UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A
Amendment No. 3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NATFRESH BEVERAGES CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 2080 | 72-1621978 |
| (State or jurisdiction of incorporation | Primary Standard Industrial | IRS Employer |
2800 Post Oak Boulevard, Suite 4100
Houston, Texas 77056
Telephone: (832) 390-2235 Facsimile: (832) 390-2350
(Address and telephone number of principal executive offices)
Incsmart.biz, Inc.
4421 Edward Avenue
Las Vegas, Nevada 89108
Telephone: (702) 403-8432
(Name, address and telephone number of agent for service)
with a copy to:
Dean Law Corp.
601 Union Street, Suite 4200
Seattle, Washington 98101
Telephone: (206) 274-4598 Facsimile: (206) 493-2777
| Approximate date of proposed sale to the public: | as soon as practicable after the effective date of this Registration Statement. |
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box |X|
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |__|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company: in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer|__| Accelerated filer |__|
Non-accelerated filer |__| Smaller reporting company | X |
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
| TITLE OF EACH |
| PROPOSED | PROPOSED |
|
| Common Stock | 11,947,741 | $0.65 per share | $7,766,031.65 | $1,059.29 |
| Common Stock | 6,200,000 (2) | $0.65 per share | $4,030,000.00 | $549.69 |
| TOTAL | 18,147,741 | $0.65 per share | $11,796,031.65 | $1,608.98 |
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act.
(2) Being sold in a Direct Public Offering.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, Dated June ____, 2013
NATFRESH BEVERAGES CORP.
18,147,741 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering 11,947,741 shares of common stock at a price of $0.65 per share for net proceeds of $7,766,032, and we are offering 6,200,000 shares of common stock at a price of $0.65 per share for net proceeds of $3,165,000. The 6,200,000 shares are being offered on our own account by aself-underwritten, best-efforts offering, through this prospectus for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days. Our sole officer and director Mr. Oliver Lin will sell our shares and intends to rely on Rule 3a4-1(a)4(iii)(B) in that he does not intend to solicit any potential purchases, rather he will only respond to inquiries from potential purchasers in a communication initiated by the potential purchaser. This limitation may severely limit our ability to sell shares as part of the direct offering. There is no guarantee that we will receive any proceeds from the direct public offering,
We are an emerging growth company. Our common stock is presently not traded on any market or securities exchange.
.
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THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. See section entitled "Risk Factors" on pages 7 to 10 of this prospectus.
The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and have elected to comply with certain reduced public company reporting requirements for future filings. Investing in our common stock involves a high degree of risk and should only be purchased by those who can afford to lose their entire investment.
The selling shareholders will sell our shares at a fixed price of $0.65. The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value.
There is no assurance of when, if ever, our stock will be listed on an exchange. We are offering up to 6,200,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our officer and director will attempt to sell the shares, without any involvement of underwriters or broker-dealers. This prospectus will permit our sole officer and director to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares that they may sell. Our sole officer and director will rely on Rule 3a4-1(a)4(iii)(B) in that he does not intend to solicit any potential purchases, rather he will only respond to inquiries from potential purchasers in a communication initiated by the potential purchaser. For more information, see the section of this prospectus entitled "Plan of Distribution”. The shares will be offered at a fixed price of $0.65 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
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The Date of This Prospectus Is: June ___, 2013
| 3 |
|
| PAGE |
| Summary | 5 |
| Risk Factors | 7 |
| Forward-Looking Statements | 11 |
| Use of Proceeds | 11 |
| Determination of Offering Price | 12 |
| Dilution | 12 |
| Selling Shareholders | 14 |
| Plan of Distribution | 15 |
| Description of Securities | 17 |
| Interest of Named Experts and Counsel | 18 |
| Description of Business | 18 |
| Legal Proceedings | 37 |
| Market for Common Equity and Related Stockholder Matters | 37 |
| Plan of Operations | 38 |
| Changes in and Disagreements with Accountants | 40 |
| Available Information | 40 |
| Directors, Executive Officers, Promoters and Control Persons | 40 |
| Executive Compensation | 41 |
| Security Ownership of Certain Beneficial Owners and Management | 42 |
| Certain Relationships and Related Transactions | 42 |
| Disclosure of Commission Position of Indemnification for Securities Act Liabilities | 42 |
| Financial Statements | 43 |
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Summary
Prospective investors are urged to read this prospectus in its entirety.
We are a development stage company. From inception to August 31, 2012, we have not yet earned revenues from the sale of our products. We have minimal assets, and have incurred losses since inception.
We are a start-up company and our main focus will be to import, distribute and export of bottled pure natural artesian water and importation of natural spring water for manufacturing. In addition, through our wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (“NPSPL”), we intend to import and distribute drinking water and beverages as well as to set up a factory to process and bottle natural spring water. We intend to use natural spring water for the production of drinking water, instant tea as well as microbrewery operations for the production of both shandy and lager beer. We intend to market, promote, and distribute our goods in the Republic of Singapore and for export to neighboring country, Malaysia. We own the following brands and trademarks in Singapore: NATfresh
, Tani Premium, Tani Magic and TaniNZ Premium.
We have not yet earned revenues, we have achieved significant losses since inception, and we have had only limited operations and have been issued a going concern opinion by our auditors.
As of May 29, 2013, we have total cash on hand of $1,132,883 in our bank accounts. We may need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. The financing we need may not be available when required. Although financing maybe available, it may be on terms that we deem unacceptable or are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences or other terms. Our inability to obtain financing will inhibit to implement our development strategy, which could require us to diminish or suspend our operations and possibly cease our operations.
We were incorporated on June 18, 2012 under the laws of the state of Nevada. Our principal office is located at 2800 Post Oak Boulevard, Suite 4100, Houston, Texas 77056. Our telephone number is (832) 390-2235 and our fax number is (832) 390-2350.
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The Offering: Securities Being Offered Up to 18,147,741 shares of common stock. Offering Price Terms of the Offering The selling shareholders will determine when and how they will sell the common stock offered in this prospectus. In addition, we are offering up to 6,200,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our officer and director will attempt to sell the shares, without any involvement of underwriters or broker-dealers. Termination of the Offering The offering will conclude when all of the 18,147,741 shares of common stock that are being offered by us in the direct public offering and the selling shareholders have been sold, or we decide at any time to terminate the registration of the shares at our sole discretion. In any event, both the direct and selling shareholder offering shall be terminated no later than one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days. Securities Issued And to be Issued 1,156,460,641 shares of our common stock are issued and outstanding as of the date of this prospectus. 11,947,741 shares of common stock to be sold under this prospectus will be Use of Proceeds We will not receive any proceeds from the sale of the common stock by the selling shareholders. However, we will receive proceeds from the shares of our common stock that we sell pursuant to our Direct Public Offering. See “Use of Proceeds.” Market for the common stock
We, through the direct public offering and the selling shareholders will sell our shares at a fixed price $0.65 per share throughout the duration of our continuous offering. The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value. We determined the offering price by considering, among other factors, a business valuation that was conducted by our management. There is no assurance of when, if ever, our stock will be listed on the OTCBB or another exchange.
sold by existing shareholders. In addition, we are offering up to 6,200,000 in a direct public offering. There has been no market for our securities. Our common stock is not traded on any exchange
or on the Over-the-Counter market. After the effective date of the registration statement
relating to this prospectus, we hope to have a market maker file an application with FINRA for
our common stock to become eligible for quotation on the Over-the-Counter Bulletin Board.
We do not yet have a market maker who has agreed to file such application. There is no
assurance that a trading market will develop or, if developed, that it will be sustained.
Consequently, a purchaser of our common stock may find it difficult to resell the securities
offered herein should the purchaser desire to do so.
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Summary Financial Information (unaudited)
The following financial information summarizes the more complete historical financial information at the end of this prospectus.
Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
RISKS RELATED TO OUR BUSINESS
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our business plan calls for ongoing expenses in connection with the importation and distribution of our natural spring water. We have not yet generated revenues from our inception to February 28, 2013.
While at February 28, 2013, we had cash on hand of $1,339,558 and accumulated $1,259,140 in business development and administrative expenses for the 6 months ended February 28, 2013. Our current monthly burn rate is $187,559. At this rate we will be able to sustain operations for approximately 7 months and we anticipate that additional funding will be needed for general administrative expenses and marketing costs. In addition, we require approximately $4,000,000 over the next 12 months to begin our operations.
In order to expand our business operations, we anticipate that we will have to raise additional funding. If we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.
We do not currently have any arrangements for financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. The most likely source of future funds available to us is through the sale of additional shares of common stock or advances from our sole director.
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BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE YOU
COULD LOSE YOUR INVESTMENT.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. The financial statements do not include any adjustments that might result from
the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.
THERE IS NO MINIMUM OFFERING AND THEREFORE YOUR INVESTMENT MAY BE USED EVEN THOUGH SUCH INVESTMENT WILL NOT SATISFY OUR CAPITAL REQUIREMENTS
TO COMPLETE ANY PROJECT.
Our director has not specified a minimum offering amount and there in no escrow account in operation. Because there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to fulfill our objectives or proceed with our operations due to a lack of interest in this offering. If this were to occur, we might be forced to curtail or abandon our operations with a loss to investors who purchase stock under this Prospectus. There is no guarantee that we will receive any proceeds from the direct offering. The selling shareholders are also offering shares of our common stock, which may make it difficult for us to raise proceeds from our direct offering.
BECAUSE OUR SOLE OFFICER AND DIRECTOR INTENDS TO RELY ON RULE 3a4-1(a)4(iii)(B) WE WILL BE SEVERELY LIMITED IN OUR ABILITY TO ATTRACT INVESTORS TO PURCHASE SHARES IN OUR DIRECT
PUBLIC OFFERING.
Mr. Lin intends to rely on Rule 3a4-1(a)4(iii)(B) in that he does not intend to solicit any potential purchases, rather he will only respond to inquiries from potential purchasers in a communication initiated by the potential purchaser. This limitation may severely limit
our ability to sell shares as part of the direct offering .
If Yi Lung Lin, our sole officer and director, should resign or die, we will not have a chief executive officer. thIS could result in our operations suspending, AND you could lose your investment.
We depend on the services of our sole officer and director, Yi Lung Lin, for the future success of our business. The loss of the services of Mr. Lin could have an adverse effect on our business, financial condition and results of operations. If he should resign or die we will not have a chief executive officer. If that should occur, until we find another person to act as our chief executive officer, our operations could be suspended. In that event it is possible you could lose your entire investment. We do not carry any key personnel life insurance policies on Mr. Lin and we do not have a contract for his services.
WE MAY HAVE DIFFICULTY ATTRACTING AND RETAINING SKILLED PERSONNEL. OUR FAILURE TO DO SO COULD CAUSE US TO GO OUT OF BUSINESS.
Our future success will depend in large part on our ability to attract and retain highly skilled management, sales, marketing, and finance and product development personnel. Competition for such personnel is intense, and there can be no assurance that we will be successful in attracting or retaining such personnel. Failure to attract and retain such personnel could have a material adverse effect on our operations and financial condition or cause us to go out of business.
WE WILL NEED SIGNIFICANT CAPITAL REQUIREMENTS TO CARRY OUT OUR BUSINESS PLAN, AND WE WILL NOT BE ABLE TO FURTHER IMPLEMENT OUR BUSINESS STRATEGY UNLESS SUFFICIENT FUNDS ARE RAISED, WHICH COULD CAUSE US TO DISCONTINUE OUR OPERATIONS.
We will require significant expenditures of capital in order to acquire and develop our planned operations. We plan to obtain the necessary funds through private equity offerings. We may not be able to raise sufficient amounts from our planned sources. In addition, if we drastically underestimate the total amount needed to fully implement our business plan, our ability to continue our business will be adversely affected.
Our ability to obtain additional financing is subject to a number of factors, including market conditions, investor acceptance of our business plan, and investor sentiment. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us. If we are unable to raise additional financing, we will have to significantly reduce our spending, delay or cancel planned activities or substantially change our current corporate structure. In such an event, we intend to implement expense reduction plans in a timely manner. However, these actions would have material adverse effects on our business, revenues, operating results and prospects, resulting in a possible failure of our business.
WE MAY BE SUSCEPTIBLE TO AN ADVERSE EFFECT ON OUR BUSINESS DUE TO THE CURRENT WORLDWIDE ECONOMIC CRISIS.
Our market and sales results could be greatly impacted by the current worldwide economic crisis, making it difficult to reach sales goals and thus generate significant revenue.
WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY. OUR INABILITY TO SUCCESSFULLY OPERATE AS A PUBLIC COMPANY COULD CAUSE YOU TO LOSE YOUR ENTIRE INVESTMENT.
We have never operated as a public company. We have no experience in complying with the various rules and regulations, which are required of a public company. As a result, we may not be able to operate successfully as a public company, even if our operations are successful. We plan to comply with all of the various rules and regulations, which are required of a public company. However, if we cannot operate successfully as a public company, your investment may be materially adversely affected. Our inability to operate as a public company could be the basis of your losing your entire investment.
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WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLIC COMPANY.
Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. Moreover, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission and the NASDAQ Stock Market, has imposed additional requirements on corporate governance practices of public companies. We expect these new rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly, which may have a materially adverse impact on our business.
THE RECENTLY ENACTED JOBS ACT WILL ALLOW US TO POSTPONE THE DATE BY WHICH WE MUST COMPLY WITH SOME OF THE LAWS AND REGULATIONS INTENDED TO PROTECT INVESTORS AND TO REDUCE THE AMOUNT OF INFORMATION WE PROVIDE IN OUR REPORTS FILED WITH THE SEC, WHICH COULD UNDERMINE INVESTOR CONFIDENCE IN OUR COMPANY AND ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
For so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies” including:
- the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;
- the “say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Act and some of the disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer;
- the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Securities Exchange Act of 1934, and instead provide a reduced level of disclosure concerning executive compensation; and
- any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.
We may take advantage of these exemptions until we are no longer an “emerging growth company.” We would cease to be an “emerging growth company” upon the earliest of: (i) the first fiscal year following the fifth anniversary of this offering; (ii) the first fiscal year after our annual gross revenues are $1 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.
Although we are still evaluating the JOBS Act, we currently intend to take advantage of some, but not all, of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth company.” For example, we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an “emerging growth company,” which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an “emerging growth company,” we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.
U.S. INVESTORS MAY EXPERIENCE DIFFICULTIES IN ATTEMPTING TO EFFECT SERVICE OF PROCESS AND TO ENFORCE JUDGMENTS BASED UPON U.S. FEDERAL SECURITIES LAWS AGAINST THE COMPANY AND ITS SOLE NON-U.S. RESIDENT OFFICER AND DIRECTOR AND A U.S. OR FOREIGN PLAINTIFF MAY LACK STANDING OR OTHERWISE BE UNABLE TO BRING A LAWSUIT IN A SINGAPOREAN OR CHINESE COURT, INCLUDING A CASE WHICH IS PREDICATED UPON U.S. SECURITIES LAWS.
Our sole officer and director is not a resident of the United States. Consequently, it may be difficult for investors to effect service of process on Mr. Lin in the United States and to enforce judgments obtained in United States courts against Mr. Lin based on the civil liability provisions of the United States securities laws. Since all our assets are located in Singapore it may be difficult or impossible for U.S. investors to collect a judgment against us. As well, any judgment obtained in the United States against us may not be enforceable in the United States.
In addition, a U.S. or foreign plaintiff may lack standing or otherwise be unable to bring a lawsuit in a Singaporean court, including a case which is predicated upon U.S. securities laws.
OUR SOLE OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS WHICH MAY LIMIT THE AMOUNT OF TIME THEY CAN DEVOTE TO OUR COMPANY AND POTENTIALLY CREATE CONFLICTS OF INTEREST.
Our director has other business interests in that Mr. Lin Yi Lung is also the Managing Director of Access Finance and Securities (NZ) Limited and Access Management Consulting and Marketing Pte Ltd and Chief Executive Officer for Access Equity Capital Management Corp. This means that Mr. Lin is unable to work full time for our Company and that potential conflicts of interests may arise when Mr. Lin is presented certain business opportunities. These conflicts might eventually lead to business failure. Mr. Lin plans to devote 30 hours a week to our business and to our affairs which may lead to periodic interruptions of business operations if he is unable to devote the amount of time required to our business because of his other business interests. Unforeseen events may cause this amount of time to become even less.
OUR SOLE OFFICER MR. LIN IS IN THE BUSINESS OF PROVIDING CERTAIN CONSULTING AND FINANCIAL SERVICES TO COMPANIES THAT SEEK TO ACCESS THE CAPITAL MARKETS IN THE UNITED STATES AND THIS COULD CREATE POTENTIAL CONFLICTS OF INTERESTS.
Our sole officer Mr. Lin is in the business of providing certain consulting and financial services to companies that seek to access the capital markets in the United States and this could create potential conflicts of interests if he devotes his time helping other companies, rather than furthering our needs.
Mr. Lin provides consulting and financial services through the following entities: Access Management Consulting and Marketing Pte Ltd. and Access Finance and Securities (NZ) Limited.
On July 2, 2012, we entered into an Agreement with Access Finance and Securities (NZ) Limited (the “Advisor”) to provide Manager Consulting Service. In consideration of these services provided by the Advisor, we have agreed to pay a total fee of US$300,000, to be payable in cash of US$250,000 and the balance US$50,000 by way of issuance of our common shares at a price of $0.001 per share.
On July 2, 2012, we entered into an Agreement with Access Management Consulting and Marketing Pte Ltd (the “Consultant”) to provide Prospectus Service. In consideration of these services provided by the Consultant, we have agreed to pay a total fee of US$800,000, to be payable in cash of US$650,000 and the balance US$150,000 by way of issuance of our common shares at a price of $0.001 per share.
OUR SOLE OFFICER AND DIRECTOR MR. LIN AND THE AFS ENTITIES PROVIDE CONSULTING AND FINANCIAL SERVICES TO GENUFOOD ENERGY ENZYMES CORP. (“GENUFOOD”) AND AND MR. LIN IS THE CEO OF GENUFOOD AND IN SEPTEMBER 2012 WE PURCHASED $500,000 IN COMMON STOCK OF GENUFOOD AND THAT GENUFOOD’S ONLY REVENUE TO DATE IS FROM A RELATED PARTY. Our sole officer and director Mr. Lin and the AFS entities provide consulting and financial services to Genufood Energy Enzymes Corp. (“Genufood”) and Mr. Lin is the CEO of Genufood and in September 2012 we purchased $500,000 in common stock of Genufood and that Genufood's only revenue to date is from a related party. This could be viewed as a potential conflict of interest.
