UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
þ
ANNUAL REPORT PURSUANT TO
SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal
year ended
December 31,
2011
.
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:
000-29321
PARK VIDA GROUP, INC.
(Exact name of registrant
as specified
in its charter)
Nevada
87-0643635
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1403 East 900 South, Salt Lake City, Utah 84105
(Address of principal executive offices)
(Zip Code)
Registrants telephone
number,
including area code:
(801) 582-9609
Securities registered under Section 12(b) of the
Act: none.
Securities registered under Section 12(g) of the
Act:
common stock (title of class), $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
whether
the
registrant
has
submitted
electronically
and
posted
on
its
corporate
Web
site,
if
any,
every
Interactive
Data
File
required
to
be
submitted
and
posted pursuant to
Rule
405 of
Regulation
S-T (§ 232.405 of
this chapter)
during
the
preceding 12 months (or for such shorter period that
the
registrant
was required to submit and post such files).
Yes
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
registrants
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
definitions
of
large
accelerated
filer,
accelerated
filer
and
smaller
reporting
company
in
Rule
12b-2 of the Exchange
Act. 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
The
aggregate market value of the registrant's common stock, $0.001 par value
(the only class of voting stock), held by
non-affiliates
(9,074,530
shares)
was
approximately
$362,981
based
on
the
average
closing
bid
and
asked
prices
($0.04)
for
the
common stock on
May 16, 2012.
At
May
16,
2012
the
number
of
shares
outstanding
of
the
registrant's
common
stock,
$0.001
par
value
(the
only
class
of
voting
stock), was
40,487,175.
1
TABLE OF CONTENTS
PART I
Item1.
Business
3
Item 1A. Risk Factors
17
Item 1B. Unresolved Staff Comments
20
Item 2.
Properties
21
Item 3.
Legal Proceedings
21
Item 4.
Mine Safety Disclosures
21
PART II
Item 5.
Market for Registrants Common Equity, Related Stockholder Matters, and Issuer
22
Purchases of Equity Securities
Item 6.
Selected Financial Data
25
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
26
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
31
Item 8.
Financial Statements and Supplementary Data
31
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
32
Item 9A.
Controls and Procedures
32
Item 9B. Other Information
34
PART III
Item 10.
Directors, Executive Officers, and Corporate Governance
35
Item 11.
Executive Compensation
37
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
38
Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
38
Item 14.
Principal Accountant Fees and Services
39
PART IV
Item 15.
Exhibits, Financial Statement Schedules
40
Signatures
41
2
PART I
ITEM 1.
BUSINESS
As used herein the terms Company we, our, and us refer to
Park Vida Group, Inc., its
subsidiary, and its predecessor, unless context indicates otherwise.
Company
Park Vida Group, Inc.
was incorporated in Nevada on December 7, 1999, as Aswan Investments,
Inc. to
engage in any legal undertaking. On July 17, 2002, the corporations name was changed to Montana
Mining Corp. to reflect the decision of management to enter into mineral exploration activities.
After
completing the first stages of an exploration program on an optioned property in the state of Montana, we
were unable to indicate conclusively the existence of any economically recoverable mineralization. We
therefore abandoned the purchase option and all exploration efforts in January of 2005. Thereafter, we
sought out other business opportunities and engaged in certain agreements, most recently our agreement to
acquire Produced Water Solutions,
Inc. (PWS"), which transaction did not close, and our agreement to
acquire JBP SRL (JBP) which transaction closed on September 23, 2011. On closing the acquisition of
JBP SRL the corporations name changed to Park Vida Group, Inc..
On August 20, 2010, we entered into an agreement, as amended, with Park Capital Management,
Inc.
(Park) to acquire JBP as a wholly-owned subsidiary, in order to design, construct and operate a
destination resort to be known as ParkVida in the Dominican Republic. The agreement required that we
issue fifteen million two hundred and eighty-two thousand one hundred and twenty (15,282,120) shares of
common
stock
and six
million
eight
hundred and twenty-four
thousand and three
hundred (6,824,300)
share
purchase warrants to be exercised within ten years of the date of grant at an exercise price of
$0.005 a
share
to the shareholders of Park. The agreement further required that we pay a finders fee of one million five
hundred and twenty-eight thousand two hundred and twelve (1,528,212) shares and six hundred and
eighty-two thousand four
hundred and thirty
(682,430)
share
purchase warrants
to be
exercised within
three
years of the date of grant at an exercise price of $0.06 a share. The transaction was conditioned on the
realization
of certain
milestones
on
or
before
closing the
transaction,
including an
obligation
to fund no less
than $717,619 at $0.05 per share. We completed a private placement of $767,019 and thereafter closed the
acquisition of JBP.
Our office is located at 1403 East 900 South, Salt Lake City, Utah,
84105, and our telephone number is
(801) 582-9609. Our registered agent is the UPS Store #1650, 3395 S. Jones Boulevard, Las Vegas,
Nevada,
89146.
The Company currently trades on the Over the Counter Bulletin Board under the symbol PRKV.
ParkVida Destination Resort
JBP
intends
to
design,
develop
and
operate
ParkVida
as
a
destination
resort,
the
first
phase
of
which,
subject
to financing, is expected to open in the fourth quarter of 2012. No financing is currently committed for this
purpose.
3
ParkVida will focus
on an eco-tourism adventure that offers a comprehensive outdoor experience. The 700
acre former coffee plantation site is located at the top of the Cordillera Central mountain range in the
Dominican
Republic.
We
expect
that
ParkVida
will
offer
199 hotel
rooms,
cottages
and tree houses
when
completed.
Adventure
activities
will
focus on
downhill
and cross-country
mountain
biking with
a
dedicated
chairlift for the uphill return. Other intended activities include zip lining, adventure rope courses, water
slides, hiking, fishing, spa, mule riding, quad biking, cultural classes, eco tours and coffee related
experiences such as growing, roasting and brewing.
Since one of the main experiences will be mountain biking, ParkVida intends to provide a rewarding biking
experience without the usual hassles of planning and researching that usually precede extended rides. Most
bikers looking
for
that
adrenalin-pumping trail endure
extensive
travel,
carrying their equipment, getting
lost,
and staying in dubious accommodations with no biking related infrastructure. ParkVida intends to offer a
simple destination riding vacation designed for mountain biking enthusiasts who want to be able to focus on
the trail, the ride, and the thrill of riding with the promise of great accommodations, service and relaxation.
ParkVida intends to match personal skills with equipment and guidance to provide that local trail
experience on a host of trails engineered and hand built by bikers for bikers.
ParkVida intends to be a destination where guests can be as active as they wish, or just simply relax.
Regardless of the weather conditions, it will be the resorts intention to provide sufficient activities,
services and facilities for guests to enjoy. ParkVida intends to offer:
A comfortable place to stay in a mountain setting;
A destination for bikers to come to learn and play in a warm climate year round;
A variety of activities which require little or no prior experience or skill level;
A place to develop skills and leadership in various activities;
A haven for excellence in service and facilities, including food and beverage offerings;
A place to meet and socialize with people from diverse cultures and
backgrounds.
Buildings & Facilities
Lodge
House
&
Reception
.
We
anticipate
that
the
resort
will
feature
a
central
lodge
where
guests
will
check
in, relax, spend time in the library, and
be briefed as to available activities.
The lodge is intended to be the
central location and hub
of the resort and offer views of the valley and national park beyond.
The central
lodge will also offer the following:
Plantation Restaurant. The lodge intends to feature a full-service restaurant open for breakfast,
lunch, and dinner serving traditional and healthy natural cuisine as
well as international dishes.
Bar. A stand-alone bar and lounge is intended
to be open for lunch, dinner and late into the night.
The bar will be a microbrewery where ParkVida expects to brew its own beers for guests to enjoy.
Coffee Shop. A coffee shop within the
lodge
will serve local organic coffees and coffee based
beverages. The shop is designed to have the look and feel of a local Dominican coffee shop.
ParkVida expects to package and sell coffee under its own brand name.
4
Lodging
. We anticipate that there will be five options for accommodation at ParkVida:
River Lodge. A River Lodge is expected to be located in the vicinity of the river at the bottom of
the valley as the main base for guests staying in the Valley and River Lodging areas of the resort.
The River Lodging is intended to be located in two buildings each with two floors containing 16
rooms. Deluxe Rooms will be on the ground
floor featuring individual garden terraces and a back
courtyard with an open-air bathroom and shower.
Superior Rooms on the upper floor will feature
private balconies and a daybed with unobstructed views of the river.
Valley Lodging. Valley Lodging is intended to be located in two buildings each with two floors
containing 16
rooms. On the ground floor will be the Deluxe Rooms each featuring individual
garden terraces and a back courtyard with an open-air bathroom and shower.
Superior Rooms on
the upper
floor
will
feature
private
balconies and a
daybed with
unobstructed views
of the
property.
Guest Cottages. All 130-guest cottages are intended to have panoramic
views of the valley
and the
Armando Bermudez National Park. Located within short walking distance of the main lodge each
of
the
cottages
will offer
a
spacious
walk-around deck
perched over
the
valley.
Large,
airy
and light
rooms will open out onto a deck. En-suite bathrooms will provide separate shower and bath. The
bath will double up as a jacuzzi,
which also opens out onto the deck. A bike cleaning and storage
area will be found within the confines of each
of the cottages.
Treehouses. Treehouse Lodging is intended to consist of five rooms
built on raised
wooden
platforms at "tree top" level and joined
by raised walkways to offer views over the valley below.
The rooms will have light wooden walls and roofs with huge window areas. The expected affect is
to provide guests with the feeling of being right in the middle of nature. Each room will have a
private deck.
The
Coffee
Plantation
House.
This
House
is
expected to
be
located in
one
of
the
river
valleys of the
resort. Originally the structure belonged to the owner of the former plantation and is to be
renovated to the highest standards. Set away from the main lodge, guests will have their own
private butler and access to their own dining arrangements, deck and plunge pool. Complete
with a
private spa gazebo, guests can be completely secluded.
Other Guest Buildings.
ParkVida expects to offer a host of other buildings and facilities for its guests:
Cigar Lounge.
The
Dominican
Republic
is
home
to
some
of the
finest
cigars
the
world has
to
offer.
ParkVidas Cigar Lounge is intended to
be a testament to this cigar quality.
Swimming Pool. An emerald-green infinity edge swimming pool
is to be
perched on
a
terrace to
give the appearance that it is floating above the valley below. The pool will be surrounded by
stone-tiled sun decks that feature comfortable sun-beds and umbrellas.
Spa. A
spa
is to be
located a
short walk away from the central hub and will provide
a spa treatment
menu for all ages. The spa will have six
open-air gazebos capable of allowing guests to enjoy a
massage with their partner. The spa will also have a
yoga area
that
sprawls onto the deck and a
wet
area with steam room, traditional bath and sauna.
Games Room. Stocked with games like board games, card games, computer games, the games
room is intended as a diversion for children and adults alike, particularly during those rainy days.
Gift Shop. The gift shop intends to sell snacks and toiletries as well as magazines and other
miscellaneous conveniences. In addition the shop will sell items produced and supplied
by
ParkVida to its in-house guests,
such as coffee, beer, wine and jams. ParkVida also intends to
support local artists and sell their products through the gift shop.
5
Activity House. The existing
schoolhouse at Loma Prieta (adjacent to ParkVida) will be
converted
into an activity house, mainly to provide a covered recreation space for guests to use during rainy
periods. The activity house will have a pool table, full size snooker table, table tennis, dart board
and more board games. The activity house is also intended to retain some educational aspects
including pictures illustrating the history of the facility.
Bike
Center. The
main
lodge
for
downhill
mountain
biking
is
to be
located next
to the
main village
at the top of the chairlift. The downhill biking lodge will house the main bike rental shop, the bike
merchandise shop and also the bike repair shop. The Bike Center will also be
the main location for
guests to find a
bike instructor and will include a small skills centre for guests to learn the basics of
mountain biking.
Chair Snack
Hut. A
small snack
hut located at the base of
the
chair
lift is
intended to provide
quick
and easy refreshments for anybody passing by, whether that is a biker, hiker or zipper.
Medical Services. A state of the art medical clinic will be located on site to deal with any minor
injuries as well as emergencies. Should any life threatening injuries occur,
evacuation via
helicopter to one of the private hospitals located in Santiago will be possible.
Employee Buildings.
ParkVida expects to offer the following buildings and facilities for its employees:
Staff Accommodation. Staff accommodation will be located within the existing village of Loma
Prieta. Local staff members who live on site will share rooms, with up to four people per room.
Management staff will have private accommodation.
All accommodation will be comfortable and
will have communal areas to relax, socialize, cook and wash. Since a majority of ParkVidas staff
will come from surrounding villages, the number of those living on site is expected to be minimal.
Staff
Recreation
House.
A
staff
recreation house
is
to be
created
separate
from
the
village
and
other
facilities of the resort. Open to them both during the day and the night, the house will have a
kitchen, games room, TV room and a small swimming pool with decking.
Services
&
Stores.
The
back
of
house
areas
of
the
resort
will
be
located
along
the
existing
village
of
Loma Prieta where all the services such as the laundry and maintenance and all the storage aspects
will be located.
ParkVida Activities
Biking Activities:
Downhill Mountain Biking. ParkVida will offer a great deal of downhill mountain biking trails.
The aim is to have a significant number of trails so that there are few riders on each trail.
All trails
will have features that will challenge every level of rider, providing difficulty and slope ratings of
blue, green, black, and double black.
Cross-Country Mountain Biking. ParkVida will have many cross country biking trails and these
will be the way for guests to explore all corners of the property. The idea will be to create a cross
country grid around the property with the easy trails based on no more than a four degree slope.
These runs will give guests quick access to all areas of the park with other runs interlinking these
trails.
Dirt Bike Jump Park. A professional dirt-jumping park will be located near the main entrance for
users to impress new guests to the resort. The jump park will be designed
by professionals
to
accommodate
all
ranges
of
biking
experience. It
is
envisaged
that
dirt-jumping
competitions
will
be
held here each year and will also allow for professionals to train here all year round.
Jump Pit. A jump pit will have a large kicker and foam pit for bikers to practice their freestyle
jumps with a soft and safe landing, prior to trying such tricks on the trails.
6
Bike Skills Centre & Boot Camp. There will be weekly workshops to assist bikers in upgrading
their skills. The operation will organize boot
camps
for people who are new to mountain biking,
involving intensive riding skills exercises and drills. Skills camps, hosted by
endorsed pros,
will be
offered and designed to improve expert riders skills which will be sure to please that up and
coming rider in the family.
