UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended November 30, 2014
or
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from __________ to __________
Commission
file number: 333-176587
il2m
INTERNATIONAL INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
27-3492854 |
(State
or other jurisdiction of
incorporation or organization) |
|
(I.R.S.
Employer
Identification
No.) |
|
|
|
3500
West Olive Avenue
Suite
810
Burbank,
California |
|
91505 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(702)
726-0381
(Registrant’s
telephone number, including area code)
N/A
(Former
name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒
No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ☐ |
Accelerated
filer ☐ |
Non-accelerated
filer ☐
(Do not check if a smaller reporting company) |
Smaller reporting
company ☒ |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As
of January 29, 2015, there were 211,718,946 shares of common stock, par value $0.0001 per share, outstanding.
il2m
INTERNATIONAL CORP.
formerly
known as Dynamic Nutra Enterprises Holdings Inc.
QUARTERLY
REPORT ON FORM 10-Q
November
30, 2014
TABLE
OF CONTENTS
PART
I - FINANCIAL INFORMATION |
PAGE |
|
|
|
Item
1. |
Financial
Statements |
F-1 |
Item
2. |
Management’s
Discussion and Analysis of Financial Condition and Results of Operations |
1 |
Item
3. |
Quantitative
and Qualitative Disclosures About Market Risk |
3 |
Item
4. |
Controls
and Procedures |
3 |
|
|
PART
II - OTHER INFORMATION |
|
|
|
|
Item
1. |
Legal
Proceedings |
9 |
Item
1A. |
Risk
Factors |
9 |
Item
2. |
Unregistered
Sales of Equity Securities and Use of Proceeds |
9 |
Item
3. |
Defaults
Upon Senior Securities |
10 |
Item
4. |
Mine
Safety Disclosure |
10 |
Item
5. |
Other
Information |
10 |
Item
6. |
Exhibits |
13 |
|
|
SIGNATURES |
14 |
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
(A
DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE |
F-1 |
CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2014 |
|
|
|
PAGE |
F-2 |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED NOVEMBER 30, 2014 (UNAUDITED) |
|
|
|
PAGE |
F-3 |
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE PERIOD FROM OCTOBER 17, 2013 (INCEPTION) TO NOVEMBER
30, 2014 (UNAUDITED) |
|
|
|
PAGE |
F-4 |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2014 (UNAUDITED) |
|
|
|
PAGES |
F-5 |
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
IL2M
INTERNATIONAL CORP. |
(f/k/a
Dynamic Nutra Enterprise Holdings, Inc.) |
|
CONSOLIDATED
BALANCE SHEET |
Assets: | |
November 30, | | |
May 31, | |
Current assets | |
2014 | | |
2014 | |
Cash | |
$ | 198 | | |
$ | 834 | |
Total current assets | |
$ | 198 | | |
$ | 834 | |
Fixed Assets-Net | |
$ | 36,962 | | |
$ | 46,566 | |
Other Assets | |
| 34,854 | | |
| 31,612 | |
Total Assets | |
$ | 72,014 | | |
$ | 79,012 | |
Liabilities: | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 176,803 | | |
$ | 240,269 | |
Accrued Interest-Related Party | |
$ | 4,589 | | |
$ | 1,845 | |
Deferred Rent | |
| 1,606 | | |
| 1,606 | |
Note Payable-Related Party | |
| 212,797 | | |
| 213,088 | |
Loan Payable-Related Party | |
| 4,379 | | |
| 26,544 | |
Convertible Notes Payable-net of discount | |
| 434,501 | | |
| 101,370 | |
Convertible notes payable-related party | |
| 732,599 | | |
| 740,600 | |
Derivative Liability | |
| 2,033,100 | | |
| 12,136,192 | |
Total current liabilities | |
| 3,600,374 | | |
| 13,461,514 | |
| |
| | | |
| | |
| |
| | | |
| | |
Deferred Rent | |
| 35,764 | | |
| 38,389 | |
| |
| | | |
| | |
Total Long Term Liabilities | |
| - | | |
| 38,389 | |
| |
| | | |
| | |
Total liabilities | |
| 3,636,138 | | |
| 13,499,903 | |
| |
| | | |
| | |
STOCKHOLDERS' DEFICIT | |
| | | |
| | |
Preferred Stock,$0.0001 par 10,000,000 authorized 0 issued | |
| - | | |
| - | |
Common stock; 500,000,000 shares authorized at $0.001
par value; 207,431,937 and 180,511,500 shares issued and outstanding, respectively | |
| 20,743 | | |
| 18,051 | |
| |
| | | |
| | |
Unearned Stock for Services | |
| (9,375 | ) | |
| - | |
Additional paid-in capital | |
| 4,735,191 | | |
| 4,064,896 | |
Accumulated Deficit | |
| (8,310,683 | ) | |
| (17,503,838 | ) |
Total Stockholders' Deficit | |
| (3,564,124 | ) | |
| (13,420,891 | ) |
| |
| | | |
| | |
Total Liabilities and Stockholders' Deficit | |
$ | 72,014 | | |
$ | 79,012 | |
The accompanying
notes are an integral part of these financial statements.
IL2M INTERNATIONAL CORP |
|
(f/k/a Dynamic Nutra Enterprises Holdings, Inc.) |
CONSOLIDATED STATEMENT OF OPERATIONS |
| |
Three Months Ended | | |
Six Months Ended | |
| |
November 30, | | |
November 30, | | |
November 30, | |
| |
2014 | | |
2013 | | |
2014 | |
Revenues | |
$ | - | | |
$ | - | | |
$ | - | |
Cost of Services | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Gross Margin | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Operating Expenses: | |
| | | |
| | | |
| | |
Consulting Expense-Related Party | |
| 22,000 | | |
| - | | |
| 67,000 | |
| |
| | | |
| | | |
| | |
General and Administrative Expenses | |
| 358,981 | | |
| - | | |
| 762,165 | |
| |
| | | |
| | | |
| | |
Total Operating Expenses | |
| 380,981 | | |
| - | | |
| 829,165 | |
| |
| | | |
| | | |
| | |
Operating Loss | |
| (380,981 | ) | |
| - | | |
| (829,165 | ) |
Other Income (Expense) | |
| | | |
| | | |
| | |
Change in Fair Value of embedded derivative liability and expense | |
| (302,000 | ) | |
| - | | |
| 10,493,908 | |
Loss on debt extinguishment | |
| - | | |
| - | | |
| (110,903 | ) |
Amortization of debt issued costs | |
| (211,758 | ) | |
| - | | |
| (339,009 | ) |
Foreign Currency | |
| - | | |
| - | | |
| 1,185 | |
Interest | |
| - | | |
| - | | |
| (22,861 | ) |
Total Other Expenses | |
| (513,758 | ) | |
| - | | |
| 10,022,320 | |
| |
| | | |
| | | |
| | |
Net income (Loss) before income taxes | |
| (894,739 | ) | |
| - | | |
| 9,193,155 | |
| |
| | | |
| | | |
| | |
Income Tax | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Net Loss | |
$ | (894,739 | ) | |
| - | | |
$ | 9,193,155 | |
| |
| | | |
| | | |
| | |
Loss per Share, Basic & Diluted | |
$ | (0.00 | ) | |
| - | | |
$ | 0.05 | |
| |
| | | |
| | | |
| | |
Weighted Average Shares Outstanding | |
| 198,404,566 | | |
| - | | |
| 190,839,812 | |
The accompanying
notes are an integral part of these financial statements.
IL2M INTERNATIONAL CORP. |
(f/k/a Dynamic Nutra Holdings, Inc.) |
(An Exploration Stage Company) |
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) |
From Inception October 17, 2013 through November 30, 2014 |
| |
| | |
Additional | | |
| | |
Services | | |
Total | | |
| |
| |
Common
Stock | | |
Paid-in | | |
Subscriptions
Payable | | |
Not | | |
Retained | | |
Stockholders' | |
| |
Issued | | |
Amount | | |
Capital | | |
Issuable | | |
Amount | | |
Yet
Earned | | |
Deficit | | |
Deficit | |
Balance at inception - October 17, 2013 | |
| - | | |
$ | - | | |
$ | - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
Stock issued to Founders | |
| 125,000 | | |
| 12,500 | | |
| (12,490 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 10 | |
In kind contribution of services | |
| - | | |
| - | | |
| 309,590 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 309,590 | |
In Kind contribution of interest | |
| - | | |
| - | | |
| 13,899 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 13,899 | |
Stock issued for services | |
| 2,500 | | |
| - | | |
| 2,500 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,500 | |
Stock issued for services | |
| 2,300,000 | | |
| 230 | | |
| 814,770 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 815,000 | |
Stock issued in merger | |
| 709,000 | | |
| 71 | | |
| (6,014,623 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,014,552 | ) |
Stock issued for debt | |
| 52,500,000 | | |
| 5,250 | | |
| 47,250 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 52,500 | |
Beneficial conversion | |
| - | | |
| - | | |
| 52,500 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 52,500 | |
Beneficial conversion Related Party | |
| - | | |
| - | | |
| 99,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 99,000 | |
Reclassification of Derivative | |
| - | | |
| - | | |
| 8,752,500 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,752,500 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (17,503,838 | ) | |
| (17,503,838 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance May 31, 2014 | |
| 180,511,500 | | |
| 18,051 | | |
| 4,064,896 | | |
| - | | |
| - | | |
| - | | |
| (17,503,838 | ) | |
| (13,420,891 | ) |
Stock issued for services | |
| 2,850,000 | | |
| 285 | | |
| 132,085 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 132,370 | |
Convertible Stock converted | |
| 3,601,810 | | |
| 360 | | |
| 108,175 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 108,535 | |
Reclassification of Derivative | |
| - | | |
| - | | |
| 97,509 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 97,509 | |
In kind Contribution | |
| - | | |
| - | | |
| 124,658 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 124,658 | |
In Kind contribution of interest | |
| - | | |
| - | | |
| 12,915 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 12,915 | |
Stock issued reducing convertible debt | |
| 1,568,627 | | |
| 157 | | |
| 7,843 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,000 | |
Stock issued for services | |
| 18,900,000 | | |
| 1,890 | | |
| 187,110 | | |
| - | | |
| - | | |
| (9,375 | ) | |
| - | | |
| 179,625 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 9,193,155 | | |
| 9,193,155 | |
Balance November 30, 2014 | |
| 207,431,937 | | |
| 20,743 | | |
| 4,735,191 | | |
| - | | |
| - | | |
| (9,375 | ) | |
| (8,310,683 | ) | |
| (3,564,124 | ) |
The
accompanying notes are an integral part of these financial statements.
