TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
Commission File Number 000-53735
PROINDIA INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 27-0267587
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
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Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
(Address of principal executive offices) (Zip Code)
001 (613) 8532 2800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Title of each class
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
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Yes x No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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Yes x No
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Yes No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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Large accelerated filer Accelerated filer
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Non-accelerated filer Smaller reporting company x
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State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.
The aggregate market value based on the average bid and asked price on the over-the-counter market of the registrant's common stock ("Common Stock") held by non-affiliates of the Company was $1,440,000 as at June 30, 2009.
There were 172,800,000 outstanding shares of Common Stock as of March 24, 2010.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
DOCUMENTS INCORPORATED BY REFERENCE
INDEX
PART I
Item 1. Business 1
Item 1A. Risk Factors 3
Item 1B. Unresolved Staff Comments 6
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. (Removed and Reserved)
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation 10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 13
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure 14
Item 9A. Controls and Procedures 15
Item 9B. Other Information 16
PART III
Item 10. Directors, Executive Officers and Corporate Governance 17
Item 11. Executive Compensation 19
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 21
Item 13. Certain Relationships and Related Transactions, and
Director Independence 21
Item 14. Principal Accounting Fees and Services 22
PART IV
Item 15. Exhibits, Financial Statement Schedules 23
SIGNATURES
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PART I
Information Regarding Forward Looking Statements
This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements.
Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make. Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated. Consequently, no forward-looking statement can be guaranteed. The potential risks and uncertainties that could affect forward looking statements include, but are not limited to:
- the risks of development stage projects,
- political risks of development in foreign countries,
- risks associated with environmental and other regulatory matters,
- the volatility of energy and commodity prices,
- movements in foreign exchange rates,
- increased competition, governmental regulation,
- performance of information systems,
- ability of the Company to hire, train and retain qualified employees, and
- our ability to enter into key project development and supply agreements
and the performance of contract counterparties.
In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects are described in this report, including under the heading "Risk Factors" and elsewhere and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company.
We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document. The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements.
Item 1 Business
Description Of Business
Introduction
ProIndia International, Inc. ("ProIndia" or the "Company", "we," "our" or "us") is a Delaware corporation that was originally incorporated in Florida as We Sell for U Corp. ("We Sell for U") on November 12, 2007. The principal stockholder of ProIndia is Power Developments Pty Ltd., an Australian corporation ("Power"), an entity majority owned by the Company's president, which owned 95.83% of ProIndia as of December 31, 2009.
ProIndia was originally established with the intention to develop and provide service offerings to facilitate auctions on eBay for individuals and companies who lack the eBay expertise and/or time to list/sell and ship items they wish to sell. Our intent was to partner with local/regional/nationally known "Brick and Mortar "retail and service establishments. These establishments would directly benefit from an additional profit center and with increased store traffic and creation of customers.
In December 2008, Power acquired an 96% interest in ProIndia from Edward T. Farmer and certain other stockholders. Mr. Farmer resigned as Sole Director and Officer of ProIndia, Joseph Gutnick was appointed President, Chief Executive Officer and a Director and Peter Lee was appointed Chief Financial Officer and Secretary. Commencing in fiscal 2009, ProIndia has decided to focus its business on energy opportunities.
Recent Developments
On January 29, 2009 the Company's Board of Directors declared a 6-for-1 stock split in the form of a stock dividend that was payable in February 2009 to stockholders of record as of February 14, 2009. An aggregate of 72,000,000 shares of common stock were issued in connection with this dividend.
The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated.
Effective March 23, 2009 ProIndia entered into an agreement with the Indian Farmers Fertiliser Cooperative ("IFFCO") to explore the commercial viability of generating and/or distributing alternate energy, or other viable products, to the Indian market.
On March 31, 2009, the Company's Board of Directors declared a 2-for-1 stock split in the form of a stock dividend that was payable in August 2009 to stockholders of record as of August 12, 2009. The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated. An aggregate of 86,400,000 shares of common stock were issued in connection with this dividend.
Effective on August 12, 2009, We Sell For U Corp. completed the
reincorporation from a Florida corporation to a Delaware corporation through a
merger with and into its wholly-owned subsidiary, ProIndia International, Inc.
Each issued and outstanding share of common stock, par value $0.0001 per share,
of We Sell For U Corp., a Florida-incorporated company, was automatically
converted into one issued and outstanding share of common stock, par value
$0.0001 per share, of ProIndia International, Inc, a Delaware-incorporated
company. The number of authorized shares of capital stock was increased to five
hundred twenty million (520,000,000) shares, of which five hundred million
(500,000,000) shares shall be Common Stock and twenty million (20,000,000)
shares shall be Preferred Stock, each with a par value of $.0001 per share. For
purposes of the Company's reporting status with the Securities and Exchange
Commission, ProIndia is deemed a successor to We Sell for U.
Description of Current Business Plans and Activities
The following is a description of the Company's current business plans and activities.
In March 2009, the Company announced the execution of an Agreement with IFFCO to explore the commercial viability of generating and/or distributing alternate energy or any other viable products to the rural Indian market. Since the announcement, the potential markets have been further refined to focus on regional farming communities in India who have little or no access to certain products, services or technologies relating to the farmers business or non business needs.
IFFCO is India's largest farmers co-operative having around 40,000 cooperatives as its shareholders which encompass over 50 million farmers. The cooperative is primarily engaged with the production and marketing of fertilizers to its shareholders. IFFCO's assets, distribution network, relationship with the Indian government and massive customer base make it well placed to support and explore the activities outlined in the Cooperation Agreement. IFFCO have already utilized their extensive communication and distribution network to sell mobile phones, mechanically charged flashlights, and general insurance to their members and are interested in exploring other beneficial opportunities.
Under the Agreement, ProIndia and IFFCO, agree to work together in a collaborative manner in relation to the products, services or technologies, in partcular those in which IFFCO is not currently engaged, that may be applicable for the rural Indian market. ProIndia shall fund the pilot studies, with IFFCO facilitating ProIndia with the relevant government and licensing authorities. The parties may by mutual agreement extend the range of products covered by the Agreement. In the event the parties elect to proceed to full commercialization, ProIndia and IFFCO shall be exclusive partners, with ProIndia having access to IFFCO's cooperative members and distribution network.
IFFCO is India's largest farmers co-operative having around 40,000 cooperatives as its shareholders which encompass over 50 million farmers. The cooperative is primarily engaged with the production and marketing of fertilizers to its shareholders. IFFCO's assets, distribution network, relationship with the Indian government and massive customer base make it well placed to support and explore the activities outlined in the Cooperation Agreement. IFFCO have already utilized their extensive communication and distribution network to sell mobile phones, mechanically charged flashlights, and general insurance to their members and are interested in exploring other beneficial opportunities.
Since that time, ProIndia has continued to pursue this strategy and has met with IFFCO and other parties in India and internationally to continue to refine this strategy and resulting from this work, has formulated a business plan. As part of the ongoing strategy and in order to advance its business plan, ProIndia has engaged Boston Consulting Group (BCG) to assist with the development of components of the business plan. BCG is a global management consulting firm and one of the world's leading advisors on business strategy.
The primary aims of ProIndia are to (i) generate a significant positive return on investment for ProIndia and its shareholders; (ii) grow ProIndia into a successful international enterprise through a model developed between IFFCO and ProIndia, that is self sustaining enabling the Company to explore further opportunities within India; and (iii) significantly improve the living standards and therefore productivity and economic development of IFFCO's member societies and other rural Indian communities.
To achieve these aims ProIndia, currently through BCG is exploring the development and commercialization of certain products, services or technologies which meet the following business criteria:
1. Be highly beneficial to Indian farmers' and in particular regional farming communities who have little or no access to these products, services or technologies. The product, service or technology will address a widespread critical need throughout India and significantly improve the living standards of the target communities.
2. Be affordable and simple to operate, use or obtain in remote areas.
In accordance with the above aims and criteria, ProIndia through BCG has identified a number of opportunities for initial investigation. These areas cover a wide range of services, products and technologies across a broad range of categories relating to a farmers business and non business needs. The opportunities are being assessed under certain economic criteria and will be refined until two or three clear opportunities have been identified.
Once suitable products, services or technologies have been approved in conjunction with an appropriate business model and plan, a target community will be selected in conjunction with IFFCO to begin a pilot study. A feasibility study will commence to assess the viability of the chosen opportunity. This will include assessing the financial model and funding structure, the sustainability within the community, the marketing strategy, appropriate tariff structure, environmental impact, social impact and the overall implementation strategy.
BCG's initial overview was completed in December 2009 and has highlighted two clear opportunities, being Agri-Input Retailing and Farm Management, to develop through IFFCO's massive distribution network.
Following discussion with BCG on BCG's results of the study, ProIndia has engaged BCG to proceed to the next phase of the engagement to investigate Agri-Input Retailing and Farm Management opportunities and to develop business models for such opportunities. ProIndia and BCG anticipate that this phase of the project will be completed by late 2010.
Employees
We use temporary employees in our activities. The services of our Chief Executive Officer, PersonNameJoseph Gutnick and Chief Financial Officer and Secretary, PersonNamePeter Lee, as well as clerical employees are provided to us on a part-time as needed basis pursuant to a Service Agreement (the "Service Agreement") between us and AXIS Consultants Pty Limited ("AXIS") effective from January 1, 2009. AXIS also provides us with office facilities, equipment, administration and clerical services in Melbourne Australia pursuant to the Service Agreement. The Service Agreement may be terminated by written notice by either party.
Other than this, we rely primarily upon consultants to accomplish our activities. We are not subject to a union labour contract or collective bargaining agreement.
Item 1A Risk Factors
You should carefully consider each of the following risk factors and all of the other information provided in this Annual Report before purchasing our common stock. An investment in our common stock involves a high degree of risk, and should be considered only by persons who can afford the loss of their entire investment. The risks and uncertainties described below are not the only ones we face. There may be additional risks and uncertainties that are not known to us or that we do not consider to be material at this time. If the events described in these risks occur, our business, financial condition and results of operations would likely suffer. Additionally, this Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. This section discusses the risk factors that might cause those differences.