In addition to riding techniques, the course will also discuss pre-ride
maintenance, the indispensable trailside repair toolkit, trail safety and courtesy.
Lake/Water Sports:
Kayaking and Rafting. Half day rafting and kayaking
will be conducted off the resort, but will be
organized for the ParkVida guests.
Hydro Speeding.
Hydro speeding is described as surfing or tobogganing down the rapids. Guests
will have wetsuits and a specially designed floating toboggan - rather like a body board.
Fishing.
It is expected the river running adjacent to ParkVida will be pooled by a dam to produce
hydroelectric power by 2016.
Once the dam has been completed, part of ParkVida
will front onto a
lake. The lake will be stocked with fish and guests will be able to catch and then have the chefs
prepare their fish for dinner.
Sailing and canoeing. Once the lake is formed, sailing and canoeing will be provided for
guests to
explore
the coastline. Using a variety of dinghies and canoes, guests with no experience can have a
guide take them out for a short tour, or, for those who know how to sail, longer excursions will be
possible.
Paddle Boarding. Paddle boarding, a fast growing and popular water sport, will allow guests to
keep fit whilst exploring the newly formed lake and its coastline. Equipment will be available to
rent from the resort and for those new to it, instruction will be on hand.
Other Outdoor Activities:
Hiking. ParkVida has numerous trails for the guests to enjoy on their own or with guides.
Exploring will be available along the ridge line, up and down the entire valley, and along the river.
Zip Trek. There will be a number of different zip trekking opportunities within the site. Zip
trekking combines an element of adventure with learning the flora and fauna of the natural
surroundings.
A
route
through
the
rainforest
valley
will
combine
six
zip
lines,
whilst
a
zip
line
route
along
the
river edge
will
allow
users
to travel
from
the
top
of the
hill
all the
way
down
to the
bottom
in one ride.
Rope Course/Airpark. The rope course/airpark, located in and amongst the dense rainforest will
consist
of a
giant
obstacle
course
up in
the trees
using ladders,
walkways, bridges
and tunnels made
of wood, rope and super-strong wire. Guests will get kitted up with harnesses, pulleys and
karabiners, and after a safety briefing, they will be let loose into the forest canopy, free to swing
through the trees. Instructors will always be on hand, regularly patrolling the forests.
Waterslide. A waterslide will meander from the top of the resort to the valley bottom, taking you
through some of the most spectacular natural landscape on offer. Splash pools will be located all
the way down.
Steel
Bobsleigh.
A
state-of-the-art
steel
track
that
starts
at
the
top of
the
chairlift
will
weave
its
way
down a narrow course that concludes at the base of the lift.
Mule Riding. ParkVida will own their own mules and guests can enjoy short or long mule rides
throughout the property. One of the most stable and sturdy animals, the mules will happily carry
guests through the entire levels of the property. It will also be possible for guests to
do a
five-day
mule/camping excursion to Pico Duarte on mule back.
7
Obstacle Course /
Jungle Training. A 1,400m
obstacle course will
incorporate physical and mental
challenges. The unique figure eight design will feature 45 obstacles that test strength, balance,
agility, stamina and mental problem solving skills. The course will be ideal for team building,
confidence building, fitness, and creating a wonderful sense of personal satisfaction.
Riverteering. Guests will be able to climb, scramble, abseil, slide and jump along the river banks
riverteering course. They will be equipped with a full set of safety gear and a guide to show the
way.
Cultural and Nature Activities.
Coffee Production. Guests will be able to learn about the intricate process of coffee growing, from
planting the tree to picking, drying, roasting and packaging, and then take a bag of coffee home
with them.
Culinary Classes. Culinary classes at ParkVida will introduce guests, both
novice and experienced
cooks, to the art of Dominican cuisine. Designed
by the resort's culinary team, the program offers
guests a hands-on learning experience in a traditional setting.
Microbrewery. ParkVida will have its own microbrewery within
the resort, where local beers are
produced. Guests will have an opportunity to learn about the process and taste the beer first hand.
Botanical Tours. Botanical tours of the nearby National Park will be conducted by local guides
who have spent their entire lives there, bringing
a
wealth of experience and stories, which, in itself,
will add a unique flavor to the experience.
Spanish Lessons. Weekly Spanish lessons will be held for the guests of ParkVida to learn basic
communication skills in order to interact more easily with the local population and test their new
found skills on the staff.
Community Activities.
Mountain Bike Training. A training program will be developed to encourage local school children
to try mountain biking.
A weekly or monthly program with an aim to try and breed world class
professional riders who can compete on a world stage will be incorporated.
English Lessons. English lessons will be offered
on a weekly basis for the local population.
ParkVida Sustainability Goals
JBP has developed numerous goals to ensure that ParkVida will be as sustainable as possible. These goals
encompass construction, energy generation and distribution, potable water, wastewater treatment, and
waste management of the project. The goals are threefold:
Environment:
o
Materials minimize the impact of building materials and the generation of waste.
o
Biodiversity no net loss of ecosystem function and biodiversity.
o
Water protect and conserve both natural hydrology and
potable water resource.
Equity:
o
Connection to nature bring nature, recreational and environmental education
opportunities into ParkVida.
o
Well being protect and
improve the health and productivity of those who visit and live
there.
8
Economic:
o
Socioeconomic
support
educational opportunity, community development and labor and
regional development.
o
Energy reduce energy consumption and minimize the use of fossil fuels and greenhouse
gas emissions.
o
Monitoring ongoing measurement and monitoring of key sustainability metrics.
ParkVida Development Team
Select International Ltd. /dba Select Contracts
Select Contracts, formed in 1978, has grown into a 50+ person-strong global group that delivers turnkey
and consultancy services to the leisure and entertainment, sport
and tourism market sectors. With corporate
offices
in
Whistler,
Dubai,
New
York
and
UK,
Select
Contracts
designs,
builds
and
operates
destinations
all
over the world.
Projects typically include theme parks, water parks,
downhill bike parks, family entertainment centers,
hotel developments, resort developments, marinas,
shopping malls, winter and summer resorts,
entertainment zones, snow-based projects and sports complexes. Each of these areas require a specialist
knowledge and which require
the vision, experience and attention to detail that have enabled these projects
to become an operational and financial success.
Select Contracts is highly experienced and
knowledgeable in the leisure resort industry. They have
designed, built and operated leisure resorts in Asia, Middle East,
Europe and North America and their
turnkey approach enables them to
provide their clients with a total destination solution that is financially,
technically and operationally viable and truly deliverable.
Select Contracts has contracted with JBP to provide the following services for the ParkVida resort as
follows:
Turnkey Solutions
Conceptual Design
Detail Design
Project Management
Development Management
Pre-opening Management
Operations Contracts
Project Repositioning
Client &
Investor Representative
Modularis
Modularis is a company based out of Santo Domingo in the Dominican Republic and is the leading design
and development firm for
handling projects in
the mountains in
the country. ParkVida very quickly saw the
experience that Modularis could bring to the project and they were commissioned straight away on a
consultancy basis.
9
Modularis has contracted
with
JBP as
the
architects of
record for
ParkVida.
Modularis
is also in
the
process
of obtaining planning and environmental permissions from the appropriate Dominican regulatory
authorities through title work, commissioning an environmental study and applying for favorable tax
treatment for the ParkVida development.
El Bufete Meija - Ricart & Associates
El
Bufete
Mejia-Ricart
&
Associates
is
JBPs
counsel
of record in
the
Dominican
Republic.
The
firm
is
also
based in Santo Domingo and is built on the experience of four generations of lawyers, offering expert
service
in
all
of the
specialist
practice
areas.
JBP relies
on
El
Bufete
Meija-Ricart
&
Associates
for
the
local
legal knowledge required for developing ParkVida.
Gravity Logic
Gravity Logic has worked with Whistler Blackcomb, operators of the Whistler Mountain Bike Park and is
known worldwide for its expertise in building the worlds number one mountain bike park.
Based on that
experience, Gravity Logic has assisted many other businesses in
the design and development of park riding
experiences by creating facilities that thrill riders over a wide range of ages, skills, and interests.
Gravity
Logic
has
already
been
onsite
in
the
Dominican
Republic
and will
be
contracted
as
the
development
proceeds to provide ParkVida with activities management in the following categories of services:
Design and planning, undertaking a thorough ParkVida site analysis.
Design and development, overseeing bike trail and other activities as per the design plan.
Mountain safety & risk management.
Architectural Design Agreements with Modularis
On May 19, 2010 JBP entered into an architectural design agreement with Modularis to prepare general
conceptual
information,
to create a
project
draft,
to generate
architectural
blueprints,
to draft
sales
materials
and to assist with legal matters over 28 weeks.
The total cost for the provision of these services was
$63,000. The agreement was performed in full by year end 2010.
On May 5, 2011 JBP entered into an architectural design agreement with Modularis to provide schematic
design and construction drawings for ParkVida to detail all aspects of the buildings to be constructed that
incorporate floor plans, cross sections and elevations in order to obtain planning permission for the
development. The total cost for the provision of these services is to be $95,400 with payments spread over
several months.
Consultancy Services Agreement with Select Contracts International
On December 7, 2010 JBP entered into a Consultancy Services Agreement with Select Contracts for the
overall concept design, project initiation, project design, market study, brand identity, component matrix,
conceptual master plan, conceptual art work,
business plan, ground finishes plan, back of house design,
food and beverage layouts, mood boards, landscaping, trail design, signage design, indicative power
requirements,
ID and data plan, AV requirements, RFID plan, detailed design review and progress reports.
The
total
cost
for
the
provision
of
these
services
is
$1,162,000.
JBP
has
suspended
its
agreement
with
Select
Contracts due to a lack of funding and may seek to renegotiate the terms of said agreement when sufficient
financing is in place.
10
Consultancy Services Agreements with Modularis
On June 30, 2011 JBP entered into a Consultancy Services Agreement with Modularis to obtain planning
permission
for
ParkVida
from
local
authorities in
the
Dominican
Republic
and to oversee
the completion
of
an
environmental
impact study
by a
third party.
The
total
cost
for
the
provision
of these services
is
$55,836.
On July 28, 2011 JBP entered into a Consultancy Services Agreement with Modularis to complete title
work on the properties that comprise Loma Prieta and to prepare and submit an application for provisional
classification under the
Law
for Promoting Tourism Development Law
158-01
in order for ParkVida to
benefit from for the incentives available to resort developers in underdeveloped areas of the Dominican
Republic. The total cost of these services is $56,825. The work to obtain classification under the tax
incentive law
has been suspended by Modularis pending final changes to the JBP business plan and will be
resumed once pending changes are finalized.
Consulting Services Agreement with Isaac Castañeda
On November 29, 2011 the Company entered into a Consulting Services Agreement with Issac Castañeda
for him to review and evaluate the market studies, business plans, and all material to date prepared for JBP
by Growthink and Select Contracts, to assess whether critical information had been produced that would
allow the management team to adequately pursue a capital raising process with sophisticated investors for
ParkVida. For that purpose, Mr. Castaňeda was to complement the information gathered thus far with
additional critical material that would be gathered from discussions with management, certain Company
stakeholders, certain key opinion leaders in the gravity-fed mountain biking field, and Dominican tourism
authorities, operators, and sports associations. The total cost of these services is $15,000.
Mountain Biking Industry
Mountain biking is a new and growing sport with a commercial history that dates back a little over three
decades. Changes in bicycle technology in the nineties combined with a wave of innovative young riders
resulted in the birth of a breed of cyclist that favors the exciting experience of riding mountain bikes
downhill on varied and challenging terrain. Since those recent beginnings, downhill mountain biking has
become popular all over the world. The sport is now supported by strong competition in the market for
bikes
and
equipment,
a
high
profile
international
race series
and
a
strong
network
of
riders
across
the
planet.
Typically, mountain bikers are also dedicated
conservationists who volunteer their time, labor and money
to
protect
the natural
and cultural resources where they
ride.
Scientific research
has shown
mountain biking
to
be a low impact environmentally sustainable activity with no more impact on natural resources than
hiking, and far less than many other recreational activities.
Mountain Biking in the Dominican Republic
Reports
of mountain
biking
taking
place
in
the
Dominican
Republic
go as
far
back
as
the
early 1990s
and it
is
likely
that
the
sport
was
present
even before
then.
The
country
contains
the
highest
peak
in
the
Caribbean,
Pico Duarte (3,087m) and a number of other mountains within the Cordillera Central mountain range.
Nonetheless, there are few reports of purpose-built mountain bike trails, with the exception
of the 12km
long track that was created in Jarabacoa for the 2003 Pan American Games.
The track was built (in part
using existing trails) for the purposes of cross-country mountain bike racing and exists to the present day
with no promotion.
Little or
no regulation
of trails and no clear legal policy
on public rights
of way, even
in
National Parks, mean trail
networks are subject to frequent disruption and change. The prospect of
changing
conditions
often
acts
as
a
barrier
to entry
for
many
and effectively hinders
the growth
of the
sport.
Iguana Mama is the only notable tour operator in the country offering regular mountain biking trips for
11
tourists. The operation currently has 30 bikes and employs three full-time guides with
three part-time staff.
They offer a range of six different tours across a range of lengths and difficulties for under $100 per day,
including bike and equipment.
Evidence exists of a strong latent domestic demand
for a
dedicated mountain biking facility in the
Dominican Republic as there are a number of existing mountain bike clubs in the country. The
communication and
organization of these clubs is generally linked to a cycle retail store and they are
generally
found in
one of
the larger urban
areas, particularly Santo Domingo and Santiago. The Dominican
Republic also has a UCI-affiliated national federation for cycling, the Federacion Dominicana De
Ciclismo which is based at the velodrome in Santo Domingo.
Downhill Bike Market Characteristics
Mountain biking market is generally segmented into the following five groups.
Downhillers & Freeriders: young,
predominantly male cyclists who have a passion for riding steep,
technical
downhill
terrain at
high
speed more
than once
per
month. They
are
willing to travel long
distances
and spend large proportions of their disposable income on participation in the sport, often staying
overnight. They require challenging and constantly evolving terrain to keep them interested
and are drawn
to competitive events.
Enthusiasts: competent bike handlers who go mountain biking an average of once per month but who are
not particularly fit and do not plan their own routes. They are willing to travel long distances and spend
large proportions of their disposable income on participation in the sport, often staying overnight at
weekends. They are influenced
by the latest trends and technologies and are likely to
be willing to pay for
the benefits of skills training. They ride uphill so they can enjoy the downhill.
Sport Riders: physically fit, able riders who are frequently involved in off-road racing. They seek
challenging uphill and downhill terrain. Often members of clubs, they may also have an interest in road
cycling
and
will
attend
events
which
test
physical
endurance
and
speed.