The objective purchasing $500,000 of common stock in Genufood is for an investment. The strategy is to seek short term profits through market share price appreciation. This was considered since the $500,000 is unused and free from commitment since we have not commenced full scale operations.
WE ONLY HAVE ONE OFFICER WHO IS ALSO OUR ONLY DIRECTOR WHICH MAY LEAD TO FAULTY CORPORATE GOVERNANCE.
We have only one director who is also our sole executive officer who makes all the decisions regarding corporate governance. This includes their (executive) compensation, accounting overview, related party transactions and so on. They will also have full control over matters that require Board of Directors approval. This may introduce conflicts of interest and prevent the segregation of executive duties from those that require Board of Directors’ approval. This may lead to ineffective disclosure and accounting controls. Non-compliance with laws and regulations may result in fines and penalties. They would have the ability to take any action as they review and approve them. They would exercise control over all matters requiring shareholder approval including significant corporate transactions. We have not implemented various corporate governance measures nor have we adopted any independent committees as we presently do not have any independent directors.
RISKS RELATED TO OUR INDUSTRY
CURRENCY EXCHANGE RATE FLUCTUATIONS MAY INCREASE OUR COSTS.
The exchange rates between the U.S. dollar and non-U.S. currencies in which we conduct our business have and will likely fluctuate in the future. Any appreciation in the value of these non-U.S. currencies would result in higher expenses for our company. We do not have any hedging arrangements to protect against such exchange rate exposures. We plan to operate our business in U.S. and Singapore dollars.
IMPORT/EXPORT REGULATIONS AND TARIFFS MAY CHANGE AND INCREASE OUR COSTS.
We are subject to risks associated with the regulations relating to the export of products. We cannot predict whether the export of our products will be adversely affected by changes in, or enactment of new quotas, duties, taxes or other charges or restrictions imposed by the Asian countries in the future. Any of these factors could have a material adverse effect on our operating costs.
9
RISKS RELATED TO OUR OFFERING
Our shares of common stock are subject to the “penny stock" rules of the Securities and Exchange Commission and the trading market in our securities will be limited, which will make transactions in our stock cumbersome and may reduce the value of an investment in our stock.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must 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. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.
There is no current trading market for our securities and if a trading market does not develop, purchasers of our securities may have difficulty selling their shares.
There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have a market maker apply for admission to provide quotation of our securities on the Over-the-Counter Bulletin Board after the Registration Statement relating to this prospectus is declared effective by the SEC. We do not yet have a market maker who has agreed to file such application. If for any reason our common stock is not quoted on the Over-the-Counter Bulletin Board or a public trading market does not otherwise develop, purchasers of the share may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.
ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
We must raise additional capital in order for our business plan to succeed. Most likely our source of additional capital will be through the sale of additional shares of common stock. Such stock issuances will cause stockholders' interests in our company to be diluted. Such dilution will negatively affect the value of investors’ shares.
YOUR PERCENTAGE OWNERSHIP IN US MAY BE DILUTED BY FUTURE ISSUANCES OF CAPITAL STOCK, WHICH COULD REDUCE YOUR INFLUENCE OVER MATTERS ON WHICH STOCKHOLDERS VOTE.
Our Board of Directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options or shares that may be issued to satisfy our payment obligations. Issuances of additional common stock would reduce your influence over matters on which our stockholders vote. Kuei Hua Tsai has interest, control and voting rights in Toprise International Investment Limited and with her 49% equity interest our company, she has the ability to exert significant influence over our decisions
WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE WHICH MAY MAKE IT MORE DIFFICULT FOR YOU TO EARN A RETURN ON YOUR INVESTMENT WITH US.
We have never paid any dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock. Therefore, you may have difficulty earning a return on your investment with us.
| 10 |
Forward-Looking Statements
This prospectus contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the “Risk Factors” section and elsewhere in this prospectus.
Use of Proceeds
We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders. However, we may be receiving funds from our direct public offering. We are offering up to 6,200,000 shares in a direct public offering, without the involvement of underwriters or broker-dealers. Our sole officer and director Mr. Oliver Lin will sell our shares and intends to rely on Rule 3a4-1(a)4(iii)(B) in that he does not intend to solicit any potential purchases, rather he will only respond to inquiries from potential purchasers in a communication initiated by the potential purchaser. This limitation may severely limit our ability to sell shares as part of the direct offering.
We intend to use our net proceeds from the Offering for the following purposes:
· between $825,000 and $1,654,329 for the purchase of manufacturing equipment, facilities and office equipment; and
· between $142,500 and $1,510,671 for working capital.
The foregoing represents our best estimate of our allocation of the net proceeds from the Offering based on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary from these estimates, and we may find it necessary or advisable to re-allocate our net proceeds within the categories described above or to use portions of our net proceeds for other purposes.
Pending the use of our net proceeds in the manner described above, we may also use our net proceeds for our working capital, place the funds in fixed deposits with banks and financial institutions or use the funds to invest in short-term money market instruments, as our Director may deem appropriate in their absolute discretion.
We estimate that the expenses of the Offering and the application for listing, including the underwriting fees and selling commission, and all other incidental expenses relating to the Offering, will amount to approximately $865,000.
Our direct public offering is being made on a self-underwritten basis - with no minimum and a maximum of $4,030,000. The table below sets forth the use of proceeds if 25%, 50%, 75% or 100% is sold.
|
| 25% | 50% | 75% | 100% |
| Gross Proceeds | $1,007,500 | $2,015,000 | $3,022,500 | $4,030,000 |
| Offering Expenses | $865,000 | $865,000 | $865,000 | $865,000 |
| Net Proceeds | $142,500 | $1,150,000 | $2,157,500 | $3,165,000 |
The proceeds will be used in the order of priority when the securities offered are sold:
|
| 25% | 50% | 75% | 100% |
| Working Capital | $142,500 | $325,000 | $503,171 | $1,510,671 |
| Purchase of manufacturing equipment, facilities and office equipment | $- | $825,000 | $1,654,329 | $1,654,329 |
| Total | $142,500 | $1,150,000 | $2,157,500 | $3,165,000 |
The securities offering and the use of the proceeds shown above are for illustrative purposes only.
| 11 |
Determination of Offering Price
The selling shareholders will sell our shares at fixed price of $0.65 per throughout the duration of our continuous offering. We intend to apply for quotation on the OTCBB, but there is no assurance of when, if ever, our stock will be listed on the OTCBB or another exchange.
We will be selling the shares in our direct public offering at $0.65 per share. There is no established public market for the securities being registered. As a result, the offering price and other terms and conditions relative to our shares have been arbitrarily determined by us and do not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value. In addition, no investment banker, appraiser or other independent, third party has been consulted concerning the offering price for the shares or the fairness of the price used for the shares. Accordingly, the offering price should not be considered an indication of the actual value of our securities.
In determining the initial public offering price of the shares we considered several factors including the following:
· the risks we face as a business;
· prevailing market conditions, including the history and prospects for the industry in which we compete;
· our future prospects; and
· our capital structure.
The above is an exhaustive list of factors we used to determine our initial public offering price. Taking into consideration a review of the above factors, our management was of the view that $0.65 per share is a fair valuation of our initial public offering price due to our capital structure, strong financial position, our advanced development of our products as well as our unique position within our industries.
Dilution
Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders.
The calculations below are based upon 1,156,460,641common shares issued and outstanding and a net tangible book value of $1,999,274or $0.0017per share of common stock as of February 28, 2013.
You will suffer substantial dilution in the purchase price of your stock compared to the net tangible book value per share immediately after the purchase.
The following assumes the sale of 100% of the shares of common stock in this offering. After giving effect to the sale of 6,200,000 shares at an offering price of $0.65 per share of common stock, our net tangible book value as of the closing of this offering would increase from $0.0017to $0.0052per share. This represents an immediate increase in the net tangible book value of approximately $0.0035 per share to current shareholders, and immediate dilution of about $0.6448per share to new investors, as illustrated in the following table:
| Public offering price per share of common stock | $ | 0.65 |
| Net tangible book value per share prior to offering | $ | 0.0017 |
| Increase per share attributable to new investors | $ | 0.0035 |
| Net tangible book value per share after offering | $ | 0.0052 |
| Dilution per share to new investors | $ | 0.6448 |
| Percentage dilution | $ | 99.2% |
11
The following assumes the sale of 75% of the shares of common stock in this offering. After giving effect to the sale of 4,650,000 shares at an offering price of $0.65 per share of common stock, our net tangible book value as of the closing of this offering would increase from $0.0017to $0.0043per share. This represents an immediate increase in the net tangible book value of approximately $0.0026 per share to current shareholders, and immediate dilution of about $0.6457per share to new investors, as illustrated in the following table:
| Public offering price per share of common stock | $ | 0.6500 |
| Net tangible book value per share prior to offering | $ | 0.0017 |
| Increase per share attributable to new investors | $ | 0.0026 |
| Net tangible book value per share after offering | $ | 0.0043 |
| Dilution per share to new investors | $ | 0.6457 |
| Percentage dilution | $ | 99.3% |
The following assumes the sale of 50% of the shares of common stock in this offering. After giving effect to the sale of 3,100,000 shares at an offering price of $0.65 per share of common stock, our net tangible book value as of the closing of this offering would increase from $0.0017 to $0.0035 per share. This represents an immediate increase in the net tangible book value of approximately $0.0018 per share to current shareholders, and immediate dilution of about $0.6465 per share to new investors, as illustrated in the following table:
| Public offering price per share of common stock | $ | 0.6500 |
| Net tangible book value per share prior to offering | $ | 0.0017 |
| Increase per share attributable to new investors | $ | 0.0018 |
| Net tangible book value per share after offering | $ | 0.0035 |
| Dilution per share to new investors | $ | 0.6465 |
| Percentage dilution | $ | 99.5% |
| 12 |
The following assumes the sale of 25% of the shares of common stock in this offering. After giving effect to the sale of 1,550,000 shares at an offering price of $0.65 per share of common stock, our net tangible book value as of the closing of this offering would increase from $0.0017to $0.0026per share. This represents an immediate increase in the net tangible book value of approximately $0.0009 per share to current shareholders, and immediate dilution of about $0.6474per share to new investors, as illustrated in the following table:
| Public offering price per share of common stock | $ | 0.6500 |
| Net tangible book value per share prior to offering | $ | 0.0017 |
| Increase per share attributable to new investors | $ | 0.0009 |
| Net tangible book value per share after offering | $ | 0.0026 |
| Dilution per share to new investors | $ | 0.6474 |
| Percentage dilution | $ | 99.6% |
Pursuant to Item 506 of Regulation S-K, t
| Shares Purchased | Total Consideration | ||||||||||
| Number | Percent | Amount | Percent | ||||||||
| Existing stockholders |
| 1,156,460,641 |
| 99.47% |
|
| $ | 3,310,000 |
| 45.10% | |
| Purchasers in this offering | 6,200,000 | 0.53% | 4,030,000 | 54.90% | |||||||
|
|
|
|
|
| |||||||
| Total |
| 1,162,660,641 |
| 100.00% |
|
| $ | 7,340,000 |
| 100.00% | |
| 13 |
Selling Shareholders
The selling shareholders named in this prospectus are offering all of the 11,947,741 shares of common stock offered through this prospectus, not including our direct public offering. These shares were acquired from us in private placements that were exempt from registration provided under Regulation S of the Securities Act of 1933. Our reliance upon the exemption under Rule 903 of Regulation S of the Securities Act was based on the fact that the sale of the securities was completed in an "offshore transaction,” as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. Each investor was not a US person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a US person.
The following table provides as of the date of this prospectus, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including:
- the number of shares owned by each prior to this offering;
- the total number of shares that are to be offered for each;
- the total number of shares that will be owned by each upon completion of the offering; and
- the percentage owned by each upon completion of the offering.
| Name Of Selling Shareholder | Shares Owned Prior To This Offering | Total Number Of Shares To Be Offered For Selling Shareholders Account | Total Shares to Be Owned Upon Completion Of This Offering | Percentage of Shares owned Upon Completion of This Offering |
| Access Finance and Securities (NZ) Limited (2) | 50,000,000 | 500,000 | 49,500,000 | 4.28% |
| Access Management Consulting and Marketing Pte Ltd. (3) | 150,000,000 | 1,500,000 | 148,500,000 | 12.84% |
| Access Equity Capital Management Corp. (4) | 10,000,000 | 100,000 | 9,900,000 | (1) |
| Kuei Hua Tsai | 70,000,000 | 700,000 | 69,300,000 | 5.99% |
| Huei Ling Wang (5) | 50,000,000 | 500,000 | 49,500,000 | 4.28% |
| En Chen Pai | 16,040,000 | 160,400 | 15,879,600 | 1.37% |
| Hsi Chuen Pai | 10,000,000 | 100,000 | 9,900,000 | (1) |
| Toprise International Investment Ltd. (6) | 500,000,000 | 5,000,000 | 495,000,000 | 42.80% |
| Chia Wan Lu | 22,350,000 | 223,500 | 22,126,500 | 1.91% |
| Li Tzu Wang | 20,120,000 | 201,200 | 19,918,800 | 1.72% |
| Pi Lin Chen | 20,780,000 | 207,800 | 20,572,200 | 1.78% |
| Shu Li Lai | 22,340,000 | 223,400 | 22,116,600 | 1.91% |
| Jui Chen Lee | 20,240,000 | 202,400 | 20,037,600 | 1.73% |
| Kuan Chen Li | 21,720,000 | 217,200 | 21,502,800 | 1.86% |
| Hsin Li Chiu | 15,000,000 | 150,000 | 14,850,000 | 1.28% |
| Hsuan Wen Yeh | 15,000,000 | 150,000 | 14,850,000 | 1.28% |
| Yu Tzu Chan | 15,000,000 | 150,000 | 14,850,000 | 1.28% |
| Kuan Lin Yeh | 12,000,000 | 120,000 | 11,880,000 | 1.03% |
| Chi Cheng Yeh | 12,000,000 | 120,000 | 11,880,000 | 1.03% |
| Shu Chin Yeh | 10,000,000 | 100,000 | 9,900,000 | (1) |
| Cheng Yu Lee | 10,000,000 | 100,000 | 9,900,000 | (1) |
| Wan Lien Li | 10,000,000 | 100,000 | 9,900,000 | (1) |
| Mei Chih Chen | 6,910,000 | 69,100 | 6,840,900 | (1) |
| Yin Chen Huang | 6,100,000 | 61,000 | 6,039,000 | (1) |
| Jung Chia Hsu | 6,000,000 | 60,000 | 5,940,000 | (1) |
| Yueh Mei Wang | 5,600,000 | 56,000 | 5,544,000 | (1) |
| Wen Chung Huang | 5,200,000 | 52,000 | 5,148,000 | (1) |
| Pi Chen Hsu | 5,200,000 | 52,000 | 5,148,000 | (1) |
| Pao Tsai Lin Wang | 5,200,000 | 52,000 | 5,148,000 | (1) |
| Miao Ju Chien | 5,000,000 | 50,000 | 4,950,000 | (1) |
| Chin Hsiu, Lin Su | 5,000,000 | 50,000 | 4,950,000 | (1) |
| Su Chuan Wang | 3,200,000 | 32,000 | 3,168,000 | (1) |
| Hsiao Ling Yeh | 3,027,000 | 30,270 | 2,996,730 | (1) |
| Pei Ling Yeh | 2,003,000 | 20,030 | 1,982,970 | (1) |
| Mei Pi Chang | 2,150,000 | 21,500 | 2,128,500 | (1) |
| Ching Tieh Chang | 2,030,000 | 20,300 | 2,009,700 | (1) |
| Cheng Ying Lee | 2,000,000 | 20,000 | 1,980,000 | (1) |
| Shu Chiung Lee | 2,000,000 | 20,000 | 1,980,000 | (1) |
| Kun Wang Lin | 2,000,000 | 20,000 | 1,980,000 | (1) |
| Mei Chi Liao | 2,000,000 | 20,000 | 1,980,000 | (1) |
| Po Jen Chen | 1,200,000 | 12,000 | 1,188,000 | (1) |
| Mei Lan Hsieh | 1,000,000 | 10,000 | 990,000 | (1) |
| Yung Shan Hsu | 400,000 | 40,000 | 360,000 | (1) |
| Yu Han Huang | 230,000 | 23,000 | 207,000 | (1) |
| Hui Cheng Hsu Lin | 100,000 | 10,000 | 90,000 | (1) |
| Shu Heng Hsu | 66,666 | 66,666 | Nil | Nil |
| Ching Ming Hsu | 50,000 | 50,000 | Nil | Nil |
| Hui Mei Lee | 40,000 | 40,000 | Nil | Nil |
| Tsuan Chih Hsieh | 33,333 | 33,333 | Nil | Nil |
| Fang Ju Lin | 28,571 | 28,571 | Nil | Nil |
| Shih Chuan Huang | 25,000 | 25,000 | Nil | Nil |
| Chieh Ching Lee | 22,222 | 22,222 | Nil | Nil |
| Chung Shou Wu | 20,000 | 20,000 | Nil | Nil |
| Ming Kan Huang | 18,182 | 18,182 | Nil | Nil |
| Li Wen Liu | 16,667 | 16,667 | Nil | Nil |
| Total | 1,156,460,641 | 11,947,741 | 1,144,512,900 |
|
(2) Yi Lung Lin has voting and investment control over shares held by Access Finance and Securities (NZ) Limited.
(3) Yi Lung Lin has voting and investment control over shares held by Access Management Consulting and Marketing Pte Ltd
(4) Yi Lung Lin has voting and investment control over shares held by Access Equity Capital Management Corp.
(5) Huei Ling Wang is the wife of our President Yi Lung Lin.
(6) Kuei Hua Tsai has voting and investment control over shares held by Toprise International Investment Ltd.
| 14 |
Other than disclosed above, none of the selling shareholders:
- has had a material relationship with us other than as a shareholder at any time within the past three years;
- has ever been one of our officers or directors;
- is a broker-dealer; or broker-dealer's affiliate.