Risk Factors
Risks of Our Business
We Lack an Operating History And Have Losses Which We Expect To Continue Into the Future.
To date we have no source of revenue. We have no operating history as an energy company upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:
- our ability to identify suitable energy opportunities. Effective March 23, 2009 the Company entered into an agreement with the IFFCO to explore the commercial viability of generating and/or distributing alternate energy to the Indian market which was completed in December 2009 and has highlighted two clear opportunities. The Company has engaged BCG to investigate these opportunities and to develop business models for such opportunities.
- our ability to raise sufficient capital to turn such opportunities into economically viable business units
There can be no assurance that we will be able to identify profitable business opportunities in the alternate energy field or, if we do, that we will be able to obtain sufficient financing to develop such opportunities.
We may engage in acquisitions, strategic investments, strategic partnerships or alliances or other ventures that may or may not be successful.
We may acquire or make strategic investments in businesses, technologies, services or products, or enter into strategic partnerships or alliances with third parties in order to enhance our business. It is possible that we may not be able to identify suitable acquisitions targets and candidates for strategic investments or partnerships, or if we do identify such targets or candidates, we may not be able to complete those transactions on terms commercially acceptable to us, or at all. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.
We may make strategic investments in early-stage technology start-up companies in order to gain experience in or exploit niche technologies. However, our investments may not be successful. The lack of profitability of any of our investments could have a material adverse effect on our operating results
World Economic Conditions Could Adversely Affect Our Results of Operations and Financial Condition
In 2008 and 2009, world economic conditions have experienced a downturn due to the sequential effects of the subprime lending crisis, general credit market crisis, the general unavailability of financing, collateral effects on the finance and banking industries, volatile energy and commodity costs, concerns about inflation, slower economic activity, decreased consumer confidence, reduced corporate profits and capital spending, adverse business conditions, increased unemployment and liquidity concerns. These adverse conditions may make it harder for the Company to raise additional funds to finance the development of any business opportunity. Continued adverse economic conditions could adversely affect our liquidity, results of operations and financial condition.
The Report Of Our Independent Registered Public Accounting Firm Contains An Explanatory Paragraph Questioning Our Ability To Continue As A Going Concern.
The report of our independent registered public accounting firm on our financial statements as of December 31, 2009 and 2008, and for the years ended December 31, 2009 and 2008 and the period from inception, November 12, 2007 through December 31, 2009, includes an explanatory paragraph questioning our ability to continue as a going concern. This paragraph indicates that we, have not yet commenced revenue producing operations, have incurred net losses from inception, and have an accumulated (deficit) of $498,356 which conditions raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.
We Are A Small Operation And Do Not Have Significant Capital.
Because we will have limited working capital, we must limit our activities. If we are unable to raise the capital required to undertake adequate activities, including identifying suitable energy opportunities, we may miss opportunities to establish or acquire suitable economically viable business units.. If we do not find suitable economically viable business units, we may be forced to cease operations and you may lose your entire investment.
If Our Officers And Directors Stopped Working For Us, We Would Be Adversely Impacted.
None of our officers or directors works for us on a full-time basis. There are no proposals or definitive arrangements to compensate our officers and directors or to engage them on a full-time basis. They each rely on other business activities to support themselves. They each have a conflict of interest in that they are officers and directors of other companies. You must rely on their skills and experience in order for us to reach our objective. We have no employment agreements or key man life insurance policy on any of them. The loss of some or all of these officers and directors could adversely affect our ability to carry on business and could cause you to lose part or all of your investment.
We Are Substantially Dependent Upon AXIS To Carry Out Our Activities
We are substantially dependent upon AXIS for our senior management, financial and accounting, corporate legal and other corporate headquarters functions. For example, each of our officers is employed by AXIS and, as such, is required by AXIS to devote substantial amounts of time to the business and affairs of the other shareholders of AXIS.
Pursuant to a services agreement, AXIS provides us with office facilities, administrative personnel and services, management and geological staff and services. No fixed fee is set in the agreement and we are required to reimburse AXIS for any direct costs incurred by AXIS for us. In addition, we pay a proportion of AXIS indirect costs based on a measure of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and indirect costs. AXIS has not charged a service fee for this fiscal year. This service agreement may be terminated by us or AXIS on 60 days' notice. See "Certain Relationships and Related Party Transactions."
Future Sales of Common Stock Could Depress The Price Of Our Common Stock
Future sales of substantial amounts of common stock pursuant to Rule 144
under the Securities Act of 1933 or otherwise by certain stockholders could have
a material adverse impact on the market price for the common stock at the time.
As at March 24, 2010 there were 165,600,000 outstanding shares of common stock
which are deemed "restricted securities" as defined by Rule 144 under the
Securities Act or control securities. Under certain circumstances, these shares
may be sold without registration pursuant to the provisions of Rule 144
following the expiration of one year after the Company ceases to be a shell
company. In general, under rule 144, a person (or persons whose shares are
aggregated) who has satisfied a six-month holding period and who is not an
affiliate of the Company may sell restricted securities without limitation as
long as the Company is current in its SEC reports. A person who is an affiliate
of the Company may sell within any three-month period a number of restricted
securities and/or control securities which does not exceed the greater of one
(1%) percent of the shares outstanding or the average weekly trading volume
during the four calendar weeks preceding the notice of sale required by Rule
144. In addition, Rule 144 permits, under certain circumstances, the sale of
restricted securities by a non-affiliate without any limitations after a
one-year holding period. Any sales of shares by stockholders pursuant to Rule
144 may have a depressive effect on the price of our Common stock.
Our Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of The Full Value Of Their Shares
Our common stock is quoted via the Over The Counter Bulletin Board (OTCBB). As such, our common stock may have fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for the common stock.
A Low Market Price May Severely Limit The Potential Market For Our Common Stock
Our common stock is currently trading at a price substantially below $5.00 per share, subjecting trading in the stock to certain SEC rules requiring additional disclosures by broker-dealers. These rules generally apply to any equity security that has a market price of less than $5.00 per share, subject to certain exceptions (a "penny stock"). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock.
Item 1B Unresolved Staff Comments
As of December 31, 2009, we do not have any Securities and Exchange Commission staff comments that have been unresolved for more than 180 days.
Item 2 Properties
The Company occupies certain executive and office facilities in CityplaceMelbourne, StateVictoria, country-regionAustralia which are provided to it pursuant to the Service Agreement with AXIS. See "Item 1- Business- Employees" and "Item 12- Certain Relationships and Related Transactions". The Company believes that its administrative space is adequate for its current needs.
Item 3 Legal Proceedings
There are no pending legal proceedings to which the Company is a party, or to which any of its property is the subject, which the Company considers material.
PART II
Item 4 (Removed and Reserved)
Item 5 Market for Common Equity and Related Stockholder Matters
Market Information
Our common stock is traded in the over-the-counter market and quoted on the OTC-Bulletin Board under the symbol "PNDI", which became effective on August 31, 2009. It was previously traded in the over-the-counter market and quoted on the OTC-Bulletin Board under the symbol "WSFU".
The following table sets out the high and low bid information for the common stock as reported by the OTC Bulletin Board for each period/quarter indicated in US$:
Calendar Period High Bid(1) Low Bid(1) --------------- ---------- 2009 ---- First Quarter 0.63 0.08 Second Quarter 0.40 0.40 Third Quarter 0.40 0.20 Fourth Quarter 0.80 0.80 |
(1) The quotations set out herein reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily reflect actual transactions.
As of December 31, 2009 and as at March 24, 2010, there were 172,800,000 shares of common stock issued and outstanding.
Dividends
To date we have not paid any cash dividends on our common stock and we do not expect to declare or pay any cash dividends on our common stock in the foreseeable future. Payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the Board of Directors.
On January 29, 2009 the Company's Board of Directors declared a 6-for-1 stock split in the form of a stock dividend that was payable in February, 2009 to stockholders of record as of February 14, 2009. An aggregate of 72,000,000 shares of common stock were issued in connection with this dividend.
On March 31, 2009, the Company's Board of Directors declared a 2-for-1 stock split in the form of a stock dividend that was payable in August, 2009 to stockholders of record as of August 12, 2009. An aggregate of 86,400,000 shares of common stock were issued in connection with this dividend.
Shareholders
As of December 31, 2009 the Company had approximately 11 shareholders of record. Within the holders of record of the Company's Common Stock are depositories such as Cede & Co., a nominee for The Depository Trust Company (or DTC), that hold shares of stock for brokerage firms which, in turn, hold shares of stock for one or more beneficial owners. Accordingly, the Company believes there are many more beneficial owners of its Common Stock whose shares are held in "street name", not in the name of the individual shareholder
Transfer Agent
Our United States Transfer Agent and Registrar is Continental Stock Transfer & Trust Company.
Item 6 Selected Financial Data
Our selected financial data presented below for the years ended December 31, 2009 and December 31, 2008 and the balance sheet data at December 31, 2009 and 2008 have been derived from financial statements, which have been audited by PKF, Certified Public Accountants, a Professional Corporation, New York, NY (PKF). The selected financial data should be read in conjunction with our financial statements for the year ended December 31, 2009 and 2008, and Notes thereto, which are included elsewhere in this Annual Report.
