UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 2014
[ ] TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from [ ] to [
]
Commission file number 333-190391
ARGAN BEAUTY CORP.
(Exact name of registrant as specified in its charter)
Nevada |
EIN 33-1227949 |
(State or other jurisdiction of incorporation or |
(I.R.S. Employer Identification No.) |
organization) |
|
Faraday Str. 31, Leipzig, Germany |
04159 |
(Address of principal executive offices) |
(Zip Code) |
|
|
Registrant's telephone number, including area code: |
49(0)1738264717 |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Name of Each Exchange On Which Registered |
N/A |
N/A |
Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.
Yes
[ ] No [X]
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
[ ] No [X]
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 last 90 days.
Yes
[X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.[ ]
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 definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] |
Accelerated
filer [ ] |
Non-accelerated filer [ ] |
Smaller reporting
company [X] |
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes
[X] No [ ]
The aggregate market value of Common Stock held by
non-affiliates of the Registrant on November 29, 2013 was $Nil based on a $Nil
average bid and asked price of such common equity, as of the last business day
of the registrants most recently completed second fiscal quarter.
Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.
29,750,000 common shares as of August 19,
2014.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
3
PART I
Item
1. Business
This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.
As used in this annual report, the terms we, us, our and
our company mean Argan Beauty Corp., unless the context clearly requires or
states otherwise.
Corporate Overview
We were incorporated in the State of Nevada on April 15, 2013.
Our company is planning to be a distributor of Argan oil and Argan oil products
to stores, spas, massage therapy offices and individuals in Germany. We intend
to bring the 100% pure and organic Argan oil and skin products made with Argan
oil directly from the manufacturers in Morocco to Germany and in the future to
the rest of Europe. We expect to generate revenues from sales of our products to
individual customers and commercial customers such as spas, stores and massage
therapy offices. Both individual and commercial customers will be able to order
our products by telephone, our website www.arganbeautycorp.com using our special
contact form, or directly at an arranged meeting with our representative. We
will import 100% pure Argan oil and all the skin care products made with Argan
oil straight from the manufacturer in Morocco and deliver them to our clients in
Germany without the help of commission base agents.
At this stage, we have no revenues. The only operations we have
engaged in are preparing our business plan and the development of our website.
Our potential client list consists of 4 companies ranging from beauty stores,
spas and massage therapy offices.
The majority of our business will be initially marketed in
Germany but as our operations expand, we plan to expand to other European
markets.
Our company will focus on providing helpful customer service.
We will have vast selection of products as well as same-day delivery services
within 100 miles radius. We also offer a no minimum order size and no shipping
charges, as well as returns of unused, saleable products for an instant credit.
4
On July 31, 2014, our companys board of directors approved a
resolution to effect a 7 new for 1 old forward split of our authorized, issued
and outstanding shares of common stock. A Certificate of Change for the stock
split was filed and becomes effective with the Nevada Secretary of State on
August 19, 2014. Consequently, our authorized share capital increases from
75,000,000 to 525,000,000 shares of common stock and our issued and outstanding
common stock increases from 4,250,000 to 29,750,000 shares, all with a par value
of $0.001.
The forward stock split was approved by the Financial Industry
Regulatory Authority (FINRA) with an effective date of August 19, 2014.
The forward split became effective with the Over-the-Counter
Bulletin Board at the opening of trading on August 19, 2014 under the symbol
"ABXXD". The "D" will be placed on our ticker symbol for 20 business days. Our
new CUSIP number is 04014V206.
Our principal executive office is located at Faraday Str. 31,
Leipzig, Germany, 04159. Our telephone number is 49 (0) 173 8264 717.
One June 1, 2013, we entered into a web site design agreement
with Smart Creations. As compensation, our company will pay Smart Creations $300
upon completion of the creation of our companys website which was estimated to
be completed on October 30, 2013.
Our Products
Argan oil is becoming more popular and known in all the markets
around the world. It is rich in vitamin E and fatty acids and can be used by
women and men of all ages. Both women and man can use it in their hair, skin and
nails. We will only order 100% organic, pure Argan oil that is grown in Morocco.
The list of products we intend to offer will vary from 100% pure Argan oil to
skin care face creams, eye creams, and cleansers made with pure Argan oil. All
our products will be 100% natural with no synthetic chemicals, chemical
preservatives, artificial fragrances, artificial colors, harsh detergents or any
other unhealthy toxins. Our customers will be able to choose from different
sizes of pure Argan oil: 30 ml, 60 ml, 120 ml and 250 ml. In order to create a
better business relationship with our commercial customers such as spas and
massage therapy offices we will offer them 500ml and 1L of Argan oil at a
discount price. Below some of the products that we are planning to purchase on
our second order:
Many sizes of 100% pure Argan oil, facial day cream, intensive
night cream, lightweight eye cream, facial spf 50 cream, foaming cleanser,
brightening mask, natural scrubs all made with Argan oil as their main
ingredient. All other ingredients in these products will also be 100% natural
and organic such as jojoba oil, aloe vera, cucumber oil, rosehip wax,
pomegranate oil, etc.
We intend to source our products from different manufacturers
in Morocco. At this time manufacturers in Morocco include many small and large
private companies that are dedicated to growth, manufacture, and wholesale of
Argan oil and other products. We will research and find the best quality Argan
oil products for the best possible wholesale prices. Mr. Vitaliy Gorelik, our
president, chief financial officer and sole director, plans to travel to Morocco
in order to personally select the best company with the best quality of Argan
oil.
Some of the guidelines that we plan to follow when searching
for products to ensure its high quality and compliance with International
Standard Assurance:
|
1. |
Mr. Gorelik plans to visit different plants and see the
quality of the Argan nuts being used and how many years the company has
been in the business. Argan oil needs to be pure, without any synthetic
additives, parabens nor silicones so Mr. Gorelik plans to look at the
ingredient list. He also plans to ensure that the company he chooses does
not test on animals. |
|
|
|
|
2. |
He plans to look for the company that uses the best
extraction method. After researching it well we believe that the best
method is raw cold-pressed as it eliminates the environment for bacteria
growth, thus giving the product a longer shelf life. Mr. Gorelik plans to
look at machines being used at all the plants to make sure they qualify
for raw extraction. |
5
|
3. |
Mr. Gorelik plans to look for companies that are USDA
Approved, have Eco Certification and that have ISO 900 which are the
standards of quality published by ISO (the International Organization for
standardization) where the legal and regulatory requirements relating to
the product strictly observed. |
Mr. Gorelik plans to utilize his personal funds to budget this
sourcing-related trip to Morocco. He plans to do his trip at the end of December
or beginning of January 2015.
At this time we do not plan on branding our products or
engaging in other forms of product differentiation.
Customers
Our company's primary markets are: stores selling skin and body
care lines, stores selling natural and organic cosmetics, spas around the
country, massage therapy or Registered Massage Therapy offices that thrive on
using only the best oils for their clients and consumers buying online. With
expending of our business in the future our markets will include cosmetic
stores, spas and massage therapy offices in the rest of Europe.
At this time we have engaged in preliminary talks with four
potential clients: Sports & Spa Wellness, Natur & Fein Beauty Store,
Sachsen Therme, and Massagepraxis Kroß Massage Clinic. All of them have
specified to us the products that they require on regular basis and we are going
to include them in every one of our orders.
The material terms of this verbal agreement with our potential
clients include:
- These clients have verbally agreed to give us the preference when
ordering.
- We have verbally promised them to beat the prices of our competitors thus
offering them the lowest price for the product.
- We have verbally offered them free delivery on orders.
- The clients have verbally told us the products they need and require on a
regular basis.
At this time we have not executed any agreement with these
clients and they do not have any obligation to purchase our product.
Marketing
Initially, our main way of promoting our services will be by
soliciting prospective clients directly and describing our list of products and
services. Another way will be by arranging a meeting directly with the potential
customer through referrals.
Once we order our initial inventory of products based on the
wish list from our potential clients and more, we will also be posting the
products on our website along with the pictures, the list of ingredients and the
option for our customers to leave a review for a specific product they have
purchased. Once we will complete the order, we will try to arrange for future
orders.
