,437 | ||||
Current Liabilities
|
(1,786,651 | ) | (447,013 | ) | ||||
Working Capital (Deficiency)
|
$ | (1,767,036 | ) | $ | (412,576 | ) |
2014
|
2013
|
|||||||
Net cash used in Operating Activities
|
$ | (30,247 | ) | $ | (21,643 | ) | ||
Net cash used in Investing Activities
|
$ | -- | $ | -- | ||||
Net cash provided by Financing Activities
|
$ | 26,200 | $ | 53,000 | ||||
Increase in Cash during the Period
|
$ | (4,047 | ) | $ | 31,357 | |||
Cash, Beginning of Period
|
$ | 5,096 | $ | (76 | ) | |||
Cash, End of Period
|
$ | 1,049 | $ | 31,291 |
Three months ended | Three months ended | |||||||
November 30, | November 30, | |||||||
2014 | 2013 | |||||||
Audit and accounting fees
|
$ | -- | $ | 19,435 | ||||
Consulting fees | 1 65,000 | 21,000 | ||||||
Banking fees | 1,199 | - - | ||||||
Insurance
|
3,882 | - - | ||||||
Financing fees
|
165,000 | -- | ||||||
Foreign exchange loss | -- | 1,891 | ||||||
Meals and entertainment
|
1,490 | -- | ||||||
Interest expense
|
- - | 1,104 | ||||||
Investor communications and transfer agent
|
3,487 | - - | ||||||
Regulatory filing fees
|
1,643 | - - | ||||||
Legal fees
|
15,855 | - - | ||||||
Office and general administration
|
6,005 | 11,983 | ||||||
Salaries and management fees
|
116,000 | - - | ||||||
Travel and entertainment
|
4,405 | 1,000 | ||||||
(483,427 | ) | (56,403 | ) | |||||
OTHER ITEM | ||||||||
Income from investment in Pro Eco
|
14,139 | -- | ||||||
NET LOSS
|
$ | (469,288 | ) | $ | (56,403 | ) |
Three months Ended November 30,
|
||||||||
2014
|
2013
|
|||||||
Current Assets
|
$
|
19,615)
|
$
|
34,437
|
||||
Current Liabilities
|
$
|
(1,786,651)
|
$
|
(447,013
|
)
|
|||
Working Capital (Deficiency)
|
$
|
(1,559,991)
|
$
|
(213,788
|
)
|
Three months Ended November 30,
|
||||||||
2014
|
2013
|
|||||||
Net cash used in Operating Activities
|
$
|
(30,247
|
)
|
$
|
(21,643
|
)
|
||
Net cash used in Investing Activities
|
$
|
--
|
$
|
--
|
||||
Net cash provided by Financing Activities
|
$
|
26,200
|
$
|
53,000
|
||||
Increase in Cash during the Period
|
$
|
(4,047
|
)
|
$
|
31,357
|
|||
Cash, Beginning of Period
|
$
|
5,096
|
$
|
(76
|
)
|
|||
Cash, End of Period
|
$
|
1,049
|
$
|
31,281
|
Three months Ended November 30,
|
||||||||
2014
|
2013
|
|||||||
REVENUES
|
$
|
Nil
|
$
|
Nil
|
||||
EXPENSES
|
||||||||
Audit and accounting fees
|
--
|
19,435
|
||||||
Consulting fees and expenses
|
165,000
|
21,000
|
||||||
Banking fees
|
1,199
|
--
|
||||||
Insurance
|
3,882
|
--
|
||||||
Financing fees
|
165,000
|
--
|
||||||
Foreign exchange loss
|
--
|
1,891
|
||||||
Meals and entertainment
|
1,490
|
--
|
||||||
Interest expense
|
--
|
1,104
|
||||||
Investor Communications and transfer agent
|
3,487
|
--
|
||||||
Regulatory filing fees
|
1,643
|
--
|
||||||
Legal fees
|
15,855
|
--
|
||||||
Office and general admin
|
5,466
|
11,983
|
||||||
Salaries and management fees
|
116,000
|
--
|
||||||
Travel and entertainment
|
4,405
|
1,000
|
||||||
Total expenses
|
483,427
|
56,403
|
||||||
OTHER ITEM
|
14,139
|
--
|
||||||
Income from Investment in Pro Eco
|
||||||||
Net Loss
|
$
|
(469,288
|
)
|
$
|
(56,403
|
)
|
Quarter Ended November 30,
|
||||||||
2014
|
2013
|
|||||||
Revenue
|
$
|
-
|
$
|
-
|
||||
Marketing
|
-
|
3,526
|
||||||
Professional fees
|
-
|
1,577
|
||||||
Travel
|
-
|
-
|
||||||
Meals
|
-
|
-
|
||||||
Office
|
-
|
-
|
||||||
Net and comprehensive loss
|
$
|
-
|
$
|
(5,103
|
)
|
At
|
At
|
|||||||
August 31,
|
August 31,
|
|||||||
2014
|
2013
|
|||||||
Current Assets
|
$
|
0
|
$
|
10
|
||||
Current Liabilities
|
$
|
516,088
|
$
|
58,850
|
||||
Working Capita
|
$
|
(516,088
|
)
|
$
|
(58,810
|
)
|
At
|
At
|
|||||||
November 30,
|
November 30,
|
|||||||
2014
|
2013
|
|||||||
Net Cash Consumed by Operating Activities
|
$
|
0
|
$
|
10
|
||||
Net Cash Consumed by Investing Activities
|
--
|
-
|
||||||
Net Cash Provided by Financing Activities
|
-
|
-
|
||||||
Net Cash Provided (Consumed)
|
$
|
0
|
$
|
10
|
Quarter Ended
|
High
|
Low
|
||||||
November 30, 2013
|
$ | - | $ | - - | ||||
February 28, 2014
|
$ | - | $ | - | ||||
May 31, 2014
|
$ | - | $ | - | ||||
August 31, 2014
|
$ | - | $ | - |
·
|
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker- dealer or the transaction is otherwise exempt;
|
·
|
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
|
·
|
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value, and information regarding the limited market in penny stocks; and
|
·
|
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account.
|
Non-equity
|
||||||||||||||||||||||||||||||||||||
Incentive
|
Non-qualified
|
All
|
||||||||||||||||||||||||||||||||||
Stock
|
Plan
|
Deferred
|
Other
|
|||||||||||||||||||||||||||||||||
Name
|
Position
|
Year
|
Salary
|
Bonus
|
Awards
|
Option
|
Compensation
|
Compensation
|
Compensation
|
Total
|
||||||||||||||||||||||||||
Neal Allen
|
President, CEO &
|
201 4
|
133,800
|
0
|
0
|
0
|
0
|
0
|
0
|
133,80 0
|
||||||||||||||||||||||||||
Director
|
201 3
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Michael Watkins
|
COO
|
201 4
|
75,966
|
0
|
0
|
0
|
0
|
0
|
0
|
75,966
|
||||||||||||||||||||||||||
201 3
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||||||
Kerry Stewart
|
EVP Operations
|
2014
|
66,800
|
0
|
0
|
|
0
|
0
|
0
|
0
|
66,800
|
|||||||||||||||||||||||||
2013
|
0
|
0
|
0
|
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Dr. Shamiul Islam
|
EVP Fuel Cell Oper.
|
2014
|
33,750
|
0
|
0
|
|
0
|
0
|
0
|
0
|
33,750
|
|||||||||||||||||||||||||
2013
|
0
|
0
|
0
|
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Dallas Gray
|
Former Director
|
201 4
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||||
201 3
|
0
|
0
|
2,000,00 0
|
0
|
0
|
0
|
0
|
20.00 0
|
||||||||||||||||||||||||||||
Darren Jacklin
|
Former Director
|
201 4
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||||
201 3
|
0
|
0
|
250,00 0
|
0
|
0
|
0
|
0
|
25 0
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Not exercisable
|
Equity
Incentive
Plan
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Dominovas Energy Corporation Consolidated Balance Sheet as of November 30, 2014
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F-2
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Dominovas Energy Corporation Consolidated Statement of Operations as of November 30, 2014
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F-3
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Dominovas Energy Corporation Consolidated Statement of Cash flows as of November 30, 2014
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F-4
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Dominovas Energy Corporation Notes to Financial Statements as of November 30, 2014
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F-5
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Report of Independent Registered Public Accounting Firm
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F-7
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Dominovas Energy Corporation Consolidated Balance Sheet as of August 31, 2014
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F-8
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Dominovas Energy Corporation Consolidated Statement of Operations as of August 31, 2014
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F-9
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Dominovas Energy Corporation Consolidated Statement of Cash flows as of August 31, 2014
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F-10
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Dominovas Energy Corporation Consolidated Statement of Stockholders' Deficit as of August 31, 2014
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F-11
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Dominovas Energy Corporation Notes to Financial Statements as of August 31, 2014
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F-12
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Report of Independent Registered Public Accounting Firm
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F-18
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Western Standard Energy Corp. Balance Sheet as of August 31, 2013
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F-19
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Western Standard Energy Corp. Statement of Operations as of August 31, 2013
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F-20
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Western Standard Energy Corp. Statement of Cash flows as of August 31, 2013
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F-21
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Western Standard Energy Corp. Statement of Stockholders' Deficit as of August 31, 2013
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F-22
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Western Standard Energy Corp. Notes to Financial Statements as of August 31, 2013
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F-23
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Report of Independent Registered Public Accounting Firm
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F-27
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Dominovas Technologies LLC Balance Sheet as of August 31, 2013
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F-28
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Dominovas Technologies LLC Statement of Operations as of August 31, 2013
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F-298
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Dominovas Technologies LLC Statement of Cash flows as of August 31, 2013
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F-30
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Dominovas Technologies LLC Statement of Member’s Deficit as of August 31, 2013
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F-31
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Dominovas Technologies LLC Notes to Financial Statements as of August 31, 2013
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F-32
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Dominovas Technologies LLC Balance Sheet as of November 30, 2013
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F-34
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Dominovas Technologies LLC Statement of Operations for the Quarter ending November 30, 2013
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F-35
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Dominovas Technologies LLC Statement of Cash flows for the Quarter ending November 30, 2013
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F-36
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Dominovas Technologies LLC Statement of Member’s Deficit for the Quarter ending November 30, 2013
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F-37
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Dominovas Technologies LLC Notes to Financial Statements for the Quarter ending November 30, 2013
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F-38
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Dominovas Technologies LLC Balance Sheet as of November 30, 2012
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F-39
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Dominovas Technologies LLC Statement of Operations for the Quarter ending November 30, 2012
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F-40
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Dominovas Technologies LLC Statement of Cash flows for the Quarter ending November 30, 2012
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F-41