(Statement of Operations Data)
2009 2008
Revenues $ - $ -
-----------------------------
- -
Costs and expenses 442,364 30,000
-----------------------------
Loss from operations (442,364) (30,000)
Foreign currency exchange (loss) (17,594) -
Other income (loss) 2 -
-----------------------------
(Loss) before income taxes (459,956) (30,000)
Provision for income taxes - -
-----------------------------
Net (loss) (459,956) (30,000)
-----------------------------
$ $
Net profit (loss) per share
per common equivalent share (0.00) (0.00)
-----------------------------
Weighted average number
of common equivalent shares outstanding
(000s) 172,800 152,784
-----------------------------
Balance Sheet Data
$ $
Total assets 376 -
Total liabilities (460,332) -
-----------------------------
Stockholders equity (deficit) (459,956) -
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Item 7. Management's Discussion and Analysis of Financial Condition or Plan
of Operation
General
The following discussion and analysis of our financial condition and plan of operation should be read in conjunction with the Financial Statements and accompanying notes and the other financial information appearing elsewhere in this report. This report contains numerous forward-looking statements relating to our business. Such forward-looking statements are identified by the use of words such as believes, intends, expects, hopes, may, should, plan, projected, contemplates, anticipates or similar words. Actual operating schedules, results of operations, ore grades and mineral deposit estimates and other projections and estimates could differ materially from those projected in the forward-looking statements.
Overview
ProIndia International, Inc. was originally established with the intention to develop and provide service offerings to facilitate auctions on eBay for individuals and companies who lack the eBay expertise and/or time to list/sell and ship items they wish to sell. Our intent was to partner with local/regional/nationally known "Brick and Mortar "retail and service establishments. These establishments would directly benefit from an additional profit center and with increased store traffic and creation of customers.
In December 2008, Power Developments Pty Ltd, an Australian corporation ("Power") acquired an 96% interest in ProIndia from Edward T. Farmer and certain other stockholders. Mr. Farmer resigned as Sole Director and Officer of ProIndia, Joseph Gutnick was appointed President, Chief Executive Officer and a Director and Peter Lee was appointed Chief Financial Officer and Secretary. Commencing in fiscal 2009, ProIndia has decided to focus its business on energy opportunities.
We have incurred net losses since our inception and may continue to incur substantial and increasing losses for the next several years. Since inception we have incurred accumulated (deficit) of $498,356 which was funded primarily by advances from affiliates and by the sale of equity securities.
In March 2009, the Company announced the execution of an Agreement with IFFCO to explore the commercial viability of generating and/or distributing alternate energy or any other viable products to the rural Indian market. Since the announcement, the potential markets have been further refined to focus on regional farming communities in India who have little or no access to certain products, services or technologies relating to the farmers business or non business needs.
Under the Agreement, ProIndia and IFFCO, agree to work together in a collaborative manner in relation to the products, services or technologies, in particular those in which IFFCO is not currently engaged, that may be applicable for the rural Indian market. ProIndia shall fund the pilot studies, with IFFCO facilitating ProIndia with the relevant government and licensing authorities. The parties may by mutual agreement extend the range of products covered by the Agreement. In the event the parties elect to proceed to full commercialization, ProIndia and IFFCO shall be exclusive partners, with ProIndia having access to IFFCO's cooperative members and distribution network.
IFFCO is India's largest farmers co-operative having around 40,000 cooperatives as its shareholders which encompass over 50 million farmers. The cooperative is primarily engaged with the production and marketing of fertilizers to its shareholders. IFFCO's assets, distribution network, relationship with the Indian government and massive customer base make it well placed to support and explore the activities outlined in the Cooperation Agreement. IFFCO have already utilized their extensive communication and distribution network to sell mobile phones, mechanically charged flashlights, and general insurance to their members and are interested in exploring other beneficial opportunities.
Since that time, ProIndia has continued to pursue this strategy and has met with IFFCO and other parties in India and internationally to continue to refine this strategy and resulting from this work, has formulated a business plan. As part of the ongoing strategy and in order to advance its business plan, ProIndia has engaged Boston Consulting Group (BCG) to assist with the development of components of the business plan.
The primary aims of ProIndia are to (i) generate a significant positive return on investment for ProIndia and its shareholders; (ii) grow ProIndia into a successful international enterprise through a model developed between IFFCO and ProIndia, that is self sustaining enabling the Company to explore further opportunities within India; and (iii) significantly improve the living standards and therefore productivity and economic development of IFFCO's member societies and other rural Indian communities.
To achieve these aims ProIndia, currently through BCG is exploring the development and commercialization of certain products, services or technologies which meet the following business criteria:
1. Be highly beneficial to Indian farmers' and in particular regional farming communities who have little or no access to these products, services or technologies. The product, service or technology will address a widespread critical need throughout India and significantly improve the living standards of the target communities.
2. Be affordable and simple to operate, use or obtain in remote areas.
In accordance with the above aims and criteria, ProIndia through BCG has identified a number of opportunities for initial investigation. These areas cover a wide range of services, products and technologies across a broad range of categories relating to a farmers business and non business needs. The opportunities are being assessed under certain economic criteria and two clear opportunities have been identified, being Agri-Input Retailing and Farm Management.
Once suitable products, services or technologies have been approved in conjunction with an appropriate business model and plan, a target community will be selected in conjunction with IFFCO to begin a pilot study. A feasibility study will commence to assess the viability of the chosen opportunity. This will include assessing the financial model and funding structure, the sustainability within the community, the marketing strategy, appropriate tariff structure, environmental impact, social impact and the overall implementation strategy.
BCG's initial overview was completed in December 2009 and has highlighted two clear opportunities to develop through IFFCO's massive distribution network.
Following discussion with BCG on BCG's results of the study, ProIndia has engaged BCG to proceed to the next phase of the engagement to investigate Agri-Input Retailing and Farm Management opportunities and to develop business models for such opportunities. ProIndia and BCG anticipate that this phase of the project will be completed by late 2010.
Results of Operations
Year ended December 31, 2009 versus Year ended December 31, 2008
We are a development stage company and have not generated any revenues since inception.
Total costs and expenses have increased from $30,000 for the year ended December 31, 2008 to $442,364 for the year ended December 31, 2009. The increase was a net result of:
i) An increase in legal, accounting and professional costs from $29,192 for the year ended December 31, 2008 to $393,273 for the year ended December 31, 2009. During the year ended December 31, 2009 we incurred professional expenses of $300,000 associated with fees for research of potential new business opportunities; stock transfer agent fees for management of the share register of $16,283; legal expenses of $19,553 for general legal work; and audit fees of $57,437 for professional services in relation to financial statements in the quarterly reports on Form 10-Q and annual report on Form 10-K. During the year ended December 31, 2008, we incurred professional expenses of $9,766 associated with stock transfer agent fees for management of the share register, consulting fees and financial advisor fees; legal expenses of $11,926 for general legal work; and audit fees of $7,500 for professional services in relation to financial statements, the quarterly reports on Form 10-Qs and annual report on Form 10-K.
ii) An increase in administrative expenses from $808 for the year ended December 31, 2008 to $49,091 for the year ended December 31, 2009. During the year ended December 31, 2009 we incurred $9,615 for lodgement of Company filings with the SEC; $33,555 charged by Axis Consultants Pty Ltd for salaries incurred on behalf of the Company which relate to fees paid to the President and Chief Executive Officer, Secretary and Chief Financial Officer and other staff of AXIS who provide services to the Company; $2,359 for printing, stationary and postage; $3,222 for website costs; and $340 for bank charges. During the year ended December 31, 2008 we incurred $712 for lodgement of Company filings with the SEC; and $96 of miscellaneous costs.
Accordingly, the loss from operations increased from $30,000 for the year ended December 31, 2008 to $442,364 for the year ended December 31, 2009.
Other income increased from $nil for the year ended December 31, 2008 to $2 for the year ended December 31, 2009 being interest received.
Foreign currency exchange loss increased from $nil for the year ended December 31, 2008 to $17,594 for the year ended December 31, 2009.
The net loss for the year ended December 31, 2009 was $459,956 compared to a net loss for the year ended December 31, 2008 of $30,000.
Liquidity and Capital Resources
For the fiscal year 2009, net cash used in operating activities was $331,113 primarily consisting of amounts spent on legal, accounting and professional expenses and administration expenses.
Financing activities in 2009 consisted of an advance of $331,489 from Axis Consultants Pty Ltd.
The Company's ability to continue operations through fiscal 2010 is dependent upon future funding from affiliated entities, capital raisings, or its ability to commence revenue producing operations and positive cash flows.
The Company continues to search for additional sources of capital, as and when needed; however, there can be no assurance funding will; be successfully obtained. Even if it is obtained, there is no assurance that it will not be secured on terms that are highly dilutive to existing shareholders.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of ProIndia International, Inc. as a going concern. However, ProIndia International, Inc. has limited assets, has not yet commenced revenue producing operations and has sustained recurring losses since inception.
ProIndia has agreed with Boston Consulting Group ("BCG") to extend BCG's consulting role to the development of a business model for the Agri-Input Retailing and Farm Management opportunity. As per the agreement, the Company will be charged professional fees aggregating approximately $1,000,000 for services to be rendered by BCG during 2010.
Our budget for general and administration and for professional expenses for fiscal 2010 is A$1.25 million. We are currently investigating capital raising opportunities which may be in the form of either equity or debt, to provide funding for working capital purposes. There can be no assurance that such a capital raising will be successful, or that even if an offer of financing is received by the Company, it is on terms acceptable to the Company.
Impact of Australian Tax Law
On December 28, 2008 the management and control of ProIndia was effectively transferred to Australia making the company an Australian resident corporation under Australian law. Australian resident corporations are subject to Australian income tax on their non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income, provided the tax credit does not exceed 30% of the foreign source income.
Under the U.S./Australia tax treaty, a country-regionU.S. resident corporation such as us is subject to Australian income tax on net profits attributable to the carrying on of a business in country-regionAustralia through a "permanent establishment" in country-regionplaceAustralia. A "permanent establishment" is a fixed place of business through which the business of an enterprise is carried on. The treaty limits the Australian tax on interest and royalties paid by an Australian business to a country-regionplaceU.S. resident to 10% of the gross interest or royalty income unless it relates to a permanent establishment. Although we consider that we do not have a permanent establishment in country-regionAustralia, it may be deemed to have such an establishment due to the location of its administrative offices in CityplaceMelbourne. In addition we may receive interest or dividends from time to time.