Another main communications channel will be digital media via
Internet. We plan to promote our products at our website
www.arganbeautycorp.com. Our website will list the benefits of using our
products. We will print business cards and have our website listed on it. We
will print out brochures with our product list for our potential clients. The
client will also be able to submit order requests and/or contact us via email
linked to our website or call our company directly.
Furthermore, we plan to attend different fairs and trade shows
to further promote our business, hand out business cards, meet potential clients
and referrals.
At last, the best marketing of our business will be our low
prices. We will focus on sourcing our product from suppliers with high quality
product and competitive pricing. Involving no commission based agents we will
take the product straight from the factory to the buyer, keeping the prices low.
6
Customer Service
We intend to follow-up on our previous orders to make sure
everything worked out well and our clients did not have any problems or
concerns. To our business customers we will offer same-day, and two day delivery
on a regular basis with no minimum order size and no shipping charges. Customer
order received by noon will be delivered same day within a 100 miles radius.
Orders that are farther away than 100 miles radius, will be delivered within two
business days. In the future all orders placed through our website will be
mailed the same day with Deutsche Post. All shipping will be free on orders of
$50 or more made on our website. At first, Mr. Gorelik or our companys
secretary, Caroline Bastidas, will use Mr. Gorelik's car to deliver products.
Mr. Gorelik will bill us $.25 per each km driven. When our operations expand by
December 2014 we plan on buying another car to use for delivering products in
addition to Mr. Goreliks car. Estimated cost $12,000.
Returns of unused, saleable products will be accepted for an
instant credit and left in our inventory for resale to another client.
With the expansion of our company we intend to sign executive
agreements with our customers in Europe as well as suppliers in Morocco.
Prices and Paying
Germany has a free-trade agreement with Morocco, so we will not
need to pay any duties on our products coming from there. It will take
approximately 2-3 weeks to receive our order. Our prices on products will have
an additional Deutsch government obligatory VAT of 19%. Payments shall be made
to one of our accounts without any deductions.
Payments by customer shall be due upon receipt of the invoice.
Customers will agree to make payment within 14 days. Upon the expiry of this
deadline, customers shall be in default of payment.
Competition
Our competition will include other distribution companies,
importers, and agents with the same or similar product list. However, there is
an increase in public interest in natural products and cosmetics and the field
grows rapidly and there is a constant need for new pure and organic products. We
expect competition to continue to intensify in the future. Competitors include
companies with more substantial customer bases. There can be no assurance that
we can maintain a competitive position against current or future competitors,
particularly those with greater financial, marketing, service, and support,
technical and other resources. Our failure to maintain a competitive position
within the market could have a material adverse effect on our business,
financial condition and results of operations. There can be no assurance that we
will be able to compete successfully against current and future competitors, and
competitive pressures faced by us may have a material adverse effect on our
business, financial condition and results of operations.
Insurance
We do not maintain any insurance and do not intend to maintain
insurance in the future. Because we do not have any insurance, if we are made a
party of a products liability action, we may not have sufficient funds to defend
the litigation. If that occurs a judgment could be rendered against us, which
could cause us to cease operations.
Employees
We are a development stage company and currently have no
employees other than our president, chief financial officer, treasurer and sole
director, Vitaliy Gorelik, our chief executive officer, Burt Ensley and our
secretary, Caroline Bastidas.
7
Government Regulation
We do not believe that government regulation will have a
material impact on the way we conduct our business.
Research and Development
We have not incurred any research and development expenditures
over the last two fiscal years.
Purchase of Significant Equipment
We plan to purchase new cars for our operations. The number of
new cars will depend on the amount of revenue that we have available. When we
have sufficient funds we plan to purchase a second car for delivery of product
at an estimated cost $12,000.
Subsidiaries
We do not have any subsidiaries.
Intellectual Property
We do not currently have any intellectual property, other than
our domain name, www.arganbeautycorp.com.
REPORTS TO SECURITY HOLDERS
We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission and our filings are available to the public over the internet at the
Securities and Exchange Commissions website at http://www.sec.gov. The public
may read and copy any materials filed by us with the Securities and Exchange
Commission at the Securities and Exchange 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 Securities and
Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, at http://www.sec.gov.
Item 1A. Risk
Factors
Risks Associated To Our Business
We are a development stage company but have not yet
commenced operations in our business. We expect to incur operating losses for
the foreseeable future.
We were incorporated on April 15, 2013 and to date have been
involved primarily in organizational activities. We have not yet commenced
business operations. Accordingly, we have no way to evaluate the likelihood that
our business will be successful. We have not earned any revenues as of the date
of this annual report. Potential investors should be aware of the difficulties
normally encountered by new distribution companies and the high rate of failure
of such enterprises. The likelihood of success must be considered in light of
the problems, expenses, difficulties, complications and delays encountered in
connection with the operations that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to the
ability to generate sufficient cash flow to operate our business, and additional
costs and expenses that may exceed current estimates. We expect to incur
significant losses into the foreseeable future. We estimate significant losses
to be up to $80,000. Our losses could be higher after the first twelve months
period. We recognize that if the effectiveness of our business plan is not
forthcoming, we will not be able to continue business operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and it is doubtful that we will generate any operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail.
8
We have yet to earn revenue and our ability to sustain our
operations is dependent on our ability to raise financing. As a result, there is
substantial doubt about our ability to continue as a going concern.
We have accrued net losses of $31,045 for the period from our
inception on April 15, 2013 to May 31, 2014, and have no revenues to date. Our
future is dependent upon our ability to obtain financing. Further, the finances
required to fully develop our plan cannot be predicted with any certainty and
may exceed any estimates we set forth. These factors raise substantial doubt
that we will be able to continue as a going concern. KLJ & Associates, LLP,
our independent registered public accountant, has expressed substantial doubt
about our ability to continue as a going concern. This opinion could materially
limit our ability to raise funds. If we fail to raise sufficient capital when
needed, we will not be able to complete our business plan. As a result we may
have to liquidate our business and you may lose your investment. You should
consider our independent registered public accountants comments when
determining if an investment in our company is suitable.
We may face damage to our professional reputation if our
future clients are not satisfied with our services. In this case, it is unlikely
that we will be able to obtain future engagements. If we are unable to obtain
engagements, investors are likely to lose their entire investment.
As a distribution company, we depend and will continue to
depend to a large extent on referrals and new engagements from our former
customers, as we will attempt to establish a reputation for professional service
company and integrity to attract and customers. As a result, if a customer is
not satisfied with our products or services, such lack of satisfaction may be
more damaging to our business than it may be to other businesses. Accordingly,
no assurances can be given that we will obtain customers in the foreseeable
future.
If we do not attract customers, we will not make a profit,
which ultimately will result in a cessation of operations.
At this time we have no signed purchase agreement with any of
our potential customers. We have only made verbal agreements with four local
clients: Sports & Spa Wellness, Natur & Fein Store, Sachsen Therme Spa
and Club and Massagepraxis Kroß Massage Clinic. There is no guarantee we will
ever conduct business with these customers or any other customers. Even if we
obtain business from the above listed customers, there is no guarantee that we
will generate a profit. If we cannot generate a profit, we will have to suspend
or cease operations. You are likely to lose your entire investment if we cannot
sell our products at prices that generate a profit.
We are subject to business risks and increasing costs
associated with the transportation of our products that are largely out of our
control, any of which could have a material adverse effect on our business,
financial condition and results of operations.
We are subject to business risks and increasing costs
associated with the transportation of our products that are largely out of our
control, any of which could adversely affect our business, financial condition
and results of operations. The factors contributing to these risks and costs
include weather, excess capacity in the transportation industry, interest rates,
fuel prices and taxes, fuel surcharge collection, impact on liquidity from the
lag between higher payments for fuel and the collection of higher fuel
surcharges in a rising fuel cost environment, terrorist attacks, insurance
premiums and self-insurance levels, difficulty in recruiting and retaining
qualified drivers, the risk of outbreak of epidemical illnesses, the risk of
widespread disruption of our technology systems, and increasing equipment and
operational costs. Our results of operations may also be affected by seasonal
factors.
