kore10-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10-K
þ ANNUAL REPORT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year
ended December 31,
2008
o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition
period from ___________ to ___________.
Commission file
number 333-153243
Kore
Nutrition, Inc.
(Exact name of
registrant as specified in its charter)
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NEVADA
|
|
N/A
|
|
(State or
Other Jurisdiction of Incorporation of Organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
Suite
200, 736 Granville Street
Vancouver,
BC V6Z 1G3
(Address
of principal executive
offices)
|
(604) 685
6472
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Exchange Act: None
Securities
registered under Section 12(g) of the Exchange Act: Common
Stock, $0.001 par value
Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes o No
þ
Indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes þ No
o
Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(§ 229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. þ
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definition of
“large accelerated filer and “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated
filer o Accelerated
filer o Non-accelerated
filer o Smaller reporting company
þ
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act) Yes o No þ
Aggregate market
value of the voting and non-voting stock of the registrant held by
non-affiliates of the registrant as of April 14, 2009: $59,889.80 (Non-affiliate
holdings of 6,294,490 common shares without quotation price).
As
of April 14, 2009 the
registrant’s outstanding stock consisted of 14,294,490 common
shares.
KORE
NUTRITION, INC.
TABLE
OF CONTENTS
PART
I
Forward-looking
Statements
This annual report
contains forward-looking statements. These statements relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.
Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable laws, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements so as to conform these statements to actual results.
As used in this
annual report, the terms "we", "us", "our", “the Company”, and "Kore Nutrition"
mean Kore Nutrition, Inc., unless otherwise indicated.
All dollar amounts
refer to US dollars unless otherwise indicated.
Overview
We
are a for-profit Nevada Corporation formed on October 13, 2006, and registered
as an extra-provincial corporation in the province of British Columbia, Canada
on January 3, 2007. We are a development stage company whose goal is to
develop a brand and line of healthy packaged snacks. Our business
model focuses on developing niche snack products to cater to a broad spectrum of
health conscious consumers. We do not have any subsidiaries. Our
principal office is located at 200-736, Granville St., Vancouver, BC V6Z
1G3. Our telephone number is (604) 662-3910. Our fiscal year end is
December 31.
We
have incurred losses since our inception. We rely upon the sale of our
securities and shareholder loans to fund our operations. We have generated
limited revenues of $12,525 from the sale of products from October 13, 2006
(Date of Inception) through December 31, 2008. To date, our sales
have been derived from the re-sale of products produced by third parties, which
we have undertaken to secure retail channels for the products that we intend to
self-produce.
Our management has
identified a growing market for natural, flavorful, healthful and convenient
packaged snack food. To access this market, we are developing ready
to eat packaged snacks which we intend will meet or exceed the highest nutrition
and quality standards for packaged snack products currently available to
consumers. We intend for our products to be available at convenience
stores, fast food outlets, small to large retail grocery stores, and vending
machines.
The key pillars of
our business strategy to create customer loyalty are i) creating products of
superior quality and taste; ii) creating products that provide
superior nutrition and health benefits to assist consumers in maintaining
healthy, balanced eating habits; and iii) creating a recognizable and trusted
brand name.
Business
Developments
During our fiscal
year ended December 31, 2008, the following developments occurred:
On
January 18, 2008, we entered into a consulting agreement with AVRO Capital
Resources whereby AVRO assisted us to complete the public listing of our
company. The services provided included assisting us to complete our
registration statement on Form S-1 and to obtain our trading
symbol. In accordance with the agreement, we have paid $45,000 to
AVRO in consideration of the services.
Our
Products
We
are developing ready to eat packaged snack foods and light meals which seek to
meet or exceed the highest industry standards for taste and
nutrition. We intend for our products to meet the specifications of a
40-30-30 (carbohydrate/protein/fat) ingredient ratio, and to meet or exceed the
requirements of popular “heart smart” or “healthy heart” type nutritional
guidelines.
Our planned product
line includes frozen and non-frozen smoothies and beverage mixes, frozen and non
frozen baked products (waffles, loaves, cookies, bars), frozen and non-frozen
veggie snacks, frozen parfait-type deserts and frozen light
meals.
Our planned
products will be made from high quality natural ingredients and with the minimum
quantity of preservatives allowed by law. The product line will be
designed to target a very broad spectrum of consumers and to accommodate a range
of individual consumer nutritional requirements with respect to protein content,
vitamin content and energy content.
Preparation of our
products will be outsourced to well-qualified producers in order to optimize
production efficiency and to allow our management to focus on product
development, sales and marketing. We intend to design and use
functional, environmentally responsible packaging for all products.
In
fiscal 2008, we completed nutritional analysis on the following original
products:
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·
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WPC (whey
protein concentrate) Breakfast
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Banana
Chocolate 40-30-30 Muffin
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Healthy-Heart
Granola Bar
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Recipe development
of our 40-30-30 Cheesecakes and Banana Chocolate 40-30-30 Muffin is complete and
we intend to develop packaging for those products in fiscal 2009. We
also intend to continue recipe
and packaging development of other selected products on an ongoing basis in
fiscal 2009.
Marketing
and Distribution
Once we have
completed recipe and package development of our initial product line, we
intend to initiate a retail trial of our products in Vancouver, British
Columbia. Based on the results of our trial, we will continue with
additional product research and development as required and seek to expand our
distribution across Canada and the United States. In fiscal 2009,
subject to our ability to raise sufficient capital, we intend to begin retail
trial of our 40-30-30 Cheesecakes and our Banana Chocolate 40-30-30
Muffin.
We
will focus our marketing efforts on the following three principal retailer
categories:
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·
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Tier one:
small specialty stores; cafes, delis and local convenience stores;
regional and national coffee shop chains; cafeterias (located in corporate
headquarters, hospitals, and schools etc); food courts; athletic and
community organizations; and online retailers;
|
|
·
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Tier two: specialized
(gourmet) grocery stores; regional grocery store chains, regional and
national chain convenience stores and gas stations;
and
|
|
·
|
Tier three:
large chain grocery stores and vending
machines.
|
We
do not anticipate requiring the services of outside distributors for our
products during the early stages of our development; we intend to
self-distribute during that time. If our market share becomes large
enough to require the services of outside distributors, we will seek to engage
the services of regional and national level food and beverage distributors as
necessary.
The nominal sales
revenues that we have generated to date have been derived from the re-sale of
products produced by third parties. We have acted as a re-seller of
these products in order to establish retail channels for our future
products.
Competition
We
are currently in the development stage and we have generated only nominal
revenues. The pre-packaged food-product business is highly competitive.