Impact of Australian Governmental, Economic, Monetary or Fiscal Policies
Although Australian taxpayers are subject to substantial regulation, we believe that our operations are not materially impacted by such regulations nor is it subject to any broader regulations or governmental policies than most Australian taxpayers.
Impact of Recent Accounting Pronouncements
For a discussion of the impact of recent accounting pronouncements on the Company's financial statements, see Note 3 to the Company's Financial Statements which are included elsewhere in this Annual Report.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
At December 31, 2009, the Company had no outstanding borrowings under Loan Facilities.
Item 8. Financial Statements
See F Pages
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
a) Dismissal of Previous Independent Accountant.
i. By letter dated, January 27, 2009, ProIndia International, Inc., a Florida corporation (the "Company") informed Moore & Associates, Chartered ("Moore"), that the client - auditor relationship between the Company and Moore had ceased.
ii. The former accountant's report on our financial statements did not contain any adverse opinions or disclaimers of opinions and was not qualified or modified as to any uncertainty except that the report of Moore, for the period of Inception on November 12, 2007 to December 31, 2007 indicated conditions which raised substantial doubt about the Company's ability to continue as a going concern.
iii. The decision to change accountants was approved by the Board of Directors of the Company.
iv. During the period from Inception on November 12, 2007 to December 31, 2007 and subsequent interim periods prior to the change in auditors there were no (1) disagreements with Moore on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Moore, would have caused them to make reference to the subject matter of the disagreement in connection with their report on the financial statements such period or (2) reportable events of the kind described in Item 304(a)(1)(v) of Regulation S-K.
v. The Company provided Moore with a copy of the above disclosures on January 27, 2009 and requested that Moore furnish a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made by the Company, and if not, stating the respects in which it does not agree.
A copy of such letter is filed as an exhibit to Form 8-K dated January 29, 2009.
b) Appointment of New Independent Accountant
i. Effective as of January 29, 2009, the Company engaged PKF, Certified Public Accountants, a Professional Corporation, New York, NY (PKF) as the Company's new independent registered public accounting firm to audit the Company's financial statements as of December 31, 2008 and 2007 and for each of the periods then ended. The decision to change accountants was approved by the Board of Directors of the Company as of January 27, 2009.
ii. During the period of Inception on November 12, 2007 to December 31, 2007 and the subsequent interim period preceding such engagement, the Company has not consulted PKF regarding either (a) the application of accounting principles to any completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements; or (b) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.
iii. The Company have provided a copy of the disclosures in this report to PKF and offered them the opportunity to furnish a letter to the Commission contemplated by Item 304(a)(2)(ii)(D) of Regulation S-K. PKF has advised that it does not intend to furnish such a letter to the Commission.
Item 9A Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Our principal executive officer and our principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended) as of the end of the period covered by this report. Based on that evaluation, such principal executive officer and principal financial officer concluded that, the Company's disclosure control and procedures were effective as of the end of the period covered by this report at the reasonable level of assurance.
(b) Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d - 15(f) under the Securities Exchange Act of 1934, as amended. Under the supervision of management and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation of internal control over financial reporting, our management concluded that our internal control over financial reporting was effective as of December 31, 2009.
This annual report does not include an attestation report of the registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.
(c) Change in Internal Control over Financial Reporting. No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
(d) Other.
We believe that a controls system, no matter how well designed and operated, can not provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurance of achieving our desired control objectives, and our principal executive officer and principal financial officer have concluded, as of December 31, 2009, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.
Item 9B Other Information
None.
PART III
Item 10. Directors and Executive Officers and Corporate Governance
The following table sets forth our directors and officers, their ages and all offices and positions with our company. Officers and other employees serve at the will of the Board of Directors.
Name Age Position(s) Held
Joseph Gutnick 57 Chairman of the Board, President, Chief
Executive Officer and Director
Peter Lee 52 Secretary, Chief Financial Officer and Principal
Accounting Officer
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Director Qualifications
The following paragraphs provide information as of the date of this report about our sole director as well as about each executive officer. The information presented includes information such director has given us about his age, all positions he holds, his principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he currently serves as a director or has served as a director during the past five years which we believe demonstrates our sole director's qualifications to serve on our Board of Directors.
Joseph Gutnick
Mr Gutnick has been President and Chief Executive Officer since December 2008. He has been a Director of numerous public listed companies in Australia specialising in the mining sector since 1980 and is currently President and CEO of Legend International Holdings Inc and Golden River Resources Corporation, US corporations listed on the OTC market and President CEO of Northern Capital Resources Corporation, Yahalom International Resources Corporation, Aurum, Inc., US corporations and Executive Chairman and Managing Director of Quantum Resources Limited, North Australian Diamonds Ltd and Top End Uranium Limited. He has previously been a Director of Hawthorn Resources Limited, Astro Diamond Mines NL, Acadian Mining Corporation and Royal Roads Corporation in the last five years. Mr. Gutnick was previously a Director of the World Gold Council. He is a Fellow of the Australasian Institute of Mining & Metallurgy and the Australian Institute of Management and a Member of the Australian Institute of Company Directors.
Peter Lee
Mr Lee has been Chief Financial Officer and Principal Accounting Officer since December 2008. Mr Lee is a Member of the Institute of Chartered Accountants in Australia, a Fellow of Chartered Secretaries Australia Ltd., a Member of the Australian Institute of Company Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne Institute of Technology. He has over 25 years commercial experience and is currently CFO and Secretary of Legend International Holdings Inc and Golden River Resources Corporation, US corporations listed on the OTC market, Northern Capital Resources Corporation, Yahalom International Resources Corporation, Aurum, Inc and Company Secretary of Quantum Resources Limited, North Australian Diamonds Ltd and Top End Uranium Limited, Australian listed public companies. Mr Lee is also President and CEO of Acadian Mining Corporation (ADA:TSX) and Chairman of the Board of Directors of Royal Roads Corp. (RRO:TSX-V).
The Company's sole director has been appointed for a one-year term which expires in December 2010.
Directors are elected for an annual term and generally hold office until the next Directors have been duly elected and qualified. Directors may receive compensation for their services as determined by the Board of Directors. A vacancy on the Board may be filled by the remaining Directors even though less than a quorum remains. A Director appointed to fill a vacancy remains a Director until his successor is elected by the Stockholders at the next annual meeting of Shareholder or until a special meeting is called to elect Directors.
Involvement on Certain Material Legal Proceedings During the Last Ten Years
No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations. No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Mr. Gutnick was formerly the Chairman of the Board, Dr. Tyrwhitt was formerly an independent Director and Mr. Lee was formerly Company Secretary of Centaur Mining & Exploration Ltd., an Australian corporation, which commenced an insolvency proceeding in Australia in March 2001.
Board, Audit Committee and Remuneration Committee Meetings
Our Board of Directors consists of one director. Our Board of Directors uses resolutions in writing to deal with certain matters, and during fiscal 2009, eight resolutions in writing were signed by all Directors.
We do not have a nominating committee. Historically our entire Board has selected nominees for election as directors. The Board believes this process has worked well thus far particularly since it has been the Board's practice to require unanimity of Board members with respect to the selection of director nominees. In determining whether to elect a director or to nominate any person for election by our stockholders, the Board assesses the appropriate size of the Board of Directors, consistent with our bylaws, and whether any vacancies on the Board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the Board will consider various potential candidates to fill each vacancy. Candidates may come to the attention of the Board through a variety of sources, including from current members of the Board, stockholders, or other persons. The Board of Directors has not yet had the occasion to, but will, consider properly submitted proposed nominations by stockholders who are not directors, officers, or employees of ProIndia on the same basis as candidates proposed by any other person.
Audit Committee
At December 31, 2009, the Company had not formed an audit committee or adopted an audit committee charter. In lieu of an audit committee, the Company's board of directors assumes the responsibilities that would normally be those of an audit committee. Given the limited scope of the Company's operations to date, the Board of Directors does not at present have a director that would qualify as an audit committee financial expert under the applicable federal securities law regulations.
Remuneration Committee
At December 31, 2009, the Company had not formed a remuneration committee or adopted a remuneration committee charter. In lieu of an remuneration committee, the Company's board of directors assumes the responsibilities that would normally be those of an remuneration committee. Code of Ethics
We have adopted a Code of Conduct and Ethics and it applies to all Directors, Officers and employees. A copy of the Code of Conduct and Ethics is posted on our website at www.wsfucorp.com and we will provide a copy to any person without charge. If you require a copy, you can download it from our website or alternatively, contact us by facsimile or email and we will send you a copy.
Stockholder Communications with the Board
Stockholders who wish to communicate with the Board of Directors should send their communications to the Chairman of the Board at the address listed below. The Chairman of the Board is responsible for forwarding communications to the appropriate Board members.
Mr. Joseph Gutnick
ProIndia International, Inc.
PO Box Street 6315 St. Kilda Road
Central Melbourne, Victoria 8008 Australia
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors, executive officers and beneficial owners of more than 10% of the outstanding Common Stock are required to file reports with the Securities and Exchange Commission concerning their ownership of and transactions in our Common Stock and are also required to provide to us copies of such reports. Based solely on such reports and related information furnished to us, we believe that in fiscal 2009 all such filing requirements were complied with in a timely manner by all Directors and executive officers and 10% stockholders, except that our chief financial officer has not yet filed a Form 3 as a result of a technical difficulty with the Edgar filing process.
Item 11. Executive Compensation.
The following table sets forth the annual salary, bonuses and all other compensation awards and pay outs on account of our Chief Executive Officer for services rendered to us during the fiscal year ended December 31, 2009 and 2008. No other executive officer received more than US$100,000 per annum during this period.