IL2M INTERNATIONAL CORP |
(f/k/a Dynamic Nutra Enterprises Holdings, Inc.) |
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
| |
Six Months Ended | |
| |
November 30, | | |
November 30, | |
| |
2014 | | |
2013 | |
CASH FLOW FROM OPERATING ACTIVITIES: | |
| | |
| |
Net Income | |
$ | 9,193,155 | | |
| - | |
Adjustments to reconcile net loss from operations: | |
| | | |
| | |
Depreciation | |
| 9,604 | | |
| - | |
Stock issues for Services | |
| 311,995 | | |
| - | |
In Kind Contributions | |
| 137,573 | | |
| - | |
Amortization | |
| 339,009 | | |
| - | |
Change in Fair value of Derivative and Derivative Expense | |
| (10,493,908 | ) | |
| - | |
Loss on Debt extinguishment | |
| 110,903 | | |
| - | |
Change in Operating Assets and Liabilities: | |
| | | |
| | |
Increase (decrease) in accounts payable | |
| (63,466 | ) | |
| - | |
Increase in accrued interest | |
| 2,744 | | |
| - | |
(Decrease) in Deferred Rent | |
| (2,625 | ) | |
| - | |
(Increase ) in other Assets | |
| (3,242 | ) | |
| - | |
| |
| | | |
| | |
Net cash used in Operating Activities | |
| (458,258 | ) | |
| - | |
| |
| | | |
| | |
CASH FLOW FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Purchase of Assets | |
| - | | |
| - | |
Net Cash used in Investing Activities | |
| - | | |
| - | |
| |
| | | |
| | |
CASH FLOW FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Repayments of Loan Payable | |
| (24,544 | ) | |
| - | |
Proceeds from notes net of discounts | |
| 482,166 | | |
| - | |
| |
| | | |
| | |
Net Cash provided by Financing Activities | |
| 457,622 | | |
| - | |
| |
| | | |
| | |
Net Increase (Decrease) in Cash | |
| (636 | ) | |
| - | |
Cash at Beginning of Period | |
| 834 | | |
| - | |
Cash at End of Period | |
$ | 198 | | |
| - | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |
| | | |
| | |
Cash paid for interest | |
| | | |
| | |
Cash paid for franchise and income taxes | |
$ | - | | |
| - | |
| |
| | | |
| | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |
| | | |
| | |
Debt Discount Recorded on Convertible Debt Accounted
for as a derivative liability | |
$ | 377,423 | | |
| - | |
Reclassification of Accounts Payable to Notes Payable | |
$ | 108,535 | | |
| - | |
Reclassification of Derivative Liability to additional
paid in capital | |
$ | 97,509 | | |
| - | |
Shares issued in conversion of convertible debt | |
$ | 116,535 | | |
| - | |
The accompanying
notes are an integral part of these financial statements.
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
NOTE 1 |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION |
(A)
Basis of Presentation
The
accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for
interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation
of financial position and results of operations.
It
is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made,
which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily
indicative of the results to be expected for the year.
il2m
International Corp. was incorporated under the laws of the State of Nevada on June 8, 2010 under the name "Dynamic Nutra
Enterprises Holdings, Inc." to market and sell a brewer's yeast product called Beta Glucan that can eliminate acne for a
majority of people who use it as a dietary supplement. Effective November 15, 2013, our Board of Directors and the majority shareholders
of the Company approved an amendment to our articles of incorporation to change our name from "Dynamic Nutra Enterprises
Holdings Inc." to "il2m International Corp." (the “Name Change Amendment”). The Name Change Amendment
was filed with the Secretary of State of Nevada on November 26, 2013 changing the name of the Company to "il2m International
Corp." (the "Name Change"). The Name Change was effectuated to better reflect the future business operations of
the Company.
On
October 17, 2013, il2m Inc. was incorporated under the laws of State of Nevada. On January 9, 2014, il2m Inc. entered into a Stock
Purchase and Share Exchange agreement with il2m International Corporation. For accounting purposes, this transaction is being
accounted for as a merger of entities under common control and has been treated as a recapitalization of il2m, International Corporation
with il2m, Inc. as the accounting acquirer (see Note 9(F). The historical financial statements of the accounting acquirer became
the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with
the transaction. The 125,000,000 shares issued to the shareholder of il2m Inc. in conjunction with the share exchange transaction
has been presented as outstanding for all periods.
The
Company’s accounting year end is May 31, which was the year end of il2m International Corp.
On
November 15, 2013 the Company declared a 1 for 10 reverse common stock split to stockholders. The Stock Split was effectuated
on January 9, 2014 based upon filing the appropriate documentation with FINRA. Per share and weighted average amounts have been
retroactively restated in the accompanying financial statements and related notes to reflect this stock split (See Note 9(E)).
Therefore,
our business operations will change to that of developing, creating and marketing a social media platform called Ilink2music.com.
Ilink2music.com is an unparalleled social media platform that will allow users to unify their personal digital-mobile lifestyle
while simultaneously providing exclusive international music entertainment content, networking, events, products, services; featuring
a unique internet radio station and exceptional co-creation content aiming at facilitating and revolutionizing the management
of your on-line “way of life”. Our platform is a Horizontal - adaptable business model based on the strategic use
of Multi-Sensory Branding, Co-Creation, Product Placement, Immersion User Experience Applications, ROI Relationship/Currency with
Economy and Licensing Structures. It is built to adapt and to embrace the monumental shifts and disruptive technologies that are
changing every facet of business. Ilink2music.com is positioned to leverage and facilitate change in the Global end user
driven Digital/Mobile content/Product placement Eco system.
Ilink2music.com
will enable the user to create a profile in the music entertainment zone that displays his/her talents or expertise, whether they
are a musician, composer, songwriter, vocalist, performer, conductor, arranger, instrumentalist, dancer, choreographer, DJ, music
video producer and/or director, booking agent, recording studio, audio engineer, record label, events planner, music venue, music
broadcaster, music educator, music publisher, road crew, talent manager, entertainment lawyer, etc. The user can also simply be
a music fan that enjoys listening to music, socializing or following and supporting others. Each member will be able to network
within our community in order to find what they’re looking for: a singer for a band, an event planner for a nightclub, a
DJ for a party, a violinist or pianist for an orchestra, a choreographer for your dance crew, a music venue for your event.
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
(B)
Principles of Consolidation
The
accompanying 2014 condensed consolidated financial statements include the accounts of il2m Inc. and its wholly owned subsidiary,
il2m International Corporation (from January 9, 2014, merger). All intercompany accounts have been eliminated upon consolidation.
(C)
Use of Estimates
In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from
those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate
of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets
and valuation of in-kind contribution of services and interest.
(D)
Cash and Cash Equivalents
The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.
At August 31, 2014 and May 31, 2014, the Company had no cash equivalents.
(E)
Loss Per Share
In
accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic loss per share
is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted
loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents
and potentially dilutive securities outstanding during the period.
The
computation of basic and diluted loss per share at November 30, 2014 excludes the common stock equivalents of the following potentially
dilutive securities because their inclusion would be anti-dilutive:
|
| |
November 30, 2014 |
|
| |
|
|
Convertible Debt (Exercise price - $0.001 - $0.25/share) | |
| 222,874,181 | |
|
Total | |
| 222,874,181 | |
(F)
Operating Leases
The
Company leases approximately 3,300 square feet of space under a 4-year lease executed on October 2, 2013. The lease commenced
on February 1, 2014. The Company occupied the lease space on October 15, 2013 through January 31, 2014 free of charge. These months
were included as part of the monthly straight-line rent expense calculation. The rent expense under this lease for the six months
ended November 30, 2014 was $74,562.
Deferred
rent payable at November 30, 2014 and May 31, 2014 was $37,370 and $39,995, respectively. Deferred rent payable is the sum of
the difference between the monthly rent payment and the straight-line monthly rent expense of an operating lease that contains
escalated payments in future periods.
(G)
Business Segments
The
Company operates in one segment and therefore segment information is not presented.
(H)
Revenue Recognition
The
Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all
cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the
service is performed and collectability of the resulting receivable is reasonably assured.
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
(I)
Fair Value of Financial Instruments
The
Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair
Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price
that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair
value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions
that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and
risk of nonperformance.