The distribution industry is cyclical and is sensitive to
changing economic conditions; we are in the midst of an industry and general
economic slowdown or recession that could materially adversely impact our
business.
Distribution services historically have been subject to
substantial cyclical variation characterized by periods of oversupply and weak
demand. We believe that many factors affect the industry, including consumer
confidence in the economy, the level of personal discretionary spending,
interest rates, fuel prices, credit availability and unemployment rates. At this
time, we cannot predict the severity or duration of the slowdown and we cannot
assure that our business will not be materially adversely affected if it
continues or worsens. Accordingly, you are likely to lose your entire investment
if the current slump in distribution industry continues.
9
We operate in a highly competitive environment, and if we
are unable to compete with our competitors, our business, financial condition,
results of operations, cash flows and prospects could be materially adversely
affected.
We operate in a highly competitive environment. Our competition
includes small and midsized companies, and many of them may sell the same
products at competitive prices. Highly competitive environment could materially
adversely affect our business, financial condition, results of operations, cash
flows and prospects.
The Managements lack of industry experience and contacts
may impact our ability to source, import and sell our products.
Our management lacks experience in the beauty products industry
and the import business. The lack of industry experience and contacts can impose
difficulties of locating additional suppliers of beauty products and import into
them into the customers' destination country. Our management may also have a
difficult time, due to their lack of contacts and networking in the industry,
finding customers and selling our beauty product. These factors can greatly
affect our profitability and could cause our business to fail and you lose your
entire investment.
If we are unable to recruit, motivate and retain qualified
personal, our business, financial condition, results of operations and cash
flows could be materially and adversely affected.
The success of our business will depend upon our ability to
attract and retain through independent contractor or other arrangements,
qualified employees who possess the skills and experience necessary to meet the
needs of our operations. We will compete in markets in which unemployment is
generally relatively low and the competition for skilled employees is intense.
We cannot assure that qualified employees will be available in
sufficient numbers and on terms acceptable to us. The inability to attract and
retain qualified personal, could materially and adversely affect our business,
financial condition, results of operations and cash flows.
Because our current officers devote limited amounts of time
to our company, they may not be able or willing to devote a sufficient amount of
time to our business operations, causing our business to fail.
Vitaliy Gorelik, our president, chief financial officer,
treasurer and sole director, currently devotes approximately 25 hours per week
providing management services to us. While he presently possesses adequate time
to attend to our interest, it is possible that the demands on him from other
obligations could increase, with the result that he would no longer be able to
devote sufficient time to the management of our business. The loss of Mr.
Gorelik to our company could negatively impact our business development.
Burt Ensley, our chief executive officer, currently devotes
approximately 25 hours per week providing management services to us. While he
presently possesses adequate time to attend to our interest, it is possible that
the demands on him from other obligations could increase, with the result that
he would no longer be able to devote sufficient time to the management of our
business. The loss of Mr. Ensley to our company could negatively impact our
business development.
Caroline Bastidas, our secretary, currently devotes
approximately 30 hours per week providing management services to us. While she
presently possesses adequate time to attend to our interest, it is possible that
the demands on her from other obligations could increase, with the result that
she would no longer be able to devote sufficient time to the management of our
business. The loss of Ms. Bastidas to our company could negatively impact our
business development.
Our president, Mr. Gorelik, informally agreed to advance us
the funds necessary to pay professional fees and operating expenses; however, he
is not legally obligated to provide such funding potentially causing our
business to fail.
Mr. Gorelik informally agreed to advance us the funds for
professional fees and operating expenses; however, he has not formally agreed to
do so and therefore is not legally obligated to provide such funding. Since we
have no formal agreement with Mr. Gorelik for the advancement of funds, Mr.
Gorelik may fail to advance us the funds, if needed.
10
Because we have only three officers who may not have enough
experience and formal training in financial accounting and management, our
business has a high risk of failure.
We have only three officers: Vitaliy Gorelik, Burt Ensley and
Caroline Bastidas. They have no formal training in financial accounting and
management; however, they are responsible for our managerial and organizational
structure, which will include preparation of disclosure and accounting controls.
When the disclosure and accounting controls referred to above are implemented,
they will be responsible for the administration of them. Should they not have
sufficient experience, they may be incapable of creating and implementing the
controls which may cause us to be subject to sanctions and fines by the SEC
which ultimately could cause you to lose your investment. However, because of
the small size of our expected operations, we believe that they will be able to
monitor the controls they will have created and will be accurate in assembling
and providing information to investors. In addition, Mr. Gorelik, Mr. Ensley and
Ms. Bastidas have no professional training in any aspects of our business. As a
result, they may not be able to recognize and take advantage of potential
acquisition and exploration opportunities in the sector without the aid of
qualified consultants. Consequently our operations, earnings and ultimate
financial success may suffer irreparable harm as a result.
Our executive officers and director do not have any prior
experience conducting a best-effort offering, or managing a public company.
Our executive officers and director do not have any experience
conducting a best-effort offering or managing a public company. Consequently, we
may not be able to raise any funds or run our public company successfully. If we
are not able to raise sufficient funds, we may not be able to fund our
operations as planned, and our business will suffer and your investment may be
materially adversely affected. Also, our executives officers and directors
lack of experience of managing a public company could cause you to lose some or
all of your investment.
We have no revenue and limited assets.
We have no revenue and limited assets and our registered
certified public accountants have issued an opinion expressing substantial doubt
about our ability to continue as a going concern; our limited operations and the
likelihood that we will incur losses for the foreseeable future represent
material risks to our potential investors.
Fluctuations in foreign currency exchange rates, including
as a result of the ongoing European debt crisis, may affect our reported results
of operations.
We plan to conduct operations in international markets from
which we receive, at least in part, revenues in foreign currencies. For example,
we plan to receive Euros in connection with the offer and sale of our common
stock and later in the sale of our products in Germany. Because our financial
results are reported in U.S. dollars, fluctuations in the value of the Euro
against the U.S. dollar are expected to have an effect, which may be
significant, on our financial results. The ongoing European debt crisis, coupled
with the policy actions taken by European central banks to support their
financial system, have caused exchange rates to remain volatile. Concerns
persist regarding the ability of European countries to continue to service their
sovereign debt obligations, the overall stability of the Euro and the
suitability of the Euro as a single currency given the diverse economic and
political circumstances in individual Euro zone countries, or, in more extreme
circumstances, the possible dissolution of the Euro currency entirely. A decline
in the value of any of the foreign currencies in which we receive subscriptions
or revenues, including the Euro, against the U.S. dollar will tend to reduce our
subscription proceeds, reported revenues and expenses, while an increase in the
value of any such foreign currencies against the U.S. dollar will tend to
increase our subscription proceeds, reported revenues and expenses. Variations
in exchange rates can significantly affect the comparability of our financial
results between financial periods.
11
Risks Related to Our Common Stock
A decline in the price of our common stock could affect our
ability to raise further working capital, it may adversely impact our ability to
continue operations and we may go out of business.
A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because we may attempt to acquire a significant
portion of the funds we need in order to conduct our planned operations through
the sale of equity securities, a decline in the price of our common stock could
be detrimental to our liquidity and our operations because the decline may cause
investors to not choose to invest in our stock. If we are unable to raise the
funds we require for all of our planned operations, we may be forced to
reallocate funds from other planned uses and may suffer a significant negative
effect on our business plan and operations, including our ability to develop new
products and continue our current operations. As a result, our business may
suffer and not be successful and we may go out of business. We also might not be
able to meet our financial obligations if we cannot raise enough funds through
the sale of our common stock and we may be forced to go out of business.
If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.
We are authorized to issue up to 525,000,000 shares of common
stock with a par value of $0.001. Our board of directors may choose to issue
some or all of such shares to acquire one or more businesses or to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
company.
Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.
The Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
12
FINRA sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules described above, the
Financial Industry Regulatory Authority (FINRA), formerly the National
Association of Securities Dealers or NASD, has adopted rules that require that
in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.