Sport
riders
may
show
an
interest
in
skills training, particularly regarding technical descents.
Trail Riders: skilled
outdoor enthusiasts with a strong interest in
adventure who
often participate in other
outdoor activities, such as hiking or kayaking. The aesthetic of the mountain biking experience is more
important to these people than the technical challenge. They are often members of rights of way or
mountain biking pressure groups. Trail riders may show
an interest in skills training, particularly regarding
technical descents.
Leisure/Families:
the
leisure
and
family
market
is
large
but
generally
unaware
of
the
technical
skill
required
to
participate
in
high-level
mountain
biking.
They
benefit
from
non-technical
trails
with
a
consistent
surface
and gentle gradient.
Hotel Market
The Dominican Republic has an estimated
70,000 hotel rooms. Approximately 60% of the hotels in the
country are rated at the three-star level, with just 26% classified as four-star. Only 2-3%
of the hotels in the
country are rated as five-star. The remainder are unclassified, 2-star or below.
Hotels in the Dominican Republic are mainly found in a small number of coastal towns and cities. The
focus of the majority of the existing product is beach tourism. Santiago and Santo Domingo are the only
12
non-beach oriented destinations.
Accommodations in the immediate vicinity of Loma Prieta are non-existent. However, there are two
principal destinations within the Cordillera Central mountain range that offer accommodations in the
region:
Constanza is a town in the La Vega province of the Dominican Republic that is home to
approximately 42,000 people. The town is at an elevation of 1,164m
and the local industry is
predominantly agriculture. Constanza is a known start point for hiking trips to the summit of Pico
Duarte and a base for other activities, including mountain biking, rock climbing and horse riding.
Constanza has three hotels with another in a neighboring village that offer accommodations at no
greater than a three-star classification.
Jarabacoa is also found in the La Vega province and is home to an estimated
57,000 people.
At an
elevation of 529m, the areas prevalent source of income is agriculture. The town hosts four
accommodation providers, of which the highest classified is three-star hotel. Jarabacoa is well
known as a destination for adventure tourism. Activities available include hiking, rock climbing,
mountain biking, rafting, kayaking and horse riding.
Competition
The Companys evaluation to date of the competitiveness of the ParkVida project is based on a site visit,
interviews with local professionals, and detailed research. The concept behind ParkVida is unique and
therefore there are no direct competitors in the Dominican Republic or elsewhere to the essence of the
project. However, there are a number of hotels and resorts both in the Dominican Republic and globally
which serve as good benchmarks for particular aspects of the ParkVida concept. Our competition is
presented here according to four important characteristics of the project.
Eco-Tourism in the Caribbean
Strawberry Fields Together, Jamaica. This development, within a tropical nature reserve on the Jamaican
coast,
provides a range of cottages in an eco-lodge setting, including standard and deluxe
options. Meal
plans are available for
guests
with
a
range of options,
all using
local
ingredients and a
mixture
of
traditional
and modern
recipes. There is even a special option available to be served dinner alone on a secluded beach.
There
is
an
in-house adventure
tour
operator
that
provides
a
range of
activities
that
take
place
during
the
day
such as ATV driving, fishing and coffee plantation tours.
Villa
Pajon, Valle Nuevo, Dominican Republic. This sustainable tourism development provides
a
range of
lodges for
different group sizes in the Valle Nuevo area near Constanza. Situated in the Cordillera Central
mountain range, the area is popular with hikers, naturalists and equestrian enthusiasts. Accommodation is
basic self-catering, with no electricity, and is aimed at those wishing to connect with nature.
Five-Star Luxury in/near the Dominican Republic
Tortuga Bay, Punta Cana, Dominican Republic. This five-star resort was awarded the AAA
Five Diamond
Award for outstanding levels of service. Guests are collected before reaching customs and provided with a
fast-track
service
through
the airport
before
being
driven
to the resort
by
private
car.
The
designer
villas are
lavishly furnished and each is provided with their own electric golf buggy in order to travel around the
resort. There is a golf course and spa on site, along with swimming pools and a range of activities.
The Horned Dorset Primavera Hotel, Rincon, Puerto Rico. The Horned Dorset provides a number of
colonial style villas on the Puerto Rican coast with
full hotel service and facilities. The hotel is a renowned
five-star facility and is noted
for its consistently high occupancy levels and regularly returning client base.
13
There are dining options
available both
in the restaurants on
site and in-room. A
golf course and casino can
be found nearby and there is access to the beach. A range of water sports is available and horseback riding
on the beach is popular.
Off-Grid Sustainable Construction
Bay of Fires Lodge, Tasmania,
Australia. This truly ecologically sensitive development offers discounted
pricing for those that choose to walk to the lodge rather than take a vehicle. Power for lighting and heating
is provided by photo voltaic cells on the roof and all of the materials for the construction were lifted in by
helicopter or carried
by hand to minimize disturbance to the local environment. There is a strict waste
management system in place to ensure that everything that can be recycled is recycled and
where possible
the use of resources is done so sparingly in the first place. The lodge provides a base for the exploration of
the surrounding area.
World-Renowned Mountain Biking
Whistler Bike Park, British Columbia, Canada. The Whistler Bike Park opened in 1998 with two main
factors driving the idea:
pressure
from
mountain bikers
in the
area who saw
an
opportunity
to
use
the
ski
lifts
in the
summer
months to increase the amount of time they spent riding downhill, and
a desire on the part of the ski resort operator Whistler Blackcomb to fill the otherwise
non-profitable summer months.
Since opening, the Whistler Bike Park has become the best-known and most successful bike park in the
world. Open from mid-May to mid-October during which time it welcomes more than 80,000 visitors onto
its
lifts.
Based on
no prior
model,
the
Whistler Bike
Park uses
the vertically integrated approach
taken
from
its winter
operation.
The company
operates lifts, rental
businesses, food
and beverage
outlets, a
bike
school
and a number of franchises and retail outlets. Users of the Whistler Bike Park must have an
appropriate
bike, protective gear and have signed a waiver before being permitted into the park. Barcode-scanning
validation is used by staff at the base of the lifts to check the pass of each individual. During full opening,
the user has access to
approximately 50 mountain bike trails graded
from green to double black and three
lifts.
The Whistler Bike Park bike school provides instruction and guiding services to all levels of rider visiting
the park. Participants can choose between public group lessons or hiring a private instructor for a group of
their choosing. Beginners are shown the basic techniques and given a safety briefing before being
introduced to the trail network, starting with the easiest trails. Higher-level riders can choose to work on
specific skills or simply be guided through new terrain. Package deals are available on lesson, lift tickets
and equipment rental.
Portes
du
Soleil,
Haute
-
Savoie,
France.
The
Portes
du
Soleil
network
is
a
total
of
12
interconnected
resorts
that operate primarily as a ski and
snowboard area of the French
Alps in winter. In summer, the region
opens
a
limited number of
lifts to allow
access by
bike to trails that span an area that crosses the border into
Switzerland. Mountain bike trails in the region grew organically, often created
by the users themselves.
Initially, the only professionally constructed trails were created to attract major international competitions
(Mountain Bike World Championships,
2004)
but increasingly the resorts themselves have begun to fund
the building of new trails.
Unlike the Whistler Bike Park, ownership of business operations in the region is fragmented. A range of
companies exists to manage retail, accommodation providers, lift operations and food/beverage outlets
among other businesses in the area. The Portes du Soleil, particularly Morzine and Les Gets, attract a large
number of summer visitors each year (official estimates are in the region of 150,000.)
14
Competitive Analysis
We believe that the ParkVida project has the following strengths:
ParkVida is a unique concept that is not easily copied given the requirement of suitable land
ownership which should serve as a barrier to entry for competitors.
Location, natural beauty, favorable topography, agreeable climate.
Local tax incentives.
Local community and political support.
Established demand.
We believe that the ParkVida project has the following weaknesses:
Existing road access to the site is merely acceptable and will require development.
Poor quality of existing tourism products in the immediately surrounding area.
General association of the Dominican Republic with three star all-inclusive beach holidays only.
We
believe
that
the
ParkVida
project
offers
the
following
opportunities
which
may
give
it
an
advantage
over existing competitors:
A high level of service in a country where currently only a small percentage of five-star level
facilities exist.
A range of different activities on the same site:
o
Downhill mountain biking
o
Cross country mountain biking
o
Zip lining
o
Hiking
o
Spa services
o
Fishing
o
Coffee tours
ParkVida will be like no other resort found in the Dominican Republic or the Caribbean with competitive
advantages that will distinguish it from other resorts as offering something unique, whilst being both
attractive and accessible to a broad market of enthusiasts.
Marketability
The Dominican Republic service sector provides 67.5% of the countrys GDP; tourism is a large
contributor to this sector. The sector is not without government-provided economic incentives for the
creation of new business and growth including tax relief to service sector business developers. On October
9, 2001, Law 158-01
was issued to promote tourist development in areas with limited resources and in new
areas with potential for tourist related activities. The legislation also created an official fund for the
promotion of tourism.
In 2010 there were 3,189,306 foreign visitors to the Dominican Republic. Of these, 2,910,280 stated their
reason for entering the country to be recreation. Approximately 53% were female, 47% male. Half of the
tourists were under the age of 35. The principal foreign originations for such tourists were North America
and Europe at over 55% and 30%, respectively.
15
The target audience for ParkVida will be relatively varied given the variety of attractions and leisure
components intended to be available. JBP anticipates a large element of crossovers from one target
audience to another, each with their own particular buying and spending patterns. The core target audience
is expected to be the mountain biking fraternity, which includes downhillers and free riders,
enthusiasts,
sport riders, trail riders, leisure/family riders and specialist groups. ParkVida will also offer facilities and
services to an audience seeking value for money, as well as an eco adventure.
The market for JBPs audience is anticipated to range from international to local. Predominantly, JBP
expects the international traveler to be from North America but it is also expected that, as the ParkVida
experience
is
recognized,
that
there
will
be
no
limitations
as
to
where
the
mountain
biker
will
travel
from,
as
it will be designed as a destination for bikers to learn and play in a warm climate year round. JBPs target
audience is also expected to be wide reaching and will not necessarily include those who want to mountain
bike, or even know how to mountain bike. ParkVida intends to cater to the needs and requirements of the
local
Dominican
market
as
well,
so day
visits
or
longer
stays
are
likely
from
nearby cities,
especially
during
the weekends.
Cyclical Nature of the Business
The busiest tourist season in the Dominican Republic is winter, beginning in mid-December and lasting
until the end of April. This season is historically drier than the rest of the year, with less chance of tropical
storms and high winds. A second peak occurs in the typical summer holiday months from June to
mid-September. The quietest months are May,
October and November.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements and Labor Contracts
The Company holds no patents, trademarks, licenses, franchises, concessions, royalty agreement or labor
contracts.
Governmental and Environmental Regulation
The Companys operations are subject to a variety of national, federal, provincial and local laws, rules and
regulations relating to, among other things, worker safety and the use, storage, discharge and disposal of
environmentally sensitive materials. The Company believes that it is in compliance in all material respects
with all laws, rules, regulations and requirements that affect its business. Further, the Company believes
that compliance with such laws, rules, regulations and requirements do not impose a material impediment
on its ability to conduct business.
Dominican Republic Tourism
Incentive Law. The Law for Promoting Tourism Development, 158-01,
was established to regulate scarcely developed Dominican Republics tourist destinations and new
destinations
in
provinces
and locations
having great
potential.
The
Cordillera
Central
mountain
range
is
one
such area. Under the regulation, projects requiring significant tourist infrastructures must submit an
environmental impact study. Accordingly, the ParkVida requires such a study, which will evaluate the
project,
the
infrastructures
required,
the
impact zone
and the
sensitivity
of the
area
to be
developed.
JBP has
initiated an environmental impact study and engaged Modularis to ensure ParkVidas eligibility for the
benefits to resort developers that come with 158-01.
Climate Change Legislation and Greenhouse Gas Regulation. Most studies over the past couple decades
have
indicated that emissions
of certain gases contribute
to warming
of the
Earths
atmosphere. In response
to these studies, many nations agreed to limit emissions of greenhouse gases pursuant to the United
Nations Framework Convention on Climate Change, and the Kyoto Protocol to which the Dominican
Republic is a signatory. Greenhouse gas legislation in the Dominican Republic could have a material
16
adverse effect on our business, financial condition, and results of operations.
Employees
The Company has four employees, including Ruairidh Campbell, our sole officer and director, two
individuals in the Dominican Republic responsible for maintaining the property and one individual in
Canada who serves as the president of JBP. Otherwise, the Company looks to Mr. Campbell for his
entrepreneurial skills and talents. Management also uses consultants, attorneys and accountants as
necessary.
Research and Development
During the years ended
December 31, 2011 and 2010, the Company spent no amounts on research and
development activities.
Reports to Security Holders
The Companys annual report contains audited financial statements. We are not required to deliver an
annual report to security holders and will not automatically deliver a copy of the annual report to our
security holders unless a request is made for such delivery. We file all of our required reports and other
information with the Securities and Exchange Commission (the Commission). The public may read and
copy any materials that are filed by the Company with the Commission at the Commissions Public
Reference Room at 100 F Street, N.E., Washington, D.C.
20549.
The public may obtain information on the
operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The statements
and forms
filed by
us
with
the
Commission
have
also been
filed electronically
and are
available
for
viewing
or copy on the Commission maintained Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the Commission. The
Internet address for this site can be found at
http://www.sec.gov
.
ITEM 1A.
RISK
FACTORS
Our operations and securities are subject to a number of risks. Below we have identified and discussed the
material risks that we are likely to face. Should any of the following risks occur, they will adversely affect
our operations, business, financial condition and/or operating results as well as the future trading price
and/or the value of our securities.
Risks Related to the Companys Business
We have a history of significant operating losses and such losses may continue in the future.
Since our inception in 2008, our expenses have substantially exceeded our income, resulting in continuing
losses and an accumulated deficit of $773,316 at December 31, 2011. The Company has never realized
revenue from operations. Our only expectation of future profitability is dependent on the successful
development of ParkVida as a resort, which success is in no way assured.
The Companys limited financial resources cast severe doubt on our ability to develop ParkVida .
The Companys future operation is dependent upon the successful development of ParkVida. We found it
impossible to realize the financing needed for
our share exchange agreement with PWS and may encounter
the same difficulty in realizing the requisite funding to see the development of ParkVida through to
17
completion. The Companys inability to finance its operations sufficiently may prevent it from developing
ParkVida. Should the Company be unable to develop ParkVida, it will, in all likelihood, be forced to cease
operations.