In addition, we are offering up to 6,200,000 shares of common stock on a direct public offering, without any involvement of underwriters or broker-dealers, no minimum. The offering price is $0.65 per share or prevailing market prices. All of the shares covered by this prospectus are being offered for a period not to exceed 180 days, unless extended by our Board of Directors for an additional 90 days.
Plan of Distribution
We are offering up to 6,200,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our sole officer and director will attempt to sell the shares, without any involvement of underwriters or broker-dealers. This prospectus will permit our officer and director to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares that they may sell. Our sole officer and director will rely on Rule 3a4-1(a)4(iii)(B) in that he does not intend to solicit any potential purchases, rather he will only respond to inquiries from potential purchasers in a communication initiated by the potential purchaser . The shares will be offered at a fixed price of $0.65 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.
The selling shareholders may sell some or all of their common stock in one or more transactions, including block transactions. There are no arrangements, agreements or understandings with respect to the sale of these securities.
The selling shareholders will sell our shares at a fixed price of $0.65 per share. The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value. There is no assurance of when, if ever, our stock will be listed on an exchange or quotation system. The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
If applicable, the selling shareholders may distribute shares to one or more of their partners who are unaffiliated with us. Such partners may, in turn, distribute such shares as described above. If these shares being registered for resale are transferred from the named selling shareholders and the new shareholders wish to rely on the prospectus to resell these shares, then we must first file a prospectus supplement naming these individuals as selling shareholders and providing the information required concerning the identity of each selling shareholder and he or her relationship to us. There is no agreement or understanding between the selling shareholders and any partners with respect to the distribution of the shares being registered for resale pursuant to this registration statement.
We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.
| 15 |
The selling shareholders must comply with the requirements of the Securities Act and the Securities Exchange Act in the offer and sale of the common stock. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things:
1. Not engage in any stabilization activities in connection with our common stock
2. Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.
The Securities Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which:
- contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
- contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements;
- contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
- contains a toll-free telephone number for inquiries on disciplinary actions;
- defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
- contains such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:
- bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the transaction;
- the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
- monthly account statements showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.
In addition, we are offering up to 6,200,000 shares of common stock on a direct public offering, without any involvement of underwriters or broker-dealers, no minimum. The offering price is $0.65 per share or prevailing market prices. The shares are being offered for a period not to exceed 180 days, unless extended by our Board of Directors for an additional 90 days.
| 16 |
Description of Securities
General
Our authorized capital stock consists of 2,000,000,000 shares of common stock at a par value of $0.001 per share.
Common Stock
As of February 28, 2013, there were 1,156,460,641 shares of our common stock issued and outstanding that were held by 50 stockholders of record.
Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our articles of incorporation.
Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Preferred Stock
We do not have an authorized class of preferred stock.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase shares of our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares of our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.
| 17 |
Interests of Named Experts and Counsel
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, an interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
Dean Law Corp. has provided an opinion on the validity of our common stock.
The financial statements included in this prospectus have been audited by M&K CPAS, PLLC to the extent and for the periods set forth in their report appearing elsewhere in this document and in the registration statement filed with the SEC, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
Description of Business
General
We were incorporated in the State of Nevada on June 18, 2012.
We are a start-up company and our main focus will be to import, distribute and export bottled pure natural artesian water and importation of natural spring water for manufacturing. In addition, through our wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (“NPSPL”), we intend to import and distribute drinking water and beverages as well as to set up a factory to process and bottle our natural spring water. We do not have yet had a bottling plant in Singapore and there is no guarantee that we will secure such a facility. We also intend to use our natural spring water for the production of drinking water, instant tea and microbrewery operations for the production of shandy and lager beer. We intend to market, promote, and distribute our goods in the Republic of Singapore as well as to its neighboring country, Malaysia. We own the following trademarks: NATfresh , Tani Premium, Tani Magic and TaniNZ Premium.
Our Business Model
Our business model has two main aspects, to import, distribute and export bottled pure natural artesian water and to import natural spring water for the manufacturing of drinking water, instant tea and for microbrewery operations. The importation of bottled pure natural artesian water is done under contract manufacturing under our private label – TaniNZ Premium as shown in the chart below. The importation of natural spring water will be implemented when our factory in Singapore is available. In the meantime, our subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL) will commence to trade in the distribution of drinking water and beverages as shown in the chart below.
The Company (“NATfresh”)
Business Activities of NATfresh
Stage 1 Stage 2 Stage 2
Contract Manufacturing Import Natural Spring Water Supply of Natural Spring Water
Pure Natural Artesian Water to NPSPL for Manufacturing
- TaniNZ Premium
500ml & 1,500ml
Business Activities of NPSPL
Stage 1 Stage 2 Stage 2 Stage 3
Sole Agent for Bottling of Manufacturing Microbrewery
Ayala’s Herbal Water Natural Spring Instant Tea with operations for
- Distribution in Water – the Natural Spring production of
Singapore and Tani Premium Water- shandy and lager
Export 600ml & 1,500ml Tani Magic instant beer using Natural
tea 600ml Spring Water-
Distribution of Nats Shandy
TaniNZ Premium Nats5 Bitter
in Singapore Nats5 Premium
Our model involves scrutinizing every single aspect of our business to maximize the use of our pure natural artesian water and natural spring water for innovative quality drinking water and beverages. Our business model is designed to maintain a technological high quality approach without compromising high essential costs, thus our disciplined approach to executing this model has given us the ability to serve the needs of the general public with innovative and quality beverages. Our objective is to maximize profitability by developing new beverages from natural spring water. Our disciplined approach will allow us to offer new quality beverages with competitive prices on a consistent and sustainable basis to the consumer, thus improving our profitability once we commence operations.
Our Markets and Growth Opportunities
Our primary target market is Singapore. Singapore has a population of 5,183,700 people as per the statistics shown below. The Singapore Government has called for an increase in population due to growth substantiality and the aging population in Singapore. The Singapore government is providing incentives for singles to get married and also for married women to have more children (Source: Child Development Co-Savings Act (CHAPTER 38A), Part II, 3. (1)).
| 18 |
SINGAPORE POPULATIONS STATISTICS
| tems | Date of Latest | Most Recent Period | % Change1 | Previous Period | % Change2 | |
| Population | ||||||
| Total Population | '000 | 2011 | 5,183.7 | 2.1 | 5,076.7 | 1.8 |
| Singapore Residents | '000 | 2011 | 3,789.3 | 0.5 | 3,771.7 | 1.0 |
| Singapore Citizens | '000 | 2011 | 3,257.2 | 0.8 | 3,230.7 | 0.9 |
| Singapore Permanent | '000 | 2011 | 532.0 | -1.7 | 541.0 | 1.5 |
Source: Singapore Department of Statistics
Singapore had an annual average of 10 million tourists and at the current rate of growth, tourism is expected to increase. This is a stable and developed tourism industry as shown below:
INTERNATIONAL VISITORS TO SINGAPORE (COUNTRY BASIS)
| Year | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 (Jan to Sept) | ||||||
| Countries | No. | % | No. | % | No. | % | No. | % | No. | % | No. | % |
| Indonesia | 1,921,000 | 19.7 | 1,962,000 | 19.1 | 1,765,000 | 17.4 | 1,745,000 | 18.0 | 2,305,000 | 19.8 | 1,925,000 | 19.6 |
| China | 1,037,000 | 10.6 | 1,114,000 | 10.8 | 1,079,000 | 10.7 | 937,000 | 9.7 | 1,171,000 | 10.1 | 1,230,000 | 12.5 |
| Australia | 692,000 | 7.1 | 768,000 | 7.5 | 833,000 | 8.2 | 830,000 | 8.6 | 880,000 | 7.6 | 717,000 | 7.3 |
| India | 659,000 | 6.8 | 749,000 | 7.3 | 778,000 | 7.7 | 726,000 | 7.5 | 829,000 | 7.1 | 641,000 | 6.5 |
| Malaysia | 634,000 | 6.5 | 646,000 | 6.3 | 647,000 | 6.4 | 764,000 | 7.9 | 1,037,000 | 8.9 | 817,000 | 8.3 |
| Japan | 594,000 | 6.1 | 594,000 | 5.8 | 571,000 | 5.6 | 490,000 | 5.1 | 529,000 | 4.5 | 475,000 | 4.8 |
| UK | 488,000 | 5.0 | 496,000 | 4.8 | 493,000 | 4.9 | 470,000 | 4.9 | 462,000 | 4.0 | 330,000 | 3.4 |
| South Korea | 455,000 | 4.7 | 464,000 | 4.5 | 423,000 | 4.2 | 314,000 | 3.2 | 361,000 | 3.1 | 319,000 | 3.2 |
| USA | 400,000 | 4.1 | 419,000 | 4.1 | 397,000 | 3.9 | 371,000 | 3.8 | 417,000 | 3.6 | 331,000 | 3.4 |
| Philippines | 386,000 | 4.0 | 409,000 | 4.0 | 419,000 | 4.1 | 432,000 | 4.5 | 544,000 | 4.7 | 505,000 | 5.1 |
| Thailand | 356,000 | 3.7 | 353,000 | 3.4 | 334,000 | 3.3 | 318,000 | 3.3 | 430,000 | 3.7 | 351,000 | 3.6 |
| Hong Kong | 291,000 | 3.0 | 302,000 | 2.9 | 278,000 | 2.7 | 294,000 | 3.0 | 388,000 | 3.3 | 366,000 | 3.7 |
| Singapore | 219,000 | 2.2 | 208,000 | 2.0 | 239,000 | 2.4 | 157,000 | 1.6 | 191,000 | 1.6 | 190,000 | 1.9 |
| Vietnam | 165,000 | 1.7 | 203,000 | 2.0 | 176,000 | 1.7 | 265,000 | 2.7 | 323,000 | 2.8 | 259,000 | 2.6 |
| Germany | 161,000 | 1.7 | 165,000 | 1.6 | 175,000 | 1.7 | 184,000 | 1.9 | 209,000 | 1.8 | 157,000 | 1.6 |
| Total Visitors Arrival in SG | 9,748,207 | 100 | 10,283,615 | 100 | 10,115,638 | 100 | 9,681,259 | 100 | 11,638,663 | 100 | 9,841,445 | 100 |
Source: Singapore Department of Statistics
On a monthly basis, Singapore had an average of 1.1 million tourists with an average growth rate of 7 to 9.0% as shown below.
INTERNATIONAL VISITORS ON MONTHLY BASIS
| Year | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | ||||||
| Month | No. | % | No. | % | No. | % | No. | % | No. | % | No. | % |
| January | 768,000 | 7.9 | 826,000 | 8.0 | 885,000 | 8.7 | 772,000 | 8.0 | 908,000 | 7.8 | 1,055,986 | 10.7 |
| February | 728,000 | 7.5 | 758,000 | 7.4 | 813,000 | 8.0 | 690,000 | 7.1 | 857,000 | 7.4 | 990,116 | 10.1 |
| March | 820,000 | 8.4 | 859,000 | 8.4 | 911,000 | 9.0 | 791,000 | 8.2 | 829,000 | 7.1 | 1,071,960 | 10.9 |
| April | 817,000 | 8.4 | 820,000 | 8.0 | 829,000 | 8.2 | 779,000 | 8.0 | 939,000 | 8.1 | 1,103,319 | 11.2 |
| May | 766,000 | 7.9 | 821,000 | 8.0 | 834,000 | 8.2 | 726,000 | 7.5 | 946,000 | 8.1 | 1,054,040 | 10.7 |
| June | 789,000 | 8.1 | 851,000 | 8.3 | 823,000 | 8.1 | 750,000 | 7.7 | 951,000 | 8.2 | 1,079,968 | 11.0 |
| July | 914,000 | 9.4 | 953,000 | 9.3 | 923,000 | 9.1 | 882,000 | 9.1 | 1,095,000 | 9.4 | 1,273,870 | 12.9 |
| August | 871,000 | 8.9 | 913,000 | 8.9 | 850,000 | 8.4 | 845,000 | 8.7 | 997,000 | 8.6 | 1,178,458 | 12.0 |
| September | 715,000 | 7.3 | 771,000 | 7.5 | 746,000 | 7.4 | 799,000 | 8.3 | 947,000 | 8.1 | 1,033,728 | 10.5 |
| October | 857,000 | 8.8 | 917,000 | 8.9 | 849,000 | 8.4 | 845,000 | 8.7 | 979,000 | 8.4 |
| - |
| November | 800,000 | 8.2 | 842,000 | 8.2 | 765,000 | 7.6 | 830,000 | 8.6 | 964,000 | 8.3 |
| - |
| December | 902,000 | 9.3 | 953,000 | 9.3 | 888,000 | 8.8 | 971,000 | 10.0 | 1,127,000 | 9.7 |
| - |
| Total Visitor Arrival in SG | 9,748,207 | 100 | 10,283,615 | 100 | 10,115,638 | 100 | 9,681,259 | 100 | 11,638,663 | 100 | 9,841,445 | 100 |
Source: Singapore Department of Statistics
Water consumption is a MUST for every human being for health reasons. Therefore, water is required by some 6.2 million people daily, but Singapore has no self-made water. However, recently, the Singapore Government has started reclaiming water through a NEWater process, that is, treated wastewater (sewage) to drinking water. The Singapore Government also purchases water from its neighboring country, Malaysia.
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According to the Institute of Medicine/Mayo Clinic, on average of 3 liters of water per day is required for males and an average of 2.2 liters of water per day for females. On an average of 3 liters of water per day per person, Singapore would require a minimum of 18,600,000 liters of water daily or 6,789,000,000 liters of water annually. This is derived by taking 6.2 million people multiply by 3 liters of water per day to give 18,600,000 liters of water needed for daily consumption. Statistic from the Singapore Ministry of the Environment and Water Resources reveals that 471,000,000,000 liters of portable water was sold in year 2010. This recorded an average annual growth consumption rate of 1.1% as shown from the chart below. It is noted that tourists have a high consumption of water and demand many different types of beverages due to the hot tropical climate of Singapore.
While we wait for the Singapore factory to be established, we had on May 17, 2013 entered into a contract manufacturing arrangement with Deep Waters Trust, New Zealand to supply bottled pure natural artesian water under our own private label – TaniNZ Premium for distribution in Singapore and export to other countries. Once our Singapore factory is available with machinery and equipment installed, we would commence to import natural spring water in bulk from Sri Lanka into Singapore for manufacturing of bottled drinking water, Tani Premium and instant tea, Tani Magic for marketing and distribution in the Singapore market under our Stage 2 plan. This may require us to apply for an import permit for the importation of natural spring water in bulk where local regulations require it.
We then intend to introduce the first of its kind – Tani Magic Instant Tea in three flavors: Black Tea, Green Tea, and Rose Tea with a view to break into the Singapore market for betterment of sales revenue. Tani Magic Instant Tea is instant tea from our natural spring water. No hot water is required to make instant tea. This will be our Stage 2 plan. We would then use our natural spring water for the microbrewery operations to produce shandy and lager beer on a Contract Manufacturing (OEM) basis under a private label to interested buyers. Along with, producing shandy and lager beer under our own brand “Nats Shandy”, Nats5 Bitter”, and “Nats5 Premium” for distribution and re-sale to pubs and restaurants in Singapore and to export to our neighboring country, Malaysia. This is our Stage 3 plan.
Strategy and Strengths
Our model involves scrutinizing every single aspect of the business to maximize the use of pure natural artesian water and natural spring water for innovative quality drinking water and beverages without compromising high essential costs. We could achieve this significant objective through the introduction of the following, but we do not possess the financial capabilities at this current time:
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* TaniNZ Premium – Pure Natural Artesian Water
We have entered into a contract manufacturing arrangement to supply bottled pure natural artesian water under our own private label – TaniNZ Premium for distribution in Singapore and export to other countries.
TaniNZ Premium pure natural artesian water is derived from a large bio-secured aquifer with unlimited supply and a sustainable source of clean and safe drinking water from New Zealand, a nuclear-free country. Bottled at source at its purest and low in minerals which give it a soft and smooth taste, TaniNZ Premium has a pH level of 7.8 that helps balance the overall body metabolism and other digestive functions.
The bottling plant is based in North Canterbury in the South Island of New Zealand which is surrounded by a vast ocean. The rain falling in the Southern Alps, is carried by the winds coming from the South Pole, Antarctica, and is free of pollutants. The raindrops weave their way into underground rivers for their marathon 80-year journey to the confined artesian aquifer, undergoing natural filtration and gaining essential minerals on the way. The plant is located on a 120,000 square meters land on a remote country-side of less than one person per square km. While many artesian wells in the world are being heavily pumped and running dry, it is ensured that its water is not drawn more than it is being recharged at the source.
TaniNZ Premium comes in two sizes, 500 ml and 1500 ml, bottled in PET plastic Hei Tiki blue bottle. Packing for the 500 ml is 18 bottles in one carton box. Packing for the 1500 ml is 12 bottles in one carton box. Shelf life is 24 months. Distribution in Singapore will start before end of July, 2013.
* Ayala’s Herbal Water, Still (16 oz/473 ml)
Our subsidiary company, NATfresh Productions (S) Pte Ltd (NPSPL) is the Sole Distributor for the Ayala’s Herbal Water Still that comes with a range of five flavors – Lemongrass Mint Vanilla, Lavender Mint, Cloves Cardamom Cinnamon, Cinnamon Orange Peel and Ginger Lemon Peel, which are bottled in PET plastic bottle of 16 oz /473 ml each, packing 12 bottles in one carton box. Shelf is 18 months. Distribution in Singapore will start sometime in June, 2013.
Ayala’s Herbal Water, Sparkling (12 oz/355 ml)
Our subsidiary company, NATfresh Productions (S) Pte Ltd (NPSPL) is the Sole Distributor for the Ayala’s Herbal Water, Sparkling that comes with a range of four flavors – Lemongrass Mint Vanilla, Lavender Mint, Cinnamon Orange Peel and Ginger Lemon Peel, which are bottled in glass bottle of 12 oz/355 ml each, packing 24 bottles in one carton box. Shelf life is 18 months. Distribution in Singapore will start sometime in June, 2013.