Item 1B.
Unresolved Staff Comments
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
2. Properties
Our office is currently located at Faraday Str.31, Leipzig,
Germany 04159. Our telephone number is 49(0)173 8435 311. The office and storage
space is provided by our director free of charge. We do not pay any rent to Mr.
Gorelik and there is no agreement to pay any rent in the future.
We intend to rent an office (approx. 200 sq. feet) in the
center of Leipzig. As of the date of this annual report, we have not sought or
selected a new office sight and have no arrangement or lease agreement for the
bigger storage.
Item
3. Legal Proceedings
We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial stockholder,
is an adverse party or has a material interest adverse to our interest.
Item
4. Mine Safety
Disclosures
Not applicable.
PART II
Item
5. Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Our common stock is currently quoted on the OTC Bulletin Board.
Our common stock was quoted on the OTC Bulletin Board effective March 8, 2014.
Our trading symbol is ABXX. There has been only one trade of our common shares
on July 21, 2014 at $0.50.
OTC Bulletin Board securities are not listed and traded on the
floor of an organized national or regional stock exchange. Instead, OTC Bulletin
Board securities transactions are conducted through a telephone and computer
network connecting dealers. OTC Bulletin Board issuers are traditionally smaller
companies that do not meet the financial and other listing requirements of a
national or regional stock exchange.
Our shares are issued in registered form. Island Stock
Transfer, 15500 Roosevelt Boulevard, Suite 301, Clearwater, FL 33760 (Telephone:
(727) 289-0010; Facsimile: (727) 289-0069 is the registrar and transfer agent
for our common shares.
13
Holders
As of August 19, 2014, there were approximately 24 holders of
record of our common stock. As of such date, 29,750,000 common shares were
issued and outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.
Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities
Other than as disclosed below, we did not sell any equity
securities which were not registered under the Securities Act during the year
ended May 31, 2014 that were not otherwise disclosed on our quarterly reports on
Form 10-Q or our current reports on Form 8-K filed during the year ended May 31,
2014.
Equity Compensation Plan Information
We do not have a stock option plan in favor of any director,
officer, consultant or employee of our company.
Purchase of Equity Securities by the Issuer and Affiliated
Purchasers
We did not purchase any of our shares of common stock or other
securities during the fiscal year ended May 31, 2014.
Item
6. Selected
Financial Data
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
7. Managements
Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our
audited financial statements and the related notes for the years ended May 31,
2014 and May 31, 2013 that appear elsewhere in this annual report. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed in
the forward-looking statements.
Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
14
Results of Operations for the Years Ended May 31, 2014 and
2013
The following summary of our results of operations should be
read in conjunction with our audited financial statements for the years ended
May 31, 2014 and 2013.
Our operating results for the years ended May 31, 2014 and 2013
are summarized as follows:
|
|
Year Ended |
|
|
|
May 31, |
|
|
|
2014 |
|
|
2013 |
|
Advertising and promotion |
$ |
36 |
|
$ |
|
|
Bank service charges |
$ |
337 |
|
$ |
35 |
|
Professional fees |
$ |
30,022 |
|
$ |
|
|
Business license and permit |
$ |
|
|
$ |
616 |
|
Net Loss |
$ |
(30,395 |
) |
$ |
(651 |
) |
Our net loss for the year ended May 31, 2014 was $30,395. Our
net loss for year ended May 31, 2013 was $651. During the year ended May 31,
2014 we did not generate any revenue.
During the year ended May 31, 2014, our operating expenses were
bank service charges of $337 and professional fees of $30,022. During the year
ended May 31, 2013, our operating expenses were bank service charges of $35 and
professional fees of $0. The weighted average number of shares outstanding were
4,250,000 and 3,000,000 for the years ended May 31, 2014 and May 31, 2013,
respectively.
Liquidity and Financial Condition
Working Capital |
|
|
|
|
|
|
|
|
At May 31, |
|
|
At May 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Current Assets |
$ |
5,171 |
|
$ |
3,065 |
|
Current Liabilities |
$ |
8,216 |
|
$ |
716 |
|
Working Capital |
$ |
(3,045 |
) |
$ |
2,349 |
|
Cash Flows |
|
|
|
|
|
|
|
|
At May 31, |
|
|
At May 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Net cash used in operations
|
$ |
(30,395 |
) |
$ |
(651 |
) |
Net cash (used in) provided by investing
activities |
|
|
|
|
|
|
Net cash (used in) provided
by financing activities |
$ |
32,500 |
|
$ |
3,716 |
|
Increase (Decrease) in Cash During the Period
|
$ |
2,105 |
|
$ |
3,065 |
|
As at May 31, 2014, our total assets were $5,171 compared to
$3,065 in total assets at May 31, 2013. Total assets were comprised of $5,171 in
cash and cash equivalents. As at May 31, 2014, our current liabilities were
$8,216 compared to $716 in current liabilities as at May 31, 2013. Stockholders
equity was $ (3,045) as of May 31, 2014 compared to stockholders' equity of
$2,349 as of May 31, 2013.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating
activities. For the year ended May 31, 2014, net cash flows used in operating
activities was $(30,395) compared to $(651) for the year ended May 31, 2013. For
the period from inception (April 15, 2013) to May 31, 2014, net cash flows used
in operating activities was $(31,045).
15
Cash Flows from Investing Activities
For the years ended May 31, 2014 and 2013 as well as for the
period from inception (April 15, 2013) to May 31, 2014, we did not have any net
cash flows used in investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either
advancements or the issuance of equity. For the year ended May 31, 2014, cash
flow provided by financing activities was $32,500 compared to $3,716 for the
year ended May 31, 2013. For the period from inception (April 15, 2013) to May
31, 2014, net cash provided by financing activities was $36,216 received from
proceeds from issuance of common stock and director loans.
Plan of Operation and Future Financings
We expect that working capital requirements will continue to be
funded through a combination of our existing funds and further issuances of
securities. Our working capital requirements are expected to increase in line
with the growth of our business.
Existing working capital, further advances and debt
instruments, and anticipated cash flow are expected to be adequate to fund our
operations over the next three months. We have no lines of credit or other bank
financing arrangements. Generally, we have financed operations to date through
the proceeds of the private placement of equity and debt instruments. In
connection with our business plan, management anticipates additional increases
in operating expenses and capital expenditures relating to: (i) acquisition of
inventory; (ii) developmental expenses associated with a start-up business; and
(iii) marketing expenses. We intend to finance these expenses with further
issuances of securities, and debt issuances. Thereafter, we expect we will need
to raise additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We
will have to raise additional funds in the next twelve months in order to
sustain and expand our operations. We currently do not have a specific plan of
how we will obtain such funding; however, we anticipate that additional funding
will be in the form of equity financing from the sale of our common stock. We
have and will continue to seek to obtain short-term loans from our directors,
although no future arrangement for additional loans has been made. We do not
have any agreements with our directors concerning these loans. We do not have
any arrangements in place for any future equity financing.
Cash Requirements
We estimate our operating expenses and working capital
requirements for the twelve month period to be as follows:
Estimated Expenses For the Twelve Month Period ending
May 31, 2015 |
|
|
|
|
|
Professional fees |
$ |
10,000 |
|
Establishing an office |
$ |
13,000 |
|
Advertising |
$ |
500 |
|
Website development |
|
2,500 |
|
General and administrative expenses |
|
30,000 |
|
Total |
$ |
56,000 |
|
16
At present, our cash requirements for the next 12 months
outweigh the funds available to maintain our operations or development of any
future properties. Of the $56,000 that we require for the next 12 months, we had
$5,171 in cash as of May 31, 2014, and a working capital deficit of $31,046.