Numerous brands and products compete for shelf space and sales, with
competition based primarily on product quality, convenience, price, trade
promotion, consumer promotion, brand recognition and loyalty, customer service,
advertising and promotion and the ability to identify and satisfy emerging
consumer preferences. We will compete with a significant number of companies of
varying sizes, including divisions or subsidiaries of larger companies.
Many of these competitors have multiple product lines, substantially
greater financial and other resources available to them and may have lower fixed
costs. There is no assurance that we will be able to compete successfully
with these companies. If we establish a market share, competitive
pressures or other factors could cause us to lose market share, which may
require us to lower prices, increase marketing and advertising expenditures, or
increase the use of discounting or promotional campaigns, each of which would
adversely affect our margins and could result in a decrease in our operating
results and profitability.
Production
Costs
Our product
production costs are subject to a number of factors outside of our control such
as the cost of raw food ingredients, packaging, and labor. The cost
of the food ingredients we use are subject to fluctuations in price attributable
to, among other things, changes in crop size and government-sponsored
agricultural and livestock programs. The cost of manufacturing our
products is subject to fluctuations in labor costs and to fluctuations in the
demand for the services of food manufacturers. The sales prices to
our customers are a delivered price. Therefore, pending an increase in our
selling price, we have to absorb higher prices for ingredients, packaging
materials and freight. Changes in these prices have a corresponding impact
on the manufactured and delivered cost of finished products and, as a result,
could impact our gross margins. Our ability to pass along cost increases to
customers is dependent upon competitive conditions and pricing methodologies
employed in the various markets in which we intend to compete. If we are
unable to pass along such cost increases, it could cause our operating results
to be reduced.
Subsidiaries
As
of December 31, 2008 and April, 2009 we do not have any
subsidiaries.
Intellectual
Property
We
have not filed for trademark protection of our corporate name. We own
the copyright in the contents of our future website, which is currently under
development. Other than the foregoing, we do not have any material
intellectual property assets.
Research
and Development Expenditures
We
have not spent any significant amounts on research and development activities
since our inception. Our planned expenditures for our product research and
development program are summarized under the section of this Annual Report
entitled “Management Discussion and Analysis of Financial Condition and Results
of Operations.”
Government
Regulations
Our current and
future operation and exploration activities are or will be subject to various
laws and regulations in the United States, Canada and anywhere we may
manufacture or distribute our products. These laws and regulations govern the
protection of consumers, food and drug regulation, consumer packaging and
labeling, taxes, labor standards, occupational health, work safety, and other
matters relating to the production and sale of food products. As we
increase our operations, we will likely experience an increase in government
oversight and associated compliances costs, and through April 14, 2009 we have
not incurred any such costs.
We
expect to be able to comply with those laws and do not believe that compliance
will have a material adverse effect on our competitive position. We have
obtained, and intend to obtain all licenses and permits required by all
applicable regulatory agencies in connection with food production operations we
carry out. We intend to maintain standards of environmental
compliance consistent with regulatory requirements. At this time, we do not
anticipate any material capital expenditures to comply with various regulatory
requirements.
Employees
and Consultants
As
of, December 31, 2008 and April 14, 2009 we had two part time
employees. Our President and Director, and our Secretary/Treasurer
and Director work as part-time employees in the areas of management, product
development, marketing and finance. We currently engage independent
contractors in the areas of accounting, legal, auditing services, investment
banking and corporate development.
Not required for
smaller reporting companies.
None.
We
neither own nor lease any real or personal property. We have an
executive office located at 200-736, Granville St., Vancouver, BC V6Z 1G3,
which is provided to us free of charge by our President and Director.
We
know of no pending or active material legal proceedings to which we are a party
and we are not aware of any legal proceedings contemplated by any governmental
authority against us.
None
PART
II
Market
Information
Our common stock is
not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board
under the trading symbol “KORE.OB”. Trading in stocks quoted on the OTC Bulletin
Board is often thin and is characterized by wide fluctuations in trading prices
due to many factors that may have little to do with a company's operations or
business prospects. We cannot assure you that there will be a market for our
common stock in the future.
OTC Bulletin Board
securities are not listed or traded on the floor of an organized national or
regional stock exchange. Instead, OTC Bulletin Board securities transactions are
conducted through a telephone and computer network connecting dealers in stocks.
OTC Bulletin Board issuers are traditionally smaller companies that do not meet
the financial and other listing requirements of a regional or national stock
exchange.
Our common stock
became eligible for quotation on the OTC Bulletin Board on January 20,
2009. From January 20, 2009 to April 14, 2009 our common stock has
been quoted as an unpriced security; no bid or offer has been made for the
purchase or sale of our common stock.
Holders
As
of April 14, 2009, there were 37 holders of record of our common
stock.
Dividends
Historically, we
have not paid dividends on shares of our common stock and we do not expect to
declare or pay dividends on shares of our common stock for the foreseeable
future. We intend to retain earnings, if any, to finance the development and
expansion of our business. Our future dividend policy will be subject to the
discretion of our Board of Directors and will depend upon our future earnings,
if any, our financial condition, and other factors deemed relevant by the
Board.
Equity
Compensation Plans
As
of December 31, 2008 and April 14, 2009 we did not have any equity compensation
plans.
Recent
Sales of Unregistered Securities
All sales of our
unregistered securities during the period from January 1, 2008 to December 31,
2008 have been previously reported.
Use
of Proceeds from Sale of Registered Securities
We
did not receive any proceeds from the sale of registered securities during the
fiscal year ended December 31, 2008.
On
September 9, 2008 the SEC declared effective our registration statement on Form
S-1 filed on August 29, 2008 whereby we registered 3,294,490 shares of our
common stock for resale by approximately 35 selling shareholders. This
registration statement does not include a direct offering and we will not
receive any proceeds from the sale of the shares thereby
registered.
Not
applicable.
Safe Harbor
This Annual Report
on Form 10-K contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including, "could" "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" and the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially.
While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested in this Annual Report.
Results
of Operations
Revenues
We
have limited operational history. During the year ended December 31, 2008 we
generated nominal revenues of $8,910 compared to our revenues of $3,615 for the
same period in 2007. From our inception on October 13, 2006 to October 31, 2008
we generated nominal revenues of $12,525 revenues. As December 31, 2008 we had
total assets of $3,631 and total liabilities of $109,293. We
anticipate that we will incur substantial losses for the foreseeable future and
our ability to generate any revenues in the next 12 months continues to be
uncertain.
Expenses:
From our inception
on October 16, 2006 to December 31, 2008 we incurred total general and
administrative expenses of $262,584, including $166,715 in employee
compensation, and $95,869 in other general and administrative
expenses. Our non-specified general and administrative expenses
include legal, accounting and auditing fees, bank and interest charges, and
general office expenses.