The
guidance also establishes a fair value hierarchy for measurements of fair value as follows:
|
● |
Level
1 - quoted market prices in active markets for identical assets or liabilities. |
|
|
|
|
● |
Level
2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets
for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active,
or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the
assets or liabilities. |
|
|
|
|
● |
Level
3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities. |
The
Company's financial instruments consist of accounts payable, accrued expenses, notes payable, notes payable - related party, loan
payable - related party, convertible notes payable, convertible notes payable - related party and deferred rent payable. The carrying
amount of the Company's financial instruments approximates their fair value as of November 30,2014 and May 31, 2014, due to the
short-term nature of these instruments.
The
Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3 (see Note 8).
(J)
Embedded Conversion Features
The
Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to
determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative
at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment
under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration
of any beneficial conversion features.
(K)
Derivative Financial Instruments
Fair
value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company
uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible
debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.
If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments
as derivative financial instruments.
Once
determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease
in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair
value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.
(L)
Beneficial Conversion Feature
For
conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion
feature" ("BCF") and related debt discount.
When
the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective
debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
(M)
Debt Issue Costs and Debt Discount
The
Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These
costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life
of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
(N)
Stock-Based Compensation - Non Employees
Equity
Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services
The
Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance
of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).
Pursuant
to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument
issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument
issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will
occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established
in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would
generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a
larger spread between the bid and asked quotes and lack of consistent trading in the market.
The
fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation
model. The ranges of assumptions for inputs are as follows:
|
● |
Expected
term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards
Codification the expected term of share options and similar instruments represents the period of time the options and similar
instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s
expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical
data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares
of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected
term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide
a reasonable basis upon which to estimate expected term. |
|
|
|
|
● |
Expected
volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii)
a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable
for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has
selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The
Company uses the average historical volatility of the comparable companies over the expected contractual life of the share
options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of
weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility
calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid
and asked quotes and lack of consistent trading in the market. |
|
|
|
|
● |
Expected
annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the
contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The
expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend
yield for periods within the expected term of the share options and similar instruments. |
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
|
● |
Risk-free
rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The
risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected
term of the share options and similar instruments. |
Pursuant
to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee
enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments),
then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement
date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement
is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized
as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to
ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return
for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement
for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such
an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof)
of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in
which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides
guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.
Pursuant
to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable
by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee
achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and
in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of
paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share
option and similar instrument that the counterparty has the right to exercise expires unexercised.
Pursuant
to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable
equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received
(that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement
date and no entry should be recorded.
(O)
Foreign Currency Transaction Gains and Losses
Transaction
gains and losses, such as those resulting from the settlement of nonfunctional currency receivables or payables are included in
foreign currency loss in our consolidated statements of earnings. Additionally, payable and receivable balances denominated
in nonfunctional currencies are marked-to-market at each reporting period, and the gain or loss is recognized in our consolidated
statements of earnings.
(P)
Recent Accounting Pronouncements
In
June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915):
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic
810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage
entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an
example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal
operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore,
the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an
entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements
for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods
beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period
or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made
available for issuance (other entities). The Company adopted this pronouncement for the three months ended August 31, 2014.
IL2M
INTERNATIONAL CORP
(F/K/A
DYNAMIC NUTRA ENTERPRISES HOLDINGS, INC.)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF NOVEMBER 30, 2014
(UNAUDITED)
In
June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation
( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved
after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees
share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved
after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved
after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in
Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities,
the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December
15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards
granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding
as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.
If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual
period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at
that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the
compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or
financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our
results of operations, cash flows or financial condition.
In
August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements
Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.
Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial
doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments
in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of
footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by
incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments
(1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods,
(3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when
substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and
other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date
that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to
determine if there will be any impact on our results of operations, cash flows or financial condition.
All
other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.
NOTE 2 |
PROPERTY
AND EQUIPMENT |
|
| |
November 30, 2014 | |
May 31, 2014 | |
Estimated Useful Life |
|
Furniture and Fixtures | |
| 7,415 | | |
| 7,415 | | |
| 5 years | |
|
Leasehold Improvements | |
| 22,414 | | |
| 22,414 | | |
| 5 years | |
|
Computer Equipment | |
| 15,798 | | |
| 15,798 | | |
| 3 years | |
|
Office Equipment | |
| 5,591 | | |
| 5,591 | | |
| 3 years | |
|
| |
| 51,218 | | |
| 51,218 | | |
| | |
|
Less: Accumulated Depreciation | |
| (14,256 | ) | |
| (4,652 | ) | |
| | |
|
Property and Equipment, Net | |
$ | 36,982 | | |
$ | 46,566 | | |
| | |
Depreciation
expense was $9,604 for the six months ended November 30, 2014.
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS NOVEMBER 30, 2014
(UNAUDITED)
NOTE 3 |
CONVERTIBLE NOTES PAYABLE |
The Company has nine convertible
notes equaling net of discount $426,601. The notes are convertible at between 50% and 58% of the market price of the stock. The
Company has calculated a derivative liability as detailed in note 8.
NOTE 4 |
CONVERTIBLE NOTES PAYABLE - RELATED PARTY |
On March 14, 2014, the Company issued
a convertible promissory note in the amount of $225,000 to a foreign corporation which is controlled by the Company’s Chief
Executive Officer. The note is non-interest bearing and due on June 14, 2014. The note was amended to extend the maturity date
to December 14, 2014 . The note can be converted into shares of Common Stock of the Company at a conversion price of $0.25
per share. The convertible promissory note is currently in default.
As of March 27, 2014, a foreign
corporation which is controlled by the Company’s Chief Executive Officer paid operating expenses on behalf of the Company
totaling $515,600. On March 27, 2014, this amount was converted into a convertible note payable. The note is non-interest bearing
and due on demand. The note can be converted into the Company’s common stock at a conversion price of the lesser of $0.10
per share or 50% of the average trading price of the Company’s common stock on the OTCQB Markets for the five days preceding
the date of conversion.
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS OF NOVEMBER 30, 2014
(UNAUDITED)
NOTE 5 |
NOTE PAYABLE - RELATED PARTY |
As of March 27, 2014, a foreign
corporation which is controlled by the Company’s Chief Executive Officer paid operating expenses on behalf of the Company
totaling $231,000 Canadian Dollars. On March 27, 2014, this amount was converted into a note payable for $207,232 using the conversion
rate from CAD to USD on the date of the note. The note bears interest at a rate of 5% per annum and is due on July 1, 2014. On
July 1, 2014, the note holder extended the maturity date to January 1, 2015. As of November 30, 2014, the fair value of note payable
was $212,797 which includes $5,565 of gain on foreign exchange rate. The Company accrued interest of $4,589 (See Note 11).
NOTE 6 |
LOAN PAYABLE - RELATED PARTY |
For the period from October 17,
2013 (inception) to May 31, 2014, a foreign corporation which is controlled by the Company’s Chief Executive Officer paid
operating expenses totaling $2,000 on behalf of the Company. The amount is treated as loan payable - related party, which is non-interest
bearing and due on demand (see Note 11). The loan payable - related party balance was $2,000 as of August 31, 2014. From September
1, 2014 to November 30, 2014 an additional $2,379 was incurred. At November 30, 2014 $4,379 was owed.
For the period from October 17,
2013 (inception) to May 31, 2014, the Officer of the Company paid operating expenses totaling $24,544 on behalf of the Company.
The amount is treated as loan payable - related party, which is non-interest bearing and due on demand (see Note 11). As of November
30, 2014, the amount was repaid in full.
As of November 30, 2014, the Company
recorded debt discounts totaling $1,228,181.
The Company amortized $817,128 for the period from October
17, 2013 (inception) to May 31, 2014.
The Company amortized $113,653 during the three months
ended August 31, 2014, and then amortized $186,650 to November 30, 2014.
|
| |
August 31, 2014 | | |
May 31, 2014 | |
|
| |
| | | |
| | |
|
Debt discount | |
$ | 1,228,181 | | |
$ | 850,758 | |
|
Accumulated amortization of debt discount | |
| (1,117,431 | ) | |
| (817,128 | ) |
|
Debt discount – Net | |
$ | 110,750 | | |
$ | 33,630 | |
NOTE 8 |
DERIVATIVE LIABILITIES |
The Company identified conversion
features embedded within convertible debt issued. The Company has determined that the features associated with the embedded conversion
option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability. The Company has elected
to account for these instruments together with fixed conversion price instruments as derivative liabilities as the Company cannot
determine if a sufficient number of shares would be available to settle all potential future conversion transactions.
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS OF NOVEMBER 30, 2014,
(UNAUDITED)
The fair value of the conversion
feature is summarized as follows:
|
Derivative Liability as of October 17, 2013 (inception) | |
$ | - | |
|
Fair value at the commitment date for convertible instruments | |
| 40,824,258 | |
|
Change in fair value of embedded derivative liability | |
| 487,755 | |
|
Adjustment of derivative liability through gain on extinguishment | |
| (20,423,321 | ) |
|
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability | |
| (8,752,500 | ) |
|
Derivative Liability as of May 31, 2014 | |
| 12,136,192 | |
|
| |
| | |
|
Fair value at the commitment date for convertible instruments | |
| 695,577 | |
|
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability | |
| (97,509 | ) |
|
Change in fair value of embedded derivative liability | |
| (10,701,160 | ) |
|
Derivative Liability as of November 30, 2014 | |
$ | 2,033,100 | |
The Company recorded a derivative
expense of $509,252 for the six months ended November 30, 2014.