Until we complete a transaction, acquisition or business combination, our cash
requirements will be in regards to maintaining our corporate existence, and
ensuring compliance with our SEC continuous disclosure obligations, including
our financial reporting requirements. In addition, we will require additional
capital in order to investigate and conclude any future transaction, acquisition
or business combination. In order to improve our liquidity, we plan to pursue
additional equity financing from private investors or possibly a registered
public offering. We do not currently have any definitive arrangements in place
for the completion of any further private placement financings and there is no
assurance that we will be successful in completing any further private placement
financings. If we are unable to achieve the necessary additional financing, then
we plan to reduce the amounts that we spend on our business activities and
administrative expenses in order to be within the amount of capital resources
that are available to us.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
Going Concern
We have suffered recurring losses from operations and are
dependent on our ability to raise capital from stockholders or other sources to
meet our obligations and repay our liabilities arising from normal business
operations when they become due. In their report on our audited financial
statements for the year ended May 31, 2014, our independent auditors included an
explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosure
describing the circumstances that lead to this disclosure by our independent
auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
Critical Accounting Policies
Basis of Presentation
The financial statements of our company have been prepared in
accordance with generally accepted accounting principles in the United States of
America and are presented in US dollars.
Accounting Basis
Our company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America (GAAP
accounting). Our company has adopted a May 31 fiscal year end.
Cash and Cash Equivalents
Our company considers all highly liquid investments with the
original maturities of three months or less to be cash equivalents. Our company
had $5,171 of cash as of May 31, 2014 and $3,065 as of May 31, 2013.
17
Fair Value of Financial Instruments
Our companys financial instruments consist of cash and cash
equivalents and amounts due to shareholder. The carrying amount of these
financial instruments approximates fair value due either to length of maturity
or interest rates that approximate prevailing market rates unless otherwise
disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Use of Estimates
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 the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue Recognition
Our company recognizes revenue when products are fully
delivered or services have been provided and collection is reasonably assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in
accordance with ASC Topic 718. To date, our company has not adopted a stock
option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing our
companys net loss applicable to common shareholders by the weighted average
number of common shares during the period. Diluted earnings per share is
calculated by dividing our companys net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year.
The diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted for any potentially dilutive debt or equity. There are
no such common stock equivalents outstanding as of May 31, 2014.
Comprehensive Income
Our company has which established standards for reporting and
display of comprehensive income, its components and accumulated balances. When
applicable, our company would disclose this information on its Statement of
Stockholders Equity. Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners. Our company
has not had any significant transactions that are required to be reported in
other comprehensive income.
Recent Accounting Pronouncements
Our company has implemented all new accounting pronouncements
that are in effect and that may impact its consolidated financial statements and
does not believe that there are any other new accounting pronouncements that
have been issued that might have a material impact on its financial position or
results of operations.
18
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
8. Financial
Statements and Supplementary Data
The condensed annual financial statements of our company have
been prepared in accordance with generally accepted accounting principles in the
United States of America and are presented in US dollars.
19
INDEX TO FINANCIAL STATEMENTS
ARGAN BEAUTY CORP.
Henderson, Nevada
FINANCIAL STATEMENTS
May 31, 2014 and 2013
20
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders Argan Beauty
Corp.
We have audited the accompanying balance sheet of Argan Beauty
Corp. as of May 31, 2014 and 2013 and the related statements of operations,
stockholders equity, and cash flows for the years ended May 31, 2014 and for
the period April 15, 2013 (inception) through May 31, 2013. Argan Beauty Corp.s
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 also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Argan Beauty
Corp. as of May 31, 2014 and 2013, and the results of its operations and its
cash flows for years ended May 31, 2014 and the period April 15, 2013
(inception) through May 31, 2013 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 3 to
the financial statements, The Company is in the development stage, has earned
only minimal revenue, has suffered net losses and has had negative cash flows
from operating activities during the year ended May 31, 2014 and from April 15,
2013 (inception) through May 31, 2013. These matters raise substantial doubt
about the Companys ability to continue as a going concern. Managements plans
concerning these matters are also described in Note 3. The financial statements
do not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.
/s/ KLJ & Associates, LLP
KLJ & Associates, LLP
St. Louis Park, Minnesota
August 29, 2014
1660 South Highway 100
Suite 500
St. Louis Park, Minnesota 55416
630.277.2330
21
Argan Beauty Corp.
Balance Sheets
ASSETS |
|
May 31, 2014 |
|
|
May 31, 2013 |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
5,171 |
|
|
3,065 |
|
|
|
|
|
|
|
|
Total Current Assets |
|
5,171 |
|
|
3,065 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
5,171 |
|
|
3,065 |
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan from director |
$ |
8,217 |
|
|
716 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
8,217 |
|
|
716 |
|
|
|
|
|
|
|
|
Stockholders Equity
(Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $.001 par
value: Authorized 750,000,000 shares:
Issued and outstanding 29,750,000 and 21,000,000 shares. |
|
29,750 |
|
|
21,000 |
|
Additional paid in capital |
|
16,250 |
|
|
- |
|
Accumulated (Deficit) |
|
(49,046 |
) |
|
(18,651 |
) |
|
|
|
|
|
|
|
Total Stockholders Equity
(Deficit) |
|
(3,046 |
) |
|
2,349 |
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders Deficit |
$ |
5,171 |
|
|
3,065 |
|
The accompanying notes are an integral part of these
financial statements.
22
Argan Beauty Corp.
Statements of Operations
|
|
|
|
|
Period from |
|
|
|
|
|
|
April 15, 2013 |
|
|
|
Year Ended May |
|
|
(inception) to May 31, |
|
|
|
31,
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Revenue |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
Advertising and Promotion |
|
36 |
|
|
|
|
Bank Service Charges |
|
337 |
|
|
35 |
|
Business license and permit |
|
- |
|
|
616 |
|
Professional fees |
|
30,022 |
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses |
|
30,395 |
|
|
651 |
|
|
|
|
|
|
|
|
Net Loss From
Operations |
|
(30,395 |
) |
|
(651 |
) |
|
|
|
|
|
|
|
Net Loss |
$ |
(30,395 |
) |
|
(651 |
) |
|
|
|
|
|
|
|
Basic and diluted net loss
per common share |
$ |
(0.00 |
) |
|
(0.00 |
) |
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding |
|
25,986,301 |
|
|
21,000,000 |
|
The accompanying notes are an integral part of these
financial statements.
23
Argan Beauty Corp.
Statements of Stockholders
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Stockholders |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Accumulated |
|
|
Equity |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(Deficit) |
|
Balance at inception April 15,
2013 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash at $0.001
per share |
|
21,000,000 |
|
|
21,000 |
|
|
- |
|
|
(18,000 |
) |
|
3,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the year ended May
31, 2013 |
|
- |
|
|
- |
|
|
- |
|
|
(651 |
) |
|
(651 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of May 31, 2013 |
|
21,000,000 |
|
|
21,000 |
|
|
- |
|
|
(18,651 |
) |
|
2,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash at $0.02
per share |
|
8,750,000 |
|
|
8,750 |
|
|
16,250 |
|
|
- |
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the year ended May
31, 2014 |
|
- |
|
|
- |
|
|
- |
|
|
(30,395 |
) |
|
(30,395 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of May 31, 2014 |
|
29,750,000 |
|
$ |
29,750 |
|
|
16,250 |
|
|
(49,046 |
) |
|
(3,046 |
) |
The accompanying notes are an integral part of these
financial statements.
24
Argan Beauty Corp.
Statements of Cash Flows
|
|
|
|
|
Period from |
|
|
|
|
|
|
April 15, 2013 |
|
|
|
Year Ended May 31, |
|
|
(inception) to May |
|
|
|
2014 |
|
|
31,
2013 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
Net loss |
$ |
(30,395 |
) |
|
(651 |
) |
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net
cash (used in) operating activities: |
|
|
|
|
|
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
- |
|
|
- |
|
Expenses
paid on behalf of the Company by a related party |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
(30,395 |
) |
|
(651 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from sale of common stock |
|
25,000 |
|
|
3,000 |
|
Loans from director |
|
7,500 |
|
|
716 |
|
|
|
|
|
|
|
|
Net cash provided by
financing activities |
|
32,500 |
|
|
3,716 |
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash |
|
2,105 |
|
|
3,065 |
|
Cash, beginning of the period |
|
3,065
|
|
|
- |
|
Cash, end of the period |
$ |
5,171 |
|
|
3,065 |
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information: |
|
|
|
|
|
|
Interest paid |
$ |
- |
|
$ |
- |
|
Income taxes paid |
$ |
- |
|
$ |
- |
|
The accompanying notes are an integral part of these
financial statements.