We are dependent upon key personnel who would be difficult to replace.
Our
continued operation will
be largely
dependent
on
the efforts
of Ruairidh
Campbell,
our
sole
officer
and
director, and Mason Blackmore, JBPs president. We do not maintain key-person insurance on Mr.
Campbell or Mr. Blackmore. Our future success also will depend in large part on our ability to identify,
attract and retain other highly qualified managerial, technical and sales and marketing personnel.
Competition for these individuals is intense. The loss of the services of either Mr. Campbell or Mr.
Blackmore or our inability to identify, attract or retain qualified personnel in the future, or delays in hiring
qualified personnel, could make it more difficult for us to maintain our operations and meet objectives.
We require near term financing to satisfy working capital requirements.
We
require
near
term
financing
through
equity offerings
or
debt
placements
to meet
current working
capital
requirements. Despite the immediacy of necessary financing, the Company has no commitment to raise
any of the requisite capital,
without which it will not be able to meet its financial obligations.
Unpredictability of future revenues and potential fluctuations in our operating results.
Since we have no history of generating revenues in the hospitality industry or at all, we are unable to
provide accurate forecasts of anticipated revenues. Although we expect to rely on the expertise of
consultants experienced in the field to indicate performance going forward, our current and future expense
levels are based largely on our own estimates. Further, our future commitments may make it prohibitive to
adjust spending to compensate for unexpected
revenue shortfalls or delay. Accordingly, any significant
shortfall or delay in realizing revenue in relation to our planned expenditures would have an immediate
adverse affect on our business, financial condition, and results of operations.
The results of our operations depend on the efforts of third parties.
Almost
all
of
our
operations
depend on
the
efforts
of
third parties
including
Modularis
and Select
Contracts.
Despite being experts in their respective fields, our dependence on third parties to initiate, determine and
conduct operations could impede our prospects for success.
Our ability to begin construction on ParkVida will depend upon the receipt of governmental approvals.
JBP is currently coordinating efforts to obtain government approvals for ParkVida from the Dominican
Republic. Approval will require JBP to provide the government with a comprehensive plan detailing the
development of ParkVida as well as an environmental impact statement for the project. A lengthy
application process or a rejection of JBPs application may cause us to abandon our plan to develop
ParkVida or alternatively to change our businesses development objectives in the Dominican Republic.
Developing and operating destination resorts like ParkVida are inherently risky.
We
will
be exposed to potential
setbacks
during
the
development
of ParkVida.
Destination resorts
require
a
lengthy development period, necessitate complicated space planning and design, are highly capital
intensive and face high market expectations in terms of the physical product offering. Setbacks related to
any of these factors could negatively affect costs and influence future investment returns.
18
Additionally, a new set of risks will arise in the event we complete the resort.
At that time volatility in our
net
operating
income will
be
our greatest risk. Fluctuations
in
the
operating
performance
of ParkVida could
negatively impact the net operating income available to us which in turn could affect our ability to service
any future mortgage or senior debt, potentially forcing us into liquidation.
Risks Related to the Companys Stock
The market for our common stock is limited and our stock price may be volatile.
The market for our common stock is limited due to low
trading volume and the small number of brokerage
firms
acting as
market
makers.
Due
to these
market
limitations and frequent
volatility in
the market
price
of
our stock, our stockholder may face difficulties in selling shares. The average daily trading volume for our
stock has varied significantly from week to week and from month to month, and the trading volume often
varies widely from day to day.
If the market price for our common stock declines, stockholders or others may be encouraged to engage
in short selling, depressing the market price.
The
significant
downward pressure
on the price
of the
common
stock as
stockholders
or
others
sell
material
amounts of common stock could encourage short sales. Short selling is the selling of a security that the
seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short
sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold it
short. Significant short selling of a companys stock creates an incentive for market participants to reduce
the value of that companys common stock.
If a significant market for short selling our common stock
develops, the market price of our common stock could be significantly depressed.
We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which expenses may
continue to negatively impact our financial performance.
We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as
well as related rules implemented by the Commission, which control the corporate governance practices of
public companies. Compliance with these laws, rules and regulations, including compliance with Section
404 of the Sarbanes-Oxley Act of 2002, has substantially increased our expenses, including legal and
accounting costs, and made some activities more time-consuming and costly.
19
Our common stock is currently deemed to be penny stock, which makes it more difficult for
stockholders to sell their shares.
Our common stock is and will be subject to the penny stock rules adopted under section 15(g) of the
Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the
NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share or that
have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or
more years). These rules require, among other
things, that brokers who trade penny stock to persons other
than established customers complete certain documentation, make suitability inquiries of stockholders
and provide stockholders with certain information concerning trading in the security, including a risk
disclosure
document and quote
information
under
certain
circumstances.
Many
brokers
have decided not
to
trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the
penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our
securities.
If our securities are subject to the penny stock rules, stockholders will find it more difficult to
dispose of our securities.
Our internal controls over financial reporting are not considered effective which conclusion may result
in a loss of investor confidence in our reports and in turn have an adverse effect on our stock price.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our
management on our internal controls over financial reporting. Such report must contain, among other
matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of
the year, including a statement as to whether or not our internal controls over financial reporting are
effective. This assessment must include disclosure of any material weaknesses in our internal controls over
financial reporting identified by management. Since we are unable to assert that our internal controls are
effective, our investors may lose confidence in the accuracy and completeness of our financial reports,
which in turn could cause our stock price to decline.
The elimination of monetary liability against our directors, officers and employees under Nevada law
and the existence of indemnification rights for our directors, officers and employees may result in
substantial expenditures by us and may discourage lawsuits against our directors, officers and
employees.
Our articles of incorporation contain a specific provision that eliminates the liability of directors for
monetary damages to us and our stockholders; further, we are prepared to give such indemnification to our
directors and officers to the extent provided by Nevada law. The foregoing indemnification obligations
could result in us incurring substantial expenditures to cover the cost of settlement or damage awards
against directors and officers, which we may be unable to recoup. These provisions and resultant costs may
also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary
duties and may similarly discourage the filing of derivative litigation by our stockholders against the
Companys directors and officers even though such actions, if successful, might otherwise benefit us and
our stockholders.
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
Not applicable.
20
ITEM 2.
PROPERTIES
Offices
The
Company
maintains
its
offices
at
1403
East
900
South,
Salt
Lake
City,
Utah,
84105.
We
pay
no rent
for
the use of this office. The Company does not believe that it will need to maintain a larger office at any time
in the foreseeable future in order to carry out its operations.
JBP maintains an office in Santo Domingo, Dominican Republic for which it pays no rent. JBP does not
believe that it will need to maintain additional office space at any time in the foreseeable future in order to
carry out the plan of operation described herein.
ParkVida
JBP has purchased
approximately 700 acres located at the top of the Cordillera Central mountain range in
the
Dominican
Republic during
2008.
The
property
is
in
the
province
of Santiago and borders
the
Armando
Bermudez National Park. JBP intends to develop the property to offer 199 rooms adjacent to an existing
village, Loma Prieta. Nine small homes, a school building and a market comprise the village, all of which
were purchased by JBP in 2010.
Road access to the site is available from Santiago, a journey of approximately two hours. The
road is a
mix
of asphalt and hard-packed earth and follows a route through a number of small villages, coffee and fruit
plantations.
The
current
road from
the
base
of
the
valley
across
a
bridge
over
the
river
Bao to
Loma
Prieta is
a poor
quality track with occasional steep sections and is currently passable only with an
appropriate all
terrain
vehicle.
Helicopter
access
to
the
site
is
possible,
with
a
suitable
open
landing
area
next
to
the
existing
school building. Domestic travel and airport transfers for guests choosing to travel by air will also be
provided.
The
proposed central
area
of development
lies
on
a
mountain
ridge
at
an
elevation
of
approximately
1,300m
that
rises
steadily
to the
highest
point
of
the
site
at
approximately
1,670m
in
the
southeast.
The
steeply
sided
ridge
drops
more
than
700m
vertically
to the
base
of the
valley
and the
river
Bao below
and to
the
west. The
majority
of
the
site
provides
a
southwest
aspect
that
is
sunlit
for
the
entire
day.
Northwest of
the site,
further
downstream
along the river Bao, is the future site of a large hydroelectric dam due to be completed by a
Brazilian developer in 2016. The dam will produce a lake in the base of the valley that will have a water
level expected to be at an
elevation of around
860m.
The project will flood a
small part of the property and
provide bordering access to a new lake.
ITEM 3.
LEGAL PROCEEDINGS
The Company is currently not a party to any legal proceedings.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
21
PART II
ITEM 5.
MARKET
FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS,
AND ISSUER
PURCHASES OF EQUITY SECURITIES
The Company's common stock is quoted on the Over the Counter Bulletin Board, a service maintained by
the Financial Industry Regulatory Authority
under the symbol, PRKV. Trading in the common stock in
the over-the-counter market has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions. Further, these prices reflect inter-dealer prices without
retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. The
following table sets forth for the periods indicated the high and low bid prices for the common stock as
reported each quarterly period within the last two fiscal years.
Year
Quarter Ended
High
Low
2011
December 31
$0.08
$0.01
September 30
$0.07
$0.05
June 30
$0.15
$0.05
March 31
$0.10
$0.05
2010
December 31
$0.08
$0.05
September 30
$0.08
$0.05
June 30
$0.09
$0.03
March 31
$0.05
$0.02
Capital Stock
The following is a summary of the material terms of the Companys capital stock. This summary is subject
to and qualified by our articles of incorporation and bylaws.
Common Stock
As of May 16, 2012 there were 86 shareholders of record holding a total of 40,487,175 shares of fully paid
and non-assessable common stock of the 250,000,000 shares of common stock, par value $0.001,
authorized. The board of directors believes that the number of beneficial owners is substantially greater
than the number of record holders because a portion of our outstanding common stock is held in broker
street names for the benefit of individual investors. The holders of the common stock are entitled to one
vote
for
each
share
held of
record
on
all
matters
submitted to a
vote
of
stockholders.
Holders
of
the
common
stock have no preemptive rights and no right to convert their common stock into any other securities. There
are no redemption or sinking fund provisions applicable to the common stock.
Preferred Stock
As of May 16, 2012 there were no shareholders of record of the 5,000,000 shares of preferred stock, par
value $0.001, authorized.
22
Warrants
As of May 16, 2012 the Company had the following warrants to purchase shares of our common stock
6,824,300 share purchase warrants to be exercised within ten years of the date of grant at an
exercise price of $0.005 per share, and
682,430 share purchase warrants to be exercised within three years of the date of grant at an
exercise price of $0.06 per share.
Stock Options
As of May 16, 2012 the Company had no outstanding stock options to purchase shares of our common
stock.
Convertible Securities
As of May 16, 2012 the Company had the following convertible securities
$60,000 Canadian dollars due on October 12, 2013, accruing 8% interest to be paid annually, of
which amount
principal and interest are
convertible into shares
of the
Companys common
stock
at
$0.07 per share at the option of holder or borrower based on certain criteria.
$30,000 due on January 19, 2014, accruing 8% interest to be paid annually, of which amount
principal and interest are convertible into shares of the Companys common stock at $0.07 per
share at the option of holder or borrower based on certain criteria.
$40,000 due on March 28, 2014, accruing 8% interest to be paid annually, of which amount
principal and interest are convertible into shares of the Companys common stock at $0.07 per
share at the option of holder or borrower based on certain criteria.
$50,000 due on March 28, 2014, accruing 8% interest to be paid annually, of which amount
principal and interest are convertible into shares of the Companys common stock at $0.07 per
share at the option of holder or borrower based on certain criteria.
Securities Authorized for Issuance Under Equity Compensation Plans
The Company has not authorized any securities for issuance under any equity compensation plan.
Purchases of Equity Securities made by the Issuer and Affiliated Purchasers
The Company has not repurchased any shares of its common stock during the year ended December 31,
2011 or since that date through May 16, 2012.
Recent Sales of Unregistered Securities
On
October
12,
2011 the
Company
authorized the
issuance
of a
convertible
promissory
note
to the
Estate
of
Arnie Olafson in the amount of $60,000 Canadian dollars for cash consideration in reliance upon the
exemptions from registration provided by Section 4(2) and Regulation S of the Securities Act of 1933, as
amended (Securities Act). The convertible note is due on October 12, 2013, bears interest of 8% per
annum
and is
convertible
into shares
of the
Companys
common
stock
at
$0.07 at
the
direction
of the
holder
or borrower based on certain criteria.
The
Company
complied with
the exemption
requirements
of
Section
4(2)
of the Securities Act
based on
the
23
following factors: (1) the issuance was an isolated private transactions by the Company which did not
involve a public offering; (2) the offeree had access to the kind of information which registration would
disclose; and (3) the offeree is financially sophisticated.
The Company complied with the exemption requirements of Regulation S by having directed no offering
efforts in the United States, by offering common shares only to an offeree who was outside the United
States
at
the
time
of
the
offering,
and ensuring
that
the
offeree
to whom
the
convertible
promissory
note
was
offered and authorized was a non-U.S. offeree with an address in a foreign country.
On January 20, 2012 the Company authorized
the issuance of a convertible promissory note to Raymond
Olson in the amount of $30,000 for cash consideration in reliance upon the exemptions from registration
provided by Section 4(2) and Regulation S of the Securities Act of 1933, as amended (Securities Act).
The convertible note is due on January 19, 2014, bears interest of 8% per annum and is convertible into
shares of the Companys common stock at $0.07 at the direction of the holder or borrower based on certain
criteria.
The
Company
complied with
the exemption
requirements
of
Section
4(2)
of the Securities Act
based on
the
following factors: (1) the issuance was an isolated private transactions by the Company which did not
involve a public offering; (2) the offeree had access to the kind of information which registration would
disclose; and (3) the offeree is financially sophisticated.
The Company complied with the exemption requirements of Regulation S by having directed no offering
efforts in the United States, by offering common shares only to an offeree who was outside the United
States
at
the
time
of
the
offering,
and ensuring
that
the
offeree
to whom
the convertible
promissory
note
was
offered and authorized was a non-U.S. offeree with an address in a foreign country.
On March 30, 2012 the Company authorized the issuance of a convertible promissory note to Jay
Blackmore in the amount of $40,000 for cash consideration in reliance upon the exemptions from
registration provided by Section 4(2) and Regulation S of the Securities Act of 1933, as amended
(Securities Act). The convertible note is due on March 28, 2014, bears interest of 8% per annum and is
convertible into shares of the Companys common stock at $0.07 at the direction of the holder or borrower
based on certain criteria.