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Dominovas Technologies LLC Statement of Member’s Deficit for the Quarter ending November 30, 2012
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F-42
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Dominovas Technologies LLC Notes to Financial Statements for the Quarter ending November 30, 2012
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F-43
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Dominovas Energy Corporation (formerly Western Standard Energy Corp.) CONSOLIDATED BALANCE SHEETS November 30, August 31, 2014 2014 ------------ ------------ (unaudited) ASSETS CURRENT ASSETS Cash $ 1,049 $ 5,096 Prepaids 18,566 31,941 ------------ ------------ 19,615 37,037 ------------ ------------ Interest in Pro Eco Energy 207,045 192,906 ------------ ------------ $ 226,660 $ 229,943 ============ ============ LIABILITIES CURRENT LIABILITIES Accounts payable $ 293,346 $ 281,815 Accrued liabilities 1,113,305 1,015,031 Notes payable 50,000 50,000 Convertible debt 333,000 -- ------------ ------------ 1,786,651 1,346,846 ------------ ------------ STOCKHOLDERS' DEFICIT COMMON STOCK Authorized: 200,000,000 common shares with par value of $0.001 Issued and outstanding: 90,545,125 (August 31, 2014-90,525,125) common shares 90,548 90,527 ADDITIONAL PAID IN CAPITAL 5,960,311 5,955,332 OBLIGATION TO ISSUE SHARES 21,200 -- DEFICIT ACCUMULATED DURING EXPLORATION STAGE (7,632,050) (7,162,762) ------------ ------------ (1,559,991) (1,116,903) ------------ ------------ $ 226,660 $ 229,943 ============ ============ The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) CONDOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months Three months ended ended November 30, November 30, 2014 2013 ------------ ------------ EXPENSES Audit and accounting fees $ -- $ 19,435 Consulting fees 165,000 21,000 Banking fees 1,199 -- Insurance 3,882 -- Financing fees 165,000 -- Foreign exchange loss -- 1,891 Meals and entertainment 1,490 -- Interest expense -- 1,104 Investor communications and transfer agent 3,487 -- Regulatory filing fees 1,643 -- Legal fees 15,855 -- Office and general administration 5,466 11,983 Salaries and management fees 116,000 -- Travel and entertainment 4,405 1,000 ------------ ------------ (483,427) (56,413) ------------ ------------ OTHER ITEM Income from investment in Pro Eco 14,139 -- ------------ ------------ $ (469,288) $ (56,413) NET LOSS ============ ============ LOSS PER SHARE - BASIC AND DILUTED $ (0.01) $ (0.00) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING - BASIC AND DILUTED 90,525,125 33,941,993 ============ ============ The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three months Three months ended ended November 30, November 30, 2014 2013 ---------- ---------- CASH FLOW FROM OPERATING ACTIVITIES Net loss $ (469,288) $ (56,403) Non-cash items included in net loss: Interest expense -- 1,104 Income from investment in Pro Eco (14,139) -- Consulting fees 165,000 -- Financing fees 165,000 -- Changes in non-cash working capital items: Prepaid expenses 13,375 -- Accounts payable and accrued liabilities 109,805 33,656 ---------- ---------- NET CASH USED IN OPERATING ACTIVITIES (30,247) (21,643) ---------- ---------- FINANCING ACTIVITIES Issuance of common Stock 5,000 -- Notes payable -- 58,000 Subscription received 21,200 -- Convertible debt repaid -- (5,000) ---------- ---------- NET CASH FROM FINANCING ACTIVITIES 26,200 53,000 ---------- ---------- INCREASE IN CASH (4,047) 31,357 Cash, beginning 5,096 (76) ---------- ---------- CASH, ENDING $ 1,049 $ 31,281 ========== ========== SUPPLEMENTARY INFORMATION CASH PAID FOR: Interest $ -- $ -- Income tax $ -- $ -- ========== ========== The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) NOTES TO FINANCIAL STATEMENTS November 30, 2014 1. BASIS OF PRESENTATION 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 generally accepted accounting principles 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, 2014. 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 three month period ended November 30, 2014 are not necessarily indicative of the results that may be expected for the year ending August 31, 2015. 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. INTEREST IN PRO ECO ENERGY On November 29, 2013, the Company acquired 41% of Pro Eco Energy Ltd. ("Pro Eco") in exchange for 4,000,000 of the Company's common shares (note 5). On December 2, 2013, the Company entered into an agreement to acquire 8.25% of Pro Eco Energy Ltd. in exchange for the following payments: * $10,000 due on December 2, 2013 (paid); * $10,000 due December 31, 2013 (unpaid); * $10,000 due January 31, 2014 (unpaid); and * $10,000 due May 31, 2014 (unpaid). The Company has decided to terminate the agreement and return the shares. During the 3 month period ended November 30, 2014, the Company recognized its portion of the loss in Pro Eco of $14,139. 4. COMMON STOCK Authorized: 200,000,000 common shares. On April 14, 2010, the Company adopted a stock option plan allowing the Company's directors to grant up to 5,000,000 stock options pursuant to the terms and conditions of the stock option plan. As at November 30, 2014 no options have been granted. During the period ended November 30, 2014, the Company received subscriptions of $17,500 to issue 70,000 shares at $0.25 per share. As at November 30, 2014, the shares have not yet been issued. During the period ended November 30, 2014, the Company received subscriptions of $3,700 to issue 10,572 shares at $0.35 per share. As at November 30, 2014, the shares have not yet been issued. 5. RELATED PARTY TRANSACTIONS During the three months ended November 30, 2014, the Company incurred wages of $23,250 (November 30, 2013 - $Nil), $22,500 (2013 - $Nil), $26,000 (November 30, 2013 - $Nil) and $44,250 (November 30, 2013 - $Nil) to the Executive Vice President of Operations, the Executive Vice President of Fuel Cell Operations, the Chief Operating Officer and the President and Chief Executive Office of the Company, respectively. As at August 31, 2014, unpaid wages of $274,598 (August 31, 2014 - $162,950) was owing to the related parties and is included in accrued liabilities.
As at November 30, 2014, the Company owed notes payable of $50,000 (2013 - $75,000) to a former director of the Company and $Nil (2013 - $75,000) to a relative of a former director of the Company. The notes are non-interest bearing, unsecured and due on demand. 6. CONVERTIBLE DEBT On October 27, 2014, the Company issued Kodiak Capital Group ("Kodiak") a convertible note in the amount of $165,000 in exchange for consulting services rendered. The note is non-interest bearing, is due on October 27, 2015 and is unsecured. The Company may repay the loan at any time prior to October 27, 2015 without incurring any penalties. Kodiak may convert the entire loan amount into shares of the Company's common stock, at a conversion price for each share equal to the 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 up to October 27, 2015. As the value of the shares under the conversion option is greater than the face value of the debt, the value of the shares, should the conversion option be exercised, of $330,000 has been recognized as a liability in these financial statements. Financing fees of $165,000 was recorded on the transaction. 7. COMMITMENTS On April 28, 2014, the Company entered into a lease agreement for office, warehouse and production space in Atlanta, GA for a term of five years. Under the agreement, the Company is committed to rent payments of a minimum of $ 13,374 per month commencing November 1, 2014. Under the agreement, the Company is committed to the following monthly rent payments: Dates Monthly Amount ----- -------------- Though October 2015 $13,374 November 1, 2015 to October 31, 2016 $13,776 November 1, 2016 to October 31, 2017 $14,189 November 1, 2017 to October 31, 2018 $14,615 November 1, 2018 to October 31, 2019 $15,053 Under the agreement, the Company also has to incur $125,000 in leasehold improvements by September 30, 2014. If the expenses are not incurred by September 30, 2014, the total lease will be in default. As at the date of these financial statements, the Company has not yet incurred the required expenditures and the lease is in default. As a result, the entire lease obligation of $838,707 has been accrued for in these financial statements. 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 him 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 him 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 Operations of the Company. Under the agreement, the Company will pay him an annual salary of $93,000 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 him an annual salary of $112,000. The agreement will be in effect for 5 years.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Dominovas Energy Corporation (formerly Western Standard Energy Corp.) We have audited the accompanying consolidated balance sheets of Dominovas Energy Corporation (formerly Western Standard Energy Corp.) as of August 31, 2014 and 2013 and the related consolidated statements of operations, stockholders' deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Dominovas Energy Corp. (formerly Western Standard Energy Corp.) as of August 31, 2014 and 2013 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Dale Matheson Carr-Hilton Labonte LLP ----------------------------------------------- CHARTERED ACCOUNTANTS Vancouver, Canada December 24, 2014
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) CONSOLIDATED BALANCE SHEETS August 31, August 31, 2014 2013 ------------ ------------ ASSETS CURRENT ASSETS Cash $ 5,096 $ -- Prepaids 31,941 3,156 ------------ ------------ 37,037 3,156 ------------ ------------ Interest in Pro Eco Energy 192,906 -- ------------ ------------ $ 229,943 $ 3,156 ============ ============ LIABILITIES CURRENT LIABILITIES Bank indebtedness $ -- $ 76 Accounts payable 281,815 76,464 Accrued liabilities 1,015,031 4,500 Due to related parties -- 139,860 Notes payable 50,000 150,000 Convertible debentures -- 128,289 ------------ ------------ 1,346,846 359,329 ------------ ------------ STOCKHOLDERS' DEFICIT COMMON STOCK Authorized: 200,000,000 common shares with par value of $0.001 Issued and outstanding: 90,525,125(August 31,2013-33,941,993) common shares 90,527 33,942 ADDITIONAL PAID IN CAPITAL 5,955,332 4,818,940 OBLIGATION TO ISSUE SHARES -- 150,000 DEFICIT (7,162,762) (5,359,055) ------------ ------------ (1,116,903) (356,173) ------------ ------------ $ 229,943 $ 3,156 ============ ============ The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) CONSOLIDATED STATEMENTS OF OPERATIONS Year ended Year ended August 31, August 31, 2014 2013 ------------ ------------ EXPENSES Audit and accounting fees $ 60,120 $ 68,538 Consulting fees and expenses 43,750 127,625 Corporate finance fee -- 47,250 Directors' fees 25,000 -- Due diligence fee -- 35,761 Foreign exchange loss 4,087 1,790 Gain on settlement of debt (140,000) 40,000 Interest expense 16,712 10,979 Investor communications and transfer agent 11,159 13,689 Write-off of intangible asset 513,652 -- Legal fees 208,659 22,456 Loss on equity accounted investment 15,882 -- Marketing 4,540 -- Office and general administration 902,252 43,983 Salaries and management fees 217,000 -- Travel and entertainment 70,894 14,084 ------------ ------------ 1,953,707 426,155 ------------ ------------ NET LOSS $ (1,953,707) $ (426,155) ============ ============ LOSS PER SHARE - BASIC AND DILUTED $ (0.03) $ (0.02) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING - BASIC AND DILUTED 66,491,440 27,172,296 ============ ============ The accompanying notes are an integral part of these financial statements..