25
ARGAN BEAUTY CORP.
NOTES TO FINANCIAL STATEMENTS
MAY 31,
2014
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
ARGAN BEAUTY CORP. is a development stage company registered in
the State of Nevada on April 15, 2013 formed to distribute Argan oil products.
ARGAN BEAUTY CORP. will position itself to take full advantage of the
distributing Argan oil products from manufacturers to customers.
NOTE 2 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of
the Company have been prepared in accordance with generally accepted accounting
principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis
of accounting and accounting principles generally accepted in the United States
of America (GAAP accounting). The Company has adopted a May 31 fiscal year
end.
Cash and Cash Equivalents
The Company considers all
highly liquid investments with the original maturities of three months or less
to be cash equivalents. The Company had $3,065 of cash as of May 31, 2013 and $
5,171 as of May 31, 2014.
Fair Value of Financial Instruments
The Companys
financial instruments consist of cash and cash equivalents and amounts due to
shareholder. The carrying amount of these financial instruments approximates
fair value due either to length of maturity or interest rates that approximate
prevailing market rates unless otherwise disclosed in these financial
statements.
Income Taxes
Income taxes are computed using the
asset and liability method. Under the asset and liability method, deferred
income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the currently enacted tax rates and laws. A valuation allowance
is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
Use of Estimates
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 the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Revenue Recognition
The Company recognizes revenue
when products are fully delivered or services have been provided and collection
is reasonably assured.
Stock-Based Compensation
Stock-based compensation is
accounted for at fair value in accordance with ASC Topic 718. To date, the
Company has not adopted a stock option plan and has not granted any stock
options.
26
ARGAN BEAUTY CORP.
NOTES TO FINANCIAL STATEMENTS
MAY 31,
2014
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Basic Income (Loss) Per Share
Basic income (loss)
per share is calculated by dividing the Companys net loss applicable to common
shareholders by the weighted average number of common shares during the period.
Diluted earnings per share is calculated by dividing the Companys net income
available to common shareholders by the diluted weighted average number of
shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of May 31, 2014.
Comprehensive Income
The Company has which
established standards for reporting and display of comprehensive income, its
components and accumulated balances. When applicable, the Company would disclose
this information on its Statement of Stockholders Equity. Comprehensive income
comprises equity except those resulting from investments by owners and
distributions to owners. The Company has not had any significant transactions
that are required to be reported in other comprehensive income.
Recent Accounting Pronouncements
On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.
NOTE 3 GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principle, which contemplate
continuation of the Company as a going concern. However, the Company had no
revenues as of May 31, 2014. The Company currently has limited working capital,
and has not completed its efforts to establish a stabilized source of revenues
sufficient to cover operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for
the near future, on additional investment capital to fund operating expenses The
Company intends to position itself so that it may be able to raise additional
funds through the capital markets. In light of managements efforts, there are
no assurances that the Company will be successful in this or any of its
endeavors or become financially viable and continue as a going concern.
NOTE 4 LOAN FROM DIRECTOR
As of May 31, 2014, a director loaned $8,217 to the Company for
business operations. The loans are unsecured, non-interest bearing and due on
demand.
The balance due to the director was $8,217 as of May 31, 2014.
NOTE 5 COMMON STOCK
The Company has 525,000,000, $0.001 par value shares of common
stock authorized.
On May 13, 2013, the Company issued 3,000,000 (21,000,000 post
split) shares of common stock to a director for cash proceeds of $3,000 at
$0.001 per share.
On November 15, 2013, the Company issued 1, 250,000 (8,750,000
post split) shares of common stock for cash proceeds of $ 25,000 at $0.02 per
share.
27
ARGAN BEAUTY CORP.
NOTES TO FINANCIAL STATEMENTS
MAY 31,
2014
NOTE 5 COMMON STOCK (CONTINUED)
The Companys board of directors approved a seven for one
forward stock split of authorized and issued and outstanding shares of common
stock. Consequently our authorized share capital increases from 75,0000 to
525,000,000 shares of common stock and our issued and outstanding common stock
increases from 4,250,000 to 29,750,000 shares all with par value of $.001.
The forward stock split has been reviewed by Financial Industry
Regulatory Authority (FINRA) and was approved for filing with an effective date
of August 19, 2014.
There were 29,750,000 shares of common stock issued and
outstanding as of May 31, 2014.
NOTE 6 COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal
property. An officer has provided office services without charge. There is no
obligation for the officer to continue this arrangement. Such costs are
immaterial to the financial statements and accordingly are not reflected herein.
The officers and directors are involved in other business activities and most
likely will become involved in other business activities in the future.
NOTE 7 INCOME TAXES
As of May 31, 2014, the Company had net operating loss carry
forwards of approximately $13,258 that may be available to reduce future years
taxable income in varying amounts through 2031. Future tax benefits which may
arise as a result of these losses have not been recognized in these financial
statements, as their realization is determined not likely to occur and
accordingly, the Company has recorded a valuation allowance for the deferred tax
asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following:
|
|
|
May 31, 2014 |
|
|
May 31, 2013 |
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
Current operations |
$ |
10,334 |
|
$ |
221 |
|
|
Less: valuation allowance |
|
(10,334 |
) |
|
(221 |
) |
|
Net provision for Federal
income taxes |
$ |
- |
|
|
- |
|
The cumulative tax effect at the expected rate of 34 percent of
significant items comprising our net deferred tax amount is as follows:
|
|
|
May 31, 2014 |
|
|
May 31, 2013 |
|
|
Deferred tax asset
attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carry over
|
$ |
10,555 |
|
|
221 |
|
|
Less: valuation allowance |
|
(10,555 |
) |
|
(221 |
) |
|
Net deterred tax asset |
$ |
- |
|
|
- |
|
Due to the change in ownership provisions of the Tax Reform Act
of 1986, net operating loss carry forwards of approximately $17,750 for Federal
income tax reporting purposes are subject to annual limitations. Should a change
in ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 8SUBSEQUENT EVENTS
We evaluated all events or transactions up to the date we
issued these financial statements. During this period we did not have any
material subsequent events that impacted our financial statements.
28
Item
9. Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure
There were no disagreements with our accountants related to
accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the two fiscal years and
subsequent interim periods.
Item
9A. Controls and Procedures
Managements Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are
designed to ensure that the information disclosed in the reports we file with
the Securities and Exchange Commission under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and forms, and that such information
is accumulated and communicated to our chief executive officer (our principal
executive officer) and our chief financial officer (our principal financial
officer and principal accounting officer), as appropriate, to allow timely
decisions regarding required disclosure.
Management, including our chief executive officer (our
principal executive officer) and our chief financial officer (our principal
financial officer and principal accounting officer), evaluated the effectiveness
of our disclosure controls and procedures, as of May 31, 2014, in accordance
with Rules 13a-15(b) and 15d-15(b) of the Securities and Exchange Act of 1934,
as amended and concluded that our disclosure controls and procedures are not
effective to ensure the information required to be disclosed by us in the
reports that we file or submit under the Securities and Exchange Act of 1934, as
amended is recorded, processed, summarized and reported within the time period
specified in SEC rules and forms.
Our management, including our chief executive officer (our
principal executive officer) and our chief financial officer (our principal
financial officer and principal accounting officer), do not expect that our
disclosure controls, and procedures or internal controls will prevent all
possible error and fraud. Our disclosure controls and procedures are, however,
designed to provide reasonable assurance of achieving their objectives, and our
chief executive officer (our principal executive officer) and our chief
financial officer (our principal financial officer and principal accounting
officer) have concluded that our financial controls and procedures are not
effective at that reasonable assurance level.
Managements Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of financial statements in
conformity with accounting principles generally accepted in the United States.