The fair value at the commitment
and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as
of November 30, 2014:
|
|
|
Commitment
Date |
|
|
Re-measurement
Date |
|
|
Expected dividends: |
|
|
0% |
|
|
|
0% |
|
|
Expected volatility: |
|
|
147.99% - 278.79% |
|
|
|
227.66% - 229.58% |
|
|
Expected term: |
|
|
0 - 1 Year |
|
|
|
0 - 0.95 Year |
|
|
Risk free interest rate: |
|
|
0.02% - 0.12% |
|
|
|
0.02% - 0.09% |
|
The fair value at the commitment
and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as
of May 31, 2014:
|
|
|
Commitment
Date |
|
|
Re-measurement
Date |
|
|
Expected dividends: |
|
|
0% |
|
|
|
0% |
|
|
Expected volatility: |
|
|
204.42% - 278.79% |
|
|
|
247.89% - 278.79% |
|
|
Expected term: |
|
|
1 Year |
|
|
|
1 Year |
|
|
Risk free interest rate: |
|
|
0% - 0.11% |
|
|
|
0.05% - 0.11% |
|
NOTE 9 |
STOCKHOLDERS’ EQUITY |
(A) Preferred Stock
The Company’s Articles of
Incorporation authorize 10,000,000 shares of preferred stock with a par value of $.0001 with rights and preferences to be determined
by the Board of Directors.
(B) Common Stock Issued for Cash and Services
During the three months ended November 30, 2014 the Company
issued 18,900,000 shares for services equaling $179,625 of which $9,375 is yet to be earned. The Compay also issued 1,568,627 shares
for a reduction of convertible debt of $8,000.
During the three months ended August
31, 2014, the Company issued 2,850,000 shares of common stock for services having a fair value of $132,370 (See Note 10).
For the period from October 17,
2013 (inception) to May 31, 2014, the Company issued 2,500 shares of common stock to a former director for services with a fair
value of $2,500 (See Note 11).
For the period from October 17,
2013 (inception) to May 31, 2014, the Company issued 2,300,000 shares of common stock to unrelated parties for services with a
fair value of $815,000.
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS OF NOVEMBER 30, 2014
(UNAUDITED)
On October 17, 2013, the Company
issued 125,000,000 shares of common stock to the founder of the Company for services having a fair value of $10 (See Note 11).
(C) In Kind Contribution
of Services and Interest
For the three months ended August
31, 2014, the Officer of the Company contributed services having a fair value of $124,658 (See Note 11).
For the three months ended August
31, 2014, a total of $12,915 in imputed interest relating to certain convertible notes payable and convertible notes payable -related
parties was recorded as an in-kind contribution of interest (see Notes 3 and 4).
For the period from October 17,
2013 (inception) to May 31, 2014, a total of $13,899 in imputed interest relating to certain convertible notes payable and convertible
notes payable -related parties was recorded as an in-kind contribution of interest (see Notes 3 and 4).
For the period from October 17,
2013 (inception) to May 31, 2014, the Officer of the Company contributed services having a fair value of $309,590 (See Note 11).
(D) Amended to the Articles
of Incorporation
On November 26, 2013 the Company
amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized capital stock
increased to 500,000,000 common shares at a par value of $0.0001 per share, with class and series designations, voting rights,
and relative rights and preferences to be determined by the Board of Directors of the Company from time to time.
(E) Stock Split
On November 15, 2013, the Company
declared a 1 for 10 reverse common stock split effective to stockholders of record on January 9, 2014. Per share and weighted average
amounts have been retroactively restated in the accompanying financial statements and related notes to reflect this stock split.
(F) Common Stock Issued
for Acquisition of an Entity Under Common Control
On January 9, 2014, the Company
entered into a Stock Purchase and Share Exchange agreement with il2m, Inc. The Company was deemed to have issued 709,000 shares
of common stock to the shareholders of il2m International Corporation. The Company has accounted for the transaction as a combination
of entities under common control and accordingly, recorded the merger at historical cost of ($6,014,552) (See Note 11).
(G) Common Stock Issued
for Convertible Note
On January 20, 2014, the Company
issued 52,500,000 shares to settle a convertible note payable of $52,500.
NOTE 10 |
COMMITMENTS AND CONTINGENCIES |
During the three months ended August
31, 2014, the Company entered into advisory board agreements with two unrelated parties. The agreements shall commence on the effective
date of the agreements and continue for a period of three years. Upon signing of the agreement, the Company issued 100,000 shares
of the company’s common stock to each individual having a fair value of $58,000 (See note 9(B)). For ten hours of services
through the first six months, and $2,500 for the duration of three-year Advisory Board Agreement thereafter.
The Company leases approximately
3,300 square feet of space under a 4-year lease executed on October 2, 2013. The lease commenced on February 1, 2014. The Company
occupied the lease space on October 15, 2013 through January 31, 2014 free of charge. These months were included as part of the
monthly straight-line rent expense calculation.
Deferred rent payable at November
30, 2014 was $37,370. Deferred rent payable is the sum of the difference between the monthly rent payment and the straight-line
monthly rent expense of an operating lease that contains escalated payments in future periods.
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS OF NOVEMBER 30, 2014
(UNAUDITED)
Future minimum lease commitments
are as follows:
|
Year | |
Amount | |
|
2014 | |
$ | 13,302 | |
|
2015 | |
| 150,313 | |
|
2016 | |
| 154,821 | |
|
2017 | |
| 174,002 | |
|
2018 | |
| 14,535 | |
|
| |
$ | 506,973 | |
From time to time, the Company may
become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The
Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate,
a material adverse affect on its business, financial condition or operating results.
NOTE 11 |
RELATED PARTY TRANSACTIONS |
On March 14, 2014, the Company issued
a convertible promissory note in the amount of $225,000 to a foreign corporation which is controlled by the Company’s Chief
Executive Officer. The note is non-interest bearing and due on June 14, 2014. The note was amended to extend the maturity date
to September 14, 2014. The note can be converted into shares of Common Stock of the Company at a conversion price of $0.25 per
share. The Company recorded a debt discount of $99,000 for the fair value of beneficial conversion feature. As of May 31, 2014,
the Company amortized $99,000 of debt discount (See Note 4). For the six months ended November 30, 2014, the Company recorded an
imputed interest of $3,435 as an in-kind contribution of interest.
As of March 27, 2014, a foreign
corporation which is controlled by the Company’s Chief Executive Officer paid operating expenses on behalf of the Company
totaling $515,600. On March 27, 2014, this amount was converted into a convertible note payable. The note is non-interest bearing
and due on demand. The note can be converted into the Company’s common stock at a conversion price of the lesser of $0.10
per share or 50% of the average trading price of the Company’s common stock on the OTCQB Markets for the five days preceding
the date of conversion. The Company recorded a debt discount of $515,600 for the fair value of derivative liability. As of May
31, 2014, the Company amortized $515,600 of debt discount (See Note 4). For the six months ended November 30, 2014, the Company
recorded an imputed interest of $7,856 as an in-kind contribution of interest.
As of March 27, 2014, a foreign
corporation which is controlled by the Company’s Chief Executive Officer paid operating expenses on behalf of the Company
totaling $231,000 Canadian Dollars. On March 27, 2014, this amount was converted into a note payable for $207,232 using the conversion
rate from CAD to USD on the date of the note. The note bears interest at a rate of 5% per annum and is due on July 1, 2014. On
July 1, 2014, the note holder extended the maturity date to October 1, 2014. As of November 30, 2014, the fair value of note payable
was $212,797 which includes $5,565 of gain on foreign exchange rate. The Company accrued interest of $4,589 (See Note 5).
IL2M INTERNATIONAL CORP
(F/K/A DYNAMIC NUTRA ENTERPRISES HOLDINGS,
INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
AS OF November 30, 2014
(UNAUDITED)
On January 9, 2014, the Company
entered into a Stock Purchase and Share Exchange agreement with il2m, Inc. The Company was deemed to have issued 709,000 shares
of common stock to the shareholders of il2m International Corporation. The Company has accounted for the transaction as a combination
of entities under common control and accordingly, recorded the merger at historical cost of ($6,014,552) (See Note 9(F)).
For the period from October 17,
2013 (inception) to May 31, 2014, a foreign corporation (the “Foreign Corporation”) which is a Company controlled by
the Company’s Chief Executive Officer paid operating expenses totaling $2,000 on behalf of the Company. The amount is treated
as loan payable - related party, which is non-interest bearing and due on demand (See Note 6). The loan payable - related party
balance was $2,000 as of August 31, 2014. From September to November 30 anothr$2,379 was incurred.
For the period from October 17,
2013 (inception) to May 31, 2014, the Officer of the Company paid operating expenses totaling $24,544 on behalf of the Company.
The amount is treated as loan payable - related party, which is non-interest bearing and due on demand (See Note 6). As of August
31, 2014, the amount was repaid in full.
For the six months ended November
30, 2014, the Officer of the Company contributed services having a fair value of $124,658 (See Note 9(C)).
For the period from October 17,
2013 to May 31, 2014, the Officer of the Company contributed services having a fair value of $309,590 (See Note 9(C)).
