UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

 

FORM 10-Q

(Mark One)

 

QUAR            ☒    QUATERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE THREE MONTH PERIOD ENDED: March 31, 2015

 

TRAN             ☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from   ______________  to ______________  

 

Commission File Number: 333-148987

 

PLEASANT KIDS, INC

(Exact name of Registrant as specified in its charter)

 

                 Florida     20-35337265

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

2600 WEST OLIVE AVENUE, 5F, BURBANK, CA 91505

(Address of principal executive offices)

 

855-710-5437

(Registrant’s telephone number)

 

NYBD HOLDINGS, INC

 

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of May 9, 2015 the issuer had 7,321,459,232 shares of its common stock issued and outstanding.

   

 

 

 

 

1
 

 

 

 

 

Part I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

PLEASANT KIDS, INC

 

(Unaudited)

 

Table of Contents   Pages
     
Unaudited Balance Sheets   2 - 3
     
Unaudited Statements of Operations   4
     
Unaudited Statement of Cash Flows   5
     
Notes to Unaudited Financial Statements   6 - 14

 

 

 
 

 

 

PLEASANT KIDS, INC

(Formerly NYBD Holdings, Inc.)
CONDENSED BALANCE SHEETS

 

 

ASSETS     (Unaudited)        (Audited)  
      March 31,       September 30,  
      2015       2014  
Current Assets                
Cash   $ —       $ 8,799  
Inventory     27,712       39,560  
Accounts receivable     29,802       899  
                      Total Current Assets     57,514       49,258  
Fixed Assets                
Property, plant and equipment, net     25,706       3,577  
               Total Fixed Assets     25,076       3,577  
Total Assets   $ 83,220     $ 52,835  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current Liabilities                
Bank overdraft   $ 1,225     $ —    
Accrued payable & accrued expense     10,091       16,882  
Accrued interest     1,975       3,402  
Accrued salary     203,487       186,641  
Due to Shareholders     108,668       106,627  
Loan payable     13,260       13,260  
Note payable     10,589       —    
Convertible notes payable, net of debt discounts     15,095       159,500  
Derivative liability     414,529       1,057,005  
    Total Current Liabilities     778,919       1,543,317  
                 
Total Liabilities     778,919       1,543,317  
                 
Stockholders' Deficit                
Preferred stock, authorized 50,000,000 shares, series A, 10,000,000 shares, Series B $0.001 par value, 60,000,000 issued and outstanding as of March 31, 2015 and 8,320,000 issued and outstanding as of September 30, 2014     60,000       8,320  
Common stock,  authorized 9,500,000,000 shares, $0.001 par value,7,321,459,232 issued and outstanding as of March 31, 2015 and 3,482,654,232 shares issued and outstanding as of September 30, 2014     7,321,459       3,482,654  
Additional paid in capital     (5,854,610 )     (2,859,333 )
Accumulated deficit     (2,222,548 )     (2,122,123 )
                     Total Stockholders' Deficit       (695,699 )     (1,490,482 )
  Total Liabilities and Stockholders' Deficit   $ 83,220     $ 52,835  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

2
 

 

 

PLEASANT KIDS, INC
(Formerly NYBD Holdings, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

 

 

      For the Three       For the Three       For the Six         For the Six    
      Months Ended       Months Ended       Months Ended         Months Ended  
      March 31, 2015       March 31, 2014       March 31, 2015        March 31, 2014    
Revenues   $ 22,888     $ —       $ 33,863     $ 244  
Cost of Revenues     19,469       —         26,629       —    
Gross Profit     3,419       —         7,234       244  
                                 
Operating Expenses:                                
  Professional services     2,117       4,000       10,663       78,800  
  Officer compensation     94,749       66,400       181,998       68,900  
   General and administrative expense     36,304       52,296       47,798       151,589  
  Total Operating Expenses     133,170       122,696       240,459       299,289  
                                 