Ayala’s Herbal Water, Sparkling (25.4 oz/750 ml)
Our subsidiary company, NATfresh Productions (S) Pte Ltd (NPSPL) is the Sole Distributor for the Ayala’s Herbal Water, Sparkling that comes with a range of three flavors – Lemongrass Mint Vanilla, Cinnamon Orange Peel and Ginger Lemon Peel, which are bottled in glass bottle of 25.4 oz/750 ml each, packing 12 bottles in one carton box. Shelf life is 18 months. Distribution in Singapore will start sometime in June, 2013.
* Tani Premium – Natural Mineral Water
We have not yet begun bottling natural spring water under the Tani Premium brand and the operations described in this section are planned operations and there is no guarantee that we will commence bottling operations as described herein. Our proposed product, Tani Premium will be natural mineral water processed from natural spring water. The Sri Lanka Authority has certified that NATfresh natural spring water will be genuine natural spring water. It is extracted from the root hills of the Adam’s Peak, Sri Lanka – tube well at Mayfield Estate, Deraniyagala. The source is originally from the fames region of tropical rain forest. The spring water is filtered and treated with Ultra Violet Rays to preserve its natural taste, and is intended to be bottled at source in a fully protected modern bottling plant of international standard.
We entered into an agreement with Rajakaruna Springs (Pvt) Ltd. (the "Rajakaruna") on September 2, 2012 to secure the supply of the natural spring water to be used in our products. This agreement has been filed as an exhibit to our prospectus. Rajakaruna has agreed to supply us with the natural spring water in 19 liter plastic bottles that shall be ISO certified and come with a seal. They also agree to supply us of a minimum of 250,000 liters of water per month, subject to a variation on the minimum order to be agreed upon by both parties. The agreement is valid for 10 years with an option to renew for an additional 10 years and may be cancelled with 6 months written notice, such notice to detail the reason for termination and that the non-terminating party agree to the reason for termination.
The above picture is a graphic presentation of Tani Premium, the bottle shape and design we intend to have. We intend to process and bottle Tani Premium 600 ml and 1,500 ml at our wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL). The natural spring water is bottled using a plastic PET bottle, food grade. For 600 ml, the outer size packing is 24 bottles and for 1,500 ml, the outer size packing is 12 bottles, respectively. The bottle shape is proprietary and brand name “Tani Premium” belongs to us.
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Water Treatment Plant, a fully automatic process
Our proposed imported natural spring water will be kept in a water storage tank with cooling jackets, insulation and stainless steel cladding. Tank capacity is 20,000 liters and is imported from China. We intend to have six water storage tanks which will store up to 120,000 liters of water. There is no guarantee that we will be able to secure water storage tanks.
Our proposed treatment plant will have that natural spring water that first passes through a filtration process which consists of a sand filter, active carbon filter, sodium-ion filter and fine filter.
It will then process through a Reverse Osmosis (R.O.) System for pure water treatment and for ultraviolet sterilizer. An ozone generator with a mix tower will be used before the processed mineral water is stored at specified storage tank.
Currently we do not have any water storage tanks. Once the water storage tanks are fabricated and shipped to us, it will be installed at our Singapore factory located FoodAxis at One Senako Avenue, Singapore. There is no guarantee that FoodAxis would be available to us by that time nor the premise will be suitable to us. It is also subject to Singapore Authority approval.
We are in the final stages of completing the leasing arrangements for our Singapore factory. We do not have yet have a bottling plant in Singapore. There is no guarantee that we will secure such a facility. We will use our current cash availability on hand and the proceeds of this offering that we allocated towards working capital to finance the lease term.
Water Treatment Process Diagram
Bottling Plant, a fully automatic process
A fully automatic blow molding machine will be installed to produce PET plastic bottle at a capacity of 8,000 bottles per hour.
A washing, filling and capping machine line will be installed for washing the cap, filling the empty bottles with the processed mineral water.
Labeling and Packing Process, a fully automatic process
After filling, the bottles will go through a sleeve labeling machine where a label will be placed on the bottles. An ink jet printer will print the batch number, date of production and expiration date. It will then move forward for packing using a wrapping and shrink machine. A conveyor system will move the packed bottles in cases for warehouse storage.
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Blow Molding to Labeling and Packing Process Diagram
Blow Molding Process Diagram
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* Tani Magic – range of instant tea
On September 26, 2012 we entered into a Memorandum of Understanding with Sky Joy International Enterprise Limited to provide us with the technology transfer in the oxygen anion water treatment for the production of instant tea using our natural spring water. No hot water is required to make instant tea. We may never venture into production and compete with competitors who enter the market with strong financial means. We may change technology transfer provider if we could not finalize the agreement with Sky Joy International Enterprise Limited.
Our proposed product, Tani Magic Instant Black Tea, will contain processed natural spring water and a package of black tea leaves of 3 grams inside the cap. The black tea leaves are organic and will come from Yuchih Township, Nantou County, Taiwan which is a popular place for growing black tea leaves. There will be no artificial coloring. It will only be natural flavor. Just twist the cap to open, the packet of black tea leaves will drop. Within 10 seconds, instant tea is made. The outer size packing is 24 bottles. The bottle shape will be proprietary and the brand name “Tani Magic” belongs to us.
Our proposed product, Tani Magic Instant Green Tea, will contain processed natural spring water and a package of green tea leaves of 3 grams inside the cap. The green tea leaves are organic and will come from Nantou County, Taiwan which is a popular place for growing green tea leaves. There will be no artificial coloring. It will only be natural flavor. Just twist the cap to open, the packet of green tea leaves will drop. Within 10 seconds, instant tea is made. The outer size packing is 24 bottles. The bottle shape will be proprietary and the brand name “Tani Magic” belongs to us.
Our proposed product, Tani Magic Instant Rose Tea, will contain processed natural spring water and a package of mixed tea leaves of 3 grams inside the cap. Tea leaves include Singapore`s most popular oolong tea and jasmine tea, and rose flower. The tea leaves are organic and will come from Nantou County, Taiwan which is a popular place for growing tea. There will be no artificial coloring. It will only be natural flavor. Just twist the cap to open, the packet of mixed tea leaves will drop. Within 10 seconds, instant tea is made. The outer size packing is 24 bottles. The bottle shape will be proprietary and the brand name “Tani Magic” belongs to us.
We intend that the Tani Magic range of instant tea will be processed and bottled at our wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL).
The ability to produce instant tea from natural spring water without hot water is the state of the art technology we intend to possess including the combination of selected high-tech equipment (which we do not currently possess) and water source. Currently we do not possess the technology. We have entered into a Memorandum of Understanding on September 26, 2012 with Sky Joy Enterprise to provide this technology. A copy of the Memorandum of Understanding has been filed as an exhibit to our prospectus.
An outline of the process flow is described below.
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Water Treatment Plant, a fully automatic process
Imported natural spring water will be kept in a water storage tank with cooling jackets, insulation and stainless steel cladding. Tank capacity is 240,000 liters and is imported from China. We intend to have six water storage tanks, although there is no guarantee that we will be able to secure the water storage tanks.
The natural spring water will first pass through a filtration process consisting of a sand filter, diatomite filter, active carbon filter, sodium-ion filter and softening filter.
It will then process through the Reverse Osmosis (R.O.) System for a pure water treatment and for an ultraviolet sterilizer. A pH regulator is installed to regulate the level of pH and for dissolved oxygen Ozone generator and a mix tower will be used before the processed mineral water is stored at a specified storage tank.
Water Treatment Process Diagram
*currently we do not possess the equipment show above.
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Bottling Plant, a fully automatic process
A fully automatic blow molding machine will be installed to produce PET plastic bottles at a capacity of 8,000 bottles per hour. A special cap with a tea bag is made and provided separately.
A washing, filling and capping machine line will be installed for washing the cap, filling the empty bottles with the processed mineral water.
Blow Molding to Labeling and Packing Process Diagram
*currently we do not possess the equipment show above.
Labeling and Packing Process, a fully automatic process
After filling, the bottles will go through a sleeve labeling machine where a label will be placed on the bottles. An ink jet printer will print the batch number, date of production and expiration date. It will then move forward for packing using a wrapping and shrink machine. A Conveyor system will move the packed bottles in cases for warehouse storage.
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Blow Molding to Labeling and Packing Process Diagram
*currently we do not possess the equipment show above.
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Blow Molding Process Diagram
*currently we do not possess the equipment show above.
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* Microbrewery – shandy and lager beer
Using our natural spring water and US brewery knowledge from our suppliers, McKinnon International Inc. and Specific Mechanical Systems Ltd., we intend to brew and produce shandy and lager beer from malt and hops from Europe and fresh liquid yeast from the US and dried brewers yeast from Europe.
We intend to order five water storage tanks, each with a 24,000 liter storage capacity with Specific Mechanical Systems once we finalize the lease of our factory in Singapore. These water storage tanks will be fitted with cooling jackets, insulation and will be made of stainless steel. Glycol Chilling Systems are included. Mechanical Systems Ltd. will provide us with these water storage tanks. These tanks will also be able to be used for multiple purposes, that is for processing Tani Premium, Tani Magic and for brewing lager beers.
We also intend to order a complete 10 hectoliter (1,000 liter per batch) Brewing System from Specific Mechanical Systems Ltd once we have acquired the liquor license approval from the Singapore Inland Revenue, Customs Department. The complete set of equipment comprises of two vessels, steam heated brewhouse, mash/brew kettle/whirpool and lauter tun; 30 HL hot liquor tank; 2 units 20 HL unitank/fermenters; 2 units 20 HL horizontal “stacked’ lagering tanks; and 1 unit 20 HL bright tank (glycol cooled). This set of complete brewing systems will provide us an annual production capacity of 1,040 HL/year of lagers based on a 28 days fermentation/conditioning length (13 cycles/year) thus enabling us to have 104 brews/year which is 2 brews/week. McKinnon International will provide us all the brewing information to Specific Mechanical Systems to enable them to design and fabricate this system for us once we purchase the system. Currently, we only intend to work with McKinnon International.
Once we commence our brewery operations, we intend to have McKinnon International supply us the hops, malts and yeast as well as the estimated costing and the material mix for brewing lager beers. We have not yet entered into any formal agreements with McKinnon International as we are waiting to receive approval of our liquor license prior to commencing our brewing operations.
An outline of the brewing process is described below.
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Brewing Process
1. Weighing and milling of the malt: The kernels are cracked, maintaining coarseness of the husk while pulverizing the flour.
2. The milled malt is held in the grist hopper for transfer to the mash tun.
3. Mashing: Heating the cracked malt with water for programmed times at specified temperatures.
4. Lautering: Separating the liquid (sweet wort) from the solid matter.
5. Boiling the sweet wort with hops.
6. Cooling the hopped wort.
7. Primary Fermentation: The cold, hopped wort is held at 9°C for 7-9 days. The yeast converts the extract into alcohol and carbon dioxide.
8. Secondary fermentation: This aging process, also referred to as lagering, occurs at near freezing temperatures over a period of 4-6 weeks. By-products of the primary fermentation are gradually broken down. The beer is held under pressure and natural carbonation occurs.
9. Filtration: Any yeast remaining in suspension is removed.
10. Dispensing: The beer is tapped from serving vessels.
We intend to recruit and employ an experienced and qualified Brew Master responsible for the brew management and brewery operations. We also intend to send suitable qualified personnel to attend on-the-job brew training program conducted by our contracted brewery suppliers. This will enable us to achieve a high level of brew skill in the production of lager beers to innovate and meet the taste of the consumers.
We intend to operate the microbrewery operations on Contract Manufacturing (OEM) basis under private label and to brew for distribution and re-sale lager under our brand: “Nats5 Shandy”, “Nats5 Bitter” and “Nats5 Premium” to pubs and restaurants and to export to neighboring country, Malaysia. The brand “Nats5” belongs to us.
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The lager beers will be packed in beer keg of US standard in three types:
We do not make this keg. We purchase it. It is made of stainless steel 304 and contains 20 liters of lager beer.
We do not make this keg. We purchase it. It is made of stainless steel 304 and contains 30 liters of lager beer
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We do not make this keg. We purchase it. It is made of stainless steel 304 and contains 60 liters of lager beer.
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Sales and Marketing
NATfresh Website
Our website, www.natfreshbeverages.comis under construction. We anticipate that when we commence our operations, our website will enhance our sales and provide an advertisement opportunity for the range of NATfresh products we manufacture and distribute. The website will be linked to our wholly owned subsidiary in Singapore, NATfresh Productions (S) Pte Ltd.’s website: www.natfreshproductions.com.sg
We intend to have a dedicated team of information technology specialists who are responsible for the development of NATfresh Group websites, managing the consumer-facing website product – the internet sales and the infrastructure necessary to support regional coverage.
Once launched, both websites will go ‘Live’ and be available 24 hours a day, seven days a week allowing customer service to be provided to dealers and consumers to shop online from their home, office or even from their mobile phone.
Marketing
We have entered into an Agreement with Access Management Consulting and Marketing Pte Ltd., Singapore appointing them as our Sole Marketing Agent in the sourcing of buyers for our range of NATfresh beverage products in and outside of Singapore. This includes the provision of determination and formulation of strategy and marketing plan.
We would rely on our Sole Marketing Agent to source, select and interview a suitable qualified sole distributor for each category of our NATfresh range of beverage products worldwide including the distribution in the Singapore market – TaniNZ Premium, Tani Premium, Tani Magic Instant Black Tea, Tani Magic Instant Green Tea, Tani Magic Instant Rose Tea, Nats Shandy, Nats5 Bitter, and Nats5 Premium. This will enable us to save substantial upfront marketing costs.
Advertising
Our marketing strategy is to communicate directly with potential customers and emphasize our innovative quality beverages embodied in our corporate slogan, "For Health, Take Fresh” and “NATfresh Only…..”
In doing so, we intend to advertise our NATfresh range of beverage products on our websites, through internet, in print media, radio and television advertisement. We would also brand pubs and restaurants in Singapore with flyers and billboards.
We would supplement our advertising expenditure by leveraging cost-effective public relation opportunities and by being pro-active and creative in various promotions and campaigns once we have commenced official production. For example, we intend to participate as a sponsor to provide
Tani Premium and Tani Magic Instant Tea free to participants in various major marathons and running events in Singapore, for example, the TNF Singapore City Race, Energizer Singapore Night Trail, Craze Ultra 100 Miles, and Standard Chartered Marathon Singapore. This will enable us to gain public awareness of Tani Premium and Tani Magic Instant Tea in Singapore.
The combination of marketing and intended advertising activities will enable us to penetrate into the Singapore market as a ‘leader’ for Tani Magic Instant Tea through effective control of marketing costs, thus creating maximum public exposure for our NATfresh range of beverage products.
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Competition – Drinking Water
We face competition from other drinking water importers and distributors in Singapore. There are many types of water distributed in Singapore such as Artesian Well Water, Bottled Mineral Water, Cosmeceutical Water, Distilled Water, Fluoridated Water, Fruit-Flavored Water, Calcium Enhanced Water, Hydrating Water, Hyper-Caffeinated Water, Mint flavored Water, Oxygenated Water, Protein Enhanced Water, Purified Water, Spring Water, Sparkling Water and Vitamin Infused Water.
There are sixteen manufacturers, importers and distributors for this drinking water in Singapore, namely: Eurolatt Soft CBC, Filed Catering & Supplies, Global Marketing, Hasn Freight & Trading Sdn Bhd, Horizon Asia Resources, J.B. rupa & Co, Litat Import 7 Export, Nomura Trading Co., Mega Exports, Rock Consulting Service, Shaan Enterprises, TWE Singapore, Vilvot Trading, Wai-Kawa, and WM Trading Co.
Among the various types of drinking water, there are about eleven brands in distribution in Singapore such as Aqua, Aquarin, Dasani, Evian, Pere Ocean, Polar, Sparkle, Vallechaira, Volvic, Isklar and Spitzer. The majority of these brands originated from Malaysia and Indonesia are not natural spring water. These brands claimed to be natural mineral water. Those claiming as ‘Spring’ water were Aqua from Indonesia and Vallechiara from Italy.
Competition in this market revolves around price and quality. We intend to spearhead Tani Premium into the Singapore market, we claim Tani Premium is certified and true “Natural Spring Water” in compliance of Agri-Food & Veterinary Authority (AVA), Singapore claim requirements and bottled in Singapore – a product of Singapore. We also intend to price Tani Premium competitively in line with Vallechiara of Italy, Evian of France and Volvic of France.
Competition – Instant Tea
Traditionally, instant tea is made from hot water. In the global market today no one has distributed instant tea from un-boiled drinking water. We intend to launch Tani Magic Instant Tea, in initially three flavors – Black Tea, Green Tea and Rose Tea into Singapore market shortly after Tani Premium. We also intend to claim we are the ‘Pioneer’ for the Instant Tea from our natural spring water and to be the ‘Leader’ in the Singapore Instant Tea beverage market. We could compete in terms of technology, quality and reliability including the supporting claim – Product of Singapore. We would price Tani Magic reasonably within the means of all Singapore consumers.
Competition – Microbrewery
Beer has been popular for decades and in Singapore, Tiger beer manufactured and distributed by Asia Pacific Breweries Ltd. is the leading bottled, canned and drafted beer. In 2011, Tiger beer reached a market share of 54.1% followed by Carlsberg Beer of 32.3%. Sales of beers in 2011 for Lager is SGD1,675.9 million (99 million liters sold in 2011), growth rate from year 2006 to 2011 is 35.1%, and potential growth rate 7% to reach 108 million liters of beer (source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources).
There are nine microbreweries operating in Singapore, namely: Paulaner Brauhaus Singapore, Prague Microbrewery & Restaurant, RedDot brewhouse, Tawandang Microbrewery, The Pump Room, AdstraGold Microbrewery Bistro-Café, Archipelago Brewing, Asia Pacific Breweries, Brewerkz Microbrewery, and Jungle Beer (Singapore).
Among the nine microbreweries, Asia Pacific Breweries is the producer of Tiger beer and Jungle Beer produces draughts beer supplying to pubs and distributing bottled beer. The remaining seven microbreweries are restaurant microbreweries. None of them are operating on Contract Manufacturing (OEM) basis.
Competition in this market revolves around price, quality, reliability, promotional activities and dealers’ incentive. We intend to focus and concentrate on Contract Manufacturing (OEM) under private label to interested buyer such as pubs and restaurants and to spearhead Nats Shandy, Nats5 Bitter and Nats5 Premium for export to neighboring country, Malaysia. We would also spearhead Nats Shandy into the Singapore market. We would price our shandy and lager beer competitively along the line of Tiger draughts beer.