During the fiscal
year ended December 31, 2008 we incurred total general and administrative
expenses of $152,315 which consisted of $73,215 in employee compensation,
$78,920 in other general and administrative expenses. This compares to our total
general and administrative expenses of $90,530 for the same period in 2007 which
consisted of $75,000 in employee compensation and $15,530 in other general and
administrative expenses. The large increase in non-specified general
and administrative expenses during fiscal 2008 is largely attributable to
increased audit and legal costs associated with the preparation of our
registration statement on Form S-1 and the quotation of our common stock on the
OTC Bulletin Board.
Net
Loss
During the fiscal
year ended December 31, 2008 we incurred a net loss of $150,951 compared to our
net loss of $89,767 for the same period in 2007. From our inception
on October 16, 2006 to December 31, 2008 we incurred a net loss of
$260,637. Our net loss was mostly funded by a combination of private
placements and shareholder loans.
Liquidity
and Capital Resources
As
of December 31, 2008 we had $1,518 in cash, $3,631 in current assets, $109,293
in current liabilities and a working capital deficit of
$105,662. This compares to our $22,737 in cash, $27,958 in current
assets, $88,919 in current liabilities and working capital deficit of $60,961
for the fiscal year ended December 31, 2007.
As
of December 31, 2008 we had an accumulated deficit of $260,637 compared to
$109,686 accumulated during the development stage as of December 31,
2007.
From our inception
on October 16, 2006 to December 31, 2008 we spent $80,036 on operating
activities including $60,048 spent during fiscal 2008 and $19,988 spent during
fiscal 2007. The increase in spending during fiscal 2008 results
primarily from increased professional fees.
From our inception
on October 30, 2006 to December 31, 2008 we received $81,554 from financing
activities, including $38,829 received in fiscal 2008 and $26,725 received in
fiscal 2007.
The decrease in
cash for the year ended December 31, 2008 was $21,219 due to our operating and
investing activities.
We
expect that our total expenses will increase over the next year as we increase
our business operations. We have not been able to reach the break-even point
since our inception and have had to rely on outside capital resources. We do not
anticipate making any significant revenues for the next year.
For the next 12
months we intend to:
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·
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Complete the
development and launch of our
website;
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·
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complete
private and/or public financing to cover the cost of additional product
research and development, food production coasts, and sales and marketing
activities; and
|
Our planned
operation and exploration expenditures over the next 12 months (Beginning
January 1, 2009) are summarized as follows:
|
Description
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Potential
Completion
Date
|
|
Estimated
Expenses
($)
|
|
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Product
research and development
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12
months
|
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20,000
|
|
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Product
Manufacturing and Distribution
|
|
12
months
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250,000
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Develop and
launch website
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September,
2009
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10,000
|
|
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Market
Research and Marketing Expense
|
|
12
months
|
|
60,000
|
|
|
Employee
Compensation
|
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12
months
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100,000
|
|
|
Professional
fees (legal, accounting and auditing fees)
|
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12
months
|
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90,000
|
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General and
administrative expenses
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12
months
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20,000
|
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Total
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550,000
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Our general and
administrative expenses for the year will consist primarily of transfer agent
fees, investor relations expenses, bank and interest charges and general office
expenses. The professional fees are related to our regulatory filings throughout
the year and to our anticipated day to day commercial activities.
Based on our
planned expenditures, we require additional funds of approximately $550,000 to
proceed with our business plan over the next 12 months. If we secure less than
the full amount of financing that we require, we will not be able to carry out
our complete business plan and we will be forced to proceed with a scaled back
business plan based on our available financial resources.
We
anticipate that we will incur substantial losses for the foreseeable future.
Even if we carry out our planned business activities this does not guarantee
that we will generate future sales or revenues.
Even though we plan
to raise capital through equity or debt financing, we believe that the latter
may not be a viable alternative for funding our operations as we do not have
tangible assets to secure any such financing. We anticipate that any additional
funding will be in the form of equity financing from the sale of our common
stock. However, we do not have any financing arranged and we cannot provide any
assurance that we will be able to raise sufficient funds from the sale of our
common stock to finance our operations or planned exploration activities. In the
absence of such financing, we will not be able to purchase non-operated working
interests in existing wells or carry out exploration programs on any acquired
properties. Even if we are successful in obtaining equity financing to fund our
operations and exploration activities, there is no assurance that we will obtain
the amount necessary to pursue the advanced exploration of any acquired
properties following the completion of preliminary exploration. If we do not
continue to obtain financing, we may be forced to abandon our business plan or
our property interests.
We
also hope to obtain additional financing as part of the merger or acquisition
agreement that we are currently negotiating. However, there is no guarantee that
we will enter into a definitive merger or acquisition agreement. If we
successfully complete a merger or acquisition our capital requirements and
business plans may change substantially.
Modifications to
our current plans will be based on many factors, including the results of
product research and development, the assessment of market research, food
production costs, and the amount of available capital. Further, the extent to
which we carry out our business plan is dependent upon the amount of financing
available to us.
We
may also consider entering into joint ventures or other strategic arrangements
to provide the required funding to pursue our business plan. If we enter into a
joint venture arrangement, we would likely have to assign a percentage of our
interest in any revenues or future proprietary products to our joint venture
partner(s). The assignment of this interest would be conditional upon the
contribution of capital by the joint venture partner(s) to enable the
advancement of our business activities. There is no assurance that any third
party would enter into a joint venture agreement with us in order to fund our
business.
We
intend to raise the balance of our cash requirements for the next 12 months
(approximately $550,000) from private placements, shareholder loans or possibly
a registered public offering (either self-underwritten or through a
broker-dealer). If we are unsuccessful in raising enough money through future
capital-raising efforts, we may review other financing possibilities such as
bank loans. At this time we do not have a commitment from any broker-dealer to
provide us with financing. There is no assurance that any financing will be
available to us or if available, on terms that will be acceptable to us. We
intend to negotiate with our management and consultants to pay parts of their
salaries and fees with stock and stock options instead of cash.
Going
Concern
We
have generated only nominal revenues and are dependent upon obtaining outside
financing to carry out our operations and pursue any product development,
production or sales. If we are unable to raise equity or secure alternative
financing, we may not be able to continue our operations and our business plan
may fail.
If
our operations and cash flow improve, management believes that we can continue
to operate. However, no assurance can be given that management's actions will
result in profitable operations or an improvement in our liquidity situation.
The threat of our ability to continue as a going concern will cease to exist
only when our revenues have reached a level able to sustain our business
operations.
Off-Balance
Sheet Arrangements
We
have no significant off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to stockholders.