Loss from operations     (129,751 )     (122,696 )     (233,225 )     (299,045 )
                                 
Other Income (Expense):                                
      Interest expense     (192,019 )     (21,796 )     (195,116 )     (26,346 )
      Loss on assumption of debt     —         (75,000 )     —         (75,000 )
     Change in fair value of derivative liability     232,735       (1,168,331 )     327,916       (1,266,924 )
    Total other income (expenses)     40,716       (1,265,127 )     132,800       (1,368,270 )
                                 
Net loss before income taxes     (89,035 )     (1,387,823 )     (100,425       (1,667,315 )
                                 
Income taxes     —         —         —         —    
                                 
Net Loss   $ (89,035 )   $ (1,387,823 )   $ (100,425 )   $ (1,667,315 )
                                 
Loss per share; Basic   $ (0.000 )   $ (0.005 )   $ (0.000 )   $ (0.009 )
                                 
Weighted average number of shares outstanding     7,977,534,630       253,677,840       4,676,084,472       181,590,604  
                                 
The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

3
 

 

PLEASANT KIDS, INC.
(Formerly NYBD Holdings, Inc.)
STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

PLEASANT KIDS, INC.
(Formerly NYBD Holdings, Inc.)
STATEMENTS OF CASH FLOWS
(Unaudited)

 

    For the Six   For the Six
    Months Ended   Months Ended
    March 31, 2015   March 31, 2014
Operating Activities:                
 Net Loss   $ (100,425 )   $ (1,667,315 )
Adjustments to reconcile net loss to net cash used in operating activities:                
  Stock issued for services     —         72,800  
  Stock issued for debt refinancing     —         13,650  
  Loss on assumption of debt     —         75,000  
  Preferred stock issued for services     6,250       —    
  Interest expense     195,116       —    
  Debt discount amortization     (41,539 )     —    
  Depreciation and amortization     1,691       —    
  Changes in fair value of derivative
liability
    (327,916 )     1,266,924  
Changes in Operating Assets and Liabilities:                
  (Increase) Decrease in Inventory     11,848       (20,643 )
  Decrease in prepaids     —         7,010  
 ( Increase) in accounts receivable     (28,903 )     —    
  Increase in accrued expenses     112,594       70,111  
Net Cash Used by Operating Activities     (171,284 )     (182,463 )
                 
Investing Activities:                
  Purchase of fixed assets     (23,820 )     (3,975 )
Net Cash Provided by Investing Activities     (23,820 )     (3,975 )
                 
Financing Activities:                
  Cash overdraft     1,225       —    
  Proceeds from loan payable     —         15,000  
  Proceeds from convertible notes     152,450       156,500  
  Proceeds from note payable     10,589       —    
  Proceeds from due to shareholders     22,041       11,321  
Net Cash Provided by Financing Activities     186,305       182,821  
                 
Net Increase (Decrease) in Cash     (8,799 )     (3,617 )
Cash at Beginning of Period     8,799       4,659  
Cash at End of Period   $ —       $ 1,042  
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES:                
  Stock issued upon conversion of debt   $ 208,856     $ 221,898  
  Preferred shares issued for repayment of due to shareholders   $ 117,950     $ —    

 

 The accompanying notes are an integral part of these unaudited condensed financial statements.

 

4
 

  

PLEASANT KIDS, INC

(Formerly NYBD Holdings, Inc.)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

NOTE 1- ORGANIZATION AND DESCRIPTION OF BUSINESS

 

The Company was originally incorporated on September 21, 2005 under the laws of the state of Florida with the name League Now Holdings Corporation. On February 27, 2013, the Company consummated a share exchange with New York Bagel Deli, Inc. (“NYBD”). Under the terms of the share exchange, NYBD received 28,500,000 shares of the Company’s common stock for 100% of the issued and outstanding capital of NYBD. As a result of the transaction, the shareholders of NYBD became the majority owners of the Company and NYBD became a wholly-owned subsidiary. Concurrent with the share exchange, the Company agreed to sell its subsidiary (the operations of League Now) to John Bianco the Company’s former CEO. In exchange for the assumption by Mr. Bianco of all associated liabilities with the exception of convertible notes held by Asher Enterprises Inc in the amount of $75,000.