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) STATEMENTS OF CASH FLOWS Year ended Year ended August 31, August 31, 2014 2013 ------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net loss $ (1,953,707) $ (426,155) Non-cash items included in net loss Write off of intangible asset 513,652 -- Interest expense 11,711 10,979 Loss on equity accounted investment 15,882 -- Loss (Gain) on settlement of debt (140,000) 40,000 Stock issued for service 42,500 -- Changes in non-cash working capital Prepaid expenses (28,785) (3,156) Accounts payable and accrued liabilities 1,329,102 70,794 ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (209,645) (307,538) ------------ ------------ INVESTING ACTIVITIES Investment in Pro Eco (10,000) -- ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (10,000) -- ------------ ------------ FINANCING ACTIVITIES Notes payable 50,000 150,000 Issuance of common shares for cash 174,817 158,462 Convertible debt -- (1,000) Bank debt (76) 76 ------------ ------------ NET CASH FROM FINANCING ACTIVITIES 224,741 307,538 ------------ ------------ CHANGE IN CASH 5,096 -- Cash, beginning -- -- ------------ ------------ CASH, ENDING $ 5,096 $ -- ============ ============ SUPPLEMENTARY INFORMATION CASH PAID FOR: Interest $ -- $ -- Income tax $ -- $ -- ============ ============ NON-CASH FINANCING AND INVESTING ACTIVITIES Forgiveness of debt $ 140,000 $ -- Loans converted to common shares $ 75,000 $ -- ============ ============ The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) STATEMENTS OF STOCKHOLDERS' DEFICIT Common stock Additional Obligation Total ------------------- Paid in to Issue Subscription Accumulated Stockholders' Shares Amount Capital Shares Receivable Deficit Deficit ------ ------ ------- ------ ---------- ------- ------- Net Loss -- $ -- $ -- $ -- $ -- $ (121,798) $ (121,798) ---------- ------- ---------- --------- ------- ----------- ----------- BALANCE AUGUST 31, 2012 192,136 192 4,670,033 -- (125) (4,932,900) (262,800) Issuance of stock under private placement for cash of $0.00125 per share 30,769,857 30,770 7,692 -- -- -- 38,462 Issuance of stock under private placement for cash of $0.25 per share 480,000 480 119,520 -- -- -- 120,000 Issuance of stock under debt conversion 2,500,000 2,500 625 -- -- -- 3,125 Share subscription cancelled -- -- (125) -- 125 -- -- Equity portion of convertible debt -- -- 21,195 -- -- -- 21,195 Obligation to issue shares -- -- -- 150,000 -- -- 150,000 Net Loss -- -- -- -- -- (426,155) (426,155) ---------- ------- ---------- --------- ------- ----------- ----------- BALANCE AUGUST 31, 2013 33,941,993 33,942 4,818,940 150,000 -- (5,359,055) (356,173) Issuance of stock under private placement for cash of $0.01 per share 4,301,666 4,302 38,715 -- -- -- 43,017 Issuance of stock under debt conversion 3,000,000 3,000 72,000 -- -- -- 75,000 Issuance of stock for services 4,250,000 4,250 38,250 -- -- -- 42,500 Issuance of stock for acquisition of Pro Eco 4,000,000 4,000 194,788 -- -- -- 198,788 Cancellation of shares (4,495,734) (4,496) 4,496 -- -- -- -- Forgiveness of obligation to issue shares -- -- -- (150,000) -- 150,000 -- Issuance of stock for acquisition of Dominovas 45,000,000 45,000 405,000 -- -- -- 450,000 Issuance of stock under private placement for cash of $0.25 per share 527,200 527 131,273 -- -- -- 131,800 Gain on forgiveness of related party debt -- -- 251,872 -- -- -- 251,872 Net Loss -- -- -- -- -- (1,953,707) (1,953,707) ---------- ------- ---------- --------- ------- ----------- ----------- BALANCE AUGUST 31, 2014 90,525,125 $90,525 $5,955,334 $ -- $ -- $(7,162,762) $(1,116,903) ========== ======= ========== ========= ======= =========== =========== The accompanying notes are an integral part of these financial statements
Dominovas Energy Corporation (formerly Western Standard Energy Corp.) NOTES TO FINANCIAL STATEMENTS August 31, 2014 1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS Dominovas Energy Corporation (formerly Western Standard Energy Corp.) (the "Company") was incorporated on February 2, 2005 under the laws of the State of Nevada. On November 29, 2013, the Company acquired 41% of Pro Eco Energy Ltd. ("Pro Eco") in exchange for 4,000,000 of the Company's common shares. Pro Eco is a private company located in Summerland, B.C, Canada in the business of providing energy efficient and environmentally friendly heating, ventilation and air conditioning ("HVAC") systems for commercial buildings (Note 3). On December 2, 2013, the Company entered into an agreement to acquire an additional 8.25% of Pro Eco (Note 3). On February 20, 2014, the Company acquired 100% of Dominovas Energy LLC., which has completed the development of a unique electric power generating Fuel Cell system (Note 8). On February 24, 2014, Dominovas Energy LLC changed its name to Dominovas Technologies LLC ("Dominovas Technologies") and is now a wholly owned subsidiary of the Company. On February 24, 2014, Western Standard Energy Corp. changed its name to Dominovas Energy Corporation. GOING CONCERN These financial statements have been prepared in accordance with United States generally accepted accounting principles (" US GAAP"), on a going concern basis, which contemplated the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company incurred a net loss of $1,953,707 for the year ended August 31, 2014 [2013 - $426,155] and at August 31, 2014 had a deficit accumulated of $7,162,762.. The Company has no revenue and has an accumulated deficit and negative working capital of $1,309,809.. Further losses are anticipated in the development of its business and there can be no assurance that the Company will be able to achieve or maintain profitability. The continuing operations of the Company and the recoverability of the carrying value of its assets depends upon the ability of the Company to obtain necessary financing to fund its on-going working capital requirements and exploration activities, and upon future profitable operations. The accompanying financial statements do not include any adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. There is no assurance that equity or debt capital will be available as necessary to meet the Company's capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. The issuances of additional equity securities by the Company may result in significant dilution in the equity interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The financial statements of the Company have been prepared in accordance with US GAAP and are presented in US dollars. The Company has elected to early adopt the guidance in FASB Topic and no longer provides the accounting disclosures for development stage companies. Accordingly, the figures for the period from inception to the current period are no longer provided and all references to development stage operations have been removed. Other recent accounting pronouncements with future effective dates are not expected to have an impact on the Company's financial statements.
USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with US GAAP required management to make estimated and assumption that affect the report amounts of assets and liabilities and disclosure of contingent assets and liability 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. 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 from 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. FINANCIAL INSTRUMENTS The fair value of the Company's financial instruments, consisting of bank indebtedness, accounts payable, convertible debentures and notes payable are estimated to approximate to their carrying value. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. FOREIGN CURRENCY TRANSLATION Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Expenses are translated at average rates of exchange during the period. Gains or losses resulting from foreign currency transactions are included in results of operations. INCOME TAXES Deferred income taxes are provided for tax effects of temporary differences between the tax basis of asset and liabilities and their reported amounts in the financial statements. The Company uses the liability method to account for income taxes, which requires deferred taxes to be recorded at the statutory rate expected to being in effect when the taxes are paid. Valuation allowances are provided for a deferred tax asset when it is probable that such asset will not be realized. Management evaluated tax positions taken or expected to be taken in a tax return. The evaluation of a tax position included a determination of whether a tax position should be recognized in the financial statements and such a position should only be recognized if the Company determines that it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based upon the technical merits of the position. For those tax positions that should be recognized, the measurement of a tax position is determined as being the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. INVESTMENTS Long term investments in which the Company has voting interests of 20% to 50%, or where the Company otherwise has the ability to exercise significant influence, are accounted for using the equity method. Under this method, the Company's share of the investees' earnings and losses are included in operations and its investments therein are adjusted by a like amount. Dividends are credited to the investment accounts. LOSS PER SHARE Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if there effect is anti-dilutive. Because the Company does not have any potentially dilutive securities, diluted loss per share is equal to basic loss per share.
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. INTEREST IN PRO ECO ENERGY On November 29, 2013, the Company acquired 41% of Pro Eco in exchange for 4,000,000 of the Company's common shares (Note 5). On December 2, 2013, the Company entered into an agreement to acquire an additional 8.25% of Pro Eco in exchange for the following payments: * $10,000 due on December 2, 2013 (paid); * $10,000 due December 31, 2013 (unpaid); * $10,000 due January 31, 2014 (unpaid); and * $10,000 due May 31, 2014 (unpaid). The Company has decided to terminate the agreement and return 600,000 shares to the vendor. During the year ended August 31, 2014, the Company recognized its portion of the loss in Pro Eco of $15,882. 4. CONVERTIBLE DEBENTURE On May 22, 2013, the Company entered into a securities purchase agreement. Under this agreement, a convertible debenture (the "Debenture") in the amount of CDN$140,000 was issued to the Lenders. The Debenture is also convertible, only upon default, into shares of the Company's common stock equal in number to 50% of the total issued and outstanding Common Stock of the Company at the time of conversion. The Debenture is unsecured and matures on May 15, 2014. The Company also had to deliver 600,000 common shares of the Company to the Lenders by May 15, 2014. On February 11, 2014, the Debenture holders agreed to cancel the Debenture and waived any and all obligation of the Company to pay the debenture or issue the shares. As a result, a gain on the settlement of $290,000 has been recognized in for the year ended August 31, 2014. 5. COMMON STOCK Authorized: 200,000,000 common shares. On April 14, 2010, the Company adopted a stock option plan allowing the Company's directors to grant up to 5,000,000 stock options pursuant to the terms and conditions of the stock option plan. As at August 31, 2014 no options have been granted. On November 12, 2012, the Company issued 30,769,857 shares of common stock at $0.00125 per share for gross proceeds of $38,462. On November 27, 2012, the Company issued 480,000 common shares at $0.25 per share for gross proceeds of $120,000. On November 12, 2012, the Company issued 2,500,000 shares of common stock in exchange for the conversion of $3,125 of debt (Note 3). On December 1, 2013, the Company issued 1,000,000 shares to an officer of the Company for accounting services rendered. The fair value of the shares is $10,000.