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Compliance with Government Regulations
We currently do not have substantial operations. However, once we do have substantial operations, our business will be affected by numerous laws and regulations. To ensure that our operations are conducted in full and substantial regulatory compliance, as part of our current internal procedures and policies, we have submitted a sample of our natural spring water to Agri-Food & Veterinary Authority (“AVA”), Singapore for compliance of import requirements and label claim requirements. On February 21, 2013, we were granted conditional approval by the AVA for the importation of our water. The AVA has informed us that although conditionally approved our water will be subject to inspection when important in. We are not required to obtain any special permits to export our products.
We would also ensure that our wholly owned subsidiary in Singapore, NATfresh Productions (S) Pte Ltd. is HACCP, ISO 22000 certified. We would also ensure that all licenses and permits such as a Brewery License, Sale Liquor License; Building and Factory Safety License, Fire Safety License, Environment and Sewage License and Import Permit, etc., are applied for and obtained before and after commencement of the Company’s business operations.
Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on business. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on our future operations.
Currently we do not have substantial operations and believe that once we do have substantial operations, we will comply in all material respects with applicable laws and regulations, and that the existence and enforcement of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in the beverage industry. We do not anticipate any material capital expenditures to comply with federal and state environmental requirements.
Employees
We currently do not have any employees other than our President and Chief Executive officer, who devotes approximately 30 hours per week to our operations. To assist him, we have entered into an agreement with Access Management Consulting and Marketing Pte Ltd. to provide accounting, finance, information technology (IT) and corporate secretarial services. We have a Sales and Marketing Manager employed under our subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL) to head the marketing and sales department for the distribution of Ayala’s Herbal Water and TaniNZ Premium in Singapore.Collectively, there are twelve persons managing the businesses of NPSPL.
Research and Development Expenditures
We have not incurred any expenditure on research and development since our inception.
We intend to conduct the following research and development activities in the future:
1. the establishment of a laboratory with fixtures and equipment;
2. from time to time carry out analysis of water from present sources and from other future source of water supplies to test water quality and suitability;
3. to carry out the test of various types of tea leaves and the water to produce instant tea as to taste, color and lead time to break tea catechin polyphenols and other mineral into water, thus innovation of new beverage products;
4. to examine the type of malt, hop and yeast for brewing of lager beers in relation to the percentage of alcohol, thus innovation of new lager to suit consumer taste, color and shelf life; and
5. to carry out random quality control test on daily or batch production of beverages that we will process.
Subsidiaries
We have a subsidiary company incorporated under the laws of the Republic of Singapore. It was incorporated on September 24, 2012 and is called: “NATfresh Productions (S) Pte Ltd”(“NPSPL”). Its main objective is to process, manufacture and bottle Tani Premium, Tani Magic Instant Black Tea, Tani Magic Instant Green Tea, Tani Magic Instant Rose Tea, Nats Shandy, Nats5 Bitter and Nats5 Premium lager beer. The products manufactured will be marketed and distributed in Singapore and exported to the neighboring country, Malaysia.While waiting for the factory to be established NPSPL will market and distribute Ayala’s Herbal Water and TaniNZ Premium.
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Patent and Trademarks
We do not own any patents but the following trademarks and logos belong to us:
Nats5
TaniNZ Premium
TANINZ PREMIUM
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Offices
Our business office is located at Williams Tower, 2800 Post Oak Boulevard, Suite 4100, Houston, TX 77056, United States of America. Our telephone number is + 1 832 390 2368. We do pay rent for our office. We have a lease agreement with Servcorp Houston, USA to provide this virtual office with secretarial services.
Legal Proceedings
We are not currently a party to any legal proceedings. Our address for service of process in Nevada is 4421 Edward Avenue, Las Vegas, Nevada 89108.
Market for Common Equity and Related Stockholder Matters
No Public Market for Common Stock
There is presently no public market for our common stock. We anticipate applying for quotation of our common stock on the over-the-counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.
Stockholders of Our Common Shares
As of the date of this registration statement, we have 55 registered shareholders.
Rule 144 Shares
The SEC has recently adopted amendments to Rule 144 which became effective on February 15, 2008 and applies to securities acquired both before and after that date. Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least six months is entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding the sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding the sale, are subject to additional restrictions. Such person is entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:
· 1% of the total number of securities of the same class then outstanding, which will equals 11,564,606 shares as of the date of this prospectus; or
· the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;
provided, in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
Such sales must also comply with the manner of sale and notice provisions of Rule 144.
As of the date of this prospectus none of our shares are eligible for resale pursuant to Rule 144.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders or to any other persons.
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Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
- We would not be able to pay our debts as they become due in the usual course of business; or
- Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
Plan of Operation
Our plan of operation for the next twelve months following the date of this prospectus is to implement all contracts we have entered into with the supply of machinery and equipment for our wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL) and to implement the NATfresh Natural Spring Water Contract Supplies Agreement and the Supply Agreement for the contract manufacturing of bottled TaniNZ Premium. We would also implement the Sole Distributorship Agreement NPSPL had for the distribution of Ayala’s Herbal Water. We would continue to source and negotiate for another water source for the supply of natural spring water and/or pure natural artesian water.
We plan to manufacture, promote, market and distribute NATfresh range of beverage products when the factory in Singapore is established and available. In the meantime, we plan to market and distribute TaniNZ Premium and Ayala’s Herbal Water in the Singapore market as well as to export to Malaysia. We have placed orders for TaniNZ Premium and Ayala’s Herbal Water of total 92,760 bottles for distribution in the Singapore market. We plan to distribute for the next twelve months 1,204,282 bottles mix in Singapore that will generate estimated sales revenue of $3,476,078. This will provide us an estimated net profit before taxation of $1,576,731. Our sales strategy for Singapore market is to distribute to supermarkets, convenience stores, café, hotels, restaurants and F&B outlets.
We expect to incur the following expenses in the next 12 months in connection with our business operations in accordance to our business modelfor Stages Two and Three:
Working Capital requirement $2,729,783
Purchase of manufacturing equipment, facilities and office equipment $1,654,329
As of May 29, 2013, we have cash on hand $1,132,883 to finance the Stage One operations, that is, import and distribute Ayala’s Herbal Water and TaniNZ Premium. We would need funding of $4,384,112 if we were to proceed with Stage Two and Stage Three operations thus making it available the factory with relevant plant and machinery and equipment.
Our planned expenditures for the next 12 months are approximately $4,384,112 derived as follows:
| Fixed Assets Cost | Next 12 Months ($) | |
| Plant and machinery | 1,032,300 | |
| Installation and commissioning | 100,000 | |
| Factory and office renovation | 100,000 | |
| Molds | 50,000 | |
| Microbrewery equipment | 372,029 | |
| Total Fixed Asset Costs | 1,654,329 | |
| Current Assets | ||
| Raw material and packing material inventory | 400,000 | |
| OEM inventory | 200,000 | |
| PET plastic materials/containers | 81,216 | |
| Natural spring water from Sri Lanka | 41,160 | |
| Liquor license fees and others | 10,000 | |
| Bank guarantee for liquor excise duty | 200,000 | |
| Factory lease deposit | 109,000 | |
| Total Current Assets | 1,041,376 | |
| General administration, sales and marketing overheads | 160,000 | |
| Factory overheads including rent | 580,600 | |
| Sales advertisement and promotion support overheads | 250,000 | |
| Other operating overheads | 697,807 | |
| Total Operating Overheads | 1,688,407 | |
| TOTAL WORKING CAPITAL | 2,729,783 | |
| TOTAL PROJECT COST | 4,384,112 | |
Our business model is divided into three stages:
Stage One:
Stage One business will operate without having to consider the funding from the sale of the offered securities.
We have on May 17, 2013 entered into a Supply Agreement with Deep Waters Trust, New Zealand for the contract manufacturing of pure natural artesian water processed and packed under our private label, TaniNZ Premium of two sizes, 500 ml and 1500 ml for distribution in Singapore and for export.
We could not produce Tani Premium from the Sri Lanka natural spring water because our plant is not ready nor we produce it under contract manufacturing. This is because our selling price may not that attractive enough to command a good profit margin if it is shown “Product of Sri Lanka”. We have sufficient cash on hand to run the TaniNZ premium operations. We expect to start distributing TaniNZ Premium in Singapore before end of July, 2013. Generation of sales revenue will begin from here.
At the same time under Stage one plan, our subsidiary company, NATfresh Productions (S) Pte Ltd (NPSPL) will start distributing Ayala’s Herbal Water in Singapore some time June, 2013.
Stage Two:
This stage calls for the availability of the factory in Singapore. We can have the factory with the required machinery and equipment (water treatment, bottling and packing including blow moulding) to produce Tani Premium and Tani Magic when we are able to sell the offered securities at 50% of $4,030,000 or $2,015,000. Therefore, financing the Tani Premium and Tani Magic operations is from the sale of the offered securities, earnings from sale of TaniNZ Premium operations and cash availability on hand at that time.
Stage Three:
This stage calls for the availability of a complete plant in Singapore for the production of Tani Premium, Tani Magic and Microbrewery operations. This would mean that in order to have the microbrewery operations, we need to have the entire offered securities sold, that is, $4,030,000 that must be raised. However, it is possible to incorporate the microbrewery operations if we sold the offered securities at 75% in which case the financing will have to come from the earnings from sale of TaniNZ Premium, Tani Premium, Tani Magic and cash availability on hand at that time.
We expect to sign the factory lease agreement when the Singapore Authority gives us the approval and the factory premise at FoodAxis is still available. Once signed, we shall order the water storage tanks and the machinery and equipment for the bottling of Tani Premium and Tani Magic. We wouldthenproceed to finalize the technology transfer for the instant tea with Sky Joy International Enterprise Limited and renovate the factory. We estimate the delivery lead time for the machinery and equipment would be 9 months from date of order. Installation and commissioningwould take a month beforecommercial production could commence.
We intend to start the initial stage of the research and development work and once the water storage tanks arrived and installed, extensive research and development on Tani Magic would begin. We plan to have Tani Magic in commercial production and distribution at the same time as we produce Tani Premium on or before 2014.
We plan to order the complete brewing machinery and equipment once the IPO subscription proceeds were fully subscribed or at least 75% of the offered securities are subscribedand our liquor license is approved. However, there is no guarantee that we will receive sufficient proceeds from the direct offering or that our liquor license will be approved. We estimate this will occur sometime June, 2014. The lead time for delivery is about 7 months. Therefore, installation and commissioning would occur sometime March 2014. Commercial production and distribution will be in June, 2014.
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Currently our monthly burn rate is approximately $187,559. However, this number is not an accurate reflection of our actual monthly cash requirement, as it will likely to be much higher once we commence operations. Currently we have enough cash on hand to sustain our Stage One – importation and trading operations, that is, distribution of TaniNZ Premium and Ayala’s Herbal Water. We will continue to maintain and sustain Stage One operations until we have received funding at least 50% from the sale of the offered securities whereby we then expand into Stage Two operations, that is, renting the factory premise and purchase of machinery and equipment for the production of Tani Premium and Tani Magic. If we could have 75% of the offered securities sold, we could possibly start the microbrewery operations which would then rely on the retained earnings generated from the sale of TaniNZ Premium, Tani Premium, Tani Magic and the cash availability at that time to finance the remaining 25% funding requirements. However, there is no guarantee that the offered securities will be sold nor the retained earnings could be achieved thus resulting uncertainty of the cash availability at that time.
We entered into a Manager Consulting Service Agreement on July 2, 2012 with Access Finance and Securities (NZ) Limited of Level 31, Vero Centre, 48 Shortland Street, Auckland 1140, New Zealand to provide management and consulting services related to the following: sourcing, evaluation and making recommendation suitable professionals or consultants for the ‘Team’ to take the Company go public; organzing, coordination and monitoring work schedule of the ‘Team’ members; consulting and determination of strategy for going public; advising and reviewing of business plan and S-1 including amendments thereof; advising on SEC comment letters and participation in the response strategy and provision of answer and to structure the offering shares; and attending meetings as from time to time required all in the capacity as the Advisor for the Issuer and Manager for the Issue. A copy of this agreement is filed as an exhibit to this registration statement. Pursuant to this agreement, we incurred $300,000 in general and administrative fees of $250,000 to be paid for in cash and the remaining expenses of $50,000 were paid for in our common shares.
We also entered a Prospectus Service Agreement on July 2, 2012 with Access Management Consulting and Marketing Pte Ltd. of Level 31, Six Battery Road #31-01, Singapore 049909 to provide us the drafting and preparation of a business plan for the Company and for the inclusion into the S-1; reviewing and advising on the modification and amendments of the business plan for the S-1; attending and providing answers to auditors’ enquires; discussion, consulting and taking instructions from the auditors, securities lawyers and Advisor to the Issuer to update, modify and amend the business plan and hence the S-1; provision of bookkeeping and accounting services including the preparation of financial statements in accordance to US GAAP and input the Financial Footnote and subsequent Event disclosure; provision of corporate secretarial services include the drafting and preparation of board and shareholders resolutions, board and shareholders meetings; and liaise with attorney in respect of trade mark application and maintaining trade mark report and register all in the capacity as a Consultant to the Company. A copy of this agreement is filed as an exhibit to this registration statement. According to this agreement, we incurred $800,000 in management fees. These fees are payable by cash of $650,000 and by the issuance of 150,000,000 common shares at a price of $0.001, valued at $150,000.
We have enough cash on hand to sustain our Stage One – importation and trading operations, that is, distribution of TaniNZ Premium and Ayala’s Herbal Water. We do not have sufficient cash to start the Stage Two – production of Tani Premium and Tani Magic operations nor could we start our Stage Three – Microbrewery operations. If we were to start the Stage Two operations we would need to obtain additional financing to operate our business while waiting for the sale of the Offered Securities to occur. If we are unable to raise the required funds we need to commence operations from our direct public offering, we will attempt to secure additional financing, whether through public or private equity or debt financing, arrangements with security holders or other sources to fund operations. However, there is no guarantee that we will be successful in raising additional financing.
Results of Operations for the Period Ending August 31, 2012
We have not generated any revenues from our inception on June 18, 2012 to August 31, 2012. We have not yet started distribution of our products . We incurred operating expenses in the amount of $533,031 for the period from our inception on June 18, 2012 to August 31, 2012. These operating expenses were comprised of general and administrative fees relating to our incorporation and business development.
We have not generated any revenues from our inception on June 18, 2012 to August 31, 2012. We have not yet started distribution of our products.
Expenses
We have incurred total operating expenses of $533,031 since our inception on June 18, 2012 to August 31, 2012. The major components of these expenses were comprised of consulting service fees of $506,433, professional fees of 19,910 and administrative expenses of $6,688.
Liquidity and Capital Resources
As of August 31, 2012, we had total current assets of $3,100,449, comprising entirely of cash. As of August 31, 2012, we had a working capital surplus of $2,976,973.
Cash Used in Operating Activities
Cash used in operating activities was $9,551 for 2012. We anticipate that cash used in operating activities will increase in 2013 as discussed under "Plan of Operations."
Cash from Financing Activities
We have funded our business to date primarily from sales of our common stock. From our inception, on June 18, 2012, to August 31, 2012, we have raised a total of $3,110,000 from private offerings of our securities.
We have not attained profitable operations and are dependent upon obtaining financing to pursue marketing and distribution activities. For these reasons, our independent auditor’s report contains a note that there is substantial doubt that we will be able to continue as a going concern.
Results of Operations for the Six Months Ending February 28, 2013 and from Inception to February 28, 2013
We have not generated any revenues from our inception on June 18, 2012 to February 28, 2013. We have not yet started distribution of our range of our various products. We incurred operating expenses in the amount of $1,792,171for the period from our inception on June 18, 2012 to February 28, 2013. These operating expenses were comprised of general and administrative fees relating to our incorporation and business development.
Revenues
We have not generated any revenues from our inception on June 18, 2012 to February 28, 2013. We have not yet started distribution of our various products.
Expenses
We have incurred operating expenses of $1,259,140 during the six months ended February 28, 2013 and total operating expenses of $1,792,171 since our inception on June 18, 2012 to February 28, 2013.
Liquidity and Capital Resources
As of February 28, 2013, we had total assets of $2,256,225. As of February 28, 2013, we had a working capital surplus of $1,082,607.
Cash Used in Operating Activities
Cash used in operating activities was $1,125,352 for the six months ended February 28, 2013 and $1,134,903 from our inception on June 18, 2012 to February 28, 2013.
Cash from Financing Activities
We used net cash of $135,000 in financing activities during the six months ended February 28, 2013 and have received net cash of $2,975,000 from our inception on June 18, 2012 to February 28, 2013.
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Changes In and Disagreements with Accountants
We have had no changes in or disagreements with our accountants.
Available Information
We have filed a registration statement on Form S-1 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company. We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving the company, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms.
The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. Our registration statement and the referenced exhibits can also be found on this site.
Directors, Executive Officers, Promoters and Control Persons
Our executive officer and directors and their ages as of the date of this prospectus is as follows:
Name of Director Age
Yi Lung Lin 61
Executive Officer:
Name of Officer Age Office
Yi Lung Lin 61 President, Chief Executive Officer, Secretary,
Treasurer, Chief Financial Officer, Principal Accounting Officer
Biographical information
Set forth below is a brief description of the background and business experience of our sole officer and director for the past five years.