 

On September 20, 2013, the Company entered into a share exchange agreement with Pleasant Kids, Inc. whereby the Company issued 10,000,000 preferred shares and 1,000 common shares for all of the outstanding shares of Pleasant Kids, Inc. As a result of the share exchange, Pleasant Kids, Inc. became the surviving Company. In connection with the closing of the share exchange agreement, Haim Yeffet, a shareholder, a director of NYBD Holding, Inc. returned 13,000,000 shares of the common stock and 100,000 shares of the Preferred A stock of NYBD Holding, Inc to the treasury of NYBD Holding, Inc. and received 2,000,000 shares of Preferred A stock. Mr. Haim Yeffett assumed the outstanding debt of NYBD Holding, Inc., with the exception of the Asher convertible notes, and kept all of the assets of NYBD Holding, Inc. For accounting purposes, the share exchange was as a reverse merger. The new operations of the Company will be solely those of Pleasant Kids, Inc. The historical balances and results of operations will be those of Pleasant Kids, exclusive of NYBD Holding, Inc. Pleasant Kids, Inc. was incorporated on July 15, 2013 under the laws of the state of Florida.

 

On June 18, 2014, the board of directors of Pleasant Kids, Inc., officially changed its name from NYBD Holding, Inc. to Pleasant Kids, Inc. The name change became effective August 9, 2014 with FINRA but did not become effective until October 7, 2014 in the state of Florida. The Company also changed the symbol from NYBD to PLKD effective August 18, 2014.

 

Pleasant Kids, Inc. (Formerly NYBD Holding, Inc) is engaged in the business of producing, marketing and distributing naturally balanced alkalized water for children, including and not limited to organic natural juices.

 

NOTE 2 - GOING CONCERN

 

The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expense, has experienced losses from operations since inception, and it does not have a source of revenue sufficient to cover its operating costs. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

 

 

5
 

 

NO TE 3 - SU MM ARY O F SI G NIFCANT ACC O UNTING P O LICIES

 

Ba sis o f P r e s en t a ti o n

 

This summary of accounting policies for NYBD Holdings, Inc. is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting) and have been consistently applied in the preparation of the financial statements.

 

The accompanying unaudited financial statements have been prepared on a basis consistent with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the periods are not necessarily indicative of the results expected for the full year or any future period. These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended September 30, 2014 as filed with the SEC on January 7, 2015.

 

Fiscal Year End

 

The Company has adopted a September 30 fiscal year end.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for allowances for bad debts, collectability of accounts receivable, amounts due to service providers, depreciation and litigation contingencies, among others. The Company held no cash equivalents as of March 31, 2015 and September 30, 2014.

 

Cash

 

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

 

Revenue recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and amortization.  The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years.   Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized.  At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the results of operations.

 

 

6
 

 

Inventory

 

At March 31, 2015, the Company’s inventory consists of raw materials and finished materials valued under the FIFO method, stated at the lower of cost or market value. When raw materials are moved to the production floor, the Company will reclassify the costs to work-in-process. When the manufacturing process is complete, the Company will reclassify these costs to finished goods inventory. At this time, all accumulated costs of raw materials, direct labor used in production, and manufacturing overhead are accounted for in the cost basis of finished goods.

 

Impairment of Long-Lived Assets

 

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset's estimated fair value and its carrying value. As of the date of these financial statements, the Company is not aware of any items or events that would cause it to adjust the recorded value of its long-lived assets for impairment.

 

Derivative Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815..

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

 

Fair Value of Financial Instruments

 

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

 

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

 

7
 

 

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

 

Level 1 : Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity and that are significant to the fair values.