On December 1, 2013, the Company issued 1,000,000 shares to a director of the Company for consulting services rendered. The fair value of the shares is $10,000. On December 1, 2013, the Company issued 2,250,000 shares to directors of the Company for directors' fees. The fair value of the shares is $22,500. On December 6, 2013, the Company issued 3,016,666 shares at $0.01 per share for gross proceeds of $30,167. On December 15, 2013, the Company issued the 4,000,000 shares for the acquisition of 41% of Pro Eco. The estimated fair value of the shares on issuance was $198,788 (Note 3). On December 20, 2013, the Company issued 3,000,000 shares to settle debt of $75,000 owing to an officer of the Company and to the President and CEO of the Company. The fair value of the shares was $30,000. The gain on the settlement of the debt of $45,000 has been recorded as additional paid in capital. On January 22, 2014, the Company issued 1,285,000 shares at $0.01 per share for gross proceeds of $12,850. On February 20, 2014, the Company acquired 100% of Dominovas Energy LLC in exchange for 45,000,000 of the Company's common shares. The estimated fair value of the shares on issuance was $450,000 (Note 8). On February 20, 2014, a director of the Company cancelled 4,495,734 shares owned by the President and CEO of the Company. On May 15, 2014, the Company issued 467,200 shares at $0.25 per share for gross proceeds of $116,800. On August 31, 2014, the Company issued 60,000 shares at $0.25 per share for gross proceeds of $15,000. 6. RELATED PARTY TRANSACTIONS During the year ended August 31, 2014, the Company incurred $23,000 (2013 - $87,000) in consulting fees to a relative of a director of the Company. As at August 31, 2014, $Nil (2013 - $22,500) owing to the related party is included in accounts payable. The amount is unsecured, non-interest bearing and due on demand. During the year ended August 31, 2014, the Company incurred $23,514 (2013 - $55,000) in accounting fees to a director of the Company. As at August 31, 2014, $Nil (2013 - $41,096) owing to the related party is included in accounts payable. The amount is unsecured, non-interest bearing and due on demand. During the year ended August 31, 2014, the Company incurred wages of $46,500 (2013 - $Nil), $30,000 (2013 - $Nil), $52,000 (2013 - $Nil) and $88,500 (2013 - $Nil) to the Executive Vice President of Operations, the Executive Vice President of Fuel Cell Operations, the Chief Operating Officer and the President and Chief Executive Office of the Company, respectively. As at August 31, 2014, unpaid wages of $162,950 (2013 - $Nil) was owing to the related parties and is included in accounts payable. As at August 31, 2014, the Company owed notes payable of $50,000 (2013 - $75,000) to a director of the Company and $Nil (2013 - $75,000) to a relative of a director of the Company. The notes are non-interest bearing, unsecured and due on demand. 7. INCOME TAXES As at August 31, 2014, the Company had accumulated non-capital loss carry-forwards of approximately $5,234,000. These losses are available to reduce taxable income in future taxation years and begin to expire in 2025 after a carry-forward period of 20 years. The Company is required to compute the deferred tax benefits from non-capital loss carrying-forwards. However, due to the uncertainty of realization of these loss carry-forwards, a full valuation allowance has been provided against this deferred tax asset.
At August 31, 2014 and 2013, the components of the deferred tax asset, the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are shown below: August 31, August 31, 2014 2013 ------------ ------------ Net loss $ (1,953,707) $ (386,156) Statutory tax rate 35% 35% Expected tax recovery (683,797) (135,155) Non-deductible items 130,779 14,000 Change in valuation allowance 553,019 121,155 ------------ ------------ Actual tax recovery $ -- $ -- ============ ============ August 31, August 31, 2014 2013 ------------ ------------ Non-capital tax loss carry forwards $ 6,085,771 $ 4,505,717 Statutory tax rate 35% 35% Deferred tax asset 2,130,000 1,577,001 Less: valuation allowance (2,130,000) (1,577,001) ------------ ------------ NET DEFERRED TAX ASSET $ -- $ -- ============ ============ 8. COMMITMENTS The Company entered into a lease agreement on November 1, 2014 for a term of five years.. Under the agreement, the Company is committed to the following monthly rent payments: Dates Monthly Amount ----- -------------- Though October 2015 $13,374.44 November 1, 2015 to October 31, 2016 $13,775.67 November 1, 2016 to October 31, 2017 $14,188.94 November 1, 2017 to October 31, 2018 $14,614.61 November 1, 2018 to October 31, 2019 $15,053.05 Under the agreement, the Company also has to incur $125,000 in leasehold improvements by September 30, 2014. If the expenses are not incurred by September 30, 2014, the total lease will be in default. As at the date of these financial statements, the Company has not yet incurred the required expenditures and the lease is in default. As a result, the entire lease obligation of $852,081 has been accrued for in these financial statements. 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 him 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 him 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 Operations of the Company. Under the agreement, the Company will pay him an annual salary of $93,000 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 him an annual salary of $112,000. The agreement will be in effect for 5 years.
9. ACQUISITION OF DOMINOVAS ENERGY LLC On February 20, 2014, the Company acquired 100% of Dominovas Technologies by issuing 45,000,000 of its common stock with a fair value of $450,000. At the date of the acquisition, Dominovas Technologies had net liabilities of $63,652 and the Company recognized goodwill of $513,652 on the acquisition. As Dominovas Technologies has not commenced operations or earned any revenues to date, management has determined goodwill to be impaired and has written off the entire amount as at August 31, 2014. 10. SUBSEQUENT EVENT On October 17, 2014, the Company issued 20,000 shares at $0.25 per share for gross proceeds of $5,000.
[LETTERHEAD OF DALE MATHESON CARR-HILTON LABONTE LLP] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF WESTERN STANDARD ENERGY CORP. We have audited the accompanying balance sheets of Western Standard Energy Corp. (an exploration stage company) as of August 31, 2013 and 2012 and the related statements of operations, cash flows and stockholders' deficit for the years then ended and the period from October 16, 2003 (inception) to August 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, these financial statements present fairly, in all material respects, the financial position of Western Standard Energy Corp. as of August 31, 2013 and 2012 and the results of its operations and its cash flows for the years then ended and the period from October 16, 2003 (inception) through August 31, 2013 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Dale Matheson Carr-Hilton Labonte LLP ------------------------------------------------ CHARTERED ACCOUNTANTS Vancouver, Canada December 2, 2013
Western Standard Energy Corp. (An Exploration Stage Company) BALANCE SHEETS August 31, August 31, 2013 2012 ------------ ------------ ASSETS CURRENT ASSETS Prepaids $ 3,156 $ -- ------------ ------------ $ 3,156 $ -- ============ ============ LIABILITIES CURRENT LIABILITIES Bank indebtedness $ 76 $ -- Accounts payable and accrued liabilities 80,964 202,800 Notes payable 150,000 60,000 Convertible debentures 128,289 -- ------------ ------------ 359,329 262,800 ------------ ------------ STOCKHOLDERS' DEFICIT COMMON STOCK Authorized: 200,000,000 common shares with par value of $0.001 Issued and outstanding: 33,941,993 and 192,136 common shares respectively 33,942 192 ADDITIONAL PAID IN CAPITAL 4,818,940 4,670,033 OBLIGATION TO ISSUE SHARES 150,000 -- SUBSCRIPTION RECEIVABLE -- (125) DEFICIT ACCUMULATED DURING EXPLORATION STAGE (5,359,055) (4,932,900) ------------ ------------ (356,173) (262,800) ------------ ------------ $ 3,156 $ -- ============ ============ The accompanying notes are an integral part of these financial statements
Western Standard Energy Corp. (An Exploration Stage Company) STATEMENTS OF OPERATIONS Cumulative from October 16, 2003 Year ended Year ended (Inception) to August 31, August 31, August 31, 2013 2012 2013 ------------ ------------ ------------ EXPENSES Advertising and promotion $ -- $ -- $ 48,670 Audit and accounting fees 68,538 10,833 360,739 Depreciation -- -- 12,280 Consulting fees and expenses 127,625 82,723 228,264 Corporate finance fee 47,250 -- 47,250 Due diligence fee 35,761 -- 35,761 Foreign exchange loss 1,790 -- 25,576 Gain on disposal of oil and gas properties -- -- (5,810) Gain on settlement of debt -- -- (104,992) Interest expense 10,979 17,205 83,548 Interest income -- -- (3,716) Investor communications and transfer agent 13,689 10,085 526,567 Legal fees 22,456 952 258,105 Office and general administration 43,983 -- 240,405 Product development -- -- 876,451 Salaries and management fees -- -- 1,283,083 Stock-based compensation -- -- 104,366 Travel and entertainment 14,084 -- 207,891 Web and graphic design -- -- 129,716 Write-down of assets and liabilities, net -- -- (34,650) Write-down of oil and gas property -- -- 1,000,551 ------------ ------------ ------------ 386,155 121,798 5,319,055 ------------ ------------ ------------ OTHER ITEMS Loss on extinguishment of debt 40,000 -- 40,000 ------------ ------------ ------------ NET LOSS $ (426,155) $ (121,798) $ (5,359,055) ============ ============ ============ LOSS PER SHARE - BASIC AND DILUTED $ (0.02) $ (0.63) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING - BASIC AND DILUTED 27,172,296 192,136 ============ ============ The accompanying notes are an integral part of these financial statements
Western Standard Energy Corp. (An Exploration Stage Company) STATEMENTS OF CASH FLOWS Cumulative from October 16, 2003 Year ended Year ended (Inception) to August 31, August 31, August 31, 2013 2012 2013 ------------ ------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net loss $ (426,155) $ (121,798) $ (5,359,055) Non-cash items included in net loss Impairment of oil and gas properties -- -- 960,551 Gain on disposal of oil and gas properties -- -- (5,809) Interest 10,979 17,205 34,080 Write-down of accounts payable -- -- 30,374 Write-down of assets -- -- (4,276) Write-down of oil and gas properties -- -- 40,000 Depreciation -- -- 12,280 Gain on settlement of debt -- -- (104,992) Stock issued for service -- -- 104,366 Loss on extinguishment of debt 40,000 -- 40,000 Changes in non-cash working capital Receivables -- -- (1,070) Prepaid expenses (3,156) -- 28,494 Accounts payable and accrued liabilities 70,794 104,593 198,141 ------------ ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (307,538) -- (4,026,916) ------------ ------------ ------------ INVESTING ACTIVITIES Purchase of equipment -- -- (20,287) Expenditures on oil and gas properties -- -- (703,242) Proceeds on sale of oil and gas properties -- -- 38,500 ------------ ------------ ------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- (685,029) ------------ ------------ ------------ FINANCING ACTIVITIES Bank indebtedness 76 -- 76 Due to related parties -- -- 1,307,771 Note payable 150,000 -- 210,000 Issuance of common shares for cash 158,462 -- 2,843,462 Convertible debt (1,000) -- (1,000) Net cash acquired on recapitalization -- -- 351,636 ------------ ------------ ------------ NET CASH FROM FINANCING ACTIVITIES 307,538 -- 4,711,945 ------------ ------------ ------------ CHANGE IN CASH -- -- -- Cash, beginning -- -- -- ------------ ------------ ------------ CASH, ENDING $ -- $ -- $ -- ============ ============ ============ SUPPLEMENTARY INFORMATION CASH PAID FOR: Interest $ -- $ -- $ 34,382 Income tax $ -- $ -- $ -- ============ ============ ============ NON-CASH FINANCING AND INVESTING ACTIVITIES Forgiveness of debt $ -- $ -- $ 24,000 Loans settled with oil and gas property interest $ -- $ -- $ 214,138 Loans converted to common shares $ -- $ -- $ 879,842 Oil and gas property purchased for common shares $ -- $ -- $ 450,000 ============ ============ ============ The accompanying notes are an integral part of these financial statements