Yi Lung Lin, Director and President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, Principal Accounting Officer
Since our inception on June 18, 2012, Yi Lung Lin has been our President, Chief Executive Officer, Secretary, Chief Financial Officer, Principal Accounting Officer and a member of the Board of Directors. Mr. Lin is a Chartered Marketer (UK), Chartered Manager (UK) cum Accountant (UK) and a banker by profession. He is also currently a final stage 4 student of the Nottingham Law School (UK), undergoing the LL.B (Hons) law degree course. He has been accepted to do the Master of Law (LLM) with the Thomas Jefferson School of Law, California, USA. After his professional accountancy studies, he has been employed by international organizations like SKF and Nestle as their accountant. He then ventured into the financial services businesses for more than 10 years. From July 1994 to November 2009, he became the duly appointed Trade Commissioner for the Republic of Vanuatu to head the Vanuatu Trade Office in New Zealand and then, to responsible for the Vanuatu Trade Office in Taiwan. Prior to his retirement as the Vanuatu Trade Commissioner, he has been appointed by the President of the Sanma Province, Vanuatu as the Ambassador. From June 2009 to present, Mr. Lin has been the chairman and managing director of Access Finance and Securities (NZ) Limited – (“AFS’), a financial institution duly incorporated under the laws of New Zealand providing offshore merchant banking/investment banking services in the area associated and/or incidental to capital markets – taking companies public in the US, mergers and acquisitions, securities placement agent service and underwriting securities. He is also the President and Managing Director of other companies under the AFS Group of Companies, namely, Access Equity Capital Management Corp, USA and Access Management Consulting and Marketing Pte Ltd, Singapore. He is also currently the President and CEO of Genufood Energy Enzymes Corp, a US public listed company whose shares are listed on the OTCBB and OTCQB exchange. Mr. Lin is highly knowledgeable and has many years of experience in marketing, accounting, finance and banking which make him an ideal candidate to serve as a director.
Independent Directors
The rules of the SEC require that we, because we are not listed on any national securities exchange, choose a definition of director “independence” for purposes of determining which directors are independent. We have chosen to follow the definition of independence as determined by the Marketplace Rules of The NASDAQ National Market (“NASDAQ”). Pursuant to NASDAQ’s definition, we do not have any independent directors.
Term of Office
Our officers and our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.
Significant Employees
There are no persons other than our sole officer and director above that is expected by us to make a significant contribution to our business.
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Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by or paid to our executive officer by any person for all services rendered in all capacities to us for the fiscal period from our inception on June 18, 2012 to August 31, 2012 (our fiscal year-end).
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FY 2010 |
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| Yi Lung Lin, President, CEO, | 2012
| None | None | None | None | None | None | None | None |
Stock Option Grants
We have not granted any stock options to the executive officers since our inception.
Employment Agreements
We do not have any employment agreements.
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Security Ownership of Certain Beneficial Owners and Management
The following tables set forth the ownership, as of the date of this Prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. The mailing address for all persons is Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002, United States of America.
| Number of Shares | Percentage |
| |
| Yi Lung Lin (1) | 210,000,000 | 18.2% |
|
| All directors and executive officers as a group [1person] | 210,000,000 | 18.2% |
|
| Toprise International Investment Ltd. (2) | 500,000,000 |
43.2% |
(1) Yi Lung Lin is our President. Mr. Lin’s beneficial ownership includes 10,000,000 shares held by Access Equity Capital Management Corp, 150,000,000 shares held by Access Management Consulting and Marketing Pte Ltd and 50,000,000 shares held by Access Finance and Securities (NZ) Limited, all companies which Mr. Lin has voting and investment control over.
(2) Kuei Hua Tsai has voting and investment control over shares held by Toprise International Investment Ltd.
This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based upon 1,156,460,641 shares of common stock outstanding as of February 28, 2013 .
Certain Relationships and Related Transactions
Our President and CEO, Yi Lung Lin, is the managing director of the two consulting companies that provides consulting services to us. During year ended August 31, 2012, we converted $200,000 owed to these two consulting companies into 200,000,000 common shares. We also owed a total $118,500 for consulting services to one of the consulting companies during the year ended August 31, 2012.
On July 9, 2012, we sold 10,000,000 shares of Common Stock at $0.001 per share to a company where our President, Yi Lung Lin , has control and voting rights. These shares were sold for cash consideration of $10,000.
On August 13, 2012, we sold 50,000,000 shares of Common Stock at $0.001 per share to the wife of our President, Yi Lung Lin , for cash consideration of $50,000.
On September 24, 2012, we purchased 1,666,667 common stock of Genufood Energy Enzymes Corp. (“GEEC”) at a price of $0.3 per share. Our President is also the President of GEEC.
We have entered into an Agreement with Access Management Consulting and Marketing Pte Ltd., Singapore (a company controlled by our President, Yi Lung Lin, appointing them as our Sole Marketing Agent in the sourcing of buyers for our range of NATfresh beverage products in and outside of Singapore.
We entered into a Manager Consulting Service Agreement on July 2, 2012 with Access Finance and Securities (NZ) Limited, a company controlled by our President, Yi Lung Lin, to provide management and consulting services related to the following: negotiate with professionals on behalf of us, manage parties related to the S-1 registration statement, and assist us in determining an effective future strategy. A copy of this agreement is filed as an exhibit to this registration statement. Pursuant to this agreement, we incurred $300,000 in general and administrative fees of $250,000 to be paid for in cash and the remaining expenses of $50,000 were paid for in our common shares.
We also entered a Prospectus Service Agreement on July 2, 2012 with Access Management Consulting and Marketing Pte Ltd., a company controlled by our President, Yi Lung Lin, to provide us the management services related to the engagement of professionals, preparation of business plan for the prospectus, liaison with the securities lawyer for the S-1, and assist us in the development and formulation of effective S-1 strategy. A copy of this agreement is filed as an exhibit to this registration statement. According to this agreement, we incurred $800,000 in management fees. These fees are payable by cash of $650,000 and by the issuance of 150,000,000 common shares at a price of $0.001, valued at $150,000.
Except as disclosed above, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
- Our sole promoter, Yi Lung Lin;
- Any relative or spouse of any of the foregoing persons who has the same house as such person;
- Immediate family members of directors, director nominees, executive officers and owners of 5% or more of our common stock.
We do not have a formal written policy for review and approval of transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K. Our board members are responsible for review, approval and ratification of “related-person transactions” between us and any related person. Under SEC rules, a related person is an officer, director, nominee for director or beneficial holder of more than 5% of any class of our voting securities since the beginning of the last fiscal year or an immediate family member of any of the foregoing.
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities
Our sole officer and director are indemnified as provided by the Nevada Revised Statutes and our Bylaws. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to court of appropriate jurisdiction. We will then be governed by the court's decision.
| 42 |
INDEX TO FINANCIAL STATEMENTS
|
| F-1 |
| Balance Sheet as of August 31, 2012 | F-2 |
| Statement of Operations for the period ended August 31, 2012 | F-3 |
| Statement of Stockholders’ Equity for the period from June 18, 2012 (Date of Inception) to August 31, 2012 | F-4 |
| Statement of Cash Flows for the period from June 18, 2012 (Date of Inception) to August 31, 2012 | F-5 |
| Notes to Financial Statements | F-6 |
43
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
NATfresh Beverages Corp.
(A Development Stage Company)
We have audited the accompanying balance sheet of NATfresh Beverages Corp. (a development stage company) as of August 31, 2012 and the related statement of operations, changes in stockholders' equity, and cash flows for period from inception (June 18, 2012) through August 31, 2012. 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 audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about 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, 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, the financial statements referred to above present fairly, in all material respects, the financial position of NATfresh Beverages Corp. as of August 31, 2012, and the results of its operations, changes in stockholders' equity and cash flows for the periods described above 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 2 to the financial statements, the Company had a cumulative net loss from operations of $533,027 as of August 31, 2012 and expects to incur additional losses in the near future. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
November 30, 2012
| F-1 |
| (A Development Stage Company) | |||
| BALANCE SHEET | |||
| August 31, 2012 | |||
|
|
|
|
|
| ASSETS | |||
| CURRENT ASSETS | |||
| Cash | $ | 3,100,449 | |
| TOTAL CURRENT ASSETS | 3,100,449 | ||
| TOTAL ASSETS | $ | 3,100,449 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| CURRENT LIABILITIES | |||
| Accounts payable and accrued liabilities – related party | $ | 123,476 | |
| TOTAL CURRENT LIABILITIES |
| 123,476 | |
| STOCKHOLDERS' EQUITY (DEFICIT) | |||
| Common stock, $0.001 par value; 1,000,000,000 shares authorized; 310,000,000 shares issued and outstanding as of August 31, 2012
| 310,000 | ||
| Additional paid-in capital |
| 200,000 | |
| Common stock payable |
|
| 3,000,000 |
| Deficit accumulated during the development stage |
| (533,027) | |
| TOTAL STOCKHOLDERS' EQUITY |
| 2,976,973 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 3,100,449 |
| The accompanying notes are an integral part of these financial statements. | |||
| F-2 |
| (A Development Stage Company) | ||
| STATEMENT OF OPERATIONS | ||
| For the period from inception (June 18, 2012) to August 31, 2012 | ||
| Period from inception | ||
| (June 18, 2012) to | ||
|
|
| August 31, 2012 |
| REVENUE | $ | - |
|
|
|
|
| GENERAL AND ADMINISTRATIVE EXPENSES | ||
| Administrative Expenses | $ | 6,688 |
|
|
|
|
|
|
|
|
|
|
|
|
| Consulting service fees | 506,433 | |
| Legal and professional | 19,910 | |
|
|
|
|
|
|
|
|
| Total expenses |
| 533,031 |
|
OTHER INCOME | ||
| Interest income | $ | 4 |
| Total income |
| 4 |
|
|
|
|
| NET LOSS | $ | (533,027) |
| BASIC AND DILUTED LOSS PER COMMON SHARE | $ | (0.00) |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||
|
| 272,162,162 | |
| | ||
| F-3 |
| (A Development Stage Company) | |||||||||||||
| STATEMENT OF STOCKHOLDERS' EQUITY | |||||||||||||
| From inception (June 18, 2012) to August 31, 2012 | |||||||||||||
|
| |||||||||||||
|
|
| ||||||||||||
|
|
|
| |||||||||||
| Common Stock |
|
|
|
| |||||||||
| Number of | Additional Paid-in |
| Common stock | Deficit accumulated during the development | |||||||||
|
| shares |
| Amount |
| Capital |
| payable |
| stage |
| Total | ||
| Balance at June 18, 2012 (inception) | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||
|
|
| ||||||||||||
| Common stock issued for services at $0.001 per share on July 2, 2012 | 200,000,000 | 200,000 | 200,000 |
| - | - | 400,000 | ||||||
|
|
| ||||||||||||
| Common stock issued for cash at $0.001 per share on July 9, 2012 | 10,000,000 | 10,000 | - |
| - | - | 10,000 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| Common stock issued for cash at $0.001 per share on July 12, 2012 | 50,000,000 | 50,000 | - |
| - | - | 50,000 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| Common stock issued for cash at $0.001 per share on August 13, 2012 | 50,000,000 |
| 50,000 |
| - |
| - |
| - |
| 50,000 | ||
|
|
|
| |||||||||||
| Common stock payable | - |
| - |
| - |
| 3,000,000 |
| - |
| 3,000,000 | ||
|
|
| ||||||||||||
| Net loss | - |
| - |
| - |
| - |
| (533,027) |
| (533,027) | ||
|
|
| ||||||||||||
| Balance, August 31, 2012 | 310,000,000 | $ | 310,000 | $ | 200,000 | $ | 3,000,000 | $ | (533,027) | $ | 2,976,973 | ||
|
|
| ||||||||||||
|
|
| The accompanying notes are an integral part of these financial statements | |||||||||||
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| F-4 |
| (A Development Stage Company) | |||
| STATEMENT OF CASH FLOWS | |||
| For the period from inception (June 18, 2012) to August 31, 2012 | |||
| Period from | |||
| inception | |||
| (June 18, 2012) to | |||
|
|
|
| August 31, 2012 |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net loss | $ | (533,027) | |
|
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
| Shares issued for consulting services expense |
| 400,000 |
| Change in operating assets and liabilities: | |||
| Increase in accounts payable and accrued expenses - related party | 123,476 | ||
| NET CASH USED IN OPERATING ACTIVITIES |
| (9,551) | |
|
| |||
| CASH FLOWS FROM INVESTING ACTIVITIES | $ | - | |
|
| |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Common stock payable | $ | 3,000,000 | |
| Proceeds from sale of common shares | 110,000 | ||
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 3,110,000 | |
|
|
|
| |
| NET INCREASE IN CASH | 3,100,449 | ||
| CASH, BEGINNING OF PERIOD |
| - | |
| CASH, END OF PERIOD | $ | 3,100,449 | |
The accompanying notes are an integral part of these financial statements.
| F-5 |
(A Development Stage Company) NOTES TO THE AUDITED FINANCIAL STATEMENTS August 31, 2012 NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION Organization and Business Operations The Company was incorporated in the State of Nevada as a for-profit Company on June 18, 2012 and established a fiscal year end of August 31. It is a company that will import and distribute natural spring water. At the same time, it focuses through its wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd., processed and bottled the natural spring water. The natural spring water is also used for the production of instant tea, and microbrewery operations for the production of lager beer. All manufactured goods will be marketed, promoted and distributed in the Republic of Singapore and exported to the neighboring country, Malaysia. The Company is the owner of the following brands or trademarks: NATfresh , Tani Premium and Tani Magic. Development Stage Activities The Company is currently in the development stage as defined under FASB ASC 915-10, "Development Stage Entities" and has as yet no products and with no significant revenues. All activities of the Company to date relate to its organization, initial funding, share issuances, and target markets identification and developing marketing plans, and equipment and factory premise sourcing. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going Concern The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it has operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit since inception of $533,027. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company funded its initial operations by way of issuing Founder’s shares. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these circumstances raise substantial doubt as to the Company’s ability to continue as a going concern.
Due to the start-up nature of the Company, the Company expects to incur additional losses in the immediate future. To-date, the Company’s cash flow requirements have been primarily met through advances from related parties and proceeds from sales of common stock.
The officers and directors have committed to advancing certain operating costs of the Company, including Legal, Audit, Transfer Agency and Edgarizing costs.
| F-6 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) | |
|
| |
| Cash and Cash Equivalents | |
|
For the purposes of the statements of cash flows, the Company considers highly liquid financial instruments purchased with a maturity date of three months or less to be cash equivalent. | |
| As at August 31, 2012 the Company held $3,100,449 in cash and zero in cash equivalents.
Foreign Currency Transactions
The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the fiscal year-end | |
|
Use of Estimates and Assumptions | |
|
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and | |
| Income Taxes | |
The Company follows the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement Net Loss per Share
| |
| F-7 |
| NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements | |
|
In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04.
In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical
In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This
In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting
In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting
The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statement. | |
| Stock-based Compensation | |
|
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly, no stock-based compensation has been recorded to date. | |
| Fair Value of Financial Instruments | |
|
On July 1, 2010, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on July 1, 2010, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
· Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
· Level 2 -Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
· Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use.
The following table presents assets and liabilities that are measured and recognized at fair value as of August 31, 2012 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains None $ - $ - $ - $ -)
| |
| NOTE 3 – CAPITAL STOCK | |
| The Company was initially authorized to issue an aggregate of 1,000,000,000 common shares with a par value of $0.001 per share (“Common Stock”). The Company filed an amendment to its articles on November 9, 2012 to increase the number of authorized common stock to 2,000,000,000. No preferred shares have been authorized or issued.
Each holder of Common Stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. | |
|
On July 2, 2012, 200,000,000 common shares were issued to two consultants for services directly related to the S-1 registration and offering. These shares were valued at $0.002 per share using fair market value on the date of the grant.
On July 9, 2012, the Company received stock subscriptions from a related party. 10,000,000 common shares were sold to one stockholder being the first founding member, at a purchase price of $0.001 per share for cash received of $10,000.
On July 12, 2012, the Company further received stock subscriptions from a stockholder being the second founder member. 50,000,000 common shares were sold to that stockholder at a purchase price of $0.001 per share for cash received of $50,000.
On August 13, 2012, the Company further received stock subscriptions from a related party being the third founder member. 50,000,000 common shares were sold to that related party at a purchase price of $0.001 per share for cash received of $50,000.
| |
F-8
| NOTE 4 – INCOME TAXES | |
| We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period. The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of August 31, 2012 is as follows: | |
|
August 31, 2012 | |
| Net operating loss carry forward Less: shares issued for services | (533,027) |
|
|
|
| Deferred tax assets | (46,559) |
| Less: valuation allowance | 46,559 |
| Net deferred tax asset | $ 0 |
| The net federal operating loss carry forward will expire between 2031 and 2032. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. | |
| NOTE 5 – RELATED PARTY TRANSACTIONS | |
| The President and CEO of the Company is the managing director of the two consulting companies that provides consulting services for the Company. During year ended August 31, 2012, the Company converted $200,000 owed to these two consulting companies into 200,000,000 common shares. The Company also owed a total $118,500 for consulting services to one of the consulting companies during the year ended August 31, 2012. The $118,500 owed for consulting services was aggregated with other professional fees and included in the line item Consulting Service Fees on the Statement of Operations.
On July 9, 2012, the Company sold 10,000,000 shares of Common Stock at $0.001 per share to a company where the President of the Company has control and voting rights. These shares were sold for cash consideration of $10,000.
On August 13, 2012, the Company sold 50,000,000 shares of Common Stock at $0.001 per share to a party who is the wife of the President of the Company for cash consideration of $50,000.
| |
NOTE 6 - COMMITMENTS
The Company leases a virtual office. The lease term is from June 18, 2012 through June 17, 2013 and renewable annually. Below is the future 5 year lease schedule:
2013 $3,660
2014 to 2017 -
NOTE 7 - SUBSEQUENT EVENTS
On September 2, 2012, the Company entered into an Agreement with Rajakaruna Springs (Pvt) Ltd., Sri Lanka for the supply of natural spring water.
On September 4, 2012, the Company established a wholly owned subsidiary company in Singapore called:
NATfresh Productions (S) Pte Ltd. for the bottling of the natural spring water, instant tea and microbrewery operations.
On September 7, 2012, the Company sold 546,040,000 shares of Common Stock at a price of $0.001 per share to an existing founder member, her family members and company owned by her for a total cash of $546,040.
On September 13, 2012, the Company sold 22,350,000 shares of Common Stock at a price of $0.002 per share for a total cash of $44,700.
On September 17, 2012, the Company sold 20,120,000 shares of Common Stock at a price of $0.0025 per share for a total cash of $50,300.