Summary Compensation Table
Name and Year Salary Bonus Stock Option Non-Equity Change in All Other Total
Principal Awards Awards Incentive Pension Compensation
Position Plan Value and
Compensation Nonqualified
Deferred
Compensation
Earnings
-------------------------------------------------------------------------------------------------
Joseph 2009 $ 2,500 - - - - - - $ 2,500
Gutnick,
Chairman
of the
Board,
President
and CEO (1)
-------------------------------------------------------------------------------------------------
Edward T 2008 $ - - - - - - - $ -
Famer,
Director
and CEO (2)
-------------------------------------------------------------------------------------------------
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1. Joseph Gutnick appointed December 28, 2008.
2. Edward Farmer appointed November 12, 2007 and resigned December 28, 2008.
We have a policy that we will not enter into any transaction with an officer, Director or affiliate of the Company or any member of their families unless the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to the Company at the time authorised.
Outstanding Equity Awards at Fiscal Year-End
The Company does not currently have any equity or stock option plans.
Principal Officers Contracts
The principal officers do not have any employment contracts.
Compensation of Directors
The Company's sole director did not receive any compensation during fiscal 2009 other than as disclosed in the executive compensation table.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
The following table sets forth certain information regarding the beneficial ownership of our common stock by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group as of March 22, 2010.
Title of Name and Address Amount and nature of Percentage
Class of Beneficial Owner* Beneficial Owner of class (1)
-----------------------------------------------------------------------------------------------------
Shares of common stock Joseph Gutnick 165,600,000 (2) 95.83
-----------------------------------------------------------------------------------------------------
All officers and Directors
as a group 165,600,000 95.83
-----------------------------------------------------------------------------------------------------
* Unless otherwise indicated, the address of each person is c/o ProIndia International, Inc.,
Level 8, 580 St. Kilda Road, Melbourne, Victoria 3004 Australia
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Notes:
(1) Based on 172,800,000 shares outstanding as of March 22, 2010. Gives effect to a 6 for 1 stock split in the form of a dividend that was effected as of February 2009 and a 2 for 1 stock split in the form of a dividend that was effected as of August 2009.
(2) Includes 165,600,000 shares owned by Power Developments Pty Ltd, of which Mr Joseph Gutnick is the sole Director and stockholder.
Item 13. Certain Relationships and Related Transactions
We are one of eight affiliated companies under common management. Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and administration staff. It is the intention of the affiliated companies and respective Boards of Directors that any arrangements or transactions between the companies should accommodate the respective interest of the relevant affiliated companies in a manner which is fair to all parties and equitable to the shareholders of each. Currently, there are no material arrangements or planned transactions between the Company and any of the other affiliated companies other than AXIS.
AXIS is paid by each company for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, legal, human resources, company secretarial, land management, certain exploration and mining support, financial, accounting advice and services. AXIS procures items of equipment necessary in the conduct of the business of the Company. AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company.
We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS's overhead cost based on AXIS's management estimate of our utilisation of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first requests AXIS to provide the service and AXIS fails to provide the service within one month.
The Service Agreement may be terminated by AXIS or ourselves upon 60 days prior notice. If the Service Agreement is terminated by AXIS, we would be required to independently provide, or to seek an alternative source of providing, the services currently provided by AXIS. There can be no assurance that we could independently provide or find a third party to provide these services on a cost-effective basis or that any transition from receiving services under the Service Agreement will not have a material adverse effect on us. Our inability to provide such services or to find a third party to provide such services may have a material adverse effect on our operations.
In accordance with the Service Agreement, AXIS provides the Company with the services of our Chief Executive Officer, Chief Financial Officer and clerical employees, as well as office facilities, equipment, administrative and clerical services. We pay AXIS for the actual costs of such facilities plus a maximum service fee of 15%.
Transactions with Management.
We have a policy that we will not enter into any transaction with an Officer, Director or affiliate of us or any member of their families unless the transaction is approved by a majority of our disinterested non-employee Directors and the disinterested majority determines that the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to us at the time authorised.
Item 14. Principal Accounting Fees and Services
The following table shows the audit fees that were billed or are expected to be billed by PKF and Moore for fiscal 2009 and 2008.
PKF PKF Moore
--- --- -----
2009 2008 2008
---- ---- ----
Audit fees $33,915 $15,000 $4,500
Audit related fees - - -
Tax fees 5,500 6,365 -
---------------------------- --------
Total $39,415 $21,365 $4,500
============================ ========
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Audit fees were for the audit of our annual financial statements, review of financial statements included in our 10-Q quarterly reports, and services that are normally provided by independent auditors in connection with our other filings with the SEC. This category also includes advice on accounting matters that arose during, or as a result of, the audit or review of our interim financial statements.
Tax fees relate to the preparation of the Company's income tax returns and other tax compliance filings.
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) Financial Statements and Notes thereto.
The Financial Statements and Notes thereto listed on the Index at page 28 of this Annual Report on Form 10-K are filed as a part of this Annual Report.
(b) Exhibits
The Exhibits to this Annual Report on Form 10-K are listed in the Exhibit Index at page 27 of this Annual Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorised.
PROINDIA INTERNATIONAL, INC.
(Registrant)
By: /s/ Peter J Lee
--------------------
Peter J Lee
Secretary,
Chief Financial Officer
and Principal Financial
Accounting Officer
Dated: March 25, 2010
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FORM 10-K Signature Page
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date
1. /s/ Joseph Gutnick Chairman of the Board,
Joseph Gutnick President and Chief Executive
Officer (Principal Executive
Officer), and Director. March 25, 2010
2. /s/ Peter Lee Secretary,
Peter Lee Chief Financial Officer and
Principal Financial and
Accounting Officer. March 25, 2010
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EXHIBIT INDEX
Incorporated by Exhibit
Reference to: No Exhibit
(1) Exhibit 99.1 3.1 Articles of Incorporation of PROINDIA INTERNATIONAL, INC.
Annex B
(1) Exhibit 99.1 3.2 Bylaws of PROINDIA INTERNATIONAL, INC.
Annex C
(1) Exhibit 99.1 3.3 Agreement and Plan of Merger between We Sell For U Corp and ProIndia International
Annex A Inc.
Exhibit 4.1 4.1 Specimen Stock Certificate of PROINDIA INTERNATIONAL, INC.
* 10.1 Service Agreement dated January 30, 2009, by and between the Registrant and AXIS
Consultants Pty Ltd
* 10.2 Agreement with IFFCO
(2) Exhibit 99.1 16.1 Letter from former independent accountant
* 31.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 by. Joseph Issac Gutnick
* 31.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 by Peter James Lee.
* 32.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by Joseph Issac Gutnick.
* 32.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by Peter James Lee
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*Filed herewith
(1) Registrant's Form 8-K filed on July 16, 2009.
(2) Registrant's Form 8-K filed on January 30, 2009.
Financial Statements as of December 31, 2009 and 2008 and for the year ended December 31, 2009 and December 31, 2008.
ProIndia International, Inc.
Audited Financial Statements for the Company as of December 31, 2009 and 2008
and for the year ended December 31, 2009 and December 31, 2008.
PROINDIA INTERNATIONAL, INC.
Financial Statements
December 31, 2009 and 2008
(with Report of Independent Registered Public Accounting Firm)
CONTENTS
Page
Report of Independent Registered Public Accounting Firm F-3 Balance Sheet F-4 Statements of Operations F-5 Statements of Stockholders' Equity (Deficit) F-6 Statements of Cash Flows F-7 Notes to Financial Statements F-8 - F-12 |
To the Board of Directors and Stockholders of ProIndia International, Inc.
We have audited the accompanying balance sheet of ProIndia International, Inc. (a development stage company) as of December 31, 2009 and 2008, and the related statements of operations, stockholders' equity (deficit) and cash flows for the years ended December 31, 2009 and 2008 and the cumulative amounts from inception, November 12, 2007 through December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ProIndia International, Inc. at December 31, 2009 and 2008, and the results of its operations and its cash flows for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As described in note 1, at December 31, 2009 the Company has not yet commenced revenue producing operations, has incurred net losses from inception, and has an accumulated (deficit) of $498,356. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management's plans in regard to these matters are also discussed in note 1.