Western Standard Energy Corp. (An Exploration Stage Company) STATEMENTS OF STOCKHOLDERS' DEFICIT FOR THE PERIOD FROM OCTOBER 16, 2003 TO AUGUST 31, 2013 Common stock Additional Obligation Total ---------------- paid in to Issue Subscription Accumulated Stockholders' Shares Amount capital Shares Receivable Deficit Deficit ------ ------ ------- ------ ---------- ------- ------- BALANCE - OCTOBER 16, 2003 (DATE OF INCEPTION) -- $ -- $ -- $ -- $ -- $ -- $ -- Issuance of stock at $0.001 per share 2 -- -- -- -- -- -- Net loss -- -- -- -- -- (150,261) (150,261) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE - AUGUST 31, 2004 2 -- -- -- -- (150,261) (150,261) Issuance of stock for services at $0.001 per share 27,000 27 17,973 -- -- -- 18,000 Issuance of stock for services at $0.001 per share 562 1 374 -- -- -- 375 Net loss -- -- -- -- -- (491,574) (491,574) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2005 27,564 28 18,348 -- -- (641,835) (623,460) Issuance of stock for services at $0.001 per share 4,500 4 2,996 -- -- -- 3,000 Issuance of stock for loan conversions at $0.0335 per share 2,812 3 94,307 -- -- -- 94,310 Issuance of stock for loan conversions at $0.0676 per share 11,625 12 785,520 -- -- -- 785,532 Net loss -- -- -- -- -- (336,776) (336,776) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 2006 46,501 47 901,171 -- -- (978,611) (77,394) Cancellation of shares returned to treasury at $0.001 per share (1,387) (1) (924) -- -- -- (925) Issuance of stock for cash at $0.0005 per share 93,750 93 49,907 -- -- -- 50,000 Issuance of stock under private placement for cash at $0.333 per share 600 1 199,999 -- -- -- 200,000 Issuance of stock under private placement for cash at $0.667 per share 862 1 574,999 -- -- -- 575,000 Cancellation of shares (54,862) (55) 54 -- -- -- -- Recapitaliztion adjustment -- -- (305,127) -- -- -- (305,127) Issuance of stock under private placement for cash at $0.667 per share 450 -- 300,000 -- -- -- 300,000 Issuance of stock uinder private placement for cash at $0.379 per share 528 1 199,999 -- -- -- 200,000 Issuance of stock under private placement for cash at $0.238 per share 419 -- 100,000 -- -- -- 100,000 Issuance of stock for assignment of farmout agreement at $0.30 per share 1,500 1 449,999 -- -- -- 450,000 Net loss -- -- -- -- -- (1,163,678) (1,163,678) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2007 88,361 88 2,470,077 -- -- (2,142,289) 327,876 Issuance of stock under private placement for cash of $0.26 per share 576 1 149,999 -- -- -- 150,000 Cancellation of stock (3,234) (3) 3 -- -- -- -- Issuance of stock under private placement for cash of $0.40 per share 1,600 2 639,998 -- -- -- 640,000 Issuance of stock under private placement for cash of $0.50 per share 1,500 1 749,999 -- -- -- 750,000 Issuance of stock under private placement for cash of $0.30 per share 833 1 249,999 -- -- -- 250,000 Issuance of stock under private placement for cash of $0.25 per share 400 -- 100,000 -- -- -- 100,000 Obligation to issue shares -- -- -- 45,083 -- -- 45,083 Net loss -- -- -- -- -- (1,133,589) (1,133,589) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2008 90,036 90 4,360,075 45,083 -- (3,275,878) 1,129,370 Issuance of stock under private placement for cash of $0.15 per share 1,000 1 149,999 -- -- -- 150,000 Issuance of stock under private placement for cash of $0.05 per share 600 1 29,999 -- -- -- 30,000 Issuance of stock under private placement for cash of $0.03 per share 500 -- 15,000 -- -- -- 15,000 Obligation to issue shares -- -- -- 62,984 -- -- 62,984 Net Loss -- -- -- -- -- (1,437,460) (1,437,460) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2009 92,136 92 4,555,073 108,067 -- (4,713,338) (50,106) Obligation to issue shares-debt settled -- -- -- (108,067) -- -- (108,067) Settlement of related party debt -- -- 117,542 -- -- -- 117,542 Sale of UK Subsidiary -- -- (2,607) -- -- -- (2,607) 100,000 100 25 -- (125) -- -- Net Loss -- -- -- -- -- (62,801) (62,801) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2010 192,136 192 4,670,033 -- (125) (4,776,139) (106,039) Net Loss -- -- -- -- -- (34,963) (34,963) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2011 192,136 192 4,670,033 -- (125) (4,811,102) (141,002) Net Loss -- -- -- -- -- (121,798) (121,798) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2012 192,136 192 4,670,033 -- (125) (4,932,900) (262,800) Issuance of stock under private placement for cash of $0.00125 per share 30,769,857 30,770 7,692 -- -- -- 38,462 Issuance of stock under private placement for cash of $0.25 per share 480,000 480 119,520 -- -- -- 120,000 Issuance of stock under debt conversion 2,500,000 2,500 625 -- -- -- 3,125 Share subscription cancelled -- -- (125) -- 125 -- -- Equity portion of convertible debt -- -- 21,195 -- -- -- 21,195 Obligation to issue shares -- -- -- 150,000 -- -- 150,000 Net Loss -- -- -- -- -- (426,155) (426,155) ---------- ------- ---------- --------- ------ ----------- ----------- BALANCE AUGUST 31, 2013 33,941,993 $33,942 $4,818,940 $ 150,000 $ -- $(5,359,055) $ (356,173) ========== ======= ========== ========= ====== =========== =========== The accompanying notes are an integral part of these financial statements
Western Standard Energy Corp. (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS August 31, 2013 1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS Western Standard Energy Corp. (the "Company") was incorporated on February 2, 2005 under the laws of the State of Nevada. GOING CONCERN These financial statements have been prepared in accordance with United States generally accepted accounting principles (" US GAAP"), on a going concern basis, which contemplated the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As at August 31, 2013, the Company was in the exploration stage; has incurred a net loss of $426,155 for the year ended August 31, 2013 [2012 - $121,798] and at August 31, 2013 had a deficit accumulated of $5,359,055 [2012 - $4,932,900]. The Company has no revenue and has an accumulated deficit and negative working capital of $356,173 as at August 31, 2013. Further losses are anticipated in the development of its business and there can be no assurance that the Company will be able to achieve or maintain profitability. The continuing operations of the Company and the recoverability of the carrying value of its assets depends upon the ability of the Company to obtain necessary financing to fund its on-going working capital requirements and exploration activities, and upon future profitable operations. The accompanying financial statements do not include any adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. There is no assurance that equity or debt capital will be available as necessary to meet the Company's capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. The issuances of additional equity securities by the Company may result in significant dilution in the equity interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The financial statements of the Company have been prepared in accordance with US GAAP and are presented in US dollars. The Company is an exploration state company and has not realized any revenues to date. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with US GAAP required management to make estimated and assumption that affect the report amounts of assets and liabilities and disclosure of contingent assets and liability 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. 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 from 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.
FINANCIAL INSTRUMENTS The fair value of the Company's financial instruments, consisting of bank indebtedness, accounts payable, convertible debentures and notes payable are estimated to be equal to their carrying value. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. FOREIGN CURRENCY TRANSLATION Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders' deficit, whereas gains or losses resulting from foreign currency transactions are included in results of operations. INCOME TAXES Deferred income taxes are provided for tax effects of temporary differences between the tax basis of asset and liabilities and their reported amounts in the financial statements. The Company uses the liability method to account for income taxes, which requires deferred taxes to be recorded at the statutory rate expected to being in effect when the taxes are paid. Valuation allowances are provided for a deferred tax asset when it is probable that such asset will not be realized. Management evaluated tax positions taken or expected to be taken in a tax return. The evaluation of a tax position included a determination of whether a tax position should be recognized in the financial statements and such a position should only be recognized if the Company determines that it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based upon the technical merits of the position. For those tax positions that should be recognized, the measurement of a tax position is determined as being the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. LOSS PER SHARE Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if there effect is anti-dilutive. Because the Company does not have any potentially dilutive securities, diluted loss per share is equal to basic loss per share. LONG-LIVED ASSETS The carrying values of long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognized impairment when the fair value is less than the carrying amount of an asset. 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. NOTE PAYABLE On December 22, 2009, the Company entered into a loan agreement with an individual and a corporation (collectively "the Lenders") whereby the Company agreed to issue a note payable in exchange for proceeds of $60,000. The note bears interest at 11% per annum, secured by the assets of the Company and is payable on demand. Between January 1, 2010 and August 31, 2012, the Lenders paid for $157,791 in expenses on behalf of the Company. This amount has the same terms as the note payable and has been included in accounts payable as at August 31, 2012. At August 31, 2012, the Company owed $217,791 to the Lenders and $35,334 in accrued interest. During the year ended August 31, 2013, the Company converted the $3,125 of the debt owing to the Lenders to 2,500,000 shares of the Company (Note 5). The remaining debt was converted into a convertible debenture (Note 4). 4. CONVERTIBLE DEBENTURE On October 29, 2012, the Company issued to the Lenders a convertible debenture (the "Debenture") of $250,000 (Note 3). The Debenture is convertible, only upon default, into shares of the Company's common stock equal in number to 50% of the total issued and outstanding common stock of the Company at the time of conversion. The Company has also agreed to register the shares that may be convertible under the Debenture. The Debenture matures on the earlier of April 1, 2013 or the 90th day following the Company's receipt of Securities Exchange Commission ("SEC") approval of the Registration statement. The Debenture is unsecured and does not bear interest. On May 22, 2013, the Company entered into a securities purchase agreement with the Lenders. Under this agreement, the Debenture was cancelled and a new convertible debenture (the "New Debenture") in the amount of CDN$140,000 was issued to the Lenders. The New Debenture is also convertible, only upon default, into shares of the Company's common stock equal in number to 50% of the total issued and outstanding Common Stock of the Company at the time of conversion. The New Debenture is unsecured and matures on May 15, 2014. The Company also has to deliver 600,000 common shares of the Company to the Lenders by May 15, 2014. As at August 31, 2013, the Company has not yet issued the shares to the Lenders. As a result of this transaction, the Company has recorded a loss on the extinguishment of debt of $40,000. The fair value of the New Debenture as at August 31, 2013 is $128,289 using the effective interest rate of 11%. 5. COMMON STOCK Authorized: 200,000,000 common shares. On April 14, 2010, the Company adopted a stock option plan allowing the Company's directors to grant up to 5,000,000 stock options pursuant to the terms and conditions of the stock option plan. As at August 31, 2013 no options have been granted. On November 12, 2012, the Company issued 30,769,857 shares of common stock at $0.00125 per share for gross proceeds of $38,462. On November 27, 2012, the Company issued 480,000 common shares at $0.25 per share for gross proceeds of $120,000. On November 12, 2012, the Company issued 2,500,000 shares of common stock in exchange for the conversion of $3,125 of debt (Note 3). 6. RELATED PARTY TRANSACTIONS During the year ended August 31, 2013, the Company incurred $87,000 (August 31, 2012 - $Nil) in consulting fees to a relative of the President of the Company. The Company is committed to paying its President consulting fees of $5,000 per month until September 30, 2014. As at August 31, 2013, $22,500 (2012 - $Nil) owing to the related party is included in accounts payable. The amount is unsecured, non-interest bearing and due on demand.