Critical
Accounting Policies
Our financial
statements are affected by the accounting policies used and the estimates and
assumptions made by management during their preparation. A complete summary of
these policies is included in Note 1 of the notes to our financial
statements. We have identified below the accounting policies that are of
particular importance in the presentation of our financial position, results of
operations and cash flows, and which require the application of significant
judgment by management.
Revenue
Recognition and Accounts Receivable
Revenue for the
Company is recognized when persuasive evidence of an arrangement exists,
products are delivered, sales price is determinable, and collection is
reasonably assured. The Company currently does not allow for product
returns.
The Company
establishes an allowance for doubtful accounts to ensure accounts receivable are
not overstated due to accounts that are not collectible. The Company
maintains a bad debt reserve based on a variety of factors, including the age of
the receivable, payment history, trends and financial condition of customers,
macroeconomic conditions, and significant one-time events.
Foreign
currency translation
Our financial
statements are presented in United States dollars. In accordance with Statement
of Financial Accounting Standards No. 52, “Foreign Currency Translation”,
foreign denominated monetary assets and liabilities are translated into their
United States dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at average rates of
exchange during the year. Gains or losses resulting from foreign currency
transactions are included in results of operations.
Off-Balance
Sheet Arrangements
As
of December 31, 2008, we had no off balance sheet transactions that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Inflation
The amounts
presented in the financial statements do not provide for the effect of inflation
on our operations or financial position. The net operating losses shown would be
greater than reported if the effects of inflation were reflected either by
charging operations with amounts that represent replacement costs or by using
other inflation adjustments.
Not
required.
Our fiscal year end
is December 31. Our audited financial statements as of December 31, 2008
follow.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Kore
Nutrition Incorporated
(A
Development Stage Company)
Vancouver
BC, Canada
We
have audited the accompanying balance sheets of Kore Nutrition Incorporated
(“Kore”) as of December 31, 2008 and 2007, and the related statements of
operations, stockholders’ deficit, and cash flows for each of the years ended
December 31, 2008 and 2007, and for the period from October 13, 2006
(Inception) through December 31, 2008. These financial statements are
the responsibility of the Company’s management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform 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 audits provide 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 Kore Nutrition Incorporated as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for each of the years then ended, and for the period from October 13, 2006
(Inception) through December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
As
discussed in Note 2 to the financial statements, the Company's absence of
significant revenues, recurring losses from operations, and its need for
additional financing in order to fund its projected loss in 2009 raise
substantial doubt about its ability to continue as a going concern. The 2008
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
LBB &
Associates Ltd., LLP
Houston,
Texas
April 10,
2009
KORE
NUTRITION INCORPORATED
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
|
|
|
December
31, 2008
|
|
|
December
31, 2007
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash
|
|
$ |
1,518 |
|
|
$ |
22,737 |
|
|
Accounts
receivable, net of allowance of $0
|
|
|
218
|
|
|
|
2,229
|
|
|
Inventory
|
|
|
1,895 |
|
|
|
2,992 |
|
|
Total
current assets
|
|
|
3,631 |
|
|
|
27,958 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
3,631 |
|
|
$ |
27,958 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
salaries and other expenses - related parties
|
|
$ |
55,884 |
|
|
$ |
88,919 |
|
|
Accounts
payable and accrued liabilities
|
|
|
14,580 |
|
|
|
- |
|
|
Short term
related party loan
|
|
|
25,844 |
|
|
|
- |
|
|
Loans from
shareholders
|
|
|
12,985 |
|
|
-
|
|
|
Total
current liabilities
|
|
|
109,293 |
|
|
|
88,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
109,293 |
|
|
|
88,919 |
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT:
|
|
|
|
|
|
|
|
|
|
Common stock,
$.001 par value, 50,000,000 shares authorized, 14,294,490 and 9,294,490
issued and outstanding as of December 31, 2008 and 2007,
respectively
|
|
|
14,295 |
|
|
|
9,295 |
|
|
Additional
paid in capital
|
|
|
140,680 |
|
|
|
39,430 |
|
|
Deficit
accumulated during the development stage
|
|
|
(260,637 |
) |
|
|
(109,686 |
) |
|
Total
stockholders’ equity (deficit)
|
|
|
(105,662 |
) |
|
|
(60,961 |
) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$ |
3,631 |
|
|
$ |
27,958 |
|
See
accompanying summary of accounting policies and notes to financial
statements.
KORE
NUTRITION INCORPORATED
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS
|
|
|
Year
ended
December
31, 2008
|
|
|
Year
ended
December
31, 2007
|
|
|
October
13, 2006
(Inception)
through
December
31, 2008
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$ |
8,910 |
|
|
$ |
3,615 |
|
|
$ |
12,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
7,726 |
|
|
|
2,852 |
|
|
|
10,578 |
|
|
Gross
profit
|
|
|
1,184 |
|
|
|
763 |
|
|
|
1,947 |
|
|
General and
administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
|
|
78,920 |
|
|
|
15,530 |
|
|
|
95,869 |
|
|
Compensation
|
|
|
73,215 |
|
|
|
75,000 |
|
|
|
166,715 |
|
|
Total general
and administrative expenses
|
|
|
152,315 |
|
|
|
90,530 |
|
|
|
262,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(150,951 |
) |
|
$ |
(89,767 |
) |
|
$ |
(260,637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
12,627,823 |
|
|
|
8,816,862 |
|
|
|
|
|
See
accompanying summary of accounting policies and notes to financial
statements.
KORE
NUTRITION INCORPORATED
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF STOCKHOLDERS’ EQUITY (DEFICIT)
Period
from October 13, 2006 (Inception) through December 31, 2008
|
|
|
|
|
|
Additional
paid-in capital
|
|
|
Deficit
accumulated during the development stage
|
|
|
Total
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
October 13, 2006
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Issuance of
common stock for services
to founders
|
|
|
6,000,000 |
|
|
|
6,000 |
|
|
|
- |
|
|
|
- |
|
|
|
6,000 |
|
|
Issuance of
common stock for
cash
|
|
|
1,600,000 |
|
|
|
1,600 |
|
|
|
14,400 |
|
|
|
|
|
|
|
16,000 |
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(19,919 |
) |
|
|
(19,919 |
) |
|
Balance,
December 31, 2006
|
|
|
7,600,000 |
|
|
|
7,600 |
|
|
|
14,400 |
|
|
|
(19,919 |
) |
|
|
2,081 |
|
|
Issuance of
common stock for
cash
|
|
|
1,694,490 |
|
|
|
1,695 |
|
|
|
25,030 |
|
|
|
- |
|
|
|
26,725 |
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(89,767 |
) |
|
|
(89,767 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2007
|
|
|
9,294,490 |
|
|
|
9,295 |
|
|
|
39,430 |
|
|
|
(109,686 |
) |
|
|
(60,961 |
) |
|
Issuance of
common stock in settlement of debt
|
|
|
5,000,000 |
|
|
|
5,000 |
|
|
|
101,250 |
|
|
|
- |
|
|
|
106,250 |
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(150,951 |
) |
|
|
(150,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2008
|
|
|
14,294,490 |
|
|
$ |
14,295 |
|
|
$ |
140,680 |
|
|
$ |
(260,637 |
) |
|
$ |
(105,662 |
) |
See
accompanying summary of accounting policies and notes to financial
statements.