 

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

 

The Company used Level 2 inputs for its valuation methodology for the conversion option liability in determining the fair value using the Black-Scholes option-pricing model with the following assumption inputs:

 

 

    March 31, 2015
Annual dividend yield     —    
Expected life (years)     .01-5  
Risk-free interest rate     10 %
Expected volatility     532.43 %

 

 

    Carrying Value   Fair Value Measurements at
    As of   March 31, 2015
    March 31,   Using Fair Value Hierarchy
    2015   Level 1   Level 2   Level 3
Liabilities                                
Convertible Debt   $ 15,095     $ —       $ 15,095     $ —    
Derivative liability     414,529               414,529          
Total   $ 429,624     $ —       $ 429,624     $ —    

 

For the six months ending March 31, 2015 the Company recognized a gain of $327,916 on the change in fair value of derivative liabilities.  For the six months ending March 31, 2014 the Company recognized a loss/gain of $1,266,924 on the change in fair value of derivative liabilities.  As at March 31, 2015 the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10.  

  

Income Taxes

 

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

 

8
 

 

Basic Income (Loss) Per Share

 

Basic income (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net inco m e available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

 

At March 31, 2015, the Company has three convertible notes outstanding totaling $109,110 which if converted at the current market would result in 2,182,200,000 new dilutive common shares.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 

Adve rtisi n g C o sts

 

The Co m pany's policy regarding advertising is to expense advertising when incurred.

 

Stock-Based Compensation

 

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).

 

Related Parties

 

The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

9
 

 

Recently Issued Accounting Standards

 

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the three months ended August 31, 2014.

   

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

 

 

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  NOTE 4 - INVENTORY

 

Inventory stated at cost at March 31, 2015 and September 30, 2014 consisted of the following: 

 

      March 31, 2015       September 30, 2014  
                 
Finished Goods   $ 18,406     $ 14,880  
Work in Process     —         —    
Raw Materials     9,306       24,680  
    $ 27,712     $ 39,560  

 

The Company values its inventory using the FIFO method.

 

NO TE 5 FIXED ASSETS

 

Property, plant and equipment consist of the following at March 31, 2015 and September 30, 2014:

 

    March 31, 2015   September 30, 2014
Property, plant and equipment   $ 27,795     $ 3,975  
Less: accumulated depreciation     (2,089 )     (398 )
Property and equipment, net   $ 25,706     $ 3,577  

 

Depreciation expense for the six months ended March 31, 2015 and March 31, 2014 was $1,691 and $-0- respectively.

 

NO TE 6 NOTES PAYABLE

 

On September 3, 2014, Pleasant Kids, Inc. (Formerly NYBD Holding, Inc.) sold and issued a Convertible Promissory Note to LG Capital Funding, LLC, for the principal amount of $26,500 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The note has a deduction for legal expense for a net total payout of $25,000. The Note, together with accrued interest at the annual rate of 8%, is due on May 25, 2015. The Note is convertible into the Company's common stock commencing 180 days from the date of issuance at a conversion price equal to 55% of the lowest closing bid price of the Company's common stock for the twenty prior trading days including the date of conversion. The Company has the right to prepay the Note at any time from the date of issuance until the note is paid in full at an amount equal to 150% of the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date. As of the quarter ended March 31 2015, the balance on the note is $26,500. The Company recorded $1,214 of accrued interest pursuant to this convertible note.

 

On December 30, 2014, Pleasant Kids, Inc. (Formerly NYBD Holding, Inc.) sold and issued a Convertible Promissory Note to LG Capital Funding, LLC, for the principal amount of $52500 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The note has a deduction for legal expense for a net total payout of $50,000. The Note, which is a the back end portion of the note issued on July 3, 2014, together with accrued interest at the annual rate of 8%, is due on January 3, 2015. The Note is convertible into the Company's common stock commencing 180 days from the date of issuance at a conversion price equal to 55% of the lowest closing bid price of the Company's common stock for the twenty prior trading days including the date of conversion. The Company has the right to prepay the Note at any time from the date of issuance until the note is paid in full at an amount equal to 150% of the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date. During the quarter ended March 31, 2015, LG Capital converted $42,340 of this debt along with $533 of interest into 857,453,400 shares of the Company’s common stock. As of March 31, 2015, the remaining balance on the note is $10,160. The Company recorded $31 of accrued interest pursuant to this convertible note.