During the year ended August 31, 2013, the Company incurred $55,000 (August 31, 2012 - $Nil) in accounting fees to an officer of the Company. The Company is committed to paying the related party consulting fees of $5,000 per month until September 30, 2014. As at August 31, 2013, $41,096 (2011 - $Nil) owing to the related party is included in accounts payable. The amount is unsecured, non-interest bearing and due on demand. During the year ended August 31, 2013, the Company issued $75,000 and $75,000 in notes payable to a relative of the President of the Company and to an officer of the Company, respectively. The notes are non-interest bearing, unsecured and due on demand. 6. INCOME TAXES As at August 31, 2013, the Company had accumulated non-capital loss carry-forwards of approximately $4,506,000. These losses are available to reduce taxable income in future taxation years and begin to expire in 2025 after a carry-forward period of 20 years. The Company is required to compute the deferred tax benefits from non-capital loss carrying-forwards. However, due to the uncertainty of realization of these loss carry-forwards, a full valuation allowance has been provided against this deferred tax asset. At August 31, 2013 and 2012, the components of the deferred tax asset, the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are shown below: August 31, August 31, 2013 2012 ------------ ------------ Non-capital tax loss carry forwards $ 4,505,717 $ 4,159,561 Statutory tax rate 35% 35% Effective tax rate -- -- Deferred tax asset 1,577,001 1,455,846 Less: valuation allowance (1,577,001) (1,455,846) ------------ ------------ NET DEFERRED TAX ASSET $ -- $ -- ============ ============ 7. COMMITMENTS The Company entered into a lease agreement on January 1, 2013 for a term of two years. Under the agreement, the Company is committed to rent payments of a minimum of $1,779 per month. 8. SUBSEQUENT EVENT On November 28, 2013, the Company entered into an agreement to acquire an investment of 41% of Pro Eco Energy Ltd. ("Pro Eco") in exchange for 4,000,000 of the Company's common shares. Pro Eco is a private BC company in the business of providing energy efficient and environmentally friendly heating and cooling HVAC systems for commercial buildings.
August 31, 2013
|
August 31, 2012
|
|||||||
ASSETS
|
||||||||
Current
|
||||||||
Cash
|
$ | 10 | $ | - | ||||
Total assets
|
10 | - | ||||||
LIABILITIES
|
||||||||
Current
|
||||||||
Due to related party (Note 3)
|
58,820 | 8,440 | ||||||
Total liabilities
|
58,820 | 8,440 | ||||||
MEMBERS’ EQUITY (DEFICIT)
|
||||||||
Membership units
|
3 | 3 | ||||||
Deficit
|
(58,813 | ) | (8,443 | ) | ||||
Total members’ deficit
|
(58,810 | ) | (8,440 | ) | ||||
TOTAL LIABILITIES AND MEMBERS’ DEFICIT
|
$ | 10 | $ | - |
Accumulated from
|
||||||||||||
August 13, 2012
|
||||||||||||
Years ended
|
(date of inception) to
August 31, 2013 |
|||||||||||
August 31, 2013
|
August 31, 2012
|
|||||||||||
EXPENSES
|
||||||||||||
Marketing
|
$ | 50,370 | $ | 6,866 | $ | 57,236 | ||||||
Professional fees
|
- | 1,577 | 1,577 | |||||||||
NET AND COMPREHENSIVE LOSS
|
$ | (50,370 | ) | $ | (8,443 | ) | $ | (58,813 | ) |
Accumulated from
|
||||||||||||
August 13, 2012
|
||||||||||||
Years ended
|
(date of inception) to
August 31, 2013 |
|||||||||||
August 31, 2013
|
August 31, 2012
|
|||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net loss
|
$ | (50,370 | ) | $ | (8,443 | ) | $ | (58,813 | ) | |||
Changes in non-cash working capital items:
|
||||||||||||
Due to related party
|
50,380 | 8,440 | 58,820 | |||||||||
Net cash provided by (used in) operating activities
|
10 | (3 | ) | 7 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Issuance of membership units
|
- | 3 | 3 | |||||||||
Net cash provided by financing activities
|
- | 3 | 3 | |||||||||
Change in cash
|
10 | - | 10 | |||||||||
Cash, beginning
|
- | - | - | |||||||||
Cash, ending
|
$ | 10 | $ | - | $ | 10 |
Membership units
– number
|
Membership units
– paid-in capital
|
Deficit
|
Total
|
|||||||||||||
August 13, 2012 (inception)
|
- | $ | - | $ | - | $ | - | |||||||||
Issuance of membership units
|
3 | 3 | - | 3 | ||||||||||||
Net loss
|
- | - | (8,443 | ) | (8,443 | ) | ||||||||||
Balance, August 31, 2012
|
3 | 3 | (8,443 | ) | (8,440 | ) | ||||||||||
Net loss
|
- | - | (50,370 | ) | (50,370 | ) | ||||||||||
Balance, August 31, 2013
|
3 | $ | 3 | $ | (58,813 | ) | $ | (58,810 | ) |
Dominovas Technologies LLC
|
||||||||
(A Development Stage Company)
|
||||||||
BALANCE SHEETS
|
||||||||
November 30, 2013
|
August 31, 2013
|
|||||||
ASSETS
|
||||||||
Current
|
||||||||
Cash
|
$ | 207 | $ | 10 | ||||
207 | 10 | |||||||
LIABILITIES
|
||||||||
Current
|
||||||||
Due to related party (Note 3)
|
61,726 | 58,820 | ||||||
61,726 | 58,820 | |||||||
MEMBERS’ DEFICIT
|
||||||||
Membership units
|
3 | 3 | ||||||
Deficit
|
(61,522 | ) | (58,813 | ) | ||||
(61,519 | ) | (58,810 | ) | |||||
TOTAL LIABILITIES AND MEMBERS’ DEFICIT
|
$ | 207 | $ | 10 |
Dominovas Technologies LLC
|
||||||||||||
(A Development Stage Company)
|
||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||
Accumulated from
August 13, 2012
(date of inception) to
|
||||||||||||
Quarters ended
|
||||||||||||
November 30,
2013
|
November 30,
2012
|
November 30,
2013
|
||||||||||
ASSETS | $ | - | $ | - | $ | - | ||||||
EXPENSES
|
||||||||||||
Marketing
|
- | - | 57,236 | |||||||||
Professional fees
|
- | - | 1,577 | |||||||||
Travel
|
2,620 | - | 2,620 | |||||||||
Meals
|
22 | - | 22 | |||||||||
Office
|
67 | - | 67 | |||||||||
NET AND COMPREHENSIVE LOSS
|
$ | (2,709 | ) | $ | - | $ | (61,522 | ) |
Dominovas Technologies LLC
|
||||||||||||
(A Development Stage Company)
|
||||||||||||
STATEMENTS OF CASH FLOWS
|
||||||||||||
Quarters ended
|
Accumulated from
August 13, 2012
(date of inception) to
November 30,
2013
|
|||||||||||
November 30,
2013
|
November 30,
2012
|
|||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net loss
|
$ | (2,709 | ) | $ | - | $ | (61,522 | ) | ||||
Changes in non-cash working capital items:
|
||||||||||||
Due to related party
|
2,906 | - | 61,726 | |||||||||
Net cash provided by (used in) operating activities
|
197 | 204 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Issuance of membership units
|
- | - | 3 | |||||||||
Net cash provided by financing activities
|
- | - | 3 | |||||||||
Change in cash
|
197 | - | 207 | |||||||||
Cash, beginning
|
10 | - | - | |||||||||
Cash, ending
|
$ | 207 | $ | - | $ | 207 |
Dominovas Technologies LLC
|
||||||||||||||||
(A Development Stage Company)
|
||||||||||||||||
STATEMENT OF MEMBERS’ DEFICIT
|
||||||||||||||||
Membership units
– number
|
Membership units
–paid-in capital
|
Deficit
|
Total
|
|||||||||||||
Balance, August 13, 2012 (inception)
|
- | $ | - | $ | - | $ | - | |||||||||
Issuance of membership units
|
3 | 3 | - | 3 | ||||||||||||
Net loss
|
- | - | (8,443 | ) | (8,443 | ) | ||||||||||
Balance, August 30, 2012
|
3 | 3 | (8,443 | ) | (8,440 | ) | ||||||||||
Net loss
|
- | - | - | - | ||||||||||||
Balance, November 30, 2012
|
3 | 3 | (8,443 | ) | (8,440 | ) | ||||||||||
Net loss
|
- | - | (50,370 | ) | (50,370 | ) | ||||||||||
Balance, August 31, 2013
|
3 | 3 | (58,813 | ) | (58,810 | ) | ||||||||||
Net loss
|
- | - | (2,709 | ) | (2,709 | ) | ||||||||||
Balance, November 30, 2013
|
3 | $ | 3 | $ | (61,522 | ) | $ | (61,519 | ) |
Dominovas Technologies LLC
|
||||||||
(A Development Stage Company)
|
||||||||
BALANCE SHEETS
|
||||||||
November 30, 2012
|
August 31, 2012
|
|||||||
ASSETS | $ | - | $ | - | ||||
LIABILITIES
|
||||||||
Current
|
||||||||
Due to related party (Note 3)
|
8,440 | 8,440 | ||||||
8,440 | 8,440 | |||||||
MEMBERS’ DEFICIT
|
||||||||
Membership units
|
3 | 3 | ||||||
Deficit
|
(8,443 | ) | (8,443 | ) | ||||
(8,440 | ) | (8,440 | ) | |||||
TOTAL LIABILITIES AND MEMBERS’ DEFICIT
|
$ | - | $ | - |
Dominovas Technologies LLC
|
||||||||
(A Development Stage Company)
|
||||||||
STATEMENTS OF OPERATIONS
|
||||||||
Quarter ended
|
Accumulated from
August 13, 2012
(date of inception) to
|
|||||||
November 30,
2012
|
November 30,
2012
|
|||||||
|
||||||||
REVENUES | $ | - | $ | - | ||||
EXPENSES
|
||||||||
Travel
|
- | 6,869 | ||||||
Professional fees
|
- | 1,577 | ||||||
NET AND COMPREHENSIVE LOSS
|
$ | - | $ | (8,443 | ) |
Dominovas Technologies LLC
|
||||||||
(A Development Stage Company)
|
||||||||
STATEMENTS OF CASH FLOWS
|
||||||||
Quarter ended
|
Accumulated from
August 13, 2012
(date of inception) to
|
|||||||
November 30,
2013
|
November 30,
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$ | - | $ | (8,443 | ) | |||
Changes in non-cash working capital items:
|
||||||||
Due to related party
|
- | 8,440 | ||||||
Net cash provided by (used in) operating activities
|
- | (3 | ) | |||||
Change in cash
|
- | - | ||||||
Cash, beginning
|
- | - | ||||||
Cash, ending
|
$ | - | $ | - |
Dominovas Technologies LLC
|
||||||||||||||||
(A Development Stage Company)
|
||||||||||||||||
STATEMENT OF MEMBERS’ DEFICIT
|
||||||||||||||||
Membership units
– number
|
Membership units
–paid-in capital
|
Deficit
|
Total
|
|||||||||||||
Balance, August 13, 2012 (inception)
|
- | $ | - | $ | - | $ | - | |||||||||
Issuance of membership units
|
3 | 3 | - | 3 | ||||||||||||
Net loss
|
- | - | (8,443 | ) | (8,443 | ) | ||||||||||
Balance, August 30, 2012
|
3 | 3 | (8,443 | ) | (8,440 | ) | ||||||||||
Net loss
|
- | - | - | - | ||||||||||||
Balance, November 30, 2012
|
3 | $ | 3 | $ | (8,443 | ) | $ | (8,440 | ) |
Item
|
Amount
|
|||
SEC Registration Fee
|
$
|
523.