KORE
NUTRITION INCORPORATED
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS
|
|
|
Year
Ended
December
31, 2008
|
|
|
Year
Ended
December
31, 2007
|
|
|
October
13, 2006 (Inception) through
December
31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(150,951 |
) |
|
$ |
(89,767 |
) |
|
$ |
(260,637 |
) |
|
Adjustments
to reconcile net deficit to cash used by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services
|
|
|
- |
|
|
|
- |
|
|
|
6,000 |
|
|
Change in
non-cash working capital items related to operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
2,011 |
|
|
|
(2,229 |
) |
|
|
(218 |
) |
|
Accounts
payable and accrued liabilities
|
|
|
14,580
|
|
|
|
- |
|
|
|
14,580 |
|
|
Accrued salaries and other expense - related parties
|
|
|
73,215 |
|
|
|
75,000 |
|
|
|
162,134 |
|
|
Inventory
|
|
|
1,097 |
|
|
|
(2,992 |
) |
|
|
(1,895 |
) |
|
CASH USED BY
OPERATING ACTIVITIES
|
|
|
(60,048 |
) |
|
|
(19,988 |
) |
|
|
(80,036 |
) |
|
CASH PROVIDED
BY INVESTING ACTIVITIES
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
- |
|
|
|
26,725 |
|
|
|
42,725 |
|
|
Proceeds
from Short term related party loan
|
|
|
25,844 |
|
|
|
- |
|
|
|
25,844 |
|
|
Loans
from shareholders
|
|
|
12,985 |
|
|
-
|
|
|
|
12,985 |
|
|
CASH PROVIDED
BY FINANCING
ACTIVITIES
|
|
|
38,829 |
|
|
|
26,725 |
|
|
|
81,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH
|
|
|
(21,219 |
) |
|
|
6,737 |
|
|
|
1,518 |
|
|
Cash,
beginning of period
|
|
|
22,737 |
|
|
|
16,000 |
|
|
|
- |
|
|
Cash,
end of period
|
|
$ |
1,518 |
|
|
$ |
22,737 |
|
|
$ |
1,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Income
taxes paid
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
NON CASH
TRANSACTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued in settlement of debt
|
|
$ |
106,250 |
|
|
$ |
- |
|
|
$ |
106,250 |
|
See
accompanying summary of accounting policies and notes to financial
statements.
KORE
NUTRITION INCORPORATED
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
NOTE 1 – NATURE OF
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Nature of
Business
Kore Nutrition
Incorporated (“Kore”) was incorporated in Nevada on October 13,
2006. Kore is a development stage company whose goal is to develop a
brand and line of healthy packaged snacks.
Use of
Estimates
The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the balance sheet. Actual results could differ from those
estimates.
Basic and Diluted Loss Per
Share
The Company
computes loss per share which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the period. Diluted
loss per share gives effect to all dilutive potential common shares outstanding
during the period including stock options and warrants using the treasury
method. Dilutive loss per share excludes all potential common shares if their
effect is anti-dilutive.
Inventory
Inventory consists
of finished goods held for resale and is recorded at the lower of cost or net
realizable value. Cost is determined on a first in-first out
basis.
Revenue Recognition and
Accounts Receivable
Revenue for the
Company is recognized when persuasive evidence of an arrangement exists,
products are delivered, sales price is determinable, and collection is
reasonably assured. The Company currently does not allow for product
returns.
The Company
establishes an allowance for doubtful accounts to ensure accounts receivable are
not overstated due to accounts that are not collectible. The Company
maintains a bad debt reserve based on a variety of factors, including the age of
the receivable, payment history, trends and financial condition of customers,
macroeconomic conditions, and significant one-time events.
Development Stage
Company
The Company
complies with Financial Accounting Standards Board Statement No. 7 “Accounting
and Reporting by Development Stage Enterprises” in its characterization of the
Company as a development stage enterprise.
Recent Accounting
Pronouncements
Kore does not
expect the adoption of recently issued accounting pronouncements to have a
significant impact on the Company’s results of operations, financial position or
cash flow.
Foreign Currency
Translation
The financial
statements are presented in United States dollars. In accordance with Statement
of Financial Accounting Standards No. 52, “Foreign Currency Translation”,
foreign denominated monetary assets and liabilities are translated into their
United States dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at average rates of
exchange during the year. Gains or losses resulting from foreign currency
transactions are included in results of operations.
NOTE 2 - GOING
CONCERN
Kore has recurring
losses and has a deficit accumulated during the development stage of $260,637 as
of December 31, 2008. Kore's financial statements are prepared using
the generally accepted accounting principles applicable to a going concern,
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. Without realization of additional
capital and achievement of profitable operations there is substantial doubt
concerning Kore’s ability to continue as a going concern. Kore's
management plans to raise cash from public or private debt or equity financing,
on an as needed basis. Kore's ability to continue as a going concern
is dependent on these additional cash financings, and, ultimately, upon
achieving profitable operations through the development of mineral
interests.
NOTE 3 – INCOME
TAXES
Kore follows
Statement of Financial Accounting Standards Number 109 (SFAS 109), “Accounting
for Income Taxes.” Deferred income taxes reflect the net effect of (a) temporary
difference between carrying amounts of assets and liabilities for financial
purposes and the amounts used for income tax reporting purposes, and (b) net
operating loss carryforwards. No net provision for refundable Federal income tax
has been made in the accompanying statement of loss because no recoverable taxes
were paid previously. Similarly, no deferred tax asset attributable to the net
operating loss carryforward has been recognized, as it is not deemed likely to
be realized.
The provision for
refundable Federal income tax consists of the following:
|
|
|
|
|
|
|
|
|
Current
operations
|
|
$ |
32,300 |
|
|
$ |
30,600 |
|
|
Less: accrued
expenses
|
|
|
19,000 |
|
|
|
- |
|
|
Less: change
in valuation allowance
|
|
|
(51,300 |
) |
|
|
(30,600 |
) |
|
Net
refundable amount
|
|
$ |
- |
|
|
$ |
- |
|
The effective tax
rate of 0% differs from the 34% statutory rate in 2008 and 2007 due to the
change in the valuation allowance during each period.