The
Company
complied with
the exemption
requirements
of
Section
4(2)
of the Securities Act
based on
the
following factors: (1) the issuance was an isolated private transactions by the Company which did not
involve a public offering; (2) the offeree had access to the kind of information which registration would
disclose; and (3) the offeree is financially sophisticated.
The Company complied with the exemption requirements of Regulation S by having directed no offering
efforts in the United States, by offering common shares only to an offeree who was outside the United
States
at
the
time
of
the
offering,
and ensuring
that
the
offeree
to whom
the
convertible
promissory
note
was
offered and authorized was a non-U.S. offeree with an address in a foreign country.
On
March
30,
2012 the
Company
authorized the
issuance
of a
convertible
promissory note
to Jim
Rogers
in
the
amount
of
$50,000
for
cash
consideration
in
reliance
upon
the
exemptions
from
registration
provided
by
Section
4(2)
and Regulation
S
of
the
Securities Act
of
1933,
as
amended (Securities
Act).
The
convertible
note is due on March 28, 2014, bears interest of 8% per annum and is convertible into shares of the
Companys common stock at $0.07 at the direction of the holder or borrower based on certain criteria.
The
Company
complied with
the exemption
requirements
of Section
4(2)
of the Securities Act
based on
the
following factors: (1) the issuance was an isolated private transactions by the Company which did not
24
involve a public offering; (2) the offeree had access to the kind of information which registration would
disclose; and (3) the offeree is financially sophisticated.
The Company complied with the exemption requirements of Regulation S by having directed no offering
efforts in the United States, by offering common shares only to an offeree who was outside the United
States
at
the
time
of
the
offering,
and ensuring
that
the
offeree
to whom
the
convertible
promissory
note
was
offered and authorized was a non-U.S. offeree with an address in a foreign country.
Trading Information
The Companys common stock is currently approved for quotation under the symbol PRKV. The
information for our transfer agent is as follows:
Interwest Transfer Company
1981 E. Murray-Holladay Road
Holladay,
Utah 841175164
(801)
272-9294.
Section 15(g) of the Securities Exchange Act of 1934
Our Companys shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended
that imposes additional sales practice requirements on broker/dealers who sell such securities to persons
other than established customers and accredited investors (generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a
special suitability determination for the purchase and have received the purchasers written agreement to
the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our
securities and also may affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny
securities. These rules require a one page summary of certain essential items. The items include the risk of
investing in penny stocks in both public offerings and secondary marketing; terms important to an
understanding of the function of the penny stock market, such as bid and offer quotes, a dealers
spread and broker/dealer compensation; the broker/dealers duties to its customers, including the
disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes
of
fraud in
penny stock
transactions;
and,
the NASDs toll
free
telephone number
and the
central
number
of
the North American Administrators Association, for information on the disciplinary history of
broker/dealers and their associated persons.
The application of the penny stock rules may affect your ability to resell your shares.
ITEM 6.
SELECTED
FINANCIAL DATA
Not required.
25
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This
Managements Discussion and Analysis of Financial Condition and Results of Operations
and other
parts of this annual report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as anticipates, expects, believes,
plans, predicts, and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include but are not limited to those
discussed in the subsection entitled
Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition
below. The following discussion should be read in conjunction with our
financial statements and notes thereto included in this report. Our fiscal year end is December 31.
Plan of Operation
The Companys plan of operation over the next twelve months is to finalize plans for the phased
development of a destination resort in the Dominican Republic to be known as ParkVida.
The development of ParkVida is to be split into two phases in order to grow the project in an economically
sustainable fashion. During Phase 1 we expect to construct 39 accommodation units and offer a host of
activities (many developed to a smaller scale than in the final plan). During Phase 2 we expect to construct
another 160 accommodation units and offer additional activities.
Phase I
development
will
require $5.8
million
in
new
financing
for
which
management
is
yet
to procure
any
commitment. Subject to realizing funding, we expect to start construction in early 2012 with a planned
opening before the end of that year. The financing of Phase 1 is expected to come from a combination of
debt and equity financings.
Phase II development will require an additional $43.5 million in new financing for which management is
yet to procure any commitment. Subject to realizing funding before the end of 2013, we expect to start
construction on the final phase of the development in early 2014 with a grand
opening planned for the end
of
2014.
The
financing
of
Phase II
is
expected to be
in
the
form
of a
traditional
construction
loan.
Following
the completion of construction we expect to secure long-term financing to retire the construction loan.
Funds for financing both Phase I and Phase II are not currently available or committed. We can offer no
assurance that sufficient funding will be available within the next twelve months or ever to
implement our
plan of operation.
Development Activities
During the year ended December 31, 2011, the Company was involved in the following:
JBP oversaw Select Contracts completion of ParkVidas concept design work which included the
projects initiation, a market study, ParkVida brand identity, concept artwork, timelines, a business
plan, trail design overview, and a final presentation.
JBP worked with Select Contracts to prepare a phased development plan for ParkVida.
JBP worked with Select Contracts in completing marketing preparations for the Kokanee
Crankworx mountain biking festival, a 10-day event between July 15
and 24,
2011 that brought the
worlds best mountain bike athletes to Whistler, British Columbia.
26
JBP engaged Modularis to provide schematic design and
construction drawings for ParkVida.
JBP engaged Modularis to oversee the preparation of an environmental impact study for submittal
to the appropriate authorities in the Dominican Republic and to obtain local permission for
development plans for ParkVida.
JBP
engaged Modularis
to transfer
title
to JBP
for
properties
purchased in
Loma
Prieta
and to
apply
for eligibility tax incentives under the
Law
for Promoting Tourism Development, 158-01
.
JBP engaged
Isaac Casteňada to review the business plan for ParkVida.
During the year ended December 31, 2010, the Company was involved in the following:
JBP engaged Modularis,
a consulting
firm
based in
the
Dominican
Republic,
to provide
the
general
conceptual work, a project draft, architectural blueprints, sales material and legal work. All such
work was completed during the period.
JBP engaged Gravity Logic to initiate trail development on the property.
JBP purchased houses and land in the town of Loma Prieta which settlement is contiguous with the
property already owned by JBP and designated for ParkVida.
JBP engaged Select Contracts, an international consulting firm, to expand on detailed design work,
enlarge its business plan for ParkVida and coordinate development efforts.
Results of Operations
Net Losses
For the period from inception (January 1, 2008) to December 31, 2011 we recorded a net loss of $773,316
due primarily to costs associated with general and administrative expenses. General and administrative
costs
include
accounting
costs,
consulting
fees,
professional
fees,
title
costs,
project
development
expenses,
due diligence costs and office operation costs.
Net losses for the twelve month period ended December 31, 2011 were $288,808 as compared to $244,892
for the twelve month period ended December 31, 2010. The increase in the Companys net losses over the
comparative
twelve
month
periods
can
be
attributed to an
increase
in general
and administrative
costs
in
the
current annual period due primarily to project development expenses in the Dominican Republic, costs
associated with our former office in Whistler, British Columbia and interest expenses.
The
Company
has
not
generated revenue
to date
and expects
to continue
to incur
losses
until
the
completion
of the first phase of the ParkVida resort at which time net revenue is expected to cover operational costs.
Capital Expenditures
The Company has expended $814,473, less accumulated depreciation of $42,215, on capital expenditures
for the period from inception to December 31, 2011 in connection to the purchase of land, houses and
equipment.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward and
start up costs that will offset any future operating profits.
27
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations over the past three years.
Liquidity and Capital Resources
The Company is in the development stage and, since inception, has experienced significant changes in
liquidity, capital resources, and stockholders deficit.
The Company had current assets of $6,487 consisting solely of cash as of December 31, 2011 and total
assets of $778,745 consisting of current assets, and property and equipment of $772,258 in the Dominican
Republic. The Company had total current liabilities of $48,987 as of December 31, 2011, consisting of
$26,672 in accounts payable and $21,280 in related party payables and $1,035 in accrued interest.
Stockholders equity in the Company was $670,932 at December 31, 2011.
Cash flow used in operating activities was $505,494 for the period from inception to December 31, 2011.
The cash flows used in operating activities since inception can be primarily
attributed to net losses incurred
as the result of general and administrative expenses.
Cash flow used in operating activities for the twelve month period ended December 31, 2011 was $25,441
as compared to $273,059 for the twelve month period ended December 31, 2010. The difference in cash
flows used in operating activities over the comparative annual periods can be attributed primarily to the
increases in depreciation, accounts payable, related party payables and the effect of the reverse
capitalization in the current annual period.
We
expect
to continue
to use
cash
flow
in
operating
activities
until
such
time
as
ParkVida
is
operational
and
net losses from operations are eliminated.
Cash flow used in investing activities was $440,372 for the period from inception to December 31, 2011.
Cash flows used in investing activities can be attributed to the purchase of property and equipment for
ParkVida.
Cash flow used in investing activities for the twelve month period ended December 31, 2011
was $41,941
as compared to $50,500 for the twelve month period ended December 31, 2010. The cash flow used in
investing activities in the prior annual month period can be attributed to purchases of property and
equipment for ParkVida.
We expect to continue to use cash flow
in investing activities once we have commenced the initial phase of
the ParkVida development.
Cash
flow
from
financing
activities was
$952,352
for
the
period from
inception
to
December 31,
2011.
The
cash flows from financing activities since inception can be mainly attributed to the reverse capitalization,
proceeds from long term debt, cash contributed by shareholders and proceeds from a note payable.
Cash flow
from financing activities for the twelve month period ended December 31, 2011 was $73,869 as
compared to $323,559 for the twelve month period ended December 31, 2010. The cash flows from
financing activities in the current annual period are attributed to the reverse capitalization with JBP and
proceeds from long term debt.
We
expect to continue
to realize
cash flow
from
financing
activities
as
debt
or
equity in order
to finance the
28
development of ParkVida.
The
Companys
current
assets
are
insufficient to follow
its
plan
of operation
over
the
next
twelve
months
as
it will need to seek at least $6,000,000 in debt or equity financing to fund the development of ParkVida.
Further
the
Companys
current
assets
are
insufficient
to maintain
its
minimal
operational
requirements.
The
Company
has no current commitments or arrangements with respect to, or immediate sources of funding to
finance the development of ParkVida. Third party investors are the most likely source of debt or equity
financing to fund Phase I of the development and shareholders are the most likely source of debt or equity
financing to maintain operations. No commitment for the equity or debt financing of ParkVida has been
secured to date. The Companys inability to obtain additional financing for ParkVida will have a material
adverse affect on its ability to develop the project.
The Company does not intend to pay cash dividends in the foreseeable future.
The Company had no lines of credit or other bank financing arrangements as of December 31, 2011.
The
Company
had no commitments
for
future
capital
expenditures
that
were
material
at
December
31,
2011
other than those anticipated for the development of ParkVida.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any property or equipment other than those
anticipated for the development of ParkVida.
The Company has no current plans to make any changes in the number of employees other than those
anticipated for the development of ParkVida.
Future Financings
We
anticipate continuing
to rely
on
debt
or
equity
sales
of our
shares
of common
stock to fund our
business
operations.
Unfortunately,
there
is
no assurance
that
we
will
be
able
to
secure
the
financing
requisite
to
fund
our plan of operations.
Off-Balance
Sheet
Arrangements
As
of
December 31,
2011,
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,
changes
in
financial condition, revenues
or
expenses, results
of operations, liquidity, capital expenditures, or capital resources that are
material to
stockholders.
Critical Accounting Policies
In Note 1 to the audited financial statements for the years ended December 31, 2011 and 2010, included in
our Form 10-K, the Company discusses those accounting policies that are considered to be significant in
determining the results of operations and its financial position. The Company believes that the accounting
principles utilized by it conform to accounting principles generally accepted in the United States.
The preparation of financial statements requires Company management to make significant estimates and
29
judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature,
these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the Company
evaluates estimates. The Company bases its estimates on historical experience and other facts and
circumstances
that are believed to be
reasonable,
and the results
form
the basis
for
making
judgments about
the carrying value of assets and liabilities. The actual results may differ from these estimates under
different assumptions or conditions.
Going Concern
Our auditors have expressed an opinion as to the Companys ability to continue as a going concern as a
result of an accumulated deficit of $773,316
as of December 31, 2011. The Companys ability to continue
as a going concern is dependent on realizing net income from operations or procuring additional financing.
Managements
plan
to address
the Companys ability
to continue as a going concern includes:
(i) procuring
financing from the placement of debt or equity; (ii) realizing net income from the realization of ParkVida;
and (iii) converting existing debt or contractual obligations to equity. On application of the methods
discussed above, management believes that the Company will remain a going concern, though there can be
no assurances that such methods will be successful.
Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled
Managements Discussion and Analysis of Financial
Condition and Results of Operations
and elsewhere in this quarterly report, with the exception of historical
facts, are forward-looking statements. Forward-looking statements reflect our current expectations and
beliefs regarding our future results of operations, performance, and achievements. These statements are
subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements concerning:
our anticipated financial performance;
uncertainties related to development of ParkVida;
our ability to generate revenue in the event we complete the development of ParkVida;
our ability to raise additional capital to fund the development of ParkVida;
the volatility of the stock market; and
general economic conditions.
We
wish
to caution
readers
that
our
operating
results
are
subject
to various
risks
and uncertainties
that
could
cause our actual results to differ materially from those discussed or anticipated including the factors set
forth in the section entitled
Risk Factors
included elsewhere in this report. We also wish to advise readers
not
to
place
any
undue
reliance
on
the
forward-looking
statements
contained
in
this
report,
which
reflect
our
beliefs
and expectations
only
as
of the
date
of this
report.
We
assume
no obligation
to update or
revise
these
forward-looking statements to reflect new events or circumstances or any changes in our beliefs or
expectations, other than as required by law.
Stock-Based Compensation
The Company has adopted Accounting Standards Codification Topic (ASC) 718, Share-Based Payment,
which addresses the accounting for stock-based payment transactions in which an enterprise receives
employee
services
in
exchange
for
(a)
equity instruments
of the
enterprise
or (b)
liabilities that
are
based on
the fair value of the enterprises equity instruments or that may be settled by the issuance of such equity
instruments.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from
other
than
employees
in
accordance
with
ASC
505.
Costs
are
measured at
the
estimated fair
market
value
of
30
the consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration other than employee services
is
determined
on
the
earliest
of
a
performance
commitment
or
completion
of
performance
by
the
provider
of
goods or services.
Recent Accounting Pronouncements
Please see Note 14 to our consolidated financial statements for recent accounting pronouncements.
ITEM 7A.