|
||
Legal Fees and Expenses*
|
$
|
20,000
|
||
Accounting Fees and Expenses*
|
$
|
12,500
|
||
Miscellaneous*
|
$
|
5,000
|
||
Total*
|
$
|
38,023
|
·
|
We are not a blank check company;
|
·
|
Sales were made to non-United States Persons; or
|
·
|
As to sales to United States Persons:
|
·
|
Sales were not made by general solicitation or advertising;
|
·
|
All certificates had restrictive legends;
|
·
|
Sales were made to persons with a pre-existing relationship to our directors or executive officers; and
|
·
|
Sales were made to investors who represented that they were accredited investors.
|
·
|
Access to all our books and records
|
·
|
Access to all material contracts and documents relating to our operations.
|
·
|
The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access. Prospective investors were invited to review at our offices at any reasonable hour, after reasonable advance notice, any materials available to us concerning our business.
|
Exhibit
|
Description
|
|
3.01
|
Articles of Incorporation. (attached as an exhibit to our Registration Statement on Form SB-2, filed on November 2, 2005).
|
|
3.02
|
Bylaws (attached as an exhibit to our Registration Statement on Form SB-2, filed on November 2, 2005).
|
|
3.03
|
Articles of Merger (attached as an exhibit to our current report on Form 8-K filed on June 28, 2006).
|
|
3.04
|
Certificate of Change dated June 8, 2006 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014).
|
|
3.05
|
Certificate of Change dated August 27, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014).
|
|
3.06
|
Articles of Merger dated August 27, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014).
|
|
3.07
|
Articles of Merger dated November 28, 2007 (attached as an exhibit to our Registration Statement on Form S-1 filed on July 28, 2014).
|
|
3.08
|
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)
|
|
5.01
|
Legal Opinion of Frederick C. Bauman, Attorney (attached as an exhibit to our Registration Statement on Form S-1, filed on November 4, 2014)
|
|
10.01
|
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).
|
|
10.02
|
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).
|
|
10.03
|
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).
|
|
10.04
|
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).
|
10.05
|
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).
|
|
10.06
|
Note by the Company to Kodiak Capital Group, LLC (attached as an exhibit to our Registration Statement on Form S-1, filed on November 4, 2014).
|
|
10.07 | Delphi MOU* | |
10.08 | Employment Agreement for Kerry Stewart, Executive VP Operations (attached as an exhibit to our current report on Form 8-K filed on February 13, 2015). | |
10.09 | Employment Agreement for Dr. Shamiul Islam Executive VP Fuel Cell Operations (attached as an exhibit to our current report on Form 8-K filed on February 13, 2015). | |
10.10 | Kodiak Capital Group Convertible Promissory Note in the amount of $165,000* | |
23.01
|
Consent of Dale Matheson Carr-Hilton LaBonte, LLP*
|
|
23.02
|
Consent of Frederick C. Bauman (included in Exhibit 5.01) (attached as an exhibit to our Registration Statement on Form S-1, filed on November 4, 2014)
|
1.
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
i.
|
To include any Prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
ii.
|
To reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of Prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
|
|
iii.
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
|
2.
|
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
3.
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
4.
|
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
i.
|
Any Preliminary Prospectus or Prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
|
|
ii.
|
Any free writing Prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
iii.
|
The portion of any other free writing Prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
iv.
|
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
5.
|
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: Each Prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than Prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or Prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or Prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or Prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
Dominovas Energy Corporation
|
|||
By:
|
/s/ Neal Allen
|
||
Neal Allen
|
|||
Chairman, President and CEO, Principal Executive Officer
|
|||
By:
|
/s/ Neal Allen
|
||
Neal Allen
|
|||
(Principal Financial Officer and Principal Accounting Officer)
|
Name
|
Title
|
Date
|
||
/s/ Neal Allen
|
Chairman, President, Chief Executive Officer, Director
|
February19, 2015
|
||
Neal Allen
|
|
|||
/s/ Emilio De Jesus
|
Director
|
February19, 2015
|
||
Emilio De Jesus
|
||||
/s/ Spero Plavoukos
|
Director
|
February19, 2015
|
||
Spero Plavoukos
|
||||
·
|
Delphi and DEC will cooperate on a Proof of Concept with a series of development demonstrations for a small scale (-45kW - -1OOkW) version of the DEC System.
|
·
|
Delphi will be responsible for design1 build, and quality of the SOFC Stacks.
|
·
|
DEC will be responsible for the overall system design and component integration, testing and validation, including product durability in application and other aspects which relate to the DEC System and environment, including the provision of appropriate production test plans, test rigs and calibration masters and procedures, but will take input from Delphi into account.
|
·
|
The Responsibility Chart below defines the parties' respective responsibilities for the Proof of Concept phase:
|
Responsibility
|
||||
Tasks
|
DEC
|
Delphi
|
||
Over All DEC System Requirements
|
||||
Define Electricity Requirements
|
R
|
|||
Define Packagi ng Dimensions
|
R
|
s
|
||
Define Fuel Quality
|
R
|
s
|
||
Define Operating Duty Cycle
|
R
|
s
|
||
Svstem FMEA
|
R
|
s
|
||
Timing
|
T
|
T
|
||
Stack Section
|
||||
SOFC Stack
|
R
|
|||
Overall Stack Operating Req uirements
|
R
|
|||
Air and Fuel Supply Lines
|
s
|
R
|
||
Exhaust Lines
|
s
|
R
|
||
Electrical Connections
|
s
|
R
|
||
Insulation/ Heat Rejection
|
s
|
R
|
||
Stack to Manifold Connections
|
s
|
R
|
||
DFMEA
|
s
|
R
|
||
Balance of Plant
|
||||
Start-up Strategy
|
R
|
s
|
||
Start-up Heating
|
R
|
s
|
||
Operating Strategy and Controls
|
R
|
s
|
||
Fuel and Air Processi ng and Supply to meet Fuel and Air Requirements
|
R
|
|||
Fuel and Air Requirements (Reformate composition, Temperature, Pressure and Flow Requirements)
|
s
|
R
|
||
Power Conditioning
|
R
|
|||
Module Heaters and Heat Exchangers
|
R
|
s
|
||
Electrical Buss Within Module
|
R
|
s
|
||
Plant to Module Connections
|
R
|
s
|
||
Component DFMEA
|
R
|
s
|
||
Manifolding
|
R
|
s
|
||
Testing
|
||||
Testing of 45kW Module
|
R
|
s
|
||
Testing of SOFC Stacks
|
R
|
|||
Testing of Reformer
|
R
|
·
|
Marketing and Sales of electric power
|
·
|
Management and oversight of installation, commissioning and operation
|
·
|
Management of services and customer service
|
·
|
Overall power generation system design, validation and warranty (excluding SOFC Stacks)
|
·
|
Delphi will be responsible for:
|
·
|
Assembly of SOFC Stacks and the mounting support, current rods, and the connection mechanism for the same, including the design, manufacturing and technical support, as well as management of any necessary 3rd party contract manufacturers
|
·
|
Testing SOFC Stacks prior to shipment based on agreed-upon specifications for the SOFC Stacks
|
·
|
Providing a limited warranty on the materials and workmanship of the SOFC Stacks. Delphi will not be responsible for any system-related failures once the SOFC Stacks are integrated into the DEC System, nor for any consequential, indirect or incidental damages whatsoever related to or arising out of the SOFC Stacks in any way
|
·
|
Training programs with DEC, specific to stack testing/gas manifolding and stack design
|
·
|
On-going research and design for improvement of SOFC Stacks and for design and manufacturing changes and upgrades. Implementation of any recommended changes will be covered under further agreed upon quotations
|
DOMINOVAS ENERGY CORPORATION |
DELPHI AUTOMOTIVE SYSTEMS,
LLC, acting through its
Powertrain Systems division
|
|
By: /s/ Neal Allen | By: /s/ Mary Gustanski | |
Name: Neal Allen | Name: Mary Gustanski | |
Position: President & CEO | Position: VP Engineering, Launch | |
Readiness & Program Management | ||
Date: 10/8/2014 | ||
Date: Oct. 7, 2014 |
/s/ DMCL | ||
DALE MATHESON CARR-HILTON LABONTE LLP | ||
Chartered Accountants |
UVQUR&'0]3TG3+RTO[6;Q5J-IID-[+KEH^C:HPNXKV33]6LW MM8I8$E;O_B+KWB/POX3U#Q)X8T:+Q%=Z&]KJ>HZ&?.^W:GX>M+B.7Q!!HGDN MN_7TTD75QHUO,LD%[?P0V,B#[2)(_&H>'?#\J&-Q5;,<_5+*ZTX8[#2R3@6C MB)?5Z5+$UJ=*KE'"=/'1(C2FN"EPMEKIUZ\\7F? M)@YN.(HO+^'*=5^SITZTXPG@ `3IWB.[^(8B\2+>O),^GZ9\-[*&VO-9 M\53&W9)0]S]NTS1-!AE,:7.M:O;F8-;6-^B^MU^A<-95D&4K'T,@^MRI.KAG MBJF(S7-LVIRJRPT*]*-"OFF.QO+;#8BC4FL-.--JM3Y^::M'ZC*<%EN"6)IY M;[=PYZ7MI5<;C<=!S=&-2"IU,9B,1:U&K3G+V,E!J<.:\E[I1117U!ZX4444 M`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110` M4444` ESBYTW6-)NS'*L% M[9R@X$T-Q:W,$D]G?6UU97-Q;R\W;>#?'CW-B-8^*^J7FF6=U;W4MKI?ACP] MH>H:H+69)H[74]4BBO`+2=HU2_CTFQTB6YA,D*36\4CH?4**X*V6X2O7>)G& MM"M*-.%2>'Q>+POMH4I2E3AB(8:O1AB8P O1]IC&K&C4A&JHWDDJJFDI2BERRDF5Q_@KP=:>"=-U/3+. M[N;V/4_%/BOQ5+)=+$KQ77BS7[_Q!=6L?DHBFWM+C4)+>V9@96AC0RL\A9CV M%%=,L/1G7I8F4$Z]"G6I4JEW>%/$.DZT4D[-3="DW=-KD5FM;[.G"52%5Q3J M4XSA"6MXQJ.#FEK;WG3A>Z;]U6MK?C_!?@ZT\%6.L6-G>7-ZFL^+/%7BV9[I M8E>&[\5ZY>:Y=6D0A1`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`W@SPO-)<^'/"OA_1+J9#%+=Z9I%C9W V\5U:7$1()CGMYTDAFC)`)21&4D#(X MK+*LNQ.6X;%4: D7GQ'U*ZUK1-`OY'D?P3X"N=0OM5\,>$;*"7/]E0M)JNH> M)]3TF`)!8ZWX@O=/C06^G6BQ_1M'3I177E.6T,HR_#9?AE%4\/!J4HPC356M M4E*K7KNG"T*;K5YU*KITTJ=/G]G2C&G&,5M@L)3P.%HX6DERTHN[45#GJ3DY MU:G+'W8NI4E*?)%*$.;E@E%)(HHHKT3J"BBB@`HHHH`****`"BBB@`HHHH`* M***`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HH MHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB M@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****` 3"BBB@`HHHH`****`"BBB@#__V3\_ ` end
('
MCA!=I*VYNKZ45+GME<8VOAT8:6&+4YWQUY^F$'?;43&J,1I)FLS@3$MTG]N?