The cumulative tax
effect at the expected rate of 34% of significant items comprising our net
deferred tax amount is as follows:
|
|
|
December
31, 2008
|
|
|
December
31, 2007
|
|
|
Deferred tax
asset attributable to:
|
|
|
|
|
|
|
|
Net operating
loss carryover
|
|
$ |
69,600 |
|
|
$ |
37,400 |
|
|
Less accrued
expenses
|
|
|
19,000 |
|
|
|
- |
|
|
Less
valuation allowance
|
|
|
(88,600 |
) |
|
|
(37,400 |
) |
|
Net deferred
tax asset
|
|
$ |
- |
|
|
$ |
- |
|
At
December 31, 2008, Kore had an unused net operating loss carryover approximating
$205,000 available to offset future taxable income; it expires
beginning in 2027
NOTE 4 – LOANS FROM
SHAREHOLDERS
The amounts due to
shareholders are non-interest bearing and have no specified terms of
repayment.
NOTE 5 – SHORT TERM
LOAN-RELATED PARTY
The short term loan
payable bears interest at 6% per annum and has no specified terms of
repayment.
NOTE 6 – COMMON
STOCK
At
inception, Kore issued 6,000,000 shares of stock to its founding shareholder for
services valued at $6,000.
During the period
ended December 31, 2006, Kore issued 1,600,000 shares of stock for $16,000
cash.
During the year
ended December 31, 2007, Kore issued 1,694,490 shares of stock for $26,725
cash.
In
April 2008, Kore issued 5,000,000 shares of common stock to officers as
settlement for unpaid salaries of $106,250.
NOTE 7 – RELATED
PARTY TRANSACTIONS
The founding
shareholder has agreed to advance Kore monies until an offering is
completed.
In
November 2006 the Company entered into two employment agreements with the
directors of the Company. The agreements expire in October 2008 but
have been continued on a month to month basis at the same terms. The
directors will be compensated $50,000 and $25,000 per year, respectively. In
April 30, 2008, Kore issued 5,000,000 shares of common stock to officers as
settlement for unpaid salaries of $106,250 (salaries earned through March 2008),
resulting in accrual of $55,884 as of December 31, 2008.Kore neither owns
nor leases any real or personal property, an officer has provided office
services without charge. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and
directors are involved in other business activities and most likely will become
involved in other business activities in the future.
NOTE 8 –
COMMITMENTS
On
January 18, 2008, the Company entered into a consulting agreement with AVRO
Capital Resources, to complete its Form S-1 registration statement, obtain
effectiveness of such registration statement and obtain a trading symbol with
NASD for the Company for total consideration of $45,000, which amount was paid
as of December 31, 2008.
NOTE 9 – MAJOR
CUSTOMER
The Company had
gross sales of approximately $8,910 and $3,615 for years ended December 31, 2008
and 2007, respectively. The Company had one customer that represented
approximately 97% sales for the year ended December 31, 2008. The Company
had one customer that represented approximately 100% of gross sales for the year
ended December 31, 2007. One customer accounted for 100% of accounts
receivable at December 31, 2007.
The accounting firm
of LBB & Associates Ltd., LLP, Certified Public Accountants, audited our
financial statements for the years ended December 31, 2008 and December 31,
2007. There have been no changes in or disagreements with our
accounting firm on accounting and financial disclosure.
Evaluation of Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that such information is accumulated
and communicated to our management, including our President, (who is our
Principal Executive and Financial Officer), as appropriate to allow timely
decisions regarding required disclosure.
We
carried out an evaluation, under the supervision and with the participation of
our management, including our President, of the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2008.
Based on the evaluation of these disclosure controls and procedures, and in
light of the material weaknesses found in our internal controls over financial
reporting, the Principal Executive and Financial Officer concluded that our
disclosure controls and procedures were not effective.
Management’s Report on
Internal Control over Financial Reporting
Our management is
responsible for establishing and maintaining effective internal control over
financial reporting. Under the supervision of our President, who is
our Principal Executive and Financial Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December
31, 2008 using the criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. In our assessment of the
effectiveness of internal control over financial reporting as of December 31,
2008, we determined that there were control deficiencies that constituted
material weaknesses, as described below.
1.
We have no formal audit committee.
2.
There is a risk of management override given that our senior officers have a
high degree of involvement in our day to day operations.
3.
There is no formal policy on fraud at this time.
Management is
currently evaluating remediation plans for the above control
deficiencies.
In
light of the existence of these control deficiencies, we concluded that there is
a reasonable possibility that a material misstatement of the annual or interim
financial statements will not be prevented or detected on a timely basis by our
internal control.
As
a result, our management has concluded that we did not maintain effective
internal control over financial reporting as of December 31, 2008 based on
criteria established in Internal Control—Integrated
Framework issued by COSO.
LBB &
Associates Ltd., LLP, an independent registered public accounting firm, was not
required to and has not issued a report concerning the effectiveness of our
internal control over financial reporting as of December 31, 2008.
Changes in Internal Control
over Financial Reporting
There have not been
any changes in our internal control over financial reporting during the year
ended December 31, 2008 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.
None.
PART
III
Directors and
Officers
Our bylaws allow
the number of directors to be fixed by the Board of Directors. Our Board of
Directors has fixed the number of directors at two.
Our current
directors and officers are as follows:
|
Name
|
Age
|
Position
|
|
Deanna
Embury
|
34
|
Director and
President
|
|
Katherine
Rodgers
|
34
|
Director,
Secretary and Treasurer
|
Our current
directors will serve as such until our next annual shareholder meeting or until
their successors are appointed. Our current executive officers hold their
positions at the will of our Board of Directors. There are no arrangements,
agreements or understandings between non-management security holders and
management under which non-management security holders may directly or
indirectly participate in or influence the management of our
affairs.
Deanna
Embury, President, Director
Deanna Embury has
served as our President and Director since our inception on October 13,
2006. Ms. Embury is also the co-founder and president of Licious
Living, Inc. a private company with that retails and delivers healthy meals and
snacks. Founded in 2002, Licious Living has operations in Vancouver,
British Columbia and Toronto, Ontario. Ms. Embury brings over twelve
years of business experience to Kore Nutrition. She holds a Masters of
Business Administration from the Edinburgh Business School and a
Bachelor of Arts from the University of British Columbia.
Katherine
Rodgers, Secretary, Treasurer, Director.
Katherine Rodgers
has served as our secretary, treasurer and director since our inception on
October 13, 2006. Ms. Rodgers is also co-owner and manager of Licious
Living, Inc. She holds a Bachelor of Commerce (Marketing, with Honors) from the
University of Guelph and is a Certified Management Accountant in British
Columbia.
Other than as
disclosed above, our directors currently do not serve on the boards of other
public companies.