QUANTITATIVE
AND
QUALITATIVE
DISCLOSURES ABOUT
MARKET
RISK
Not required.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our
financial
statements
for
the
years
ended
December
31,
2011
and
2010
are
attached
hereto
as
F-1
through F-17.
31
PARK VIDA GROUP, INC.
(A Development Stage Company)
December 31, 2011 and 2010
INDEX
Page
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets
F-3
Consolidated Statements of Operations
F-4
Consolidated Statement of Stockholders Equity
F-5
Consolidated Statements of Cash Flows
F-6
Notes to
Consolidated Financial Statements
F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Park
Vida Group, Inc. and Subsidiary
Salt Lake City, Utah
We
have
audited
the
accompanying
consolidated
balance
sheets
of
Park
Vida
Group,
Inc.
and
Subsidiary
[
a
development
stage
company
]
as
of
December
31,
2011
and
2010
and
the
related
consolidated statements of operations, stockholders'
equity
(deficit) and
cash flows for each of
the
years
in
the
two-year
period
ended
December
31,
2011
and
for
the
period
from
inception
on
December
7,
1999
through
December
31,
2011.
Park
Vida
Group,
Inc.
and
Subsidiarys
management
is
responsible
for
these
financial
statements.
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
Companys
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
An
audit 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
consolidated
financial
statements
referred
to
above
present
fairly,
in
all
material
respects, the financial position of Park Vida Group, Inc. and Subsidiary as of December 31, 2011
and
2010 and
the
results
of its
operations and
its
cash
flows
for each of the
years
in the two-year
period ended December 31, 2011 and for the period from inception on December 7,
1999 through
December
31,
2011,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States of America.
The
accompanying
consolidated
financial
statements
have
been
prepared
assuming
Park
Vida
Group, Inc.
and
Subsidiary
will
continue
as
a
going
concern.
As
discussed
in
Note
2
to
the
consolidated financial statements, Park Vida Group, Inc. and Subsidiary
has incurred losses since
its
inception
and
has
not
yet
established
profitable
operations. These
factors
raise
substantial
doubt
about
the
ability of
the
Company to
continue
as
a
going
concern.
Managements
plans
in
regards
to
these
matters
are
also
described
in
Note
2.
The
consolidated
financial
statements
do
not
include any
adjustments that might result from the outcome of these uncertainties.
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
May
16, 2012
F-2
PARK VIDA GROUP, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, 2011 and 2010
ASSETS
2011
2010
Current assets:
Cash
$
6,487
-
Prepaid expenses
-
71,250
Total current assets
6,487
71,250
Property and equipment, net
772,258
585,560
Total assets
$
778,745
656,810
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
26,672
8,461
Related party payables
21,280
-
Accrued expenses
1,035
4,870
Note payable
-
378,963
Total current liabilities
48,987
392,294
Long-term debt
58,826
-
Total liabilities
107,813
392,294
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding
-
-
Common stock, $.001 par value, 250,000,000 shares
authorized, 40,487,175 and 15,282,120 shares issued
and outstanding, respectively
40,487
15,282
Additional paid-in capital
1,403,761
733,742
Deficit accumulated during the development stage
(773,316)
(484,508)
Total stockholders' equity
670,932
264,516
Total liabilities and stockholders' equity
$
778,745
656,810
The accompanying notes are an integral part of these consolidated financial statements.
F-3
PARK VIDA GROUP, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2011 and 2010 and Cumulative Amounts
Cumulative
2011
2010
Amounts
Revenue
$
-
-
-
General and administrative costs
263,679
240,022
743,317
Loss from operations
(263,679)
(240,022)
(743,317)
Other income (expense):
Interest income
8
-
8
Interest expense
(25,137)
(4,870)
(30,007)
Loss before provision for income taxes
(288,808)
(244,892)
(773,316)
Provision for income taxes
-
-
-
Net loss
$
(288,808)
(244,892)
(773,316)
Loss per common share -
basic and diluted
$
(0.01)
(0.01)
Weighted average common shares -
basic and diluted
22,118,560
15,282,120
The accompanying notes are an integral part of these consolidated financial statements.
F-4
PARK VIDA GROUP, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
January 1, 2008 (Date of Inception) to December 31, 2011
Deficit
Accumulated
Additional
During the
Total
Common Stock
Paid-in
Development
Stockholders'
Shares
Amount
Capital
Stage
Equity
Balance at January 1, 2008
- $
- $
- $
- $
-
Issuance of common stock for cash
15,282,120
15,282
(12,138)
-
3,144
Capital contributions:
Cash
-
-
258,803
-
258,803
Office rental costs
-
-
12,000
-
12,000
Net loss
-
-
-
(89,200)
(89,200)
Balance at December 31, 2008
15,282,120
15,282
258,665
(89,200)
184,747
Capital contributions:
Cash
-
-
292,977
-
292,977
Office rental costs
-
-
12,000
-
12,000
Net loss
-
-
-
(150,416)
(150,416)
Balance at December 31, 2009
15,282,120
15,282
563,642
(239,616)
339,308
Capital contributions:
Cash
-
-
158,100
-
158,100
Office rental costs
-
-
12,000
-
12,000
Net loss
-
-
-
(244,892)
(244,892)
Balance at December 31, 2010
15,282,120
15,282
733,742
(484,508)
264,516
Effect of reverse recapitalization
25,205,055
25,205
584,317
-
609,522
Capital contributions:
Office rental costs
-
-
9,000
-
9,000
Related party payable forgiveness
-
-
76,702
-
76,702
Net loss
-
-
-
(288,808)
(288,808)
Balance at December 31, 2011
40,487,175 $
40,487 $ 1,403,761 $
(773,316) $
670,932
The accompanying notes are an integral part of these consolidated financial statements.
F-5
PARK VIDA GROUP, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2011 and 2010 and Cumulative Amounts
Cumulative
2011
2010
Amounts
Cash flows from operating activities:
Net loss
$
(288,808)
(244,892)
(773,316)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
37,339
17,752
63,714
Related party contributions
85,702
12,000
121,702
Reverse recapitalization
99,799
-
99,799
(Increase) decrease in:
Prepaid expenses
-
(71,250)
(71,250)
Increase (decrease) in:
Accounts payable
18,211
8,461
26,672
Accrued expenses
1,035
4,870
5,905
Related party payables
21,280
-
21,280
Net cash used in operating activities
(25,441)
(273,059)
(505,493)
Cash flows from investing activities:
Purchases of property and equipment
(41,941)
(50,500)
(440,372)
Net cash used in investing activities
(41,941)
(50,500)
(440,372)
Cash flows from financing activities:
Proceeds from note payable
-
165,459
165,459
Proceeds from long-term
debt
58,826
-
58,826
Cash contributed by stockholders
-
158,100
709,880
Reverse recapitalization
15,043
-
15,043
Issuance of common stock
-
-
3,144
Net
cash provided by financing activities
73,869
323,559
952,352
Net
change
in cash
6,487
-
6,487
Cash, beginning of period
-
-
-
Cash, end of period
$
6,487
-
6,487
The accompanying notes are an integral part of these consolidated financial statements.
F-6
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 1 Organization and Summary of Significant Accounting Policies
Organization and Reverse Capitalization
Park Vida Group, Inc. (the Company) was incorporated in the State of Nevada on December 7, 1999 as
Montana
Mining
Corp.
The
Company
is
engaged
in
the
design
and
construction
of
a
destination
resort
in
the
Dominican Republic.
On August 20, 2010, Montana Mining Corp., a U.S. public shell company entered into an asset purchase
agreement (the Purchase Agreement) with Park Capital Management,
Inc. (Park) to acquire JBP, S.R.L.
(JBP) (a privately held company organized on January 1, 2008 under the laws of the Dominican Republic).
The Purchase Agreement closed on September 23, 2011 pursuant to which the Company acquired from
Park all of the outstanding shares of JBP in exchange for fifteen million two hundred and eighty-two
thousand one hundred and twenty (15,282,120) shares of common stock and six million eight hundred and
twenty-four thousand and three hundred (6,824,300) share purchase warrants exercisable within ten years
of the date of grant at an exercise price of $0.005 a share.
As of December 31, 2011 the stock had not yet
been issued but has been shown in the financial statements as issued and outstanding.
The Purchase Agreement further required the Company to issue at closing a facilitation fee of one million
five hundred and twenty-eight thousand two hundred and twelve (1,528,212) shares and six
hundred
eighty-two thousand four hundred and thirty (682,430) share purchase warrants exercisable within three
years of the date of grant at an exercise price of $0.06 a share. As of December 31, 2011 the stock has not
yet been issued but has been shown in the financial statements as issued and outstanding.
The closing of the Purchase Agreement caused the Company to acquire JBP as a wholly-owned subsidiary.
On giving effect to the closing of the Purchase Agreement, the former stockholder of JBP holds
approximately 40% of the Companys common stock.
The Purchase Agreement was accounted for as a reverse acquisition and recapitalization whereby JBP is
deemed to be the accounting acquirer (and the legal acquiree). Accordingly, JBPs historical financial
statements for the periods prior to the reverse acquisition became those of the Company retroactively
restated for, and giving effect to, the number of shares received in the Purchase Agreement.
The surviving
entity reflects the assets and liabilities of JBP and the Company at their historical book value and no
goodwill has been recognized, as required by the rules and regulations of the SEC. The issued common
stock
is
that
of the
Company,
the
accumulated deficit
is
that
of JBP
and the
statements
of
operations
are
that
of JBP
for the years ended December 31,
2011 and 2010 and cumulative amounts plus that of the Company
from September 24, 2011 through December 31, 2011.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and JBP. All significant
intercompany balances and transactions have been eliminated.
F-7
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 1 Organization and Summary of Significant Accounting Policies (continued)
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a
maturity of three months or less to be cash equivalents.
Property and Equipment
Property, buildings, improvements, and equipment are stated at cost less accumulated depreciation.
Maintenance and repairs are charged to expense as incurred. Costs of major renewals or betterments are
capitalized over the remaining useful lives of the related assets. Depreciation is computed by using the
straight-line method. Land improvements are depreciated over ten years. Buildings and improvements are
depreciated over fifteen to thirty-nine years. Equipment is depreciated between five and seven years.
Leasehold improvements are depreciated over the shorter of the estimated useful life or the remaining life
of the lease.
The cost of property disposed of and related accumulated depreciation is removed from the
accounts at the time of disposal, and gain or loss is reflected in operations.
Long-Lived Assets
The Company evaluates its long-lived assets in accordance with Accounting Standards Codification (ASC)
360, Accounting for the Impairment of Long-Lived Assets. Long-lived assets held and used by the
Company are reviewed for impairment whenever events or changes in circumstances indicate that their net
book value may not be recoverable. When such factors and circumstances exist, the Company compares
the projected undiscounted future cash flows associated with the related asset or group of assets over their
estimated useful lives against their respective carrying amounts.
Impairment, if any, is based on the excess
of the carrying amount over the fair value of those assets and is recorded in the period in which the
determination was made.
F-8
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 1 Organization and Summary
of Significant Accounting Policies (continued)
Convertible Debts
In accordance with ASC 470-20, the Company calculated the value of any beneficial conversion features
embedded in its convertible debts.
If the debt is contingently convertible, the intrinsic value of the
beneficial conversion feature is not recorded until the debt becomes convertible.
Convertible debts are split into two components: a debt component and a component representing the
embedded
derivatives
in
the
debt.
The
debt
component
represents
the
Companys
liability
for
future
interest
coupon payments and the redemption amount. The embedded derivatives represent the value of the option
that debt holders have to convert into ordinary shares of the Company. If the number of shares that may be
required to be issued upon conversion of the convertible debt is indeterminate, the embedded conversion
option of the convertible debt is accounted for as a derivative instrument liability rather than equity in
accordance with ASC 815-40.
The debt component of the convertible debt is measured at amortized cost and therefore increases as the
present value of the interest coupon payments and redemption amount increases, with a corresponding
charge to finance cost other than interest. The debt component decreases by the cash interest coupon
payments made. The embedded derivatives are measured at fair value at each balance sheet date, and the
change in the fair value is recognized in the income statement.
Income Taxes
Deferred income taxes arise from temporary differences resulting from income and expense items reported
for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or
noncurrent, depending on the classification of the assets and liabilities to which they relate.
Deferred taxes
arising from temporary differences that are not related to an asset or liability are classified as current or
noncurrent depending on the periods in which the temporary differences are expected to reverse.
If the Company has uncertain tax positions, they are evaluated by management and a loss contingency is
recognized when it is probable that a liability has been incurred and the amount of the loss can be
reasonably estimated. The amount recognized is subject to estimate and management judgment and the
amount ultimately sustained for an uncertain tax position could differ from the amount recognized. As of
December 31, 2011, management did not identify any uncertain tax positions. The tax years previous to
2008 are closed to examination by the Internal Revenue Service.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and
penalties in operating expenses. During the year ended December 31, 2011 and 2010 the Company
recognized no interest and penalties and had no accruals for interest and penalties.
F-9
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 1 Organization and Summary of Significant Accounting Policies (continued)
Stock-Based Compensation
The
Company
records
stock-based compensation
in
accordance
with
ASC
718
which
requires companies
to
measure compensation cost for stock-based employee compensation at fair value at the grant date and
recognize the expense over the employees requisite service period. Under ASC 718, the Companys
volatility is based on the historical volatility of the Companys stock or the expected volatility of similar
companies. The expected life assumption is primarily based on historical exercise patterns and employee
post-vesting termination behavior. The risk-free interest rate for the expected term
of the option is based on
the U.S. Treasury yield curve in effect at the time of grant.
The Company uses the Black-Scholes option-pricing model which was developed for use in estimating the
fair value of options. Option-pricing models require the input of highly complex and subjective variables
including the expected life of options granted
and the Companys expected stock price volatility over a
period equal to or greater than the expected life of the options. Changes in the subjective assumptions can
materially affect the estimated value of the Companys employee stock options.
The Company recognizes in the statement of operations the grant-date fair value of stock options and other
equity-based compensation issued to employees and non-employees.
Earnings Per Share
The computation of basic earnings per common share is based on the weighted average number of shares
outstanding during the year.
The computation of diluted earnings per common share is based on the weighted average number of shares
outstanding during the year plus the common stock equivalents which would arise from the exercise of
stock options and warrants outstanding using the treasury stock method and the average market price per
share during the period. Common stock equivalents are not included in the diluted earnings per share
calculation when their effect is antidilutive.
Concentration of Credit Risk
The
Company
maintains
its
cash
in
bank
deposit
accounts,
which,
at
times,
may
exceed
federally
insured
limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any
significant credit risk on cash and cash equivalents.