On September 17, 2012, the Company held its First Shareholders’ Special Meeting and by a 100% attendance, Special Resolutions was passed and approved the following:
(1) The resolution as in place of a Special Meeting of Shareholders of the Company;
(2) Appointment of Yi Lung Lin as the Sole Director of the Company for the time being;
(3) Appointment of Yi Lung Lin as the Company’s President, CEO, CFO, Treasurer, Secretary and Principal Accounting Officer;
(4) Disclosure of Director’s Interest of Yi Lung Lin;
(5) All contracts entered into with the Company where Yi Lung Lin has an interest;
F-9
NOTE 7 - SUBSEQUENT EVENTS (continued)
(6) Businesses of the Company;
(7) Purchase of 1,666,667 common stock of Genufood Energy Enzymes Corp (OTCBB:GFOO) at an IPO price of $0.30 per share total $500,000.00 from Taiwan Cell Energy Enzymes Corp;
(8) Incorporation and set-up of a subsidiary company in Singapore called: NATfresh Productions (S) Pte Ltd. and to invest in that company; and
(9) Acts of the Board of Directors since the Company’s inception approved and ratified.
On September 19, 2012, the Company made payments for the investment in NATfresh Productions (S) Pte Ltd. total $18,537.
On September 21, 2012, the Company sold 20,780,000 shares of Common Stock at a price of $0.003 per share for a total cash of $62,340.
On September 24, 2012, the Company made payment for the purchase of the 1,666,667 common stock of Genufood Energy Enzymes Corp for cash consideration of $500,000. The President and CEO of the Company is also the President and CEO of Genufood Energy Enzymes Corp.
On September 25, 2012, the Company sold 22,340,000 shares of Common Stock at a price of $0.0035 per share for a total cash of $78,190.
On September 26, 2012, the Company entered into a Memorandum of Understanding with Sky Joy International Enterprises Limited, Hong Kong for the technology transfer in respect of manufacturing of instant tea from natural spring water.
On October 1, 2012, the Company sold 20,240,000 shares of Common Stock at a price of $0.004 per share for a total cash of $80,960.
On October 4, 2012, the Company sold 21,720,000 shares of Common Stock at a price of $0.0045 per share for a total cash of $97,740.
On October 5, 2012, the Company entered into a Sole Marketing Agent Agreement with Access Management Consulting and Marketing Pte Ltd., Singapore to be the Company’s Sole Marketing Agent for all the Company’s products.
On October 10, 2012, the Company sold 79,000,000 shares of Common Stock at a price of $0.005 per share for a total cash of $395,000.
On October 15, 2012, the Company sold 10,000,000 shares of Common Stock at a price of $0.0055 per share for a total cash of $55,000.
On October 17, 2012, the Company sold 10,000,000 shares of Common Stock at a price of $0.006 per share for a total cash of $60,000.
On October 19, 2012, the Company sold 6,910,000 shares of Common Stock at a price of $0.0065 per share for a total cash of $44,915.
On October 22, 2012, the Company sold 6,100,000 shares of Common Stock at a price of $0.007 per share for a total cash of $42,700.
On October 24, 2012, the Company sold 6,000,000 shares of Common Stock at a price of $0.0075 per share for a total cash of $45,000.
On October 26, 2012, the Company sold 5,600,000 shares of Common Stock at a price of $0.008 per share for a total cash of $44,800.
On October 29, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.0085 per share for a total cash of $44,200.
On October 31, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.009 per share for a total cash of $46,800.
On November 5, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.0095 per share for a total cash of $49,400.
On November 5, 2012, the Company sold 5,000,000 shares of Common Stock at a price of $0.01 per share for a total cash of $50,000.
On November 8, 2012, the Company sold 5,000,000 shares of Common Stock at a price of $0.015 per share for a total cash of $75,000.
On November 9, 2012, the Company sold 3,200,000 shares of Common Stock at a price of $0.02 per share for a total cash of $64,000.
On November 13, 2012, the Company sold 3,027,000 shares of Common Stock at a price of $0.025 per share for a total cash of $75,675.
On November 15, 2012, the Company sold 2,003,000 shares of Common Stock at a price of $0.03 per share for a total cash of $60,090.
On November 19, 2012, the Company sold 2,150,000 shares of Common Stock at a price of $0.035 per share for a total cash of $75,250.
On November 23, 2012, the Company sold 2,030,000 shares of Common Stock at a price of $0.04 per share for a total cash of $81,200.
On November 27, 2012, the Company sold 2,000,000 shares of Common Stock at a price of $0.045 per share for a total cash of $90,000.
| F-10 |
|
|
|
| ||
| NATfresh BEVERAGES CORP. |
| |||
|
|
| |||
| (A Development Stage Company) |
| |||
|
| ||||
| FINANCIAL STATEMENTS |
| |||
|
| ||||
| For the quarter ended February 28, 2013 |
| |||
|
| ||||
|
| ||||
|
|
|
| ||
|
|
|
| ||
| BALANCE SHEETS AS OF FEBRUARY 28, 2013 (UNAUDITED), AND AUGUST 31, 2012 | F-11 |
|
| |
|
|
|
|
| |
| STATEMENTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED FEBRUARY 28, 2013 (UNAUDITED), AND PERIOD | F-12 |
|
| |
|
|
|
| ||
| STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM JUNE 18, 2012 (INCEPTION) THROUGH FEBRUARY 28, 2013 (UNAUDITED) | F-13 |
|
| |
|
|
|
| ||
| STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIOD ENDED FEBRUARY 28, 2013(UNAUDITED), AND PERIOD | F-14 |
|
| |
|
|
|
| ||
| NOTES TO FINANCIAL STATEMENTS (UNAUDITED) | F-15 |
|
| |
| 44 |
| NATFRESH BEVERAGES CORP. |
| (A Development Stage Company) |
|
|
| CONSOLIDATED BALANCE SHEETS |
| AS OF FEBRUARY 28, 2013, AND AUGUST 31, 2012 |
| February 28, 2013 | August 31, 2012 | ||||
| (Unaudited) | |||||
| ASSETS | |||||
| CURRENT ASSETS | |||||
| Cash | $ | 1,339,558 | $ | 3,100,449 | |
| TOTAL CURRENT ASSETS | 1,339,558 | 3,100,449 | |||
| OTHER ASSETS | |||||
| Investment in related parties | 916,667 | - | |||
| TOTAL ASSETS | $ | 2,256,225 | $ | 3,100,449 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable and accrued liabilities | $ | 75,713 | $ | - | |
| Accounts payable to related parties |
| 181,238 |
| 123,476 | |
| TOTAL CURRENT LIABILITIES | 256,951 | 123,476 | |||
| STOCKHOLDERS' EQUITY | |||||
| Authorized | |||||
| Common stock, $0.01 par value: 2,000,000,000 shares authorized: | |||||
| 1,156,460,641 and 310,000,000 shares issued and outstanding | |||||
| as of February 28, 2013 and August 31, 2012, respectively. | 1,156,461 | 310,000 | |||
| Additional paid-in capital | 2,635,206 | 200,000 | |||
| Common stock payable | - | 3,000,000 | |||
| Deficit accumulated during the development stage | (1,791,854) | (533,027) | |||
| Other comprehensive loss – cumulative translation adjustment | (539) | - | |||
| TOTAL STOCKHOLDERS' EQUITY | 1,999,274 | 2,976,973 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,256,225 | 3,100,449 | ||
The accompanying notes are an integral part of these financial statements
| F-11 |
| NATFRESH BEVERAGES CORP. |
| |||||||||||||||||||||||||
| (A Development Stage Company) |
| |||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2013, AND PERIODS FROM JUNE 18, 2012 (INCEPTION) THROUGH AUGUST 31, 2012 AND FEBRUARY 28, 2013 |
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| Six months Ended February 28, 2013 |
| June 18, 2012(Inception) Through August 31, 2012 |
| June 18, 2012 (Inception) Through February 28, 2013 (Unaudited) |
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| REVENUE | - | - | - |
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| GENERAL AND ADMINISTRATIVE EXPENSES |
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| Computer and internet | 177 | 114 | 291 |
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| Product design fees | 420 | 1,279 | 1,699 |
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| Bank services | 2,441 | 578 | 3,019 |
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| Meals and entertainment | 3,244 | 2,638 | 5,882 |
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| Consulting service fees | 1,001,107 | 506,433 | 1,507,540 |
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| Legal and professional | 179,781 | 19,910 | 199,691 |
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| Rent | 3,092 | 1,800 | 4,892 |
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| Travel | 18,435 | 279 | 18,714 |
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| Marketing & Advertising | 2,761 | - | 2,761 |
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| Miscellaneous Expense | 1,796 | - | 1,796 |
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| Telephone expenses | 24 | - | 24 |
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| Postage and Delivery | 302 | - | 302 |
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| Printing and Reproduction | 5 | - | 5 |
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| Director’s Allowance | 5,000 |
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| - |
| 5,000 |
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| Meeting Expenses –AGM | 40,555 |
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| - |
| 40,555 |
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| Total expenses | 1,259,140 | 533,031 | 1,792,171 |
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| Operating income (loss) | (1,259,140) | (533,031) | (1,792,171) |
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| Other income and expense |
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| Interest income | 326 | 4 | 330 |
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| Foreign currency exchange gain / (loss) | (13) |
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| - |
| (13) |
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| Net Income/(loss ) | (1,258,827) |
| $ (533,027) | $ (1,791,854) |
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| Other comprehensive loss | (539) | $ - | (539) |
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| Total comprehensive loss | (1,259,366) | $ (533,027) | $ (1,792,393) |
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| Weight average number of common shares outstanding-basic and diluted | 1,073,251,884 | 310,000,000 |
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| Net loss per share-basic and diluted | (0.00) |
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| (0.00) |
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The accompanying notes are an integral part of these financial statements
| F-12 |
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| NATfresh BEVERAGES CORP. |
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| (A Development Stage Company) |
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| STATEMENT OF STOCKHOLDERS' EQUITY |
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| FROM INCEPTION (JUNE 18, 2012) to FEBRUARY 28, 2013 (UNAUDITED) |
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| Common Stock |
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|
| Number of shares |
| Amount |
| Additional Paid-in Capital |
| Common stock payable |
| Deficit accumulated during the development stage |
| Foreign currency – translation adjustment |
| Total | ||||||||||||||||
| Balance at June 18, 2012 (inception) | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
| Common stock issued for service at $0.001 per share on July 2, 2012 | 200,000,000 |
| 200,000 |
| 200,000 |
| - | - |
| - | 400,000 | ||||||||||||||||||
| Common stock issued for cash at $0.001 per share on July 9, 2012
| 10,000,000 |
| 10,000 |
| - |
| - |
| - |
| - |
| 10,000 | ||||||||||||||||
| Common stock issued for cash at $0.001 per share on July 12, 2012
| 50,000,000 |
| 50,000 |
| - |
| - |
| - |
| - |
| 50,000 | ||||||||||||||||
| Common stock issued for cash at $0.001 per share on August 13, 2012
| 50,000,000 |
| 50,000 |
| - |
| - |
| - |
| - |
| 50,000 | ||||||||||||||||
| Common stock payable | - |
| - |
| - |
|
3,000,000 |
| - |
| - |
| 3,000,000 | ||||||||||||||||
| Net loss | - |
| - |
| - |
| - |
| (533,027) |
| - |
| (533,027) | ||||||||||||||||
| Balance, August 31, 2012 | 310,000,000 | $ | 310,000 | $ | 200,000 | $ | 3,000,000 | $ | (533,027) | $ | - | $ | 2,976,973 | ||||||||||||||||
| Common stock issued for common stock payable at $0.001 per share on September 7, 2012 | 546,040,000 |
| 546,040 |
| - |
| (546,040) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.002 per share on September 13, 2012 | 22,350,000 |
| 22,350 |
| 22,350 |
| (44,700) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0025 per share on September 17, 2012 | 20,120,000 |
| 20,120 |
| 30,180 |
| (50,300) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.003 per share on September 21, 2012 | 20,780,000 |
| 20,780 |
| 41,560 |
| (62,340) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0035 per share on September 25, 2012 | 22,340,000 |
| 22,340 |
| 55,850 |
| (78,190) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.004 per share on October 1, 2012 | 20,240,000 |
| 20,240 |
| 60,720 |
| (80,960) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0045 per share on October 4, 2012 | 21,720,000 |
| 21,720 |
| 76,020 |
| (97,740) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.005 per share on October 10, 2012 | 79,000,000 |
| 79,000 |
| 316,000 |
| (395,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0055 per share on October 15, 2012 | 10,000,000 |
| 10,000 |
| 45,000 |
| (55,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.006 per share on October 17, 2012 | 10,000,000 |
| 10,000 |
| 50,000 |
| (60,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0065 per share on October 19, 2012 | 6,910,000 |
| 6,910 |
| 38,005 |
| (44,915) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.007 per share on October 22, 2012 | 6,100,000 |
| 6,100 |
| 36,600 |
| (42,700) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0075 per share on October 24, 2012 | 6,000,000 |
| 6,000 |
| 39,000 |
| (45,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.008 per share on October 26, 2012 | 5,600,000 |
| 5,600 |
| 39,200 |
| (44,800) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0085 per share on October 29, 2012 | 5,200,000 |
| 5,200 |
| 39,000 |
| (44,200) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.009 per share on October 31, 2012 | 5,200,000 |
| 5,200 |
| 41,600 |
| (46,800) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.0095 per share on November 5, 2012 | 5,200,000 |
| 5,200 |
| 44,200 |
| (49,400) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.01 per share on November 5, 2012 | 5,000,000 |
| 5,000 |
| 45,000 |
| (50,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.015 per share on November 8, 2012 | 5,000,000 |
| 5,000 |
| 70,000 |
| (75,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.02 per share on November 9, 2012 | 3,200,000 |
| 3,200 |
| 60,800 |
| (64,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.025 per share on November 13, 2012 | 3,027,000 |
| 3,027 |
| 72,648 |
| (75,675) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.03 per share on November 15, 2012 | 2,003,000 |
| 2,003 |
| 58,087 |
| (60,090) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.035 per share on November 19, 2012 | 2,150,000 |
| 2,150 |
| 73,100 |
| (75,250) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.04 per share on November 23, 2012 | 2,030,000 |
| 2,030 |
| 79,170 |
| (81,200) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.045 per share on November 27, 2012 | 2,000,000 |
| 2,000 |
| 88,000 |
| (90,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.05 per share on November 28, 2012 | 2,000,000 |
| 2,000 |
| 98,000 |
| (100,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.055 per share on November 30, 2012 | 2,000,000 |
| 2,000 |
| 108,000 |
| (110,000) |
| - |
| - |
| - | ||||||||||||||||
| Cash paid for offering costs | - |
| - |
| (135,000) |
| - |
| - |
| - |
| (135,000) | ||||||||||||||||
| Net loss | - |
| - |
| - |
| - |
| (611,303) |
| - |
| (611,303) | ||||||||||||||||
| Foreign currency – translation adjustment | - |
| - |
| - |
| - |
| - |
| (2,244) |
| (2,244) | ||||||||||||||||
| Common stock issued for common stock payable at $0.06 per share on December 3, 2012 | 2,000,000 |
| 2,000 |
| 118,000 |
| (120,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.065 per share on December 5, 2012 | 1,200,000 |
| 1,200 |
| 76,800 |
| (78,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.07 per share on December 7, 2012 | 1,000,000 |
| 1,000 |
| 69,000 |
| (70,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.08 per share on December 10, 2012 | 400,000 |
| 400 |
| 31,600 |
| (32,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.09 per share on December 13, 2012 | 230,000 |
| 230 |
| 20,470 |
| (20,700) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.1 per share on December 14, 2012 | 100,000 |
| 100 |
| 9,900 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.15 per share on December 17, 2012 | 66,666 |
| 67 |
| 9,933 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.2 per share on December 19, 2012 | 50,000 |
| 50 |
| 9,950 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.25 per share on December 21, 2012 | 40,000 |
| 40 |
| 9,960 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.3 per share on December 28, 2012 | 33,333 |
| 33 |
| 9,967 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.35 per share on January 2, 2013 | 28,571 |
| 29 |
| 9,971 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.40 per share on January 4, 2013 | 25,000 |
| 25 |
| 9,975 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.45 per share on January 7, 2013 | 22,222 |
| 22 |
| 9,978 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.50 per share on January 9, 2013 | 20,000 |
| 20 |
| 9,980 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.55 per share on January 11, 2013 | 18,182 |
| 18 |
| 9,982 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Common stock issued for common stock payable at $0.60 per share on January 14, 2013 | 16,667 |
| 17 |
| 9,983 |
| (10,000) |
| - |
| - |
| - | ||||||||||||||||
| Net Loss | - |
| - |
| - |
| - |
| (647,524) |
| - |
| (647,524) | ||||||||||||||||
| Foreign currency - translation adjustment | - |
| - |
| - |
| - |
| - |
| 1,705 |
| 1,705 | ||||||||||||||||
| Mark to market of investment in related party | - |
| - |
| 416,667 |
| - |
| - |
| - |
| 416,667 | ||||||||||||||||
| Balance, February 28, 2013 | 1,156,460,641 |
| 1,156,461 |
| 2,635,206 |
| - |
| (1,791,854) |
| (539) |
| 1,999,274 | ||||||||||||||||
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The accompanying notes are an integral part of these financial statements | |||||||||||||||||||||||||||||
| F-13 |
NATFRESH BEVERAGES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
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| Six Months ended February 28, 2013 (Unaudited) | From Inception (June 18, 2012) to August 31, 2012 | From Inception (June 18, 2012) to February 28, 2013 (Unaudited) |
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| CASH FLOWS FROM OPERATING ACTIVITIES |
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| Net loss for the period |
$ |
(1,258,827) | $ | (533,027) | $ | (1,791,854) |
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| Adjustments to reconcile net loss to net cash used in operating activities: |
|
| - |
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| Shares issued for consulting services expense |
| - | 400,000 | 400,000 |
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| Change in operating assets and liabilities: |
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| |||||||||||||
| Accounts payable and accrued liabilities |
| 75,713 | - | 75,713 |
| |||||||||||
| Accounts payable to related parties |
| 57,762 |
| 123,476 |
| 181,238 |
| |||||||||
| NET CASH USED IN OPERATING ACTIVITES |
$ |
(1,125,352) | $ | (9,551) | $ | (1,134,903) |
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| CASH FLOWS FROM INVESTING ACTIVITIES |
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| Investment in related parties |
|
(500,000) | - | (500,000) |
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| NET CASH USED IN INVESTING ACTIVITIES |
$ |
(500,000) | $ | - | $ | (500,000) |
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| NET CASH FLOWS FROM FINANCING ACTIVITIES |
|
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| |||||||||||||
| Common stock payable |
| - |
| 3,000,000 |
| 3,000,000 |
| |||||||||
| Cash paid for equity offering cost |
| (135,000) |
| - |
| (135,000) |
| |||||||||
| Proceeds from sale of common shares |
| - | 110,000 | 110,000 |
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| NET CASH PROVIDED (USED IN) BY FINANCING ACTIVITIES |
$ |
(135,000) | $ | 3,110,000 | $ | 2,975,000 |
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| Other comprehensive loss - cumulative translation adjustment |
|
(539) | - | (539) |
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| NET INCREASE/(DECREASE) IN CASH |
|
(1,760,891) | 3,100,449 | 1,339,558 |
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| CASH, BEGINNING OF PERIOD |
|
3,100,449 | - | - |
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| CASH, END OF PERIOD |
|
1,339,558 | 3,100,449 | 1,339,558 |
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| Supplemental disclosure of cash flow information Non-cash financing activities: | ||||||||||||||||
| Interest | $ | - | - | - | ||||||||||||
| Mark to Market of Related Party Investment | $ | 416,667 | - | 416,667 | ||||||||||||
| Reduction of common stock payable | $ | 3,000,000 | - | 3,000,000 | ||||||||||||
The accompanying notes are an integral part of these financial statements
| F-14 |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and Business Operations
The Company was incorporated in the State of Nevada as a for-profit Company on June 18, 2012 and established a fiscal year end of August 31. It is a company that will import and distribute natural spring water. At the same time, it focuses through its wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd (NPSPL), processed and bottled the natural spring water. The natural spring water is also used for the production of instant tea, and microbrewery operations for the production of lager beer. All manufactured goods will be marketed, promoted and distributed in the Republic of Singapore and for export to the neighboring countries, Malaysia. The Company is the owner of the following brands or trademarks: NATfresh , Tani Premium and Tani Magic.