/s/ PKF
Certified Public Accountants
A Professional Corporation
New York, NY
March 24, 2010
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PROINDIA INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheet
December 31, 2009 and 2008
US$ US$
2009 2008
---- ----
ASSETS
Current Assets:
Cash 376 -
----------------------------
Total Current Assets 376 -
----------------------------
Total Assets 376 -
============================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable and Accrued Expenses 128,843 -
----------------------------
Total Current Liabilities 128,843 -
----------------------------
Non Current Liabilities:
Advances payable - affiliate 331,489 -
----------------------------
Total Non Current Liabilities 331,489 -
----------------------------
Total Liabilities 460,332 -
----------------------------
Stockholders' Equity (Deficit):
Common stock: $.0001 par value
500,000,000 shares authorised,
and 172,800,000 shares issued and outstanding at
December 31, 2009 and 2008. 17,280 17,280
Additional Paid-in-Capital 21,120 21,120
Accumulated (Deficit) during the development
stage (498,356) (38,400)
----------------------------
Total Stockholders' Equity (Deficit) (459,956) -
----------------------------
Total Liabilities and Stockholders' Equity
(Deficit) 376 -
============================
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See Notes to Financial Statements
PROINDIA INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Operations
November 12,
2007
Year Year (Inception)
Ended Ended to December
December 31, December 31, 31,
2009 2008 2009
---- ---- ----
Revenues US$- US$- US$-
------------------------------------------
Cost and expenses
Legal, Accounting and Professional 393,273 29,192 422,465
Administration Expense 49,091 808 49,899
------------------------------------------
442,364 30,000 472,364
------------------------------------------
(Loss) from Operations (442,364) (30,000) (472,364)
Foreign Currency Exchange (Loss) (17,594) - (17,594)
Other Income
Interest - other 2 - 2
------------------------------------------
(Loss) before Income Tax (459,956) (30,000) (489,956)
Provision for Income Tax - - -
------------------------------------------
Net (Loss) (459,956) (30,000) (489,956)
------------------------------------------
Basic net (Loss) per Common Equivalent
Shares (0.00) (0.00) (0.00)
==========================================
Weighted Number of Common Equivalent
Shares Outstanding (000's) 172,800 152,784 161,576
==========================================
See Notes to Financial Statements
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PROINDIA INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital (Deficit) Total
------ ------ ------- -------- -------
US$ US$ US$ US$
-------------------------------------------------------------
Inception, November 12, 2007 - - - - -
Issuance of 144,000,000 shares 144,000,000 14,400 - (8,400) 6,000
Net (loss) - - - - -
-------------------------------------------------------------
Balance, December 31, 2007 144,000,000 14,400 - (8,400) 6,000
Issuance of 28,800,000 shares 28,800,000 2,880 21,120 - 24,000
Net (loss) - - - (30,000) (30,000)
-------------------------------------------------------------
Balance, December 31, 2008 172,800,000 17,280 21,120 (38,400) -
Net (loss) - - - (459,956) (459,956)
-------------------------------------------------------------
Balance December 31, 2009 172,800,000$ 17,280 $ 21,120 $(498,356) $(459,956)
-------------------------------------------------------------
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See Notes to Financial Statements
PROINDIA INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Cash Flows
November 12,
Year 2007
Ended Year (Inception)
December 31, Ended December to December
2009 31, 2008 31, 2009
US$ US$ US$
------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (459,956) $ (30,000) $ (489,956)
Adjustments to reconcile net (loss) to net cash
(used) in Operating Activities
Net change in Accounts Payable and Accrued
Expenses 128,843 - 128,843
------------------------------------------
Net Cash (used) in Operating Activities (331,113) (30,000) (361,113)
------------------------------------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from Issuance of Stock - 24,000 30,000
Advances Payable - Affiliate 331,489 - 331,489
------------------------------------------
Net Cash Provided by Financing Activities 331,489 24,000 361,489
------------------------------------------
Net Increase (Decrease) in Cash 376 (6,000) (376)
Cash at Beginning of Year - 6,000 -
------------------------------------------
Cash at End of Year 376 - 376
==========================================
|
See Notes to Financial Statements
PROINDIA INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009 and 2008
(1) ORGANIZATION AND BUSINESS
ProIndia International, Inc. ("ProIndia" or the "Company") is a Delaware corporation originally incorporated in Florida as We Sell for U Corp. ("We Sell for U"). The principal stockholder of ProIndia is Power Developments Pty Ltd., an Australian corporation ("Power"), an entity majority owned by the Company's president, which owned 95.83% of ProIndia as of December 31, 2009.
On August 12, 2009, the Company re-incorporated in the state of Delaware (the "Reincorporation") through a merger involving We Sell for U Corp. and ProIndia International, Inc., a Delaware Corporation that was a wholly owned subsidiary of We Sell for U. The Reincorporation was effected by merging We Sell for U with ProIndia, with ProIndia being the surviving entity. For purposes of the Company's reporting status with the Securities and Exchange Commission, ProIndia is deemed a successor to We Sell for U.
In December 2008, Power Developments Pty Ltd, an Australian corporation ("Power") acquired an 96% interest in ProIndia from certain stockholders. In connection therewith, the Company appointed a new President/Chief Executive Officer and Chief Financial Officer/Secretary and a new sole Director.
Commencing in fiscal 2009, ProIndia has decided to focus its business on energy opportunities.
In March 2009, the Company announced the execution of an Agreement with Indian Farmers Fertiliser Cooperative ("IFFCO") to explore the commercial viability of generating and/or distributing alternate energy or any other viable products to the rural Indian market. Since the announcement, the potential markets have been further refined to focus on regional farming communities in India who have little or no access to certain products, services or technologies relating to the farmers business or non business needs.
Under the Agreement, ProIndia and IFFCO, agree to work together in a collaborative manner in relation to the products, services or technologies, in particular those in which IFFCO is not currently engaged, that may be applicable for the rural Indian market. ProIndia shall fund the pilot studies, with IFFCO facilitating ProIndia with the relevant government and licensing authorities. The parties may by mutual agreement extend the range of products covered by the Agreement. In the event the parties elect to proceed to full commercialization, ProIndia and IFFCO shall be exclusive partners, with ProIndia having access to IFFCO's cooperative members and distribution network.
IFFCO is India's largest farmers co-operative having around 40,000 cooperatives as its shareholders which encompass over 50 million farmers. The cooperative is primarily engaged with the production and marketing of fertilizers to its shareholders. IFFCO's assets, distribution network, relationship with the Indian government and massive customer base make it well placed to support and explore the activities outlined in the Cooperation Agreement. IFFCO have already utilized their extensive communication and distribution network to sell mobile phones, mechanically charged flashlights, and general insurance to their members and are interested in exploring other beneficial opportunities.
Since that time, ProIndia has continued to pursue this strategy and has met with IFFCO and other parties in India and internationally to continue to refine this strategy and resulting from this work, has formulated a business plan. As part of the ongoing strategy and in order to advance its business plan, ProIndia has engaged Boston Consulting Group (BCG) to assist with the development of components of the business plan. During February 2010 the Company has agreed with Boston Consulting Group ("BCG") to extend BCG's consulting role to the development of a business model for Agri-Input Retailing and Farm Management opportunities.
The primary aims of ProIndia are to (i) generate a significant positive return on investment for ProIndia and its shareholders; (ii) grow ProIndia into a successful international enterprise through a model developed between IFFCO and ProIndia, that is self sustaining enabling the Company to explore further opportunities within India; and (iii) significantly improve the living standards and therefore productivity and economic development of IFFCO's member societies and other rural Indian communities.
To achieve these aims ProIndia, currently through BCG is exploring the development and commercialization of certain products, services or technologies which meet the following business criteria:
1. Be highly beneficial to Indian farmers' and in particular regional farming communities who have little or no access to these products, services or technologies. The product, service or technology will address a widespread critical need throughout India and significantly improve the living standards of the target communities.
2. Be affordable and simple to operate, use or obtain in remote areas.
In accordance with the above aims and criteria, ProIndia through BCG has identified a number of opportunities for initial investigation. These areas cover a wide range of services, products and technologies across a broad range of categories relating to a farmers business and non business needs. The opportunities are being assessed under certain economic criteria with two clear opportunities identified.
Once suitable products, services or technologies have been approved in conjunction with an appropriate business model and plan, a target community will be selected in conjunction with IFFCO to begin a pilot study. A feasibility study will commence to assess the viability of the chosen opportunity. This will include assessing the financial model and funding structure, the sustainability within the community, the marketing strategy, appropriate tariff structure, environmental impact, social impact and the overall implementation strategy.
BCG's initial overview was completed in December 2009 and has highlighted two clear opportunities to develop through IFFCO's massive distribution network.
Following discussion with BCG on BCG's results of the study, ProIndia has engaged BCG to proceed to the next phase of the engagement to investigate Agri-Input Retailing and Farm Management opportunities and to develop business models for such opportunities. ProIndia and BCG anticipate that this phase of the project will be completed by late 2010.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of ProIndia as a going concern. The Company has not yet commenced revenue producing operations and has incurred net losses since inception and may continue to incur substantial and increasing losses for the next several years, all of which raises substantial doubt as to its ability to continue as a going concern. The financial statements do not contain any adjustments that could arise as a result of this uncertainty.
In addition, ProIndia is reliant on loans and advances from corporations affiliated with the Company. Based on discussions with these affiliate companies, The Company believes this source of funding will continue to be available. Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding. As a result the Company may be required to raise funds by additional debt or equity offerings in order to meet its cash flow requirements during the forthcoming year.
(2) ACCOUNTING POLICIES
The Company is a development stage company and the following is a summary of the significant accounting policies followed in connection with the preparation of the financial statements.
(a) Basis of presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
The functional and reporting currency of the Company is the U.S. dollar.
The Company complies with ASC Topic 915 and its characterization of the Company as a development stage company.
(b) Cash Equivalents
ProIndia considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. For the periods presented there were no cash equivalents.
(c) Federal Income Tax
ASC Topic 740 prescribes how a company should recognise, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. Additionally for tax positions to qualify for deferred tax benefit recognition under ASC 740, the position must have at least "more than likely not" chance of being sustained upon challenge by the respective taxing authorities, and whether or not it meets that criteria is a matter of significant judgement. The Company believes that it does not have any uncertain tax positions that would require the recognition or disclosure of a potential tax liability.
The Company follows the asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. For the periods presented, there was no taxable income. There are no deferred income taxes resulting from temporary differences in reporting certain income and expense items for income tax and financial accounting purposes. The Company, at this time, is not aware of any net operating losses which are expected to be realized.
(d) Australian Tax Law
The Company is an Australian resident corporation under Australian law and accordingly is subject to Australian income tax on its non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income provided the tax credit does not exceed 30% of the foreign source income.
Under the U.S./Australia tax treaty, a U.S. resident corporation such as us is subject to Australian income tax on net profits attributable to the carrying on of a business in Australia through a "permanent establishment" in Australia. A "permanent establishment" is a fixed place of business through which the business of an enterprise is carried on. The treaty limits the Australian tax on interest and royalties paid by an Australian business to a U.S. resident to 10% of the gross interest or royalty income unless it relates to a permanent establishment. Although we consider that we do not have a permanent establishment in Australia, it may be deemed to have such an establishment due to the location of its administrative offices in Melbourne. In addition we may receive interest or dividends from time to time.
(e) Loss per share
The Company calculates loss per share in accordance with FASB ASC Topic 260, "Earnings per Share".
Basic (loss) per share is computed based on the weighted average number of common shares outstanding during the period. Dilutive loss per share has not been presented as there are no common stock equivalents.
(f) Fair value of Financial Instruments
The Company's financial instruments consist primarily of cash and advances payables-affiliates. The fair value of cash approximates its carrying value. The fair value of the advance payables-affiliates is not determinable as it is due to an affiliate entity and settlement date is uncertain.