For the period from October 17,
2013 to May 31, 2014, the Company issued 2,500 shares of common stock to a former director of the Company for services with a fair
value of $2,500 (See Note 9(B)).
On October 17, 2013, the Company
issued 125,000,000 shares of common stock to the founder of the Company for services having a fair value of $10 (See Note 9(B)).
As reflected in the accompanying
financial statements, the Company has minimal operations, has negative working capital a stockholders’ deficit and no revenue.
This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going
concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial
statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions
presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
NOTE 13 |
SUBSEQUENT EVENTS |
Management has evaluated
it subsequent events and has determined that 1 existed described below:
| 1. | In January 2015 the Company entered into a stock agreement providing for debts of $130,604 to be
paid in return for stock. |
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The
following plan of operation provides information which management believes is relevant to an assessment and understanding of our
results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto.
This section includes a number of forward-looking statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend,
project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty
on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from our predictions.
GENERAL
il2m
International Corp. was incorporated under the laws of the State of Nevada on June 8, 2010 under the name "Dynamic Nutra
Enterprises Holdings Inc." to market and sell a brewer’s yeast product called Beta Glucan™ and other nutraceuticals.
Effective November 15, 2013, our Board of Directors and the majority shareholders of the Company approved an amendment to our
articles of incorporation to change our name from "Dynamic Nutra Enterprises Holdings Inc." to "il2m International
Corp." (the “Name Change Amendment”). The Name Change Amendment was filed with the Secretary of State of Nevada
on November 26, 2013 changing the name of the Company to "il2m International Corp." (the "Name Change"). The
Name Change was effected to better reflect the future business operations of the Company.
On
October 17, 2013, il2m Inc. was incorporated under the laws of State of Nevada. On January 9, 2014, il2m Inc. entered into a Stock
Purchase and Share Exchange agreement with il2m International Corporation. The transaction has been accounted for the transaction
as a combination of entities under common control (see Note 10(F)). For accounting purposes, this transaction is being accounted
for as a merger of entities under common control and has been treated as a recapitalization of il2m, International Corporation
with il2m, Inc. as the accounting acquirer. The historical financial statements of the accounting acquirer became the financial
statements of the registrant. We did not recognize goodwill or any intangible assets in connection with the transaction. The 125,000,000
shares issued to the shareholder of il2m Inc. in conjunction with the share exchange transaction has been presented as outstanding
for all periods. The historical financial statements include the operations of the accounting acquirer for all periods presented
and the accounting acquiree for the period from January 9, 2014 through May 31, 2014.
Please
note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us,"
the "Company", or "il2m International Corp." refers to il2m International Corp.
3(a)
(10) SETTLEMENT AGREEMENTS
2010
Settlement Agreement
On
January 13, 2015, our Board of Directors authorized the execution of that certain settlement agreement and stipulation dated January
13, 2015 (the "Settlement Agreement") with IBC Funds LLC, a Nevada limited liability company ("IBC Funds").
We
had certain payables outstanding due and owing to creditors aggregating $125,284.00 (collectively, the "Payables").
IBC Funds purchased the Payables from their respective holders and subsequently filed a claim against us in the Circuit Court
of the Twelfth Judicial Circuit in and for Manatee County, Florida (the "Circuit Court"), Case No. 2015 CA 000208 NC
(the "Claim"), for the payment of the Payables. Thus, we and IBC Funds desired to resolve and settle the Payables and
entered into the Settlement Agreement. In accordance with the terms and provisions of the Settlement Agreement, we and IBC Funds
agreed to submit the Settlement Agreement to the Circuit Court for a hearing on fairness of such terms and conditions and the
issuance of settlement shares exempt from registration. In settlement of the Claims, we shall initially issue and deliver to IBC
Funds in one or more traunches shares of our common stock sufficient to satisfy the compromised amount at a 45% discount to market
based on the market price during the valuation period and further issue to IBC Funds 2,500,000 free-trading shares as a settlement
fee (collectively, the "Settlement Shares").
The
Circuit Court Judge, Honorable Rochelle T. Curley, issued an Order dated January 14, 2015 reflecting that a hearing was held as
to the fairness of the terms and conditions of the Settlement Agreement and order that the resale of the Settlement Shares by
IBC Funds will be exempt from registration under the Securities Act of 1933, as amended (the "Securities "Act"),
in reliance upon Section 3(a)(1) of the Securities Act.
The
Board of Directors determined it was in our best interests and our shareholders to enter into the Settlement Agreement and resulting
3(a)(10) issuance of Settlement Shares in order to ensure the acceleration of generation of revenue from multiple sources.
2014
Settlement Agreement
On
June 13, 2014, our Board of Directors authorized the execution of that certain settlement agreement and stipulation dated June
13, 2014 (the "Settlement Agreement") with IBC Funds LLC. We had certain payables outstanding due and owing to creditors
aggregating $108,535 as follows: (i) $19,030 owed to Berman & Company P.A.; (ii) $14,505 owed to Liggett, Vogt & Webb
P.A.; (iii) $65,000 owed to No Sleep Til Productions; and (iv) $10,000 owed to Epoch Financial Group Inc. (collectively, the "Payables").
IBC Funds purchased the Payables from their respective holders and subsequently filed a claim against us in the Circuit Court
of the Twelfth Judicial Circuit in and for Manatee County, Florida, Case No. 2014 CA 2928 (the "Claim") for the payment
of the Payables. Thus, we desired to resolve and settle the Payables and entered into the Settlement Agreement with IBC Funds.
On June 13, 2014, the court order granted an approval of Settlement Agreement and stipulation. According to the Settlement Agreement,
we shall issue and deliver shares of our common stock to IBC Funds in one or more tranches subject to adjustment and ownership
limitations to satisfy the settlement amount. The shares should be valued at 45% discount to market based on the market price
during the valuation period. We recorded a loss on debt extinguishment of $110,903.
Subsequent
to June 13, 2014, IBC Funds delivered a conversion notice to us (the "Conversion Notice") proposing a full conversion
of the Settlement Agreement into 3,601,810 shares of common stock. The shares of common stock will be exempt from registration
under the Securities Act of 1933, as amended, in reliance upon Section 3(a)(10). The Board of Directors determined it was in our
best interests and our shareholders to enter into the Settlement Agreement and resulting 3(a)(10) issuance of shares in order
to ensure the successful launch of its two websites within the next month and accelerate the possibility of generation of revenue
from multiple sources.
As
of August 31, 2014, IBC Funds fully converted the settlement amount into 3,601,810 shares of common stock.
CURRENT
OPERATIONS
Our
business operations have changed to that of developing, creating and marketing a social media platform called Ilink2music.com.
Management believes that Ilink2music.com is an unparalleled social media platform that will allow users to unify their
personal digital-mobile lifestyle while simultaneously providing exclusive international music entertainment content, networking,
events, products, services; featuring a unique internet radio station and exceptional co-creation content aiming at facilitating
and revolutionizing the management of your on-line “way of life”. Our platform is a Horizontal - adaptable business
model based on the strategic use of Multi-Sensory Branding, Co-Creation, Product Placement, Immersion User Experience Applications,
ROI Relationship/Currency with Economy and Licensing Structures. It is built to adapt and to embrace the monumental shifts and
disruptive technologies that are changing every facet of business. Management believes that Ilink2music.com is positioned
to leverage and facilitate change in the global end user driven digital/ mobile content/product placement eco system.
iLink2Music.com
is based on user experience sensory aesthetics. It is optimally designed around end users’ perceptions and creates the milieu
that allows end users to act as lead designers, co-creators and actual tastemakers of lifestyle brands, products and services
in a rapidly changing market. Our paradigmatic approach provides for a people-generated, user-driven structure. In this new environment
(“Ecosystem”), the very concept of “producer” is blurred because anyone can broadcast to any number of
people anywhere, from their loved ones to the entire planet. We believe that both of these will be “emergent properties”
if there is a serious effort to broaden the use and applications whereby this symbiosis of human creativity and technology is
combined. We are focusing our efforts on bringing the symbiosis to the music production, social media, digital, and mobile landscape
consumer consumption and distribution sub-Ecosystem.
Ilink2music.com
will enable the user to create a profile in the music entertainment zone that displays his/her talents or expertise, whether they
are a musician, composer, songwriter, vocalist, performer, conductor, arranger, instrumentalist, dancer, choreographer, DJ, music
video producer and/or director, booking agent, recording studio, audio engineer, record label, events planner, music venue, music
broadcaster, music educator, music publisher, road crew, talent manager, entertainment lawyer, etc. The user can also simply be
a music fan that enjoys listening to music, socializing or following and supporting others. Each member will be able to network
within our community in order to find what they’re looking for: a singer for a band, an event planner for a nightclub, a
DJ for a party, a violinist or pianist for an orchestra, a choreographer for your dance crew, and a music venue for an event.
RESULTS
OF OPERATIONS
The
Share Exchange Agreement results in the treatment of the Company and its wholly-owned subsidiary as entities under common control,
which reflects il2m Inc. and il2m International Corp., our wholly-owned subsidiary for the three months ended August 31, 2014.
The prior operations for accounting purposes is deemed to be those of the accounting acquirer, which differs from the legal acquirer.