Development Stage Activities
The Company is currently in the development stage as defined under FASB ASC 915-10, “Development Stage Entities" and has as yet no products and with no significant revenues. All activities of the Company to date relate to its organization, initial funding, share issuances, and target markets identification and developing marketing plans, and equipment and factory premise sourcing.NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor it has operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit since inception of ($1,791,854). The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company funded its initial operations by way of issuing Founder’s shares. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these circumstances raise substantial doubt as to the Company’s ability to continue as a going concern.
Due to the start-up nature of the Company, the Company expects to incur additional losses in the immediate future. To-date, the Company’s cash flow requirements have been primarily met through advances from related parties and proceeds from sales of common stock.
The officers and directors have committed to advancing certain operating costs of the Company, including Legal, Audit, Transfer Agency and Edgarizing costs.
Basis of Presentation
The financial statements present the balance sheet, statements of operations as at February 28, 2013 and August 31, 2012, stockholders' equity (deficit) and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Foreign Currency Translation and Transactions
The reporting and functional currency of the Company is United States Dollar (“U.S. dollar”). The functional currency of NPSPL, a wholly owned subsidiary of the Company, is the Singapore Dollar (“SGD”).
For financial reporting purpose, the financial statements of the Company’s Singapore subsidiary, which are prepared using the SGD, are translated into the Company’s reporting currency, the U.S. dollar. Assets and liabilities are translated using the exchange rate on the balance sheet date, which was 0.8074 as of February 28, 2013. Revenue and expenses are translated using average exchange rates prevailing during each reporting period. The 0.8138 average exchange rate was used to translate revenues and expenses for the reporting period ended February, 2013. Stockholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the statements of operations.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers highly liquid financial instruments purchased with a maturity date of three months or less to be cash equivalent.
As at February 28, 2013 and August 31, 2012 the Company held $1,339,558 and 3,100,449 respectively in cash and zero in cash equivalents.
| F-15 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company follows the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Recent Accounting Pronouncements
In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.
In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.
The Company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statement.
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly, no stock-based compensation has been recorded to date.
Fair Value of Financial Instruments
On July 1, 2010, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on July 1, 2010, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
· Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
· Level 2 -Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
· Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use.
The following table presents assets and liabilities that are measured and recognized at fair value as of February 28, 2013 on a recurring and non-recurring basis:
| Gains | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | (Losses) | ||||||||||||
| Trading account securities | $ | 916,667 | $ | - | $ | - | $ | - | ||||||||
The Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the management of the Company has the intention to sell the instruments in the near future.
| F-16 |
The Company was initially authorized to issue an aggregate of 1,000,000,000 common shares with a par value of $0.001 per share (“Common Stock”). The Company filed an amendment to its articles on November 9, 2012 to increase the number of authorized common stock to 2,000,000,000. No preferred shares have been authorized or issued.
Each holder of Common Stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights.
As of November 30, 2012, the Company has issued a total of 1,151,210,000 common shares to forty stockholders. 656,040,000 out of 1,151,210,000 were issued to founding members.
On July 2, 2012, 200,000,000 common shares were issued to two consultants for services directly related to the S-1 registration and offering. These shares were valued at $0.001 per share using fair market value on the date of the grant.
On July 9, 2012, the Company received stock subscriptions from a related party. 10,000,000 common shares were sold to one stockholder being the first founding member, at a purchase price of $0.001 per share for cash received of $10,000.
On July 12, 2012, the Company further received stock subscriptions from a stockholder being the second founder member. 50,000,000 common shares were sold to that stockholder at a purchase price of $0.001 per share for cash received of $50,000.
On August 13, 2012, the Company further received stock subscriptions from a related party being the third founder member. 50,000,000 common shares were sold to that related party at a purchase price of $0.001 per share for cash received of $50,000.
As of August 31, 2012, the Company has $3,000,000 common stock payable held under Trust.
During three months ended November 30, 2012, the Company issued 841,210,000 shares to thirty five stockholders at prices between $0.001 and 0.055 per share. These shares were issued with the corresponding reduction in common stock payable as the cash was received prior to August 31, 2012.
During three months ended November 30, 2012, the Company paid a total of $135,000 cash to a consultant for offering costs associated with the $3,000,000 common stock payable referred to above.
As of November 30, 2012, the Company has $430,700 common stock payable held under Trust.
During three months ended February 28, 2013, the Company issued 5,250,641 shares to sixteen stockholders at prices between $0.06 and 0.6 per share. These shares were issued with the corresponding reduction in common stock payable as the cash was received prior to August 31, 2012.
NOTE 4 – INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of February 28, 2013 and August 31, 2012 is as follows:
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| February 28, 2013 | August 31, 2012 |
| Net operating loss carry forward | (1,791,854) | (533,027) |
| Less: shares issued for services | - | 400,000 |
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| (133,027) |
| Effective tax rate | 35% | 35% |
| Deferred tax assets | (627,149) | (46,559) |
| Less: valuation allowance | 627,149 | 46,559 |
| Net deferred tax asset | $ 0 | $ 0 |
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The net federal operating loss carry forward will expire between 2031 and 2032. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
| F-17 |
NOTE 5 – RELATED PARTY TRANSACTIONS
The President and CEO of the Company is the managing director of the two consulting companies that provide consulting services for the Company.
On July 9, 2012, the Company sold 10,000,000 shares of Common Stock at $0.001 per share to a company where the President of the Company has control and voting rights. These shares were sold for cash consideration of $10,000.
On August 13, 2012, the Company sold 50,000,000 shares of Common Stock at $0.001 per share to a party who is the wife of the President of the Company for cash consideration of $50,000.
NOTE 6 – INVESTMENT IN RELATED PARTY
On September 24, 2012, the Company purchased 1,666,667 common stock of Genufood Energy Enzymes Corp (GEEC) at a price of $0.3 per share, representing less than 1% of the total outstanding shares of GEEC. The Company’s President is also the President of GEEC. The market value was $0.55 per share as of February 28, 2013. The Company recognized mark-to-market of $416,667 for its investment in GEEC.
NOTE 7 - COMMITMENTS
The Company leases a virtual office. The lease term is from June 18, 2012 through June 17, 2013 and renewable annually. Below is the future 5 year lease schedule:
2013 $3,660
2014 to 2017 -
NOTE 8 - SUBSEQUENT EVENTS
On April 8, 2013, Natfresh Productions (S) Pte Ltd (NPSPL) entered into a Distribution Agreement with Herbal Water Inc., United States of America whereby NPSPL will be the Sole Distributor for their range of herbal water in Singapore, Malaysia, Indonesia, Taiwan, Hong Kong, Macau, Thailand and Sri Lanka.
On May 17, 2013, the Company has entered into an Agreement with Deep Waters Trust, New Zealand for the contract manufacturing of Pure Natural Artesian Water under our own private label – TaniNZ Premium for distribution in Singapore.
| F-18 |
Part II
Information Not Required In the Prospectus
Other Expenses of Issuance and Distribution
The estimated costs of this offering are as follows:
| Securities and Exchange Commission registration fee | $ | 1,351.83 |
| Accounting fees and expenses | $ | 10,000.00 |
| Legal fees and expenses | $ | 50,000.00 |
| Edgar filing fees | $ | 3,000.00 |
| Miscellaneous expenses | $ | 800,648.17 |
| Total | $ | 865,000.00 |
* All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale.
Indemnification of Directors and Officers
Our sole officer and director is indemnified as provided by the Nevada Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are:
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| (1) | a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest; |
| (2) | a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful); | |
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| (3) | a transaction from which the director derived an improper personal profit; and |
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| (4) | willful misconduct. |
| 45 |
Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:
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| (1) | such indemnification is expressly required to be made by law; |
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| (2) | the proceeding was authorized by our Board of Directors; |
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| (3) | such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or |
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| (4) | such indemnification is required to be made pursuant to the bylaws. |
Our bylaws provide that we will advance all expenses incurred to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advance of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision- making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to our best interests.
Recent Sales of Unregistered Securities
On July 2, 2012, 200,000,000 common shares were issued to two consultants for services directly related to the S-1 registration and offering. These shares were issued at $0.002 per share using fair market value on the date of grant.
On July 9, 2012, the Company received stock subscriptions from a related party. 10,000,000 common shares were sold to one stockholder being the first founder member, at a purchase price of $0.001 per share for cash received of $10,000.
On July 12, 2012, the Company further received stock subscriptions from a stockholder being the second founder member. 50,000,000 common shares were sold to that stockholder at a purchase price of $0.001 per share for cash received of $50,000.
On August 13, 2012, the Company further received stock subscriptions from a related party being the third founder member. 50,000,000 common shares were sold to that related party at a purchase price of $0.001 per share for cash received of $50,000.
On September 7, 2012, the Company sold 546,040,000 shares of Common Stock at a price of $0.001 per share to an existing founder member, her family members and company owned by her for a total cash of $546,040.
On September 13, 2012, the Company sold 22,350,000 shares of Common Stock at a price of $0.002 per share for a total cash of $44,700.00.
On September 17, 2012, the Company sold 20,120,000 shares of Common Stock at a price of $0.0025 per share for a total cash of $50,300.
On September 21, 2012, the Company sold 20,780,000 shares of Common Stock at a price of $0.003 per share for a total cash of $62,340.
On September 25, 2012, the Company sold 22,340,000 shares of Common Stock at a price of $0.0035 per share for a total cash of $78,190.
On October 1, 2012, the Company sold 20,240,000 shares of Common Stock at a price of $0.004 per share for a total cash of $80,960.
On October 4, 2012, the Company sold 21,720,000 shares of Common Stock at a price of $0.0045 per share for a total cash of $97,740.
On October 10, 2012, the Company sold 79,000,000 shares of Common Stock at a price of $0.005 per share for a total cash of $395,000.
On October 15, 2012, the Company sold 10,000,000 shares of Common Stock at a price of $0.0055 per share for a total cash of $55,000.
On October 17, 2012, the Company sold 10,000,000 shares of Common Stock at a price of $0.006 per share for a total cash of $60,000.
On October 19, 2012, the Company sold 6,910,000 shares of Common Stock at a price of $0.0065 per share for a total cash of $44,915.
On October 22, 2012, the Company sold 6,100,000 shares of Common Stock at a price of $0.007 per share for a total cash of $42,700.
On October 24, 2012, the Company sold 6,000,000 shares of Common Stock at a price of $0.0075 per share for a total cash of $45,000.
On October 26, 2012, the Company sold 5,600,000 shares of Common Stock at a price of $0.008 per share for a total cash of $44,800.
On October 29, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.0085 per share for a total cash of $44,200.
On October 31, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.009 per share for a total cash of $46,800.
On November 5, 2012, the Company sold 5,200,000 shares of Common Stock at a price of $0.0095 per share for a total cash of $49,400.
On November 5, 2012, the Company sold 5,000,000 shares of Common Stock at a price of $0.01 per share for a total cash of $50,000.
On November 8, 2012, the Company sold 5,000,000 shares of Common Stock at a price of $0.015 per share for a total cash of $75,000.
On November 9, 2012, the Company sold 3,200,000 shares of Common Stock at a price of $0.02 per share for a total cash of $64,000.
On November 13, 2012, the Company sold 3,027,000 shares of Common Stock at a price of $0.025 per share for a total cash of $75,675.
On November 15, 2012, the Company sold 2,003,000 shares of Common Stock at a price of $0.03 per share for a total cash of $60,090.
On November 19, 2012, the Company sold 2,150,000 shares of Common Stock at a price of $0.035 per share for a total cash of $75,250.
On November 23, 2012, the Company sold 2,030,000 shares of Common Stock at a price of $0.04 per share for a total cash of $81,200.
On November 27, 2012, the Company sold 2,000,000 shares of Common Stock at a price of $0.045 per share for a total cash of $90,000.
On November 28, 2012, the Company sold 2,000,000 shares of Common Stock at a price of $0.05 per share for a total cash of $100,000.
On November 30, 2012, the Company sold 2,000,000 shares of Common Stock at a price of $0.055 per share for a total cash of $100,000.
On December 3, 2012, the Company sold 2,000,000 shares of Common Stock at a price of $0.06 per share for a total cash of $120,000.
On December 5, 2012, the Company sold 1,200,000 shares of Common Stock at a price of $0.065 per share for a total cash of $78,000.
On December 7, 2012, the Company sold 1,000,000 shares of Common Stock at a price of $0.07 per share for a total cash of $70,000.
On December 10, 2012, the Company sold 400,000 shares of Common Stock at a price of $0.08 per share for a total cash of $32,000.
On December 13, 2012, the Company sold 230,000 shares of Common Stock at a price of $0.09 per share for a total cash of $20,700.
On December 14, 2012, the Company sold 100,000 shares of Common Stock at a price of $0.1 per share for a total cash of $10,000.
On December 17, 2012, the Company sold 66,666 shares of Common Stock at a price of $0.15 per share for a total cash of $10,000.
On December 19, 2012, the Company sold 50,000 shares of Common Stock at a price of $0.2 per share for a total cash of $10,000.
On December 21, 2012, the Company sold 40,000 shares of Common Stock at a price of $0.25 per share for a total cash of $10,000.
On December 28, 2012, the Company sold 33,333 shares of Common Stock at a price of $0.3 per share for a total cash of $10,000.
On January 2, 2012, the Company sold 28,571 shares of Common Stock at a price of $0.35 per share for a total cash of $10,000.
On January 4, 2012, the Company sold 25,000 shares of Common Stock at a price of $0.4 per share for a total cash of $10,000.
On January 7, 2012, the Company sold 22,222 shares of Common Stock at a price of $0.45 per share for a total cash of $10,000.
On January 9, 2012, the Company sold 20,000 shares of Common Stock at a price of $0.5 per share for a total cash of $10,000.
On January 11, 2012, the Company sold 18,182 shares of Common Stock at a price of $0.55 per share for a total cash of $10,000.
On January 14, 2012, the Company sold 16,667 shares of Common Stock at a price of $0.6 per share for a total cash of $10,000.
All of the above shares were issued pursuant to private placements that were exempt from registration provided under Regulation S of the Securities Act of 1933. Our reliance upon the exemption under Rule 903 of Regulation S of the Securities Act was based on the fact that the sale of the securities was completed in an "offshore transaction,” as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. Each investor was not a US person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a US person.
| 46 |
Exhibits
| Exhibit Number | Description | |
| 3.1* | Articles of Incorporation | |
| 3.2* | Certificate of Amendment | |
| 3.3* | By-Laws | |
| 5.1* | Legal Opinion of Dean Law Corp., with consent to use | |
| 10.1* | Manager Consulting Service Agreement, dated July 2, 2012, with Access Finance and Securities (NZ) | |
| 10.2* | Prospectus Service Agreement, dated July 2, 2012, with Access Management Consulting and Marketing Pte Ltd. | |
| 10.3* | Memorandum of Understanding, dated September 26, 2012, with Sky Joy International Enterprise Limited | |
| 10.4* | Contract Supplies Agreement, dated September 2, 2012, with Rajakaruna Mineral Springs (PVT) Ltd. | |
| 21.1* | List of Subsidiaries | |
| 23.1 | Consent of M&K CPAS, PLLC | |
| 99.1* | Form of Subscription Agreement | |
* Previously Filed.
The undersigned registrant hereby undertakes:
| 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: | ||
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| (a) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
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| (b) | To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; Notwithstanding the forgoing, 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 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 the 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. |
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| (c) | To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement. |
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| 2. That, for the purpose of determining any liability under the | ||
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| Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
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| 3. To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering. | ||
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| 4. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to officers, directors, and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted our director, officer, or other controlling person in connection with the securities registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the final adjudication of such issue. | |
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| 5. 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 430(B) 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 referenced 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. | ||
| 6. 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. | ||
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.
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Signatures
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on the 4th day of June, 2013
Natfresh Beverages Corp.
By:/s/ Yi Lung Lin
Yi Lung Lin
President, Chief Executive Officer,
Secretary, Treasurer, Principal
Accounting Officer, Chief
Financial Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated.
| SIGNATURE | CAPACITY IN WHICH SIGNED | DATE |
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| /s/ Yi Lung Lin | President, Chief Executive | June 4, 2013 |
| Yi Lung Lin | Officer, Secretary, Treasurer, |
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| Principal Financial Officer |
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| and Director |
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| 49 |