Our management assessed the effectiveness of our internal control over financial
reporting as of May 31, 2014. In making this assessment, our management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Our
management has concluded that, as of May 31, 2014, our internal control over
financial reporting was not effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our board of directors.
This annual report does not include an attestation report of
our companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
companys registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit our company to provide only managements
report in this annual report.
15
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. 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 with the policies or procedures may deteriorate.
Changes in Internal Control over Financial
Reporting
There have been no changes in our internal controls over
financial reporting that occurred during the year ended May 31, 2014 that have
materially or are reasonably likely to materially affect, our internal controls
over financial reporting.
Item
9B. Other Information
Effective July 22, 2014, Vitaliy Gorelik resigned as chief
executive officer of our company. Mr. Gorelik remains as president, chief
financial officer and sole director of our company. Mr. Gorelik's resignation
was not the result of any disagreement with our company regarding our
operations, policies, practices or otherwise.
Effective July 22, 2014, Burt Ensley was appointed as chief
executive officer of our company.
PART III
Item
10. Directors, Executive
Officers and Corporate Governance
The following individuals serve as the directors and executive
officers of our company as of the date of this annual report. All directors of
our company hold office until the next annual meeting of our shareholders or
until their successors have been elected and qualified. The executive officers
of our company are appointed by our board of directors and hold office until
their death, resignation or removal from office.
Name
|
Position Held
with our
company |
Age
|
Date First Elected or
Appointed |
Vitaliy Gorelik |
President, Chief Financial Officer, Treasurer
and Director |
39 |
April 15, 2013 |
Burt Ensley |
Chief Executive Officer |
65 |
July 22, 2014 |
Caroline Bastidas |
Secretary |
33 |
April 15, 2013 |
Business Experience
The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.
16
Vitaliy Gorelik President, Chief Financial Officer,
Treasurer and Director
Vitaliy Gorelik was appointed as our president, chief executive
officer, chief financial officer, treasurer and director on April 15, 2013. Mr.
Gorelik resigned as our chief executive officer on July 22, 2014. From 2003 to
2007 Mr. Gorelik worked as a sous chef at Bürgerhaus in Delitzsch, Germany. From
2008 until 2010 he became a full-time manager at Kurhaus, his family owned
restaurant. From 2010 to present Mr. Gorelik still works part-time at Kurhaus
and part-time devoting his attention to our company.
Burt Ensley, Ph.D. Chief Executive Officer
Burt Ensley, Ph.D., is the founder of Protein Genomics, Inc.
and DermaPlus, Inc., Arizona-based biotechnology companies involved in wound
healing, tissue regeneration and skin care.
His professional career began in 1981 when he was hired by
Amgen, Inc., a start-up biotech firm in Thousand Oaks, California, that he
helped become the largest such company in the world within 10 years. Amgen now
has 40,000 employees and $12 billion in annual revenue.
In 1989, Dr. Ensley left Amgen to serve as director of advanced
technologies for Envirogen, Inc. There, he led research and field demonstrations
of biological and physical/chemical technologies for the treatment of hazardous
wastes from the companys inception until its public offering in 1992. He then
became a founder and the president, chief executive officer and director of
Phytotech, Inc., a biotechnology company using plants for the treatment of
contaminated soil and water. He raised financing for Phytotech of $5 million in
equity and $2 million in debt from inception to sale of the business in June
1999.
In 1999, Dr. Ensley founded Nucycle Therapy, Inc., a
biotechnology company involved in discovering, developing and commercializing
unique nutritional supplements and high value nutraceutical and therapeutic
products from plants. He served as the companys chief executive officer from
1999 to 2001. The company was able to scale-up the manufacture of 50 million
doses of plant-based nutritional mineral supplements, and was sold to Integrated
Biopharma, a publicly traded entity, in 2001.
In 2004, Dr. Ensley founded Protein Genomics, Inc., a privately
held genomics-based biopolymer company. The company designs and manufactures
protein monomers and polymers of human structural molecules with applications in
wound healing, tissue repair and personal care products. These products are
designed directly from the mRNA sequences of individuals and population groups.
Dr. Ensley currently acts as chairman and chief executive officer of Protein
Genomics, Inc.
Dr. Ensley was elected to Fellowship in the American Academy of
Microbiology in recognition of his research accomplishments. His professional
affiliations have included membership in the board of directors and co-chair of
The BIO5 Institute at the University of Arizona; board of trustees at the
Biotechnology Council of New Jersey; board of directors of the Natural History
Museum at the University of Kansas; the American Association for the Advancement
of Science; the American Society for Microbiology; service on the National
Research Council Committee on Catalysis; and on the biology directorate advisory
committee of the National Science Foundation. He is an adjunct professor at
Northern Arizona University.
He holds his Ph.D. degree in microbiology from the University
of Georgia (1979), his masters degree in biology from the University of New
Mexico (1976), and bachelors degree in biology from the University of New
Mexico (1974).
Dr. Ensley has 30 publications in peer-reviewed scientific
literature and holds 19 issued and 2 pending US patents.
Dr. Ensley served in the US Army from August 1968 until May,
1971, graduating from the MACV Recondo School and serving with the 5th Special
Forces Group, 1st Special Forces (Airborne) in Nha Trang, Vietnam. He was
decorated twice (BSM and ARCOM) for service in combat.
17
Caroline Bastidas - Secretary
Caroline Bastidas was appointed as secretary of our company on
April 15, 2013. Ms. Bastidas studied at University of Chile where she majored in
commerce from 2001 till 2005. From 2006- 2009 Ms. Bastidas worked as a Sales
Representative at Seguros Chile, an Insurance company. From 2009-2013 Ms.
Bastidas worked as a Cash Operations Specialist in Banco de Chile, the Bank of
Chile. Presently, Ms. Bastidas is devoting her time to management of Argan
Beauty Corp. Currently she devotes 30 hours a week to our company.
Our board of directors consists solely of Vitaliy Gorelik.
Significant Employees
There are no individuals other than our executive officers who
make a significant contribution to our company.
Family Relationships
There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or
executive officers has, during the past ten years:
|
1. |
been convicted in a criminal proceeding or been subject
to a pending criminal proceeding (excluding traffic violations and other
minor offences); |
|
|
|
|
2. |
had any bankruptcy petition filed by or against the
business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive
officer, either at the time of the bankruptcy filing or within two years
prior to that time; |
|
|
|
|
3. |
been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction or federal or state authority, permanently or temporarily
enjoining, barring, suspending or otherwise limiting, his involvement in
any type of business, securities, futures, commodities, investment,
banking, savings and loan, or insurance activities, or to be associated
with persons engaged in any such activity; |
|
|
|
|
4. |
been found by a court of competent jurisdiction in a
civil action or by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated; |
|
|
|
|
5. |
been the subject of, or a party to, any federal or state
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated (not including any settlement
of a civil proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud
or fraud in connection with any business entity;
or |
18
|
6. |
been the subject of, or a party to, any sanction or
order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member. |
Compliance with Section 16(a) of the Securities Exchange Act
of 1934
Our common stock is not registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the Exchange Act).
Accordingly, our officers, directors, and principal stockholders are not subject
to the beneficial ownership reporting requirements of Section 16(a) of the
Exchange Act.
Code of Ethics
We have not yet adopted a code of ethics that applies to our
sole officer and director, or persons performing similar functions because we
are in the start-up phase and are in the process of establishing our operations.
We plan to adopt a code of ethics as and when our company grows to a sufficient
size to warrant such adoption.
Audit Committee
As we have only a sole director, we have not established an
audit committee as at the date of this registration statement, nor do we have
plans to establish an audit committee until such time as we have established our
full operations, and retained sufficient independent directors as members of our
board of directors willing to be appointed to the audit committee and carry out
the customary functions of an audit committee.
Director Nominees
We do not have a nominating committee. Our sole director will
in the future select individuals to stand for election as members of our board
of directors. The company does not have a policy with regards to the
consideration of any director candidates recommended by our security holders.