The
following table presents the statement of operations for the six months ended November 30, 2014.
| |
For
Six Months Ended November 30, 2014 | |
Revenues | |
$ | - | |
Total
Operating Expenses | |
| 829,166 | |
Total
Other Income (Expense) | |
| 10,022,320 | |
Net
Income | |
$ | 9,193,155 | |
Net
income per share - basic and diluted | |
$ | 0.05 | |
For the
Six Months Ended November 30, 2014
Total
Revenues. For the six months ended November 30, 2014, we did not generate any revenue.
Operating
Expenses. During the six months ended November 30, 2014, we incurred operating expenses in the amount of $829,165 as follows:
(i) consulting expense - related party of $67,000; and (ii) general and administrative expenses of $762,165. General and administrative
expenses generally consisted of: (i) professional fees of $99,875; (ii) wages of $98,853; (iii) stock for services valued at $237,625;
and (iv) in-kind services valued at $124,658. Operating expenses substantially increased due to the increases in consulting expense
and general and administrative based on the increased scope and scale of our business operations, including the commencement of
construction on our commercial radio station and the engagement of consultants.
Other
Income (Expenses). Other income for the six months ended November 30, 2014 were $10,022,320. Other income consisted
of: (i) change in fair value of embedded derivative liability and expense of $10,493,908; and (ii) foreign currency transaction
gain of $1,185 which was offset by other expenses of (a) $110,903 in loss on debt extinguishment; (b) $339,009 in amortization
of debt issued costs; and (c) $22,861 in interest expense.
Net
Income. Therefore, our net income for the six months ended November 30, 2014 was $9,193,155 or per share of $0.05. Net
income generally increased primarily due to the recording of the change in fair value of embedded derivative liability of $10,493,908.
The
weighted average number of shares outstanding during the six months ended November 30, 2014 was 190,839,812.
For the
Three Months Ended November 30, 2014
Total
Revenues. For the three months ended November 30, 2014, we did not generate any revenue.
Operating
Expenses. During the three months ended November 30, 2014, we incurred operating expenses in the amount of $380,981 as
follows: (i) consulting expense - related party of $22,000; and (ii) general and administrative expenses of $358,981. General
and administrative expenses consisted of: (i) rent of $39,906; (ii) professional fees of $85,691; (iii) stock for services valued
at $179,625; and (iv) salaries of $35,686. Operating expenses substantially increased due to the increases in consulting expense
and general and administrative based on the increased scope and scale of our business operations, including the commencement of
construction on our commercial radio station and the engagement of consultants.
Other
Income (Expenses). Other expense for the three months ended November 30, 2014 were $513,758. Other expense
consisted of: (i) change in fair value of embedded derivative liability and expense of ($302,000); and (ii) amortization of debt
issued costs of ($211,758).
Net
Income. Therefore, our net loss for the three months ended November 30, 2014 was $894,739 or per share of $0.00. Net income
generally decreased primarily due to the recording of the change in fair value of embedded derivative liability of ($302,000).
The
weighted average number of shares outstanding during the three months ended November 30, 2014 was 198,404,566.
Capital
Resources and Liquidity
As
of November 30, 2014, our current assets were $198 and our current liabilities were $3,600,374, which resulted in a working capital
deficit of $3,600,176.
As
of November 30, 2014, our current assets were comprised of $198 in cash. As of November 30, 2014, our total assets were $72,014
comprised of: (i) current assets of $198; (ii) $36,962 in fixed assets - net; and (iii) other assets of $34,854.
As
of November 30, 2014, our current liabilities were comprised of: (i) $176,803 in accounts payable and accrued expenses; (ii) $4,589
in accrued interest - related party; (iii) $1,606 in deferred rent; (iv) $212,797 in note payable - related party; (v) $4,379
in loan payable - related party; (vi) $434,501 in convertible notes payable, net of debt discount; (vii) $732,599 in convertible
notes payable - related party; and (viii) $2,033,100 in derivative liability.
As
of November 30, 2014, our total liabilities were $3,636,138 comprised of: (i) current liabilities of $3,600,374; and (ii) deferred
rent of $35,764. The increase in total liabilities was primarily due to the recording of the derivative liability of $2,033,100
and the convertible notes payable, net of debt discount.
Stockholders’
deficit was ($3,564,124) as of November 30, 2014.
Cash
Flows from Operating Activities. We have not generated positive cash flows from operating activities due to a lack of
a source of revenues. For the six month period ended November 30, 2014, net cash flows used in operating activities was $458,258.
Net cash flows used in operating activities consisted primarily of net income of $9,193,155, which was adjusted by: (i) $9,604
in depreciation expense; (ii) $311,995 in stock issued for services; (iii) $137,573 in in-kind contribution of services; (iv)
$339,009 in amortization; (v) ($10,493,908) in change in fair value of derivative and derivative expense; and (vi) $110,903 in
loss on debt extinguishment.
Net
cash flows used in operating activities was further changed by a decrease in accounts payable of ($63,466), a decrease in deferred
rent of ($2,625) and an increase in accrued interest of $2,744 and an increase in other assets of $3,242.
Cash
Flows from Investing Activities. For the six months ended November 30, 2014, net cash flows used in investing activities
was $-0-.
Cash
Flows from Financing Activities. We have financed our operations primarily from debt or the issuance of equity instruments.
For the six months ended November 30, 2014, net cash flows provided from financing activities was $457,622 consisting of $482,166
in proceeds from notes net of discounts, which was offset by $24,544 in repayments of loan payable.
Plan
Of Operation and Funding
We
expect that working capital requirements will continue to be funded through a combination of our existing funds and future generation
of revenues. Our working capital requirements are expected to increase in line with the growth of our business. Our principal
demands for liquidity are to increase capacity, marketing, and general corporate purposes. We intend to meet our liquidity requirements,
including capital expenditures related to the purchase of equipment and/or inventory, and the expansion of our business, through
cash flow provided by operations and funds raised through proceeds from the issuance of debt or equity. Existing working capital,
further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next
six months. We have no lines of credit or other bank financing arrangements. We may finance expenses with further issuances of
securities and debt issuances. Any 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.
Material
Commitments
Convertible
Notes
On
January 9, 2014, we issued a convertible promissory note in the amount of $22,500. The note is non-interest bearing and due on
demand. The note can be converted into shares of our common stock at a conversion price to $0.0001 per share. The price per share
was subsequently adjusted to $0.001 per share to reflect the 1 for 10 reverse common stock split effectuated on January 9, 2014.
We recorded a debt discount of $22,500 for the fair value of derivative liability. As of May 31, 2014, we amortized $22,500 of
debt discount. For the three months ended August 31, 2014, we recorded an imputed interest of $347 as an in-kind contribution
of interest.
On
May 2, 2014, we issued a convertible promissory note in the amount of $37,500. The note bears interest at a rate of 8% per annum
and is due on February 7, 2015. The note can be converted into shares of our common stock at a conversion price of fifty-eight
percent (58%) of the market price, which is the average of the lowest three (3) trading prices for the common stock during the
ten (10) trading day period prior to the conversion. We received $37,500 less $2,500 of debt issuance costs pursuant to the terms
of this convertible note. We recorded a debt discount of $37,500 for the fair value of derivative liability. As of August 31,
2014, we amortized $16,148 of debt discount, $1,077 of debt issuance cost and accrued interest of $998.
On
June 6, 2014, we issued a convertible promissory note in the amount of $62,750. The note bears interest at a rate of 8% per annum
and is due on March 6, 2015. The note can be converted into shares of our common stock at a conversion price of fifty-five percent
(55%) of the market price, which is the average of the lowest two (2) trading prices for the common stock during the twenty-five
(25) trading day period prior to the conversion. We received $62,750 less $2,750 of debt issuance costs pursuant to the terms
of this convertible note. We recorded a debt discount of $62,750 for the fair value of derivative liability. As of August 31,
2014, we amortized $19,767 of debt discount, $2,441 of debt issuance costs and accrued interest of $1,174. In connection with
this funding, we paid additional debt issue costs of $5,000 of which $1,575 was amortized as of August 31, 2014.
On
June 19, 2014, we issued a convertible promissory note in the amount of $100,000. The note bears interest at a rate of 12% per
annum and is due on December 19, 2014. The note can be converted into shares of our common stock at a conversion price of fifty
percent (50%) of the market price, which is the average of the lowest three (3) trading prices for the common stock during the
twenty (20) trading day period prior to the conversion. We received $100,000 pursuant to the terms of this convertible note. We
recorded a debt discount of $100,000 for the fair value of derivative liability. As of August 31, 2014, we amortized $39,891 of
debt discount and accrued interest of $2,379. In connection with this funding, we paid debt issue costs of $10,000 of which $3,989
was amortized as of August 31, 2014.
On
June 24, 2014, we issued a convertible promissory note in the amount of $37,500. The note bears interest at a rate of 8% per annum
and is due on March 26, 2015. The note can be converted into shares of our common stock at a conversion price of fifty-eight percent
(58%) of the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10)
trading day period prior to the conversion. We received $37,500 less $2,500 of debt issuance costs pursuant to the terms of this
convertible note. We recorded a debt discount of $24,020 for the fair value of derivative liability. As of August 31, 2014, we
amortized $5,940 of debt discount, $618 of debt issuance costs and accrued interest of $552.
On
June 30, 2014, we issued a convertible promissory note in the amount of $85,000. The note is non-interest bearing and due on demand.
The convertible note can be converted into shares of our common stock at a conversion price of the lesser of $0.10 per share or
50% of the average trading price of our common stock on the OTCQB Markets for the five days preceding the date of conversion.