 

On February 13, 2015, Pleasant Kids, Inc. (Formerly NYBD Holding, Inc.) sold and issued a Convertible Promissory Note to LG Capital Funding, LLC, for the principal amount of $72,450 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The note contains a 15% OID such that the purchase price shall be $63,000. The Note, together with accrued interest at the annual rate of 8%, is due on February 13, 2016. The Note is convertible into the Company's common stock commencing 180 days from the date of issuance at a conversion price equal to 50% of the lowest closing bid price of the Company's common stock for the twenty prior trading days including the date of conversion. The Company has the right to prepay the Note at any time from the date of issuance until the note is paid in full at an amount equal to 150% of the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date. As of the quarter ended March 31 2015, the balance on the note is $72,450. The Company recorded $730 of accrued interest pursuant to this convertible note.


As of March 31, 2015, the Company has three convertible notes outstanding with LG Capital Funding, LLC totaling $109,110. As of September 30, 2014, the Company had convertible notes payable of $159,500.

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Accrued Interest

 

At March 31, 2015, the Company has recorded accrued interest of $1,975 pertaining to the outstanding convertible notes. As of September 30, 2014, the Company recorded $3,402 of accrued interest pertaining to the outstanding convertible notes.

 

Derivative Liability

 

At March 31, 2015 and September 30, 2014, the Company had $414,529 and $1,057,005 in derivative liability. In the six months ended March 31, 2015, the Company has a gain on changes in derivative liability of $327,916. In the six months ended March 31, 2014, the Company the Company has a loss on changes in derivative liability of $1,266,924.

We calculate the derivative liability using the Black Scholes Model which factors in the Company’s stock price volatility as well as the convertible terms applicable to the outstanding convertible notes. The following is the range of variables used in revaluing the derivative liabilities at March 31, 2015 and September 30, 2014:

      March 31, 2015       September 30, 2014  
Annual dividend yield     0       0  
Expected life (years) of     0.01 – .5       0.01 – .75  
Risk-free interest rate     10 %     10 %
Expected volatility     532.43 %     465.6 %

 

NOTE 7 – ACCRUED SALARY

 

On October 1, 2013, the Company entered into Employment Contracts with Robert Rico, President/CEO and Calvin Lewis, Vice President. The contracts each have a term of 5 years with a base salary plus a bonus of 2% of sales annually. The annual base salaries are as follows:

 

Robert Rico   $ 175,000  
Calvin Lewis   $ 150,000  

 

NO TE 8 SHAREHOLDER LOAN

 

As of the quarter ended March 31, 2015 the Company has a shareholder loan balance of $108,668 from two officers of the Company. Robert Rico is the CEO and his portion of the total due is $91,693. Calvin Lewis is the Vice President and the amount due to him is $16,975. As of September 30, 2014 the total amount of the shareholder loans was $106,627 with the total due to Robert Rico being $90,883 and the amount due to Calvin Lewis being $15,744.

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

Free office space from its Chief Executive Officer

 

The Company has been provided office space by its chief executive officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

 

Unpaid salary

 

As of March 31, 2015 and September 30, 2014, the Company has unpaid salaries to officers of the Company of $203,487 and $186,641 respectively.

 

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NO T E 10 – STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

At the time of incorporation, the Company was authorized to issue 10,000,000 shares of preferred stock with a par value of $.001. On April 1, 2013, the Company amended its corporate articles of incorporation to designate 10,000,000 preferred shares as “Series A Preferred Stock”. These Series A Preferred Shares shall for a period of 48 months from the date of issuance, be convertible in aggregate into that number of fully paid and non-assessable shares of the common stock of the Corporation, equal to seventy-five percent (75%) of the post conversion issued and outstanding common stock of the Corporation on the date of conversion.