F-10
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 2 Going Concern
As of December 31, 2011, the Companys revenue generating activities are not in place, and
the Company
has incurred losses since inception. These factors raise substantial doubt about the Companys ability to
continue as a going concern.
The
Company
intends
to seek
additional
equity
or
debt
financing
to develop the
ParkVida
destination resort
in the Dominican Republic. There can be no assurance that such funds will be available to the Company.
The financial statements do not include any adjustments that might result from the outcome of these
uncertainties.
Note 3 Property and Equipment
Property and equipment consist of the following:
2011
2010
Land and improvements
$
447,824
447,824
Buildings and improvements
29,000
29,000
Construction in process
270,338
50,300
Leasehold improvements
-
17,500
Equipment
67,311
67,311
814,473
611,935
Less accumulated depreciation
(42,215)
(26,375)
$
772,258
585,560
F-11
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 4 Related Party Transactions
The president of JBP is the son of a shareholder of the Company and was paid $6,000 ($2,000 per month)
during the last quarter of 2011 for services rendered.
The
Companys
Chief Executive
Officer
is a
shareholder and director
of the
Company and was
paid $3,000
($1,000 per month) during the last quarter of 2011 for services rendered.
The Companys Chief Executive Officer is the sole shareholder and owner of a company that provides
services
to
the
Company
that
was
paid
$3,000
($1,000
per
month)
on
account
during
the
last
quarter
of
2011
for services rendered.
The Company contracts with Modularis C. xA. (Modularis), a Dominican architectural services and
consulting firm owned by a shareholder of the Company (see Note 12).
Prior to the reverse merger, the Company paid $99,799 in operating expenses on behalf of JBP.
Note 5 Related Party Payables
Related party accounts payables consist of the following:
2011
2010
Payables to officers and shareholders of the Company
and their affiliated entities. The payables are non-
interest bearing, due on demand, and unsecured.
$
21,280
-
Note 6 Note Payable
Prior to the reverse recapitalization (see Note 1), the Company advanced funds to JBP under the terms of a
note payable.
At December 31, 2011, intercompany balances between the Company and JBP were eliminated in
consolidation.
At
December
31,
2010 the
note
payable
balance
consists
of cash advances
of $165,459 and direct
payments
for property and equipment additions of $213,504 from the Company and related accrued interest of
$4,870.
F-12
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 7 Long-Term Debt
Long-term debt consists of the following:
2011
2010
Unsecured note payable in the amount of CAD $60,000,
to the Estate of Arnie Olafson, bearing interest at 8%
and due October 2013. The note may be converted to
common shares of the Company at the option of the
holder or borrower if certain criteria are met, based on the
outstanding principal and accrued interest at the rate of
USD $0.07 per common share.
$
58,826
-
F-13
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 8 Income Taxes
The provision for income taxes differs from the amount computed at statutory rates as follows:
Cumulative
2011
2010
Amounts
Income tax benefit at statutory rate
$
(99,000)
(68,000)
(262,500)
Loss of subsidiary
6,500
-
6,500
Shareholder paid expenses
15,000
-
15,000
Expiration of net operating loss
carryforwards
22,500
-
25,000
Change in valuation allowance
55,000
68,000
216,000
$
-
-
-
Deferred tax assets (liabilities) are comprised of the following:
2011
2010
Start up costs
$
46,000
34,000
Net operating loss carryforwards
175,000
127,000
Accrued interest income
(5,000)
-
Valuation allowance
(216,000)
(161,000)
$
-
-
The Company has federal income tax net operating loss carryforwards of approximately $32,000, which
begin to expire in 2020. The amount of net operating loss carryforwards that can be used in any one year
will be limited by significant changes in the ownership of the Company and by the applicable tax laws
which are
in effect
at
the
time
such
carryforwards
can
be
utilized.
The
Company
has
Dominican
income
tax
net
operating loss carryforwards
of approximately $673,000,
which will expire
in
the approximate amounts
of $150,000, $245,000, and $278,000 in the years 2012, 2013, and 2014, respectively.
F-14
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 9 Supplemental Cash Flow Information
No amounts have been paid for interest or income taxes since inception.
During the year ended December 31, 2011, the Company:
Transferred $71,250 from prepaid expenses to construction in process.
Disposed of abandoned leasehold improvements of $21,500, which were fully amortized.
Acquired property and equipment in exchange for an increase in a note payable of $110,847.
During the year ended December 31,
2010, the Company acquired property and equipment in exchange for
an increase in a note payable of $213,504
Note 10 Common Stock Warrants
Common stock warrants consist of:
Exercise
Number of
Price
Warrants
Per Share
Outstanding at January 1, 2011 and 2010
-
$
-
Granted, vested, and exercisable
7,506,730
$.005 - .06
Outstanding at December 31, 2011
7,506,730
$.005 - .06
The
following
table
summarizes
information
about
common
stock
warrants
outstanding
at
December
31,
2011.
Outstanding
Exercisable
Weighted
Average
Weighted
Weighted
Remaining
Average
Average
Exercise Price
Number
Contractual
Exercise
Number
Exercise
Range
Outstanding
Life (Years)
Price
Exercisable
Price
$0.06
682,430
2.7
$0.06
682,430
$0.06
$0.005
6,824,300
9.7
$0.005
6,824,300
$0.005
$0.005 - .06
7,506,730
9.1
$0.01
7,506,730
$0.01
F-15
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 11 Fair Value of Financial Instruments
The
Companys
financial
instruments
consist of
cash,
payables,
and a
note
payable.
The
carrying
amount
of
these items approximates fair value because of their short-term nature.
Note 12 Commitments
During
December
2010,
the
Company
entered into a
consultancy
services
agreement with
Select
Contracts,
which will provide the following services: concept, project, and construction design, development, and
management services, including architectural plans and specifications, up through the planned resorts soft
opening. The agreement stipulates different phases. If all phases are executed, the Company is committed
to paying fees of approximately $1,162,000. As of December 31, 2011, the Company had paid fees of
$125,000.
During 2011, the Company entered into three separate consultancy services agreements with Modularis.
Per the agreements, the Company paid approximately $83,000 thus far during 2011, and will pay
approximately $126,000 more as committed pursuant to these agreements (see Note 13).
Note 13 Subsequent Events
The
Company
evaluated its
December
31,
2011
financial
statements
for
subsequent
events
through
the
date
the financial statements were issued. Except for the events discussed below, the Company is not aware of
any subsequent events which would require recognition or disclosure in the financial statements.
The Company entered into three convertible promissory notes totaling $120,000 between January and
March 2012. The notes bear interest at 8%, are unsecured, are convertible into shares of the Companys
$0.001 par value per share common stock at $0.07 per share, and have maturity dates between January and
March 2014.
The Company paid
approximately $67,000
between January and
April 2012 to
Modularis as
per the terms
of its consultancy services agreements with the Company (see Note 12).
F-16
PARK VIDA GROUP, INC.
(A Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
Note 14 Recent Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update (ASU) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which will require
disclosures for entities with financial instruments and derivatives that are either offset on the balance sheet
in
accordance
with ASC
210-20-45
or
ASC
815-10-45,
or
are
subject
to a
master
netting
arrangement. ASU
No. 2011-11 is effective for interim and annual periods beginning on or after January 1, 2013. The
Company is currently evaluating the impact of the adoption of ASU 2011-11 on its financial position,
results of operations, and disclosures.
In September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08, Testing
Goodwill for Impairment. This ASU permits an entity to make a qualitative assessment of whether it is
more likely than not that a reporting units fair value is less than its carrying amount before applying the
two-step goodwill impairment test. If an entity concludes it is not more likely than not that the fair value of
a reporting unit is less than its carrying amount, then there is no need to perform the two-step impairment
test. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years
beginning after December 15, 2011. Early adoption is permitted. The adoption of this ASU will not have a
material impact on the Companys consolidated financial statements, as it is intended to simplify the
assessment for goodwill impairment.
In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income (as amended
by ASU 2011-12). ASU 2011-05 requires entities to report components of comprehensive income in either
a continuous statement of comprehensive income or two separate but consecutive statements. Under the
continuous statement approach, the statement would include the components and total of net income, the
components and total of other comprehensive income and the total of comprehensive income. Under the
two statement approach, the first statement would include the components and total of net income and the
second statement would include the components and total of other comprehensive income and the total of
comprehensive income.
ASU 2011-05/12 does not change the items that must be reported in other
comprehensive income.
ASU 2011-05/12 is effective retrospectively for interim and annual periods
beginning after December 15, 2011, with early adoption permitted. The Company is currently evaluating
the impact of the adoption of ASU 2011-05/12 on its financial statements.
In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirement in U.S. GAAP and
IFRSs. ASU 2011-04 does not extend the
use of fair value but, rather, provides guidance about how fair value should be applied where it already is
required and permitted under IFRS or U.S. GAAP. For U.S. GAAP, most of the changes are clarifications
of
existing
guidance
or
wording
changes
to align
with IFRS
13. ASU
2011-04 is
effective
on
a
prospective
basis for interim and annual periods beginning after December 15, 2011, with early adoption not
permitted.
In the period of adoption, a reporting entity will be required to disclose a change, if any, in
valuation technique and related inputs that result from applying ASU 2011-04 and to quantify the total
effect, if practicable. The Company is currently evaluating the impact of the adoption of ASU 2011-04 on
its financial position, results of operations, and disclosures.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future
effective dates are either not applicable or are not expected to be significant to the financial statements of
the Company.
F-17
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND
PROCEDURES
Management's Annual Report on Internal Control over Financial Reporting
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Companys
management, with the participation of the chief executive officer and chief financial officer, of the
effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of December 31, 2011.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in the Commissions rules and forms, and that such information is accumulated
and communicated to management, including the chief executive officer and chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered by
this report, that the Companys disclosure controls and procedures were ineffective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and such information was not accumulated and
communicated to management,
including
the
chief executive
officer
and the
chief financial
officer,
to allow
timely decisions regarding required disclosures.
Managements Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control
over financial reporting. The Companys internal control over financial reporting is a process, under the
supervision of the chief executive officer and the chief financial officer, designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the Companys financial
statements
for
external purposes in accordance with United States generally accepted accounting principles
(GAAP).
Internal control over financial reporting includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the Companys assets;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
the financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of management
and the board of directors; and
Provide
reasonable
assurance
regarding
prevention
or
timely
detection
of unauthorized acquisition,
use, or disposition of the Companys assets that could have a material effect on the financial
statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or that the degree of compliance
32
with the policies or procedures may deteriorate.
The Companys management conducted an assessment of the effectiveness of our internal control over
financial reporting as of December 31, 2011,
based on criteria established in Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which
assessment identified material
weaknesses in internal
control
over financial
reporting.
A
material weakness
is a control deficiency, or a combination of deficiencies in internal control over financial reporting that
creates a reasonable possibility that a material misstatement in annual or interim financial statements will
not be prevented or detected on a timely basis.
Since the assessment of the effectiveness of our internal
control
over
financial
reporting
did identify
material
weaknesses,
management
considers
its
internal
control
over financial reporting to be ineffective.
The matters involving internal control over financial reporting that our management considered to be
material weaknesses were:
lack of an audit committee due to a lack of a majority of outside directors, resulting in ineffective
oversight in the monitoring of required internal controls over financial reporting;
inadequate segregation of duties consistent with control objectives since the responsibilities
associated with the offices of chief executive officer, chief financial officer and principal
accounting officer are assumed by one individual.
The aforementioned material weaknesses were identified by our chief executive officer in connection with
the review of our financial statements as of December 31, 2011.
Management believes that the material weaknesses set forth above did not have an effect on our financial
results. However, management believes that the lack of an audit committee, the inadequate segregation of
duties and the lack of a majority of outside directors results in ineffective oversight in the monitoring of
required internal controls over financial reporting,
which weaknesses could result in a material
misstatement in our financial statements in future periods.
This annual report does not include an attestation report of our independent registered public accounting
firm regarding internal control over financial reporting. We were not required to have, nor have we,
engaged our independent registered public accounting firm to perform an audit of internal control over
financial reporting pursuant to the rules of the Commission that permit us to provide only managements
report in this annual report.
Managements Remediation Initiatives
In
an
effort
to remediate
the
identified material weaknesses and enhance
our
internal
controls over
financial
reporting, the Company plans to initiate, the following measures:
segregate the duties of chief executive officer and chief financial officer/principal accounting
officer consistent with our control objectives; and
appoint outside directors to our board in order to form an audit committee that will undertake
oversight in monitoring of required internal controls over financial reporting such as reviewing
estimates and assumptions made by management.
33
Changes in Internal Controls over Financial Reporting
During the period ended December 31, 2011, there has been no change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect our internal control over
financial reporting.
9B.
OTHER
INFORMATION
None.
34
PART III
ITEM 10.
DIRECTORS
, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Officers and Directors
The following table sets forth the name, age and position of each director and executive officer of the
Company:
Name
Age
Position(s) and Office(s)
Ruairidh Campbell
48
chief executive
officer,
chief financial
officer
and director
Ruairidh Campbell
was appointed as officer and
director of the Company on December 10, 1999. He
estimates that he spends approximately 20 percent of his time, approximately 10 hours per week, on the
Companys business. He also has significant responsibilities with other companies, as detailed in the
following paragraph.
Business Experience:
Mr. Campbell has been advising early-stage businesses for over 15 years in the public and private
sectors. Services range from investment banking to managerial duties that include working with
government regulators, business organizations, auditors, accountants, attorneys and quasi-public
governing bodies responsible for everything from public health to public quotation. He formed Orsa &
Company in 2001,
a private company dedicated to providing these services and also serves as an officer
and director of another public company.
Officer and Director Responsibilities and Qualifications:
Mr. Campbell is responsible for the overall management of the Company and is involved in many of its
day-to-day operations, finance and administration.
Mr.
Campbell
graduated from
the
University
of Texas
at Austin with
a
Bachelor
of Arts
in
History
and then
from the University of Utah College of Law with a Juris Doctorate.
Other Public Company Directorships in the Last Five Years:
Over the past five years he has been an officer and director of one other public company: Allied Resources
Inc., an oil and gas production company from June 1998 to present (chief executive officer, chief financial
officer, director).
Term of Office
The Companys directors are appointed for a one (1) year term to hold office until the next annual
shareholders meeting or until removed from office in accordance with the Companys bylaws. The
35
Companys executive officers are appointed by the board of directors and hold office until removed by the
board.