We recorded a debt discount of $85,000 for the fair value of derivative liability. As of August 31, 2014, we amortized $85,000
of debt discount. For the three months ended August 31, 2014, we recorded an imputed interest of $1,277 as an in-kind contribution
of interest.
On
August 4, 2014, we issued a convertible promissory note in the amount of $100,000. The note bears interest at a rate of 5% per
annum and is due on January 31, 2015. The note can be converted into shares of our common stock at a conversion price of fifty
percent (50%) of the market price, which is the lowest trading price for the common stock during the twenty (20) trading day period
prior to the conversion. We received $100,000 less and original issue discount of $10,000 and less $5,000 of debt issuance costs
pursuant to the terms of this convertible note. We recorded a debt discount of $90,000 for the fair value of derivative liability.
As of August 31, 2014, we amortized $1,500 of original issue discount, $13,500 of debt discount, $750 of debt issuance costs and
accrued interest of $1,332.
Securities
Purchase Agreement
On
June 26, 2014, we entered into a Securities Purchase Agreement with an unrelated party under which we agreed to issue two 8% convertible
redeemable notes in the principal amount of $60,000 each for an aggregate principal amount of $120,000 in exchange for (i) $60,000
in cash for the front end note; and (ii) for the back end note, a $60,000 promissory note issued by the note holder to us which
is due on June 26, 2015, bears interest at the rate of 8% per annum and is secured by a pledge of the front end note. The two
convertible redeemable notes are due and payable on June 26, 2015. The note can be converted into shares of our common stock at
a conversion price of fifty-four percent (54%) of the market price, which is the lowest trading price for the common stock during
the fifteen (15) trading day period prior to the conversion. We received $60,000 less $3,000 of debt issuance costs pursuant to
the terms of this convertible note. We recorded a debt discount of $60,000 for the fair value of derivative liability. As of August
31, 2014, we amortized $10,849 of debt discount, $542 of debt issuance costs and accrued interest of $856. In connection with
this funding, we paid additional debt issue costs of $6,000 of which $1,085 was amortized as of August 31, 2014. As a result of
the terms of the agreement, there are no assurances we will receive the additional $60,000 proceeds from the back end note. The
back end note can be converted after the full cash payment of additional funding in the amount $60,000 by the note holder simultaneously
with the issuance of the $60,000 promissory note by us.
On
August 14, 2014, we entered into a Securities Purchase Agreement with an unrelated party under which we agreed to issue two 8%
convertible redeemable notes in the principal amount of $40,000 each for an aggregate principal amount of $80,000 in exchange
for (i) $40,000 in cash for the front end note; and (ii) for the back end note, a $40,000 promissory note issued by the note holder
to us which is due on August 14, 2015, bears interest at the rate of 8% per annum and is secured by a pledge of the front end
note. The two convertible redeemable notes are due and payable on August 14, 2015. The note can be converted into shares of our
common stock at a conversion price of fifty percent (50%) of the market price, which is the average of the three (3) lowest trading
price for the common stock during the twenty (20) trading day period prior to the conversion. We received $40,000 less $6,000
of debt issuance costs pursuant to the terms of this convertible note. We recorded a debt discount of $30,652 for the fair value
of derivative liability. As of August 31, 2014, we amortized $1,428 of debt discount, $279 of debt issuance costs and accrued
interest of $149. As a result of the terms of the agreement, there are no assurances we will receive the additional $60,000 proceeds
from the back end note. The back end note can be converted after the full cash payment of additional funding in the amount $40,000
by the note holder simultaneously with the issuance of the $40,000 promissory note by us.
Convertible
Notes - Related Party
On
March 14, 2014, we issued a convertible promissory note in the amount of $225,000 to a foreign corporation which is controlled
by our Chief Executive Officer. The note is non-interest bearing and due on June 14, 2014. The note was amended to extend the
maturity date to September 14, 2014 . The note can be converted into shares of our common stock at a conversion price of
$0.25 per share. We recorded a debt discount of $99,000 for the fair value of beneficial conversion feature. As of May 31, 2014,
we amortized $99,000 of debt discount. For the three months ended August 31, 2014, we recorded an imputed interest of $3,435 as
an in-kind contribution of interest. The convertible promissory note is currently in default.
Note
Payable - Related Party
As
of March 27, 2014, a foreign corporation which is controlled by our Chief Executive Officer paid operating expenses on our behalf
totaling $515,600. On March 27, 2014, this amount was converted into a convertible note payable. The note is non-interest bearing
and due on demand. The note can be converted into shares of our common stock at a conversion price of the lesser of $0.10 per
share or 50% of the average trading price of our common stock on the OTCQB Markets for the five days preceding the date of conversion.
We recorded a debt discount of $515,600 for the fair value of derivative liability. As of May 31, 2014, we amortized $515,600
of debt discount. For the three months ended August 31, 2014, we recorded an imputed interest of $7,856 as an in-kind contribution
of interest.
As
of March 27, 2014, a foreign corporation which is controlled by our Chief Executive Officer paid operating expenses on our behalf
totaling $231,000 Canadian Dollars. On March 27, 2014, this amount was converted into a note payable for $207,232 using the conversion
rate from CAD to USD on the date of the note. The note bears interest at a rate of 5% per annum and is due on July 1, 2014. On
July 1, 2014, the note holder extended the maturity date to October 1, 2014. As of August 31, 2014, the fair value of note payable
was $212,797 which includes $5,565 of gain on foreign exchange rate. We accrued interest of $4,589.
Loan
Payable - Related Party
For
the period from October 17, 2013 (inception) to May 31, 2014, a foreign corporation which is controlled by our Chief Executive
Officer paid operating expenses totaling $2,000 on our behalf. The amount is treated as loan payable - related party, which is
non-interest bearing and due on demand. The loan payable - related party balance was $2,000 as of August 31, 2014.
The
debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of our common
stock at the conversion prices and terms discussed above. We classified embedded conversion features in these notes as a derivative
liability due to management’s assessment that we may not have sufficient authorized number of shares of common stock required
to net-share settle. We identified conversion features embedded within convertible debt. We have determined that the features
associated with the embedded conversion option should be accounted for at fair value as a derivative liability as we could not
determine if a sufficient number of shares would be available to settle all transactions.
The fair
value of the conversion feature is summarized as follows:
|
Derivative
Liability as of October 17, 2013 (inception) | |
$ | - | |
|
Fair
value at the commitment date for convertible instruments | |
| 40,824,258 | |
|
Change
in fair value of embedded derivative liability | |
| 487,755 | |
|
Adjustment
of derivative liability through gain on extinguishment | |
| (20,423,321 | ) |
|
Reclassification
to additional paid in capital for financial instruments that ceased to be a
derivative liability | |
| (8,752,500 | ) |
|
Derivative
Liability as of May 31, 2014 | |
| 12,136,192 | |
|
| |
| | |
|
Fair
value at the commitment date for convertible instruments | |
| 695,577 | |
|
Reclassification
to additional paid in capital for financial instruments that ceased to be a derivative liability | |
| (97,509 | ) |
|
Change
in fair value of embedded derivative liability | |
| (10,701,160 | ) |
|
Derivative
Liability as of November 30, 2014 | |
$ | 2,033,100 | |
We
recorded a derivative expense of $509,252 for the six months ended November 30, 2014.
Purchase
of Significant Equipment
We
do not intend to purchase any significant equipment during the next twelve months.
Off-Balance
Sheet Arrangements
As
of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to investors.
Going
Concern
The
independent auditors' report accompanying our May 31, 2013 and May 31, 2012 financial statements contains an explanatory paragraph
expressing substantial doubt about our ability to continue as a going concern. The financial statements for the three months ended
August 31, 2014 reference in note 12 our ability to continue as a going concern. The financial statements have been prepared "assuming
that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities
and commitments in the ordinary course of business. We have suffered recurring losses from operations, have a working capital
deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about
our ability to continue as a going concern.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required
for smaller reporting companies.
ITEM
4. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
Evaluation
of disclosure controls and procedures. We maintain controls and procedures that are designed to ensure that information
required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to our management including our principal executive and principal financial officers, as appropriate, to
allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed
as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded
that our disclosure controls and procedures were not effective.
Management’s
report on internal control over financial reporting. Our chief executive officer and our chief financial officer are responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting
is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or
under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management
and other personnel, 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 and includes those policies and procedures
that:
● |
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
|
|
● |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and |
|
|
● |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because
of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. 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.
Based
on our assessment, our chief executive officer and our chief financial officer believe that, as of November 30, 2014, our internal
control over financial reporting is not effective based on those criteria, due to the following:
● |
Deficiencies
in Segregation of Duties. Lack of proper segregation of
functions, duties and responsibilities with respect to our cash and control over the disbursements related thereto due to
our very limited staff, including our accounting personnel. |
● |
Deficiencies
in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public
company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial
accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk
that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner,
by this shortage of qualified resources. |
In
light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes
as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that
(1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the
statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other
financial information included in this report, fairly present in all material respects our financial condition, results of operations
and cash flows for the periods then ended.
This
report does not include an attestation report of our registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules
of the SEC that permit us to provide only management’s report in this report.
Changes
in internal control over financial reporting.