Significant
Employees
There are no
individuals other than our executive officers who make a significant
contribution to our business.
Family
Relationships
There are no family
relationships among our officers or directors.
Legal
Proceedings
None of our
directors, executive officers, promoters or control persons has been involved in
any of the following events during the past five years:
|
·
|
any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
|
·
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
|
·
|
being subject
to any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
|
·
|
being found
by a court of competent jurisdiction (in a civil action), the SEC or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.
|
Section
16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of
the Securities Exchange Act of 1934 requires a company’s directors and officers,
and persons who own more than ten-percent (10%) of the company’s common stock,
to file with the Securities and Exchange Commission reports of ownership on Form
3 and reports of change in ownership on Forms 4 and 5. Such officers, directors
and ten-percent stockholders are also required to furnish the company with
copies of all Section 16(a) reports they file. Based solely on our review of the
copies of such forms received by us and on written representations from certain
reporting persons, we believe that all Section 16(a) reports applicable to our
officers, directors and ten-percent stockholders with respect to the fiscal year
ended December 31, 2008 were filed.
Code
of Ethics
We
have not yet adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions because we have not yet
finalized the content of such a code. Companies whose equity securities are
quoted on the OTC Bulletin Board are not currently required to implement a code
of ethics.
Director
Nominees
As
of April 14, 2009 there have been no material changes to the procedures by which
security holders may recommend nominees to our Board of Directors.
We
do not have a nominating committee. Our Board of Directors selects individuals
to stand for election as members of the Board. Since the Board of Directors does
not include a majority of independent directors, the decision of the Board as to
director nominees is made by persons who have an interest in the outcome of the
determination. The Board will consider candidates for directors proposed by
security holders, although no formal procedures for submitting candidates have
been adopted. Unless otherwise determined, not less than 90 days prior to the
next annual meeting of the Board of Directors at which the slate of Board
nominees is adopted, the Board will accept written submissions of proposed
nominees that include the name, address and telephone number of the proposed
nominee; a brief statement of the nominee’s qualifications to serve as a
director; and a statement as to why the security holder submitting the proposed
nominee believes that the nomination would be in the best interests of security
holders. If the proposed nominee is not the same person as the stockholder
submitting the name of the nominee, a letter from the nominee agreeing to the
submission of his or her name for consideration should be provided at the time
of submission. The letter should be accompanied by a résumé supporting the
nominee's qualifications to serve on the Board of Directors, as well as a list
of references.
The Board
identifies director nominees through a combination of referrals from different
people, including management, existing Board members and security holders. Once
a candidate has been identified, the Board reviews the individual's experience
and background and may discuss the proposed nominee with the source of the
recommendation. If the Board believes it to be appropriate, Board members may
meet with the proposed nominee before making a final determination whether to
include the proposed nominee as a member of management's slate of director
nominees submitted to security holders for election to the Board.
Among the factors
that the Board considers when evaluating proposed nominees are their knowledge
of and experience in business matters, finance, capital markets and mergers and
acquisitions. The Board may request additional information from any candidate
prior to reaching a determination. The Board is under no obligation to formally
respond to all recommendations, although as a matter of practice, it will
endeavor to do so.
Audit
Committee
The functions of
the Audit Committee are currently carried out by our Board of
Directors. Our Board of Directors has determined that we do not
presently need an audit committee financial expert on our Board of Directors
carrying out the duties of the Audit Committee. Our Board of
Directors has determined that the cost of hiring a financial expert to act as
one of our directors and to be a member of the Audit Committee or otherwise
perform Audit Committee functions outweighs the benefits of having a financial
expert on the Audit Committee.
The following
Summary Compensation Table sets forth the total annual compensation paid or
accrued by us to or for the account of the Principal Executive Officer (“PEO”)
and our Principal Financial Officer (“PFO”). None of our other executive
officers received compensation in excess of $100,000 during the fiscal year
ended December 31, 2008.
Summary
Compensation
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
|
Option Awards
($)
|
Non-Equity Incentive
Plan Compensation
($)
|
Non-qualified
Deferred
Compensation
Earnings
($)
|
All Other Compensation
($)
|
Total
($)
|
|
Katherine
Rodgers Secretary, Treasurer, Director (1)
|
2008
|
25,000
(3)
|
0
|
(3)
|
0
|
0
|
0
|
0
|
25,000
|
|
2007
|
25,000
(3)
|
0
|
0
|
0
|
0
|
0
|
0
|
25,000
|
|
2006
|
4,166.66
(3)
|
0
|
1,000
(4)
|
0
|
0
|
0
|
0
|
5,166.66
|
|
Deanna
Embury (2)
|
2008
|
50,000
(3)
|
0
|
(3)
|
0
|
0
|
0
|
0
|
50,000
|
|
2007
|
50,000
(3)
|
0
|
0
|
0
|
0
|
0
|
0
|
50,000
|
|
2006
|
8,333.33
(3)
|
0
|
5,000
(4)
|
0
|
0
|
0
|
0
|
13,333.33
|
|
(1)
|
Katherine
Rodgers has been our Secretary, Treasurer and Director since October 13,
2006.
|
|
(2)
|
Deanna Embury
has been our President and DIrector since October 13,
2006.
|
|
(3)
|
Effective
November 1, 2006, we entered into employment agreements with Deanna Embury
and Katherine Rodgers regarding their respective director and officer
services. Pursuant to the agreements, we agreed to compensate
Ms. Rodgers and Ms. Embury at the rate of $25,000 and $50,000 per year,
respectively. The agreements were to expire on October 31, 2008, but have
been extended on a month to month basis on the same terms. In
accordance with the agreements, on April 30, 2008, we issued 3,000,000
shares of common stock to Ms. Embury and 2,000,000 common shares to Ms.
Rodgers at the $0.02 per share in full settlement of unpaid salaries of
$106,250 (salaries earned through March 2008), resulting in accrual of
unpaid salaries to Ms. Embury and Ms. Rodgers of $55,884 as at December
31, 2008 we may be paid in either cash, stock or a combination thereof by
mutual agreement of the parties.
|
|
(4)
|
On October
13, 2006 we issued 1,000,000 common shares to Ms. Rodgers and 5,000,000 to
Ms. Embury at $0.001 per share in consideration for their services as
founders of Kore Nutrition.
|
Employment
Agreements
We entered into an
employment agreement with Deanna Embury effective November 1, 2006, to provide
us with research and development services. Ms. Embury is to be
compensated $50,000 per year during the term of the agreement. Annual
compensation may be deferred, at Ms. Embury’s discretion. Deferred
compensation may be paid by cash, common stock or a combination thereof as
agreed upon by us and Ms. Embury. The term of the Agreement was for an
initial period of two years and continues on a month to month basis since
November 1, 2008.