Our board has determined that it is in the best position to evaluate our
companys requirements as well as the qualifications of each candidate when it
considers a nominee for a position on our board. If security holders wish to
recommend candidates directly to our board, they may do so by communicating
directly with our sole officer and director at the address specified on the
cover of this registration statement.
Audit Committee and Audit Committee Financial Expert
We do not currently have an audit committee or a committee
performing similar functions. The board of directors as a whole participates in
the review of financial statements and disclosure.
Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an audit committee financial
expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and is independent
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.
We believe that the sole member of our board of directors is
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting. We believe that
retaining an independent director who would qualify as an audit committee
financial expert would be overly costly and burdensome and is not warranted in
our circumstances given the early stages of our development and the fact that we
have not generated any material revenues to date. In addition, we currently do
not have nominating, compensation or audit committees or committees performing
similar functions nor do we have a written nominating, compensation or audit
committee charter. Our sole director does not believe that it is necessary to
have such committees because believes the functions of such committees can be
adequately performed by the sole member of our board of directors
19
Item 11.
Executive Compensation
The particulars of the compensation paid to the following
persons:
|
(a) |
our principal executive officer; |
|
|
|
|
(b) |
each of our two most highly compensated executive
officers who were serving as executive officers at the end of the years
ended May 31, 2014 and 2013; and |
|
|
|
|
(c) |
up to two additional individuals for whom disclosure
would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at the end of the years ended May
31, 2014 and 2013, |
who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION
TABLE |
Name and
Principal Position |
Year |
Salary
($) |
Bonus ($) |
Stock
Awards ($) |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation
($) |
Change in Pension
Value and Nonqualified Deferred
Compensation Earnings ($) |
All
Other Compensation ($) |
Total
($) |
Vitaliy Gorelik(1) President, Chief
Financial Officer, Treasurer and Director |
2014 2013
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Nil Nil
|
Burt Ensley(2) Chief Executive
Officer |
2014 2013 |
N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
|
(1) |
Mr. Gorelik was appointed as president, chief financial
officer, chief executive officer, treasurer, and director of our company
on April 15, 2013 and resigned as chief executive officer on July 22,
2014. |
|
(2) |
Mr. Ensley was appointed as chief executive officer of
our company on July 22, 2014. |
There are no compensatory plans or arrangements with respect to
our executive officers resulting from their resignation, retirement or other
termination of employment or from a change of control.
Stock Option Plan
Currently, we do not have a stock option plan in favor of any
director, officer, consultant or employee of our company.
Option Grants
We have not granted any options or stock appreciation rights to
our named executive officers or directors since inception. We do not have any
stock option plans.
20
Management Agreements
We have not entered into any management agreements with any of
our executive officers.
Compensation of Directors
We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.
We have determined that none of our directors are independent
directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the
Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(15) of the NASDAQ Marketplace Rules.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits to our directors or executive officers. We have
no material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.
Compensation Committee
We do not currently have a compensation committee of the board
of directors or a committee performing similar functions. The board of directors
as a whole participates in the consideration of executive officer and director
compensation.
Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management
None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.
21
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The following table sets forth, as of August 19, 2014, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.
Name and Address of Beneficial
Owner |
Title of Class |
Amount and
Nature of
Beneficial Ownership |
Percentage of
Class(1) |
Vitaliy Gorelik(2) Faraday
Str. 31 Leipzig, Germany 04159 |
Common
|
21,000,000
|
70.59%
|
Burt Ensley(3) PMB 1319, 2674
W. Hwy. 89A Sedona, Arizona 86335 |
Common
|
Nil
|
0%
|
Caroline Bastidas(4) Faraday
Str. 31 Leipzig, Germany 04159 |
Common
|
Nil
|
0%
|
Directors and Officers as a
group |
Common |
21,000,000 |
79.59%
|
(1) |
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition
rights. As a result, the percentage of outstanding shares of any person as
shown in this table does not necessarily reflect the persons actual
ownership or voting power with respect to the number of shares of common
stock actually outstanding on August 19, 2014. As of August 19, 2014,
there were 29,750,000 shares of our companys common stock issued and
outstanding. |
|
|
(2) |
Vitaliy Gorelik is our president, chief financial
officer, treasurer and director. |
|
|
(3) |
Burt Ensley is our chief executive officer. |
|
|
(4) |
Caroline Bastidas is our
secretary. |
Changes in Control
We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.
22
Item
13. Certain Relationships
and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended May 31, 2014, in which
the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year-end for
the last three completed fiscal years.
Director Independence
We currently act with one director consisting of Vitaliy
Gorelik. We have determined that our sole director is not an independent
director as defined in NASDAQ Marketplace Rule 4200(a)(15).
We do not have a standing audit, compensation or nominating
committee, but our entire board of directors acts in such capacities. We believe
that our members of our board of directors are capable of analyzing and
evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The board of directors of our company does
not believe that it is necessary to have an audit committee because we believe
that the functions of an audit committee can be adequately performed by the
board of directors. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.
Item
14. Principal Accounting
Fees and Services
The aggregate fees billed for the most recently completed
fiscal year ended May 31, 2014 and for the fiscal year ended May 31, 2013 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
|
Year Ended |
May 31, 2014
$ |
May 31, 2013
$ |
Audit Fees |
$6,500 |
$3,500 |
Audit Related Fees |
- |
- |
Tax Fees |
- |
- |
All Other Fees |
- |
- |
Total |
$6,500 |
$3,500 |
Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.
23
PART IV
Item 15. Exhibits,
Financial Statement Schedules
(a) |
Financial Statements |
|
(1) |
Financial statements for our company are listed in the
index under Item 8 of this document |
|
(2) |
All financial statement schedules are omitted because
they are not applicable, not material or the required information is shown
in the financial statements or notes thereto. |
(b) |
Exhibits |
* |
Filed herewith. |
** |
Furnished herewith. Pursuant to Rule 406T of
Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are
deemed not filed or part of any registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed
not filed for purposes of Section 18 of the Securities and Exchange Act of
1934, and otherwise are not subject to liability under those
sections. |
24
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
ARGAN BEAUTY CORP. |
|
(Registrant) |
|
|
|
|
|
|
Dated: August 29, 2014 |
/s/
Vitaliy Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer
and Director |
|
(Principal Executive Officer) |
|
|
|
|
|
|
Dated: August 29, 2014 |
/s/
Burt Ensley |
|
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Financial Officer and Principal
Accounting |
|
Officer) |
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.
Dated: August 29, 2014 |
/s/
Vitaliy Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer
and Director |
25
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Burt Ensley, certify that:
1. |
I have reviewed this annual report on Form 10-K of Argan
Beauty Corp; |
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have: |
|
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the
equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
Date: August 29, 2014
/s/ Burt
Ensley |
|
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Vitaliy Gorelik, certify that:
1. |
I have reviewed this annual report on Form 10-K of Argan
Beauty Corp.; |
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have: |
|
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the
equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
Date: August 29, 2014
/s/ Vitaliy
Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer and Director
|
|
(Principal Financial Officer and Principal Accounting
Officer ) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
I, Burt Ensley, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) |
the Annual Report on Form 10-K of Argan Beauty Corp. for
the period ended May 31, 2014 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
(2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Argan Beauty Corp. |
|
/s/
Burt Ensley |
Dated: August 29, 2014 |
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
Argan Beauty Corp. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Argan Beauty
Corp. and will be retained by Argan Beauty Corp. and furnished to the Securities
and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
I, Vitaliy Gorelik, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) |
the Annual Report on Form 10-K of Argan Beauty Corp. for
the period ended May 31, 2014 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
(2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Argan Beauty Corp. |
|
/s/
Vitaliy Gorelik |
Dated: August 29, 2014 |
Vitaliy Gorelik |
|
Chief Financial Officer, Treasurer and Director
|
|
(Principal Financial Officer and Principal
Accounting Officer) |
|
Argan Beauty Corp. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Argan Beauty
Corp. and will be retained by Argan Beauty Corp. and furnished to the Securities
and Exchange Commission or its staff upon request.