Involvement in Certain Legal Proceedings
During the past ten years there are no events that occurred related to an involvement in legal proceedings
that are material to an evaluation of the ability or integrity of the Companys sole director, or persons
nominated to become directors or executive officers.
Compliance with Section 16(A) of the Exchange Act
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, the Company is aware of one
entity which, during the period ended December 31, 2011, failed to file, on a timely basis, reports required
by Section 16(a) of the Securities Exchange Act of 1934.
Park
Capital
Management, Inc.
failed to timely file
either
a
Form
3 or
Form
5 in
connection with
its
acquisition
of
15,282,120 shares
of
the
Companys
common
stock
and
6,824,300
of
the
Companys
share purchase warrants in connection with the sale of JBP.
Code of Ethics
The Company has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the
Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior officers, such as the
principal executive
officer,
principal
financial officer,
controller,
and persons
performing
similar
functions.
A copy of the Companys Code of Ethics is incorporated as Exhibit 14 to this Form 10-K. Further, the
Companys Code of Ethics is available in print, at no charge, to any security holder who requests such
information.
Board of Directors Committees
The board of directors has not yet established an audit committee. An audit committee typically reviews,
acts on and reports to the board of directors with respect to various auditing and accounting matters,
including the recommendations and performance of independent auditors, the scope of the annual audits,
fees to be paid to the independent auditors, and internal accounting and financial control policies and
procedures. Certain stock exchanges currently require companies to adopt a formal written charter that
establishes an audit committee that specifies the scope of an audit committees responsibilities and the
means by which it carries out those responsibilities.
In order to be listed on any of these exchanges, the
Company would be required to establish an audit committee.
The board of directors has not established a compensation committee.
Director Compensation
Our
director
receives
no compensation
for
his service
as
director. We
do not
anticipate
adopting
a
provision
for compensating directors in the foreseeable future.
36
ITEM 11.
EXECUTIVE
COMPENSATION
Compensation Discussion and Analysis
The objective of the Companys compensation program is to incentivize our chief executive officer for
services rendered. The compensation program
includes a consulting fee. We utilize this form of
compensation because we feel that this compensatory element is adequate to retain and motivate our
executive officer. The amounts we have deemed appropriate to compensate our executive officer were
determined in accordance with compensatory packages for other development stage companies though we
have
no specific
formula
to determine
compensation.
While
we
have
deemed that
our
current compensatory
program is appropriately suited for accomplishing our current objectives, in the future we may expand our
compensation program to include additional benefits as the Company realizes those objectives.
Executive compensation for the periods ended
December 31, 2011, and December 31, 2010 to our chief
executive officer were $12,000 and $12,000 respectively. Compensation disclosure includes a consulting
fee of $12,000 per annum and amounts paid or accrued to a related company for services rendered totaling
$31,279 and $22,238
for the years ended December 31, 2011 and 2010, respectively. The increase in
executive compensation for services rendered in the current annual period over the prior annual period can
be attributed to an increase in those amounts accrued to the related company over the current period in
connection with the documentation required by the acquisition of JBP. Additional compensation in the
prior period of $55,907 was paid to our chief executive and his consulting company in shares of
common
stock valued at $0.05 a share in settlement of amounts due over prior periods that were accrued and unpaid.
Executive compensation is expected to expand in future periods to include salaries, stock awards and stock
options in the event the Company is successful in the development of ParkVida.
Table
The following table provides summary information for 2011 and
2010 concerning cash and non-cash
compensation
paid or
accrued by
the
Company to
or
on
behalf of
(i)
the
chief executive
officer
and the
chief
financial officer and (ii) any other employee to receive compensation in excess of $100,000.
Summary Compensation Table
Name and
Year
Salary
Bonus
Stock
Option
Non-Equity
Change in
All Other
Total
Principal
($)
($)
Awards
Awards Incentive Plan Pension Value
Compensation
($)
Position
($)
($)
Compensation
and
($)
($)
Nonqualified
Deferred
Compensation
($)
Ruairidh
2011
12,000
-
-
-
-
-
31,279*
43,279
Campbell
2010
12,000
-
-
-
-
-
78,235**
90,235
CEO, CFO,
PAO, and
director
*
Amounts paid or accrued to a related company during the
annual period.
**
Amounts paid or accrued to a related company of $22,238 during the
annual period and amounts paid or accrued to Mr.
Campbell
and
a related company of $55,907 for amounts accrued over prior periods all paid in common shares.
The Company has no option or stock award plans.
The Company has no
consulting agreement
with its executive officer.
37
The Company has no plans that provide for the payment of retirement benefits, or benefits that will be paid
primarily following retirement.
The Company has no agreement that provides for payment to our executive officer at, following, or in
connection with the resignation, retirement or other termination, or a change in control of Company or a
change in our executive officer's responsibilities following a change in control.
ITEM 12.
SECURITY
OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding the beneficial ownership of the stock of the
Company
as
of
May
16,
2012,
by
each
shareholder
who
is known
by
the
Company
to
beneficially
own
more
than 5% of the outstanding common stock, by each director, and by all executive officers and directors as a
group.
Title of Class
Names and Addresses of Directors,
Number of Shares
Percent of Class
Officers and Beneficial Owners
Ruairidh Campbell
Common Stock
600 Westwood Terrace
1,778,140*
4.4%
Austin, Texas 78746
Common
All Executive Officers and Directors
Stock
as a Group (1)
1,778,140
4.4%
Park Management
Group, Inc.
2398 Scarth Street, Regina,
15,282,120**
37.7%
Saskatchewan, Canada S4P 2J7
Dwayne Walbaum
Common Stock
340 6
th
Avenue East, Regina,
10,534,527
26.0%
Saskatchewan, Canada S4N 5A4
Owen Walbaum
Common Stock
23 Turner Crescent, Regina,
3,817,858
9.4%
Saskatchewan, Canada S4N 4P7
Total
31,412,645
77.5%
* Mr. Campbell holds 438,140 shares of the
Companys common stock in a related entity.
** Park Management Group, Inc.
holds 6,824,300 share
purchase warrants
with an
exercise
price of $0.005.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
None of our directors or executive officers, nor any proposed nominee for election as a director, nor any
person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate family (including spouse,
parents, children, siblings, and in
−
laws) of any of the foregoing persons has any material interest, direct or
indirect, in any transaction since the beginning of our last fiscal year or in any presently proposed
transaction which,
in
either
case,
has
or
will
materially
affect
us
except
the
following consulting
agreement,
for the rendition of consulting services:
38
Ruairidh Campbell, sole executive officer and director has entered into a consulting arrangement
on a month to month basis that provides for a monthly fee of $1,000.
Ruairidh Campbell, sole executive officer and director has caused the Company to enter into a
consulting arrangement with a related company for services rendered in connection with the
preparation of documentation that is invoiced as completed. The Company paid the related
company a total of $24,858 and accrued a total amount due of
$8,956 as of December 31, 2011.
Director Independence
Our common stock is listed on the OTC Bulletin Board inter-dealer quotation system, which does not have
director independence requirements. For purposes of determining director independence, we have applied
the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not
considered to be independent if he or she is also an executive officer or employee of the corporation.
Accordingly, our sole director is not independent.
ITEM 14.
PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
Audit Fees
Pritchett, Siler & Hardy, P.C. (Pritchett) provided audit services to the Company in connection with its
annual report and review of quarterly filings during the fiscal years ended
December 31, 2011 and 2010.
The aggregate fees billed by Pritchett for the audit of the Companys annual financial statements and a
review of the Companys quarterly financial statements were $28,853and $14,930, respectively.
Audit Related Fees
Pritchett billed to the Company no fees in 2011 and 2010 for professional services that are reasonably
related to the audit or review of the Companys financial statements that are not disclosed in Audit Fees
above.
Tax Fees
Pritchett billed to the Company no fees in 2011 and 2010 for professional services rendered
in connection
with the preparation of the Companys tax returns.
All Other Fees
Pritchett billed to the Company no fees in 2011 and 2010 for other professional services rendered or any
other services not disclosed above.
Audit Committee Pre-Approval
The Company does not have a standing audit committee. Therefore, all services provided to the Company
by
Pritchett
as
detailed above,
were
pre-approved by
the
Companys
board of directors.
Pritchett
performed
all work only with their permanent full-time employees.
39
PART IV
ITEM 15.
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
The following documents are filed under
Item 8. Financial Statements and Supplementary Data,
pages
F-1 through F-17, and are included as part of this Form 10-K:
Consolidated financial Statements of the Company for the years ended December 31,
2011 and 2010:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statement of Stockholders Equity
Consolidated Statements of Cash Flows
Notes to
Consolidated Financial Statements
(b) Exhibits
The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 42 of this Form 10-K, and are incorporated herein by this reference.
(c) Financial Statement Schedules
We are not filing any financial statement schedules as part of this Form 10-K because such schedules are
either not applicable or the required information is included in the financial statements or notes thereto.
40
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Park Vida Group, Inc.
Date
/s/ Ruairidh Campbell
May 16, 2012
By: Ruairidh Campbell
Its: Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date
/s/ Ruairidh Campbell
May 16, 2012
Ruairidh Campbell
Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
41
INDEX TO EXHIBITS
Exhibit No.
Description
3.1.1*
Articles
of
Incorporation of
the Company,
formerly
known as
Aswan Investments, Inc.
(incorporated herein by
reference to
the Form 10-SB as filed with the Commission
on February
3, 2000).
3.1.2*
Amendment to Articles
of
Incorporation
filed with the State of Nevada on August 5, 2002 (incorporated herein by
reference
to the Form 8-K as
filed with the Commission
on August 15, 2002).
3.1.3*
Amendment to Articles of Incorporation
filed with the State of Nevada on October 12, 2004 (incorporated herein by
reference to the
Form 10-QSB as filed with the Commission
on
November 8, 2004).
3.1.4*
Amendment
to
Articles of
Incorporation
filed
with
the
State
of
Nevada on
August
10,
2011
(incorporated
herein
by
reference
to the Form 8-K as
filed with the Commission
on September 29, 2011).
3.2*
By-laws of the Company adopted on December 10, 1999
formerly
known as Aswan Investments, Inc. (incorporated herein
by
reference to the Form 10-SB as filed with the Commission
on February
3, 2000).
10.1*
PWS Share Exchange Agreement dated November 20, 2008 (incorporated herein by
reference to
the Form 8-K as filed with
the Commission on December 3, 2008).
10.2*
Amendment to PWS Share Exchange Agreement dated February
2, 2009 (incorporated herein by
reference to
the Form 8-K
as filed with the Commission on March 3, 2009).
10.3*
Amendment to PWS Share Exchange Agreement dated July
9,
2009 (incorporated herein by reference to
the Form 8-K as
filed with the Commission on July
14, 2009).
10.4*
Amendment to PWS Share Exchange Agreement dated July
22,
2009 (incorporated herein by reference to
the Form 10-Q as
filed with the Commission on August 5, 2009).
10.5*
Assignment Agreement dated August 26, 2009 (incorporated herein by
reference to
the Form 8-K as filed with the
Commission on August 31, 2009).
10.6*
Extension to Assignment Agreement dated November 29, 2009
(incorporated herein by reference to
the Form 10-K as
filed
with the Commission on April 13, 2010).
10.7*
Amendment to PWS Share Exchange Agreement dated December 10, 2009 (incorporated herein by reference to
the Form
10-K as
filed with the Commission
on April 13, 2010).
10.8*
Amendment to PWS Share Exchange Agreement dated March
31, 2010 (incorporated herein by
reference to
the Form 10-K
as filed with the Commission on April 13, 2010).
10.9*
Extension to Assignment
Agreement
dated
March
31,
2010 (incorporated herein
by
reference
to
the
Form
10-K as filed
with
the Commission on April 13, 2010).
10.10*
Asset Purchase Agreement with Park Capital Management, Inc.
dated August 30. 2010 (incorporated herein by
reference to
the Form 8-K filed with the Commission
on August 31, 2010).
10.11*
Amendment to the Asset Purchase Agreement with Park Capital Management, Inc. dated November 12, 2010
(incorporated
herein by reference to the Form 10-K filed with the Commission on March 31, 2011).
10.12*
Architectural
Design Agreement
with
Modularis dated
May
19,
2010
(incorporated
herein
by
reference
to
the
Form
8-K filed
with the Commission on September 29, 2011).
10.13*
Service Agreement with Gentium Financial dated October 1, 2010 (incorporated herein by reference to
the Form 8-K filed
with the Commission on September 29, 2011).
10.14*
Consultancy Services Agreement with
Select Contracts International dated December 7, 2010 (incorporated herein by
reference to the Form 8-K filed with the Commission
on September 29, 2011).
10.15*
Consultancy
Services Agreement with
Modularis dated
May
4,
2011 (incorporated
herein
by
reference
to
the
Form
8-K filed
with the Commission on September 29, 2011).
10.16*
Consultancy Services Agreement with Modularis dated June 30, 2011 (incorporated herein by reference to
the Form 8-K
filed with
the Commission on September 29, 2011).
10.17*
Consultancy
Services Agreement
with
Modularis dated
July
28,
2011(incorporated
herein
by
reference
to
the
Form
8-K filed
with the Commission on September 29, 2011).
14*
Code of Ethics adopted April 14, 2004 (incorporated herein by reference to
the Form 10-KSB/A
filed with the Commission
on April 16, 2004).
21*
Subsidiaries of
the
Company
(incorporated
herein
by
reference
to
the
Form
8-K filed
with
the
Commission on
September
29,
2011).
31
Certification
of
the
Chief
Executive
Officer
and
Chief
Financial
Officer
pursuant
to
Rule
13a-14
of
the
Securities
and
Exchange Act of 1934, as amended, as adopted pursuant to Section 302
of the Sarbanes-Oxley
Act of
2002 (attached).
32
Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to
18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of
the Sarbanes-Oxley
Act of 2002 (attached).
101. INS
XBRL
Instance Document
101. PRE
XBRL Taxonomy Extension Presentation
Linkbase
101. LAB
XBRL Taxonomy Extension Label Linkbase
101. DEF
XBRL Taxonomy Extension Label Linkbase
101. CAL
XBRL Taxonomy Extension Label Linkbase
101. SCH
XBRL Taxonomy Extension Schema
*
Incorporated by reference from previous
filings
of
the Company.
Pursuant to Rule 406T of
Regulation S-T, these interactive data
files are deemed furnished and not filed or part of
a
registration
statement
or
prospectus
for
purposes
of
Section
11 or
12
of
the
Securities
Act
of
1933, or
deemed
furnished
and
not filed
for purposes
of
Section 18
of the Securities and Exchange Act of 1934, and otherwise is not subject to
liability
under these sections.
42
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