We
entered into an employment agreement with Katherine Rodgers effective November
1, 2006, to provide us with research and development services. Ms.
Rodgers is to be compensated $25,000 per year during the term of the agreement.
Annual compensation may be deferred, at Ms. Roger’s discretion.
Deferred compensation may be paid by cash, common stock or a combination
thereof as agreed upon by us and Ms. Rodgers. The term of the Agreement
was for an initial period of two years and continues on a month to month basis
since November 1, 2008.
Ms. Rodgers and Ms.
Embury each spend approximately 20% of their time on our business.
Pension, Retirement or
Similar Benefit Plans
There are no
arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers. We have no material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of the Board of Directors or a committee
thereof.
Compensation
Committee
We
currently do not have a compensation committee of the Board of Directors. The
Board of Directors as a whole determines executive compensation.
Compensation of
Directors
We
do not pay members of the Board of Directors any fees for attendance at the
Board meetings or similar remuneration or reimburse them for any out-of-pocket
expenses incurred by them in connection with our business.
Compensation Committee
Report
Our Principal
Executive and Financial Officer reviewed the Compensation Discussion and
Analysis and the requirements pertaining to this item. She has determined that
no disclosure is necessary as we have not adopted any compensation programs and
we have approved that a statement to that effect be disclosed in this Form
10-K.
Neither we nor our
wholly owned subsidiary have any compensation plans or individual compensation
arrangements under which our securities are authorized for issuance to either
employees or non-employees.
The following table
sets forth the ownership, as of April 14, 2009, of our common stock by each of
our directors, by all of our executive officers and directors as a group and by
each person known to us who is the beneficial owner of more than 5% of any class
of our securities. As of April 14, 2009, there were 14,294,490 shares of our
common stock issued and outstanding. All persons named have sole or shared
voting and investment control with respect to the shares, except as otherwise
noted. The number of shares described below includes shares which the beneficial
owner described has the right to acquire within 60 days of the date of this
annual report.
|
Title
of Class
|
Name
and Address of Beneficial
Owner
|
Amount
and Nature
of Beneficial Ownership
|
Percent
of Class
|
|
Common
|
Deanna Embury
(1)
1721-938
Smithe Street
Vancouver,
British Columbia,
V6Z 3H8
Canada
|
8,000,000
|
56%
(4)
|
|
|
Katherine
Rodgers (2)
1136-701
Pacific Street
Vancouver,
British Columbia
V6E
1T4 Canada
|
3,300,000
(3)
|
23%
(4)
|
|
|
All
Executive Officers and Directors as a Group
|
11,300,000
|
79%
(4)
|
|
|
1.
|
Deanna Embury
is our President and Director.
|
|
|
2.
|
Katherine
Rodgers is our Secretary, Treasurer and
Director.
|
|
|
3.
|
Includes
3,000,000 shares held by Ms. Rodgers and 300,000 shares held by her
spouse, Scott Simpson.
|
|
|
4.
|
Calculated
based on issued and outstanding shares of 14,294,490 as of April 14,
2009.
|
Effective November
1, 2006, we entered into employment agreements with Deanna Embury and Katherine
Rodgers regarding their respective director and officer
services. Pursuant to the agreements, we agreed to compensate Ms.
Rodgers and Ms. Embury at the rate of $25,000 and $50,000 per year,
respectively. The agreements were to expire on October 31, 2008, but have been
extended on a month to month basis on the same terms. In accordance
with the agreements, on April 30, 2008, we issued 3,000,000 shares of common
stock to Ms. Embury and 2,000,000 common shares to Ms. Rodgers at the $0.02 per
share in full settlement of unpaid salaries of $106,250 (salaries earned through
March 2008), resulting in accrual of unpaid salaries to Ms. Embury and Ms.
Rodgers of $55,884 as at December 31, 2008 we may be paid in either cash, stock
or a combination thereof by mutual agreement of the parties.
The OTC Bulletin
Board on which our common stock is quoted on does not have any director
independence requirements. We also do not have a definition of independence as
our sole director is also employed in management positions as an executive
officer. Once we engage further directors and officers, we plan to develop a
definition of independence and scrutinize our Board of Directors with regard to
this definition.
Audit,
Audit-Related and Non-Audit Fees
The following table
sets forth the fees for professional audit services and the fees billed for
other services rendered by our auditors, LBB & Associates Ltd., LLP, in
connection with the audit of our financial statements for the years ended
December 31, 2008 and 2007, and any other fees billed for services rendered by
our auditors during these periods.
AUDIT,
AUDIT-RELATED AND NON-AUDIT FEES
|
Description
of Service
|
|
Fees
(January
1, 2006 to December 31, 2007)
($)
|
|
|
Fees
(January
1, 2007 to December 31, 2008)
($)
|
|
|
Audit
fees
|
|
|
5,250 |
|
|
|
13,000 |
|
|
Audit-related
fees
|
|
|
8,700 |
|
|
|
1,500 |
|
|
Tax
fees
|
|
|
- |
|
|
|
- |
|
|
All other
fees
|
|
|
- |
|
|
|
- |
|
|
Total
|
|
|
13,950 |
|
|
|
14,500 |
|
Audit
Committee Approval
Since our
inception, our Board of Directors, performing the duties of the audit committee,
has reviewed all audit and non-audit related fees at least annually. The Board,
acting as the audit committee, pre-approved all audit related services for the
year ended December 31, 2008
Part
IV
The financial
statement schedules are omitted because they are inapplicable or the requested
information is shown in our financial statements or related notes
thereto.
Exhibits
|
Exhibit
Number
|
Exhibit
Description
|
|
10.1
|
Employment
Agreement of Deanna Embury incorporated by reference as Exhibit 10.1 of
our Registration Statement on Form S-1 filed on August 29,
2008
|
|
10.2
|
Employment
Agreement of Katherine Rodgers incorporated by reference as Exhibit 10.2
of our Registration Statements on Form S-1 filed on August 29,
2008
|
|
31.1
|
|
|
32.1
|
|
SIGNATURES
Pursuant to the
requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly
caused this Annual Report to be signed on its behalf by the undersigned
thereunto duly authorized.
| |
KORE NUTRITION,
INC. |
| |
|
|
|
Date: April
15, 2009
|
By:
|
/s/
Deanna Embury
|
|
|
|
Deanna
Embury
|
|
|
|
President,
Principal Executive Officer, Principal Financial Officer,
Director
|
Pursuant to the
requirements of the Exchange Act this Report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
| Signature |
Title |
Title
|
| |
|
|
|
/s/ Deanna
Embury
Deanna
Embury
|
President, Director, Principal
Executive Officer, Principal
Financial officer |
April 15,
2009
|
19