There
were no significant changes in our internal control over financial reporting during the second quarter ended November 30,
2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
AUDIT
COMMITTEE
Our
board of directors has not established an audit committee. The respective role of an audit committee has been conducted by our
board of directors. We intend to establish an audit committee during the fiscal year 2015. When established, the audit committee's
primary function will be to provide advice with respect to our financial matters and to assist our board of directors in fulfilling
its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities
will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system;
(ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance
as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies
and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our
Board of Directors.
PART
II – OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
Management
is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.
As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding,
or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending
or that have been threatened against us or our properties.
ITEM
1A. RISK FACTORS
Not required
for smaller reporting companies.
ITEM
2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
Share
Exchange Agreement
We
issued an aggregate of 125,000,000 post-Reverse Stock split shares of our restricted common stock at a per share price of $0.0001
to the shareholder of il2m in accordance with the terms and provisions of the Share Exchange Agreement. The shares were issued
in a private transaction in exchange for the acquisition by us of 100% of the total issued and outstanding shares of common stock
of il2m. The shares were issued to one non-United States resident in reliance on Regulation S promulgated under the United States
Securities Act of 1933, as amended (the “Securities Act”). The shares of common stock have not been registered under
the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States
Securities and Exchange Commission or an applicable exemption from the registration requirements. The il2m shareholder acknowledged
that the securities to be issued have not been registered under the Securities Act, that it understood the economic risk of an
investment in the securities, and that it had the opportunity to ask questions of and receive answers from our management concerning
any and all matters related to acquisition of the securities.
Conversion
of Convertible Note
During
March and April 2014, we issued an aggregate of 24,300,000 shares of our common stock to five entities in connection with the
conversion of debt in the amount of $24,300. The debt is evidenced by that certain 3% convertible promissory note dated May 17,
2013 in the principal amount of $52,500 (the "Convertible Note") issued by us to Asia Capital Markets Limited LLC ("Asia
Capital"). The Convertible Note was subsequently acquired by Gatehouse Financial Limited ("Gatehouse") from Asia
Capital in accordance with the terms and provisions of that certain debt purchase agreement dated November 15, 2013 between Asia
Capital and Gatehouse (the "Debt Purchase Agreement") as part of a transaction involving acquisition of and change in
control of the Corporation. Subsequently, in accordance with the terms and provisions of that certain assignment of convertible
note dated January 20, 2014 (the "Assignment"), Gatehouse sold and assigned a portion of its right, title and interest
in and to the Convertible Note to separate assignees, which assignees all paid consideration to Gatehouse for the purchase of
their respective interest. We received those certain notices of conversion and the Board of Directors authorized the issuance
of the aggregate 24,300,000 shares of common stock to the five separate assignees. The shares were issued in a private transaction
in exchange for the acquisition by us of 100% of the total issued and outstanding shares of common stock of il2m. The shares were
issued to five non-United States residents in reliance on Regulation S promulgated under the Securities Act. The shares of common
stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without
registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements.
The assignees acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood
the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers
from our management concerning any and all matters related to acquisition of the securities.
Advisory
Board Agreements
Our
Board of Directors previously appointed certain members to our Advisory Board (collectively, the "Advisory Board Members")
in accordance with the terms and provisions of those certain advisory board agreements dated from March 1, 2014 through June 8,
2014 (collectively, the "Advisory Board Agreements"). Effective October 1, 2014, our Board of Directors and the Advisory
Board Members agreed to amend the Advisory Board Agreements to provide for: (i) a reduction in hours of monthly service from ten
to six; (ii) remove monthly compensation of $2,500; (iii) increase issuance of shares of common stock from 100,000 to 250,000
shares; and (iv) provide for a 2% commission regarding executed sponsorship or advertising agreement (collectively, the “Amended
Advisory Board Agreements”). As of August 31, 2014, we issued 500,000 shares of our common stock with a fair value of $172,970.
Therefore, in accordance with the terms and provisions of the Amended Advisory Board Agreements, we issued to each Advisory Board
Member 250,000 shares of our restricted common stock at fair value. The shares were issued in a private transaction to five United
States residents in reliance on Regulation D promulgated under the Securities Act. The shares of common stock have not been registered
under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United
States Securities and Exchange Commission or an applicable exemption from the registration requirements. The Advisory Board Members
acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic
risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management
concerning any and all matters related to acquisition of the securities.
Consultant/Employment
Agreements
On
June 1, 2014, we entered into three certain consultant agreements and four certain employment agreement (collectively, the “Agreements”),
pursuant to which our Board of Directors authorized the issuance of an aggregate 2,650,000 shares of our restricted common stock
effective October 1, 2014 with a fair value of $74,370. The shares were issued in a private transaction to five United States
residents and two non-U.S. residents in reliance on Regulation D and Regulation S, respectively, promulgated under the Securities
Act. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not
be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from
the registration requirements. The consultants/employees acknowledged that the securities to be issued have not been registered
under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity
to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.
Services
Rendered by Chief Executive Officer
Effective
October 1, 2014, our Board of Directors authorized the issuance of 15,000,000 shares of our restricted common stock to Sarkis
Tsaoussian, our President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and sole member of the Board of
Directors (“Tsaoussian”) at fair value. Tsaoussian had incurred substantial time in providing services to us from
approximately September 2013 through August 2014, which have advanced us and our business operations including, but not limited
to: (i) establishing us and obtaining our trading symbol and platform on OTC Markets; (ii) dedication and devotion to our continued
operation, maintenance and growth; (iii) establishing and maintaining public and investor relations; (iv) establishing procedures
to ensure compliance with accounting standards, rules and regulations relating to a public company; (v) preparation and filing
of associated quarterly and annual reports and coordination of edgar filings; and (vi) negotiating and managing all consultants
and personnel required for our operations. The shares were issued in a private transaction to one non United States resident in
reliance on Regulation S promulgated under the Securities Act. The shares of common stock have not been registered under the Securities
Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and
Exchange Commission or an applicable exemption from the registration requirements.
IBC
Funds
During
the six month period ended November 30, 2014, we issued an aggregate 1,568,627 shares of common stock to IBC in connection with
the Settlement Agreement. The shares were issued in a private transaction to IBC in reliance on Section 3(a)(10) promulgated under
the Securities Act. The shares of common stock have not been registered under the Securities Act or under any state securities
laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable
exemption from the registration requirements. IBC acknowledged that the securities to be issued have not been registered under
the Securities Act, that it understood the economic risk of an investment in the securities, and that it had the opportunity to
ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM
5. OTHER INFORMATION
None
ITEM
6. EXHIBITS
Exhibit No. |
|
Description |
|
|
|
10.01 |
|
Share
Exchange Agreement dated January 9, 2014 among il2m International Corp., formerly known as Dynamic Nutra Enterprises Holdings
Inc., il2m Inc. and il2m International Ltd. , which is incorporated by reference to Exhibit 10.01 to the Current Report on
Form 8-K filed with the Securities and Exchange Commission on January 14, 2014. |
|
|
|
10.02
|
|
Convertible
Note dated March 14, 2014 between il2m International Corp. and il2m Global Ltd. in the amount of $100,000.00. |
|
|
|
10.03
|
|
Convertible
Note dated March 14, 2014 between il2m International Corp. and il2m Global Ltd. in the amount of $125,000.00. |
|
|
|
10.04 |
|
Convertible
Note dated March 14, 2014 between il2m International Corp and il2m Global Ltd in the amount of $231,000.00 Canadian Dollars.
|
|
|
|
10.05 |
|
Convertible
Note dated March 27, 2014 between il2m International Corp. and il2m Global Ltd. in the amount of $515,600.00. |
|
|
|
31.1 |
|
Certification
of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1 |
|
Certification
of Principal Executive Officer and Principal Financial, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS |
|
XBRL
Instance Document |
101.SCH |
|
XBRL
Taxonomy Schema |
101.CAL |
|
XBRL
Taxonomy Calculation Linkbase |
101.DEF |
|
XBRL
Taxonomy Definition Linkbase |
101.LAB |
|
XBRL
Taxonomy Label Linkbase |
101.PRE |
|
XBRL
Taxonomy Presentation Linkbase |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: February
4, 2015
|
Il2m
International Corp. |
|
|
|
/s/
Sarkis Tsaoussian |
|
Name:
Sarkis Tsaoussian |
|
Chief
Executive Officer/President, |
|
Chief
Financial Officer/Treasurer |
14
Exhibit 31.1
Certification of Principal Executive
Officer and Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To Section 302 of
The Sarbanes-Oxley Act of 2002
I, Sarkis Tsaoussian, certify that:
1. |
I have reviewed this Quarterly Report
on Form 10-Q of il2m Iinternational Inc.;
|
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 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 and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of 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 controls. |
Dated: February
4, 2015 |
/s/ Sarkis Tsaoussian |
|
Chief Executive Officer |
|
(Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
Certification of Principal Executive
Officer and Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To Section 906 of
The Sarbanes-Oxley Act of 2002
In connection with the accompanying
quarterly report on Form 10-Q of il2m International Inc. for the quarter ended November 30, 2014, I, Sarkis Tsaoussian, Principal
Executive Officer and Principal Financial Officer of il2m International Inc., hereby certify pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
1. |
Such quarterly report of Form 10-Q for the quarter ended November 30, 2014, 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 such quarterly report of Form 10-Q for the quarter ended November 30, 2014, fairly represents in all material respects, the financial condition and results of operations of il2m International Inc. |
Dated: February 4, 2015 |
/s/ Sarkis Tsaoussian |
|
Chief Executive Officer |
|
(Principal Executive Officer and Principal Financial Officer) |
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