(3) RECENT ACCOUNTING PRONOUNCEMENTS
In June 2009, the Financial Accounting Standards Board ("FASB") issued the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, also known as FASB Accounting Standards Codification ("ASC") 105-10, Generally Accepted Accounting Principles, ("ASC 105-10"). ASC 105-10 establishes the FASB Accounting Standards Codification ("Codification") as the single source of authoritative US GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants. The subsequent issuances of new standards will be in the form of Accounting Standards Updates ("ASU") that will be included in the Codification. Generally, the Codification is not expected to change US GAAP. All other accounting literature excluded from the Codification will be considered nonauthoritative. This ASC is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company adopted this ASC for our quarter ended September 30, 2009. The adoption did not have any effect on our financial condition or results of operations. All accounting references have been updated, and therefore SFAS references have been replaced with ASC references.
Effective January 1, 2009, the Company adopted the amended provisions of ASC Topic 820, Fair Value Measurements and Disclosures. This topic defines fair value, establishes a hierarchal disclosure framework for measuring fair value, and requires expanded disclosures about fair value measurements. The provisions of this topic apply to all financial instruments that are being measured and reported on a fair value basis. The adoption of ASC 820 has not had a material impact on the Company's financial position or results of operations.
In December 2007, the FASB amended ASC Topic 805, Business Combinations, which replaced FAS No. 141. ASC 805 establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired and the liabilities assumed. The provisions of ASC 805 are effective for the Company's fiscal year beginning January 1, 2009 which applies prospectively to all business combinations entered into on or after such date. Any future acquisitions will be impacted by application of this topic.
In December 2007, the FASB amended ASC Topic 810, Noncontrolling Interests in Consolidated Financial Statements. ASC 810 clarifies the accounting for noncontrolling interests and establishes accounting and reporting standards for the noncontrolling interest in a subsidiary, including classification as a component of equity. ASC 810 is effective for fiscal years beginning after December 15, 2008. The Company does not currently have any minority interests.
The Company adopted the amended provision of ASC 825, Financial Instruments on April 1, 2009. This standard requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements.
In May 2009, the FASB issued ASC 855, Subsequent Events, on the accounting for and disclosure of events that occur after the balance sheet date. This guidance was effective for interim and annual financial periods ending after June 15, 2009. This guidance was amended in February 2010. It requires an entity that is a SEC filer to evaluate subsequent events through the date that the financial statements are issued. The adoption of this guidance did not have an impact on our consolidated financial statements.
(4) AFFILIATE TRANSACTIONS
In January 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd to provide management and administration services to the Company. AXIS is affiliated through common management. The Company is one of eight affiliated companies under common management. Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and administration staff. It has been the intention of the affiliated companies and respective Boards of Directors that each of such arrangements or transactions should accommodate the respective interest of the relevant affiliated companies in a manner which is fair to all parties and equitable to the shareholders of each. Currently, there are no material arrangements or planned transactions between the Company and any of the other affiliated companies other than AXIS.
The payable to affiliate at December 31, 2009 in the amount of $331,489 is all due to AXIS. During the year ended December 31, 2009, AXIS provided services in accordance with the services agreement and incurred direct costs on behalf of the Company of $331,489. The Company intends to repay these amounts with funds raised either via additional debt or equity offerings, but as this may not occur within the next 12 months, the Company has decided to classify the amounts payable as non current in the accompanying balance sheets.
(5) INCOME TAXES
ProIndia files its income tax returns on an accrual basis. ProIndia has carry-forward losses of approximately $488,000 as of December 31, 2009 which will expire in the year 2029. Due to the uncertainty of the availability and future utilization of those operating loss carry-forwards, management has provided a full valuation against the related tax benefit.
(6) STOCKHOLDERS EQUITY
In November 2007, 72,000,000 shares of common stock were issued to the Company's founder raising $6,000.
In September 2008, the Company raised $24,000 in a registered public offering of 14,400,000 shares of common stock share pursuant to a prospectus dated March 7, 2008.
On January 29, 2009 the Company's Board of Directors declared a 6-for-1 stock split in the form of a stock dividend that was payable in February, 2009 to stockholders of record as of February 14, 2009. The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated.
On March 31, 2009, the Company's Board of Directors declared a 2-for-1 stock split in the form of a stock dividend that was payable in August, 2009 to stockholders of record as of August 12, 2009. The Company has accounted for this bonus issue as a stock split and accordingly, all share and per share data has been retroactively restated..
Effective on August 12, 2009, the Company completed the reincorporation from a Florida corporation to a Delaware corporation. Each issued and outstanding share of common stock, par value $0.0001 per share, of We Sell For U Corp., a Florida-incorporation Company, was automatically converted into one issued and outstanding share of common stock, par value $0.0001 per share, of ProIndia International, Inc, a Delaware-incorporated Company. The number of authorized shares of capital stock was increased to five hundred twenty million (520,000,000) shares, of which five hundred million (500,000,000) shares shall be Common Stock and twenty million (20,000,000) shares shall be Preferred Stock, each with a par value of $.0001 per share.
(7) SUBSEQUENT EVENTS
The Company has evaluated subsequent events and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements except as noted herein:
During February 2010 the Company has agreed with Boston Consulting Group ("BCG") to extend BCG's consulting role to the development of a business model for the Agri-Input Retailing and Farm Management opportunity. As per the agreement, the Company will be charged professional fees aggregating approximately $1,000,000 for services to be rendered by BCG during 2010.
Exhibit 10.1
THIS SERVICE DEED is made on the day of January 2009
BETWEEN: WE SELL FOR U CORP.
of Level 8, 580 St Kilda Road, Melbourne ("the Client")
of the one part
AXIS CONSULTANTS PTY LTD of Level 8,
580 St Kilda Road, Melbourne ("the Service Company")
of the other part
WHEREAS:
A. THE Client has requested the Service Company to provide managerial and administrative services to the Client and certain facilities and equipment for the use of the Client in the conduct of its business effective from 1 January, 2009.
B. THE Service Company and the Client now wish to formalize the terms and conditions which apply to the provision of these services, facilities and equipment.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. THE Service Company agrees to provide or procure, until termination of this Deed, managerial and administrative services and facilities and equipment required for the business conducted by the Client and as requested by the Client. The services include but are not limited to provision and maintenance of staff, all payroll facilities and employee records required by law and by usual accounting procedures, provision of all types of insurance in accordance with prudent business practice and provision of legal, financial and accounting advice and services.
2. THE Service Company shall procure either by purchase or lease items of equipment including vehicles, necessary in the conduct of the business of the Client and shall continue to lease and/or make available the same to the Client.
3. THE Service Company agrees to meet sundry office and running expenses incurred by the Client upon the Client providing to the Service Company original accounts and invoices received in respect of these expenses.
4. IN addition to the above the Service Company shall procure and provide for the Client various services including but not limited to the making available of stationery, furniture, furnishings, floral arrangements, library facilities, reference books, periodicals, transport, secretarial services, telephone answering services, photocopying and duplicating facilities and any other services as may be required from time to time by the Client as and when requested by the Client.
5. THE Service Company and the Client shall execute any further agreements or documents and do such acts and things as may be reasonably required to record the terms upon which any particular service is provided.
6. UNLESS otherwise agreed and subject to Clause 9 below, the Service Company shall be responsible for all outgoings in respect of any items or services supplied including insurance, stamp duty, rent, maintenance and hiring charges and other expenses and outgoings.
7. The Client shall not obtain from sources other than the Service Company or shall not itself perform or provide the services contemplated by this Deed unless it first requests the Service Company to provide the service and the Service Company on the expiration of one month after such request has failed to provide the service.
8. The Client shall pay to the Service Company in consideration of the services provided hereunder a service fee equal to the aggregate of the cost and expense to the Service Company of providing the services, facilities and equipment (less any moneys already paid by the Client pursuant to Clause 9 below) and 15% thereof and such fee shall be paid by the Client within 21 days from the receipt of the monthly invoice from the Service Company. The parties may vary this fee from time to time by mutual written agreement.
9. THE Service Company at all times is entitled to request that the Client provide moneys to the Service Company, on receipt by the Service Company of an invoice, demand or account or upon notification of a claim or a requirement to make a payment for greater than $1,000.00 in relation to or as a result of the provision or termination of any of the services, facilities or equipment provided to the Client by the Service Company either prior to or after the Service Company making that payment. The Client shall within 14 days after the receipt of such a request pay the moneys required as instructed by the Service Company.
10. The Client shall reimburse the Service Company for the costs and expenses incurred by it but not paid by the Client to date for the provision of the services, facilities and equipment by the Service Company to the Client plus 15% thereof within 21 days from the date of the invoice for such amount received from the Service Company by the Client.
11. The Client shall indemnify and keep indemnified the Service Company for all costs, expenses, claims, outgoings, damages and liabilities incurred, resulting or arising directly or indirectly, from the provision or termination of services, facilities and equipment to the Client whether pursuant to this Deed or prior to the execution of this Deed and shall include any breach by the Client of this Deed or any lease agreement or other agreement with the Service Company or any breach by the Service Company of any lease or other agreement such breach being caused by, resulting or arising from some act or omission by the Client. This indemnity shall survive termination of this Deed.
12. The Client covenants that it has and shall continue to:-
12.1 keep and maintain the items of equipment referred to in Clause 2 ("the equipment") in good repair;
12.2 if applicable, use or permit the use of the Equipment only by properly qualified or licensed personnel;
12.3 skillfully and properly test the Equipment to ensure it is safe for use and operation;
12.4 take care of the Equipment in order to prevent damage, loss or destruction to the Equipment;
12.5 at the expiry of any lease entered into the by Service Company in respect to an item or items of the Equipment ("Lease"), to deliver that item or items to the Service Company or to the lessor under the particular Lease, as instructed by the Service Company;
12.6 in all respects use and treat the Equipment as though it was the lessee under each Lease'
12.7 make all necessary payments on request by the Service Company pursuant to Clause 9 above, required to be made by the lessee under each or any of the Leases on a return to the Equipment or any items of the Equipment by the Client, prior to the expiry of the particular Lease covering that item or items of Equipment.