MV(.#
1.
|
We note you have revised the registration statement cover page to reflect that there is only one selling stockholder in response to prior comment 2. Please make corresponding revisions to your prospectus cover page, Selling Stockholder and Plan of Distribution disclosure.
|
2.
|
Please revise your registration to reflect updated disclosures in your periodic and current reports. For example, we note you included a risk factor related to your ability to continue as a going concern in the Form 10-Q/A for the fiscal quarter ended November 30, 2014. In addition, we note you filed a Form 8-K to disclose Mr. Jacklin’s resignation from the Board.
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
3.
|
We note disclosure here continues to reflect that you are offering 82.83% of your issued and outstanding shares of common stock although disclosure on your cover page and elsewhere reflects that the offering of 15,000,000 shares represents 16.57% of your issued and outstanding shares of common stock. Please revise accordingly.
|
4.
|
Please include a description of the promissory notes issued to Kodiak Capital Group, LLC for $165,000 on October 3, 2014 and October 27, 2014. In that regard, we note your disclosure at page 3 that that Kodiak Capital Group, LLC was issued a promissory note on October 3, 2014 for $165,000 as a commitment fee for its investment in the Equity Purchase Agreement and your disclosure in Note 6 to your unaudited consolidated financial statements. In addition, please revise your selling stockholders table to reflect the beneficial ownership of these shares or tell us why they are not included.
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
5.
|
Please revise the biographies of Messrs. Allen, De Jesus, Watkins and Plavoukos to provide a complete five year discussion, including the names of companies of employment and dates of employment. See Item 401(e) of Regulation S-K.
|
6.
|
Please disclose the information required by Item 303 of Regulation S-K. You must address both annual and interim periods on a comparative basis, as indicated in Instruction 1 to paragraph 303(a) and Item 303(b).
|
7.
|
Please update your registration statement to provide 2014 executive compensation information. In addition, please ensure that all compensation for 2013 is included. In that regard, we note you issued 250,000 shares to Mr. Jacklin and 2,000,000 shares to Mr. Gray in 2013.
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
8.
|
We note you disclose you have a “Sole Director” that is not independent. However, you disclose at page 18 that you have four directors and each has signed the registration statement. Please advise or revise.
|
9.
|
Please provide the name of the related parties involved in the August 31, 2014 notes payable of $50,000 to your director that is a relative of a director of the Company.
|
10.
|
We note your response to prior comment 4, but are unable to locate Exhibit 10.7. Please file the Delphi MOU as Exhibit 10.7. In addition, please file the employment agreements for you Executive Vice President and Executive Vice President of Fuel Cell Operations. See Item 601(b)(10) of Regulation S-K or tell us why these are not required.
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
11.
|
We note your response to prior comment seven, indicating that revisions were made to your filing to reflect an inception date of October 16, 2003. However, you have retained disclosure on page 32, specifying October 4, 2013 as the date of inception. Please resolve the inconsistency.
|
12.
|
We note that although you indicated, in your response to prior comment eight, that pro forma financial statements reflecting the acquisitions of Pro Eco Energy LTD and Dominovas Technologies LLC were added to your filing, this does not appear to be the case. We reissue prior comment eight.
|
13.
|
We reiterate prior comment nine, regarding the financial statements that are necessary to comply with Rule 8-02 of Regulation S-X. You are required to include audited financial statements for each of the most recently completed two fiscal years.
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
14.
|
We reiterate prior comment 11, pertaining to your investment in Pro Eco Energy Ltd. Given the significance of the investment, it appears you should file financial statements of this entity to comply with Item 9.01 of Form 8-K and Rule 8-04 of Regulation S-X (covering periods ending just prior to the date of acquisition). You may need to include financial statements of this entity in your registration statement to comply with Item 11(e) of Form S-1. Also disclose sales, gross profit, net income or loss from continuing operations, and net income of the investee in all subsequent periodic reports to comply with Rule 8-03(b)(3) of Regulation S-X.
|
15.
|
We note that although you added interim financial statements on pages F-14 through F-18, for the quarters ended November 30, 2013 and 2012, in response to prior comment 12, you also included partial financial statements (the asset side of the balance sheet is missing) for the quarter ended November 30, 2012 on pages F-19 through F-23. There is no need for partial nor duplicate interim financial statements covering the comparative interim quarter in 2012.
|
Sincerely,
|
||
/s/ Neal Allen
|
||
President and Chief Executive Officer
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
|
Re:
|
Dominovas Energy Corporation Request For Accommodation To Rule 8-02, and 8-03 and Rule 8-04 of Regulation S-X Specific To Filed Amendment No. 1 to Registration Statement on Form S-1 Filed January 30, 2015
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
·
|
Pro Eco Energy, LTD is a private corporation based in and solely operating in Canada;
|
·
|
Dominovas Energy Corporation owns 41% of Pro Eco Energy, LTD;
|
·
|
Pro Eco Energy, LTD is not required by Canadian Corporate Laws to prepare audited financial statements and they do not have said audited financial statements;
|
·
|
Dominovas Energy Corporation requested audited financial statements from Pro Eco Energy, LTD, as well as their certified public accountants, White Kennedy, LLP located in British Columbia, Canada on multiple occasions. The collective response to Dominovas Energy from both Pro Eco Energy, LTD and their accounting firm was Pro Eco Energy, LTD has no audited financials;
|
·
|
Pro Eco Energy, LTD has refused all direct requests by Dominovas Energy Corporation to initiate and perform certified financial audits;
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
·
|
Principal accountants from Dominovas Energy’s auditing firm, Dale, Matheson, Carr-Hilton and Labonte (DMCL) also contacted the accounting firm of record for Pro Eco Energy, LTD to obtain information for audited financials and they received no affirmative responses, even after multiple requests;
|
·
|
Pro Eco Energy, LTD has only provided Dominovas Energy with unaudited annual financial statements and T2 Corporation Income Tax Returns; and as a result, has severely impaired our ability to meet S.E.C. regulated standard for reporting. Dominovas Energy has, however, provided the information for this company that was provided to us;
|
·
|
Dominovas Energy has been able to obtain T2 Corporation Income Tax Returns from Pro Eco Energy, LTD for the years 2012 and 2013;
|
·
|
Dominovas Energy has been able to obtain the unaudited Balance Sheet for the 2014 quarter ended November 30, 2014 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Statement of Loss and Deficit for the 2014 quarter ended November 30, 2014 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Balance Sheet for the 2014 fiscal year ended August 31, 2014 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Statement of Loss and Deficit for the 2014 fiscal year ended August 31, 2014 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited General Ledger for the 2014 fiscal year ended August 31, 2014 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Balance Sheet for the 2013 quarter ended November 30, 2013 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Statement of Loss and Deficit for the 2013 quarter ended November 30, 2013 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Balance Sheet for the 2013 fiscal year ended August 31, 2013 form Pro Eco Energy, LTD’s accountants;
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
·
|
Dominovas Energy has been able to obtain the unaudited Statement of Loss and Deficit for the 2013 fiscal year ended August 31, 2013 from Pro Eco Energy, LTD’s accountants;
|
·
|
Dominovas Energy has been able to obtain the unaudited Trail Balance for the 2013 fiscal year ended August 31, 2013 from Pro Eco Energy, LTD’s accountants;
|
·
|
The Dominovas Energy accounting staff and its auditors were able to utilize the above listed quarter ended November 30, 2014 financial statements provided by Pro Eco Energy, LTD to account for Dominovas Energy’s Balance Sheet asset carrying value that represents a 41% ownership in Pro Eco Energy, LTD, as referenced in the quarter ended Balance Sheet and the carrying value of $207,045 (see the November 30, 2014 10Q Balance Sheet on page 3); and an income from its investment in Pro Eco Energy, LTD in the amount of $14,139 (see the November 30, 2014 10Q Statement of Income on page 4), as reflected in the Statement of Income for the end of the 1st quarter;
|
·
|
The Dominovas Energy accounting staff and its auditors were able to utilize the above listed quarter ended August 31, 2014 financial statements provide by Pro Eco Energy, LTD to account for the Dominovas Energy’s Balance Sheet asset carrying value that represents a 41% ownership in Pro Eco Energy, LTD, as referenced in the fiscal year ended Balance Sheet and the carrying value of $192,906 (see the August 31, 2014 10K Balance Sheet on page 24); and a loss of income from its investment in Pro Eco Energy, LTD in the amount of $15,882 (see the August 31, 2014 10K Statement of Income on page 19 and 25) as reflected in the Statement of Income for the end of the 2014 fiscal year;
|
·
|
The Pro Eco Energy, LTD investment has been accounted for in the Company’s Financial Statements as an equity investment (see the November 30, 2014 10Q Balance Sheet on page 3);
|
·
|
As noted in the S1 Registration, the Company’s present management is actively evaluating the investment in Pro Eco Energy, LTD with a view to determining whether continued investment should be maintained or divested.
|
·
|
As that decision has not yet been made, the investment has been referred to in Amendment No. 1 to the S-1 (see page 27 of Amendment No. 2 of the S1 Registration); but without elaboration that might give the impression that it is strategically important, specific to fuel cell technology which is not the case; and,
|
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|
·
|
Comparing Pro Eco Energy, LTD’s Tax Statements and their unaudited financial statements show they are aligned with one another from a reporting standpoint; and, therefore, may be reasonably relied upon as a viable option for the audited financial statements they have not provided and refuse to provide to date.
|
Sincerely,
|
||
/s/ Neal Allen
|
||
President and Chief Executive Officer
|
||
Direct Cell: 404-428-1052 |
CONFIDENTIAL
|
CONFIDENTIAL
|
DE Corp. Headquarters - 1395 Chattahoochee Avenue * Atlanta, Georgia 30318
|
|
DE Corp. African Headquarters - Rua Joaquim Kapango n0 4-B R/C, Imgombota, Luanda, Angola
|
|
www.dominovasenergy.com
|