13.
13.1 IF either party breaches in any way this Deed or causes directly
or indirectly either party to be in breach of another agreement in
relation to the subject matter of this Deed, the non-defaulting party
may send a notice of default to the other party requiring the default
to be remedied within 14 days from the receipt of the notice.
13.2 If the defaulting party does not remedy the default within fourteen (14) days from the receipt of the notice the non-defaulting party may, without prejudice to its rights at law, demand specific performance, terminate the agreement, and/or demand damages.
13.3 The defaulting party shall pay the costs of any action taken by the other party as a result of the default.
14.
14.1 Either the Service Company or the Client may terminate this Deed
by sixty days prior written notice ("Notice of Termination").
14.2 The Notice of Termination, if given by the Client, must set out which of the staff employed by the Service Company, whose services were provided wholly for the conduct of the Client business, ("the Staff") that the Client wishes to offer employment with the Client after the termination of this Deed and the items of Equipment of which the Client desires to retain possession until the expiry of the Lease in relation to that item or items of Equipment.
14.3 The Notice of Termination, if given by the Service Company, shall request the Client to give written notice within 14 days of the date of the Termination Notice (or such further time, as agreed in writing) of which of the Staff the Client wishes to employ and the items of Equipment of which the Client wishes to retain possession until the expiry of the Lease in relation to that item or items of Equipment.
14.4 The Service company shall after receipt of notification in respect to the Staff and Equipment as required in sub-clauses 14.2 or
14.3:-
14.4.1 terminate the employment of the Staff the client
wishes to employ and the client shall immediately offer to
employ those members of Staff without there being any
adjustment for leave or other entitlements. In the event any
of these members of Staff do not accept the Client offer of
employment, the Client shall pay the termination pay and all
other entitlements properly due to any such member of Staff;
3
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14.4.2 Arrange for an agreement or agreements to be drawn up
in respect to the items of Equipment which the Client
desires to retain and the return and necessary payments in
respect to the items the Client does not wish to retain;
Until such time as sub-clauses 14.4.1. and 14.4.2 have been
complied with, Clauses 5, 8, 9, 10, 11, 12, 13 and 14 of
this Deed shall continue to bind the Client and the Service
Company.
|
14.5 The Service Company shall be entitled in the circumstances set out below, to terminate the employment of the Staff and regain possession of the Equipment, which it may return to the lessors under the Leases. The Client shall be liable for all termination, leave and other entitlements of the Staff in relation to the period of service and if the Service Company does not terminate the employment, the client shall be liable for the appropriate adjustment of leave and other entitlements. The client shall be liable for all payments required to be made on or as a result of the return of the Equipment or any of items of the Equipment prior to the expiry of the Leases pursuant to the relevant Lease and such demand for payment shall be made in accordance with Clause 9 above which shall continue to bind the parties after termination of this Deed:-
14.5.1 If the information is provided as required pursuant
to sub-clauses 14.2 or 14.3, this Clause shall only apply to
the Staff which the Client does not wish to employ and the
Equipment of which it does not wish to retain possession; or
14.5.2 If the Client does not provide the information
required in sub-clauses 14.2 or 14.3 within the time allowed
or any further time as agreed in writing this Clause shall
apply to all Staff and Equipment.
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14.6 In the event the Service Company does not terminate the
employment of any one or more of the Staff within one month after the
date of the receipt of the information required in sub-clauses 14.2 or
14.3 ("the Receipt Date") or if the information is not received within
the time allowed pursuant to this Deed, one month after the last day
for the Client to provide that information ("the Information Date")
the Client shall not be liable for any termination pay in respect such
staff but shall be liable for the adjustment of leave and other
entitlements. In the event the Service Company does not return the
Equipment or any of item of Equipment within four months of the
Receipt Date or the Information Date as the case may be, the Client
shall not be liable for any payments required pursuant to the lease
upon the return of the Equipment prior to the expiry of the lease.
15. IN calculating the periods of service of the Staff and all entitlements and adjustments for and in relation to the Staff, the Client shall be liable for the total time the relevant member of the Staff was providing service for the conduct of the business of the Client whether the Client or the Service Company was the employer or not.
16. THIS Deed shall be construed in accordance with the laws of Victoria, Australia.
THE COMMON SEAL OF AXIS ) CONSULTANTS PTY LTD was ) hereunto affixed in accordance ) with its Articles of Association ) in the presence of: ) |
.................................... Director
.................................... Secretary
THE COMMON SEAL OF WE SELL )
FOR U CORP. )
was hereunto affixed in accordance )
with its Articles of Association )
in the presence of: )
.................................... Director
.................................... Secretary
Exhibit 10.2
COOPERATION
AGREEMENT
Dated: 23 March 2009
Between: Indian Farmers Fertilizer Cooperative Limited ("IFFCO")
and
We Sell For U Corp ("WSFU")
and
Joseph Isaac Gutnick ("JIG")
Preamble
a. IFFCO is India's largest farmers co-operative having around 40,000 cooperatives as its shareholders in India, primarily engaged in production and marketing of fertilizers in India. IFFCO has the requisite distribution network and assets to support these activities.
b. IFFCO's distribution network is associated with, and in some cases IFFCO has agreed to associate its network with, reaching products other than fertilisers, including some alternate energy products (the "Existing Energy Products" or "EEP"), to the Indian rural markets.
c. WSFU is a listed US company, having its Principal Office at Level 8, 580 St Kilda Road, Melbourne, Victoria 3004 Australia, developing commercial projects in the energy and mining sectors.
d. JIG is the President, CEO and major shareholder of WSFU. JIG owns 82,800,000 shares, which were acquired at a cost of USD311,458. JIGs shares represent 82,800,000 out of the total issued and outstanding shares of 86,400,000 of WSFU.
e. WSFU is looking to develop and commercialize alternate energy sources, distribution methods and other commercial projects, other than those relating to EEP, to cater for the needs of the India market
f. IFFCO and WSFU have agreed to work together to explore the commercial viability of generating and/or distributing alternate energy to Indian market.
Terms of Agreement
1. WSFU undertakes to fund any and all investigations and/or developmental activities, pertaining to a pilot study for the assessment and procurement of energy generating sources and/or distribution methods other than those relating to EEP, that may be applicable for the Indian market (the "Pilot"). IFFCO shall disclose a list of EEPs before the start of the Pilot.
2. IFFCO undertakes to facilitate WSFU during its investigation and/or developmental phase, including introductions to relevant Government and Licensing Authorities; access to IFFCO's internal resources and/or the like, use of land and/or other resources associated with a the Pilot study, at mutually agreed terms, so as to enable WSFU the ability to assess the economic viability of WSFU's energy project. WSFU undertakes to share with IFFCO the outcome of this Pilot study.
3. In the event that IFFCO and WSFU elect to proceed to the commercialization of WSFU's energy generating and/or distributing activities, other than those relating to EEP, based on the Pre-feasibilty Report to be prepared after the Pilot study, WSFU and IFFCO shall be exclusive energy partners for such activities and shall enter into a detailed partnership agreement (the "Partnership Agreement").
4. In consideration for the access, facilitation and rights granted
by IFFCO to WSFU, JIG grants to IFFCO either
a. an option to purchase up to 50% of his shares in WSFU
(41,400,000 shares), for a consideration of USD155,729 (USD
0.00376 per share). The option shall have a life of two years
from the date of the Partnership Agreement. IFFCO shall exercise
this option after a detailed due diligence on WSFU; or
b. In case after the due diligence IFFCO does not find the
options to be attractive, the right to set up a new joint venture
company between IFFCO and JIG/WSFU, to pursue the Project with
equal shareholding.
5. The parties may by mutual agreement extend the terms covered by this agreement to include those relating to other commercial opportunities developed and to be pursued between them.
6. The parties intend to be bound by the terms of this Agreement for a period of 24 months or till the date of the Partnership Agreement, whichever is earlier. The parties may by mutual consent extend the period of this Agreement.
SIGNED for and on behalf of
Indian Farmers Fertilizer Cooperative Limited
SIGNED for and on behalf of
We Sell For U Corp.
J I Gutnick
Name
President and CEO
Title
SIGNED for and on behalf of
Joseph I. Gutnick
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Peter James Lee, certify that:
1. I have reviewed this annual report on Form 10-K of ProIndia International, Inc. (the "registrant");
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 13(a)-15(e) and 15(d)-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) 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 controls over financial reporting, or caused such internal controls 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 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 annual 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 of internal control over financial reporting, 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 control over financial reporting.
Date: March 25, 2010
/s/ Peter Lee
------------------------------------
Name: Peter Lee
Title: Secretary and
Chief Financial Officer
(Principal Financial Officer)
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Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph Isaac Gutnick, certify that:
1. I have reviewed this annual report on Form 10-K of ProIndia International, Inc. (the "registrant");
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 13(a)-15(e) and 15(d)-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) 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 controls over financial reporting, or caused such internal controls 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 principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual 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 of internal control over financial reporting, 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 control over financial reporting.
Date: March 25, 2010
/s/ Joseph I. Gutnick
-----------------------------------
Name: Joseph I. Gutnick
Title: Chairman of the Board,
President and Chief
Executive Officer
(Principal Executive Officer)
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report on Form 10-K of ProIndia International, Inc. (the "Company") for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "report"), the undersigned, Joseph Isaac Gutnick, Chief Executive Officer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: March 25, 2010
/s/ Joseph Isaac Gutnick
------------------------------------
Joseph Isaac Gutnick
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report on Form 10-K of ProIndia International, Inc. (the "Company") for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "report"), the undersigned, Peter James Lee, Chief Financial Officer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: March 25, 2010
/s/ Peter James Lee
--------------------------------------------
Peter James Lee
Secretary and
Chief Financial Officer
(Principal Financial Officer)
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