 

On February 25, 2015, the Company increased the authorized Preferred Stock Series A from 10,000,000 shares to 50,000,000 shares with a par value of $0.001. On March 18, 2015, Robert Rico and Calvin Lewis each purchased 19,590,000 shares of Preferred Stock Series A for $48,975 each. The $48,975 amount was deducted from their respective accrued salaries. The Company also issued 2,500,000 shares of Preferred Stock Series A to a marketing representative for services rendered. The total amount of Preferred Stock Series A outstanding as of the quarter ended March 31, 2015, is 50,000,000 shares.

 

On March 19, 2015, the Company increased the authorized Preferred Stock from 50,000,000 shares to 60,000,000 shares with par value of $0.001. The additional 10,000,000 shares of Preferred Stock are designated as Series B. The Series B Preferred Stock is not convertible into Common Stock at any time and is not entitled to dividends of any kind or liquidation, dissolution rights of any kind. The holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock.

 

On March 20, 2015, Robert Rico and Calvin Lewis each purchased 5,000,000 shares of Series B Preferred for the sum of $10,000 each. The $10,000 was deducted from each of their respective shareholders loans.

 

Common Stock

 

On May 10, 2013, the Company amended its articles of incorporation with the state of Florida to increase its authorized shares of common stock from 250,000,000 to 750,000,000. The stock has a par value of $.001.

 

  

During the fiscal year ended September 30, 2014, the Company issued 3,176,946,873 common shares for the conversion and reduction of $583,000 in convertible debt and $39,122 of accrued interest.

 

During the fiscal year ended September 30, 2014, the Company issued 150,000,000 shares of common stock for cash of $52,998.

 

During the fiscal year ended September 30, 3014, the Company issued 42,000,000 shares of common stock for the conversion of 1,680,000 shares of Preferred Series A stock.

 

During the six months ended March 31, 2015, the Company issued 3,838,805,000 shares of Common Stock for the conversion and reduction of $202,840 in convertible debt and $6,116 of accrued interest.

 

Based on the share exchange agreement, and on the closing date of September 20, 2013, the controlling stockholder of Pleasant Kids, sold all 1,000 issued and outstanding shares of common stock of Pleasant Kids, Inc. to NYBD Holding, Inc. in consideration for the issuance of 1,000 shares of the common shares of NYBD Holding, Inc. And as a result, at the conclusion of the share exchange on September 20, 2013 the additional common stock of NYBD Holding, Inc. was added to the historical balances of Pleasant Kids. The share of common stock reported on the Company’s books is the exchanged shares of 1,000 plus 74,206,359 for a total number of shares outstanding of 74,207,359.

 

Summary of common stock activity since September 30, 2014:   Outstanding shares
September 30, 2014 – Balance     3,482,654,232  
Oct 2014 thru Mar 2015 – shares issued for debt reduction     3,838,805,000  
         
March 31, 2015 - Balance     7,321,459,232  

 

 

 

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NO T E 11 SUBSEQUENT EVENT

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that other than listed below no material subsequent events exist through the date of this filing.

 

 

1. On April 26, 2015, the State of Florida approved the amendment for the Company to effect a reverse stock split. The outstanding common shares of the Company shall be decreased on the basis of 500 shares of Common Stock shall become 1 share of Common Stock (1:500 reverse split) without changing the par value of the shares of the Corporation and without changing the amount of the Authorized shares of the Corporation. The Company is awaiting final approval for the reverse split from FINRA.

 

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ITEM 2. Management’s Discussion and Analysis and Results of Operations

 

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report.

 

Forward-Looking Statements

 

This Report contains forward-looking statements that relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Report. Forward-looking statements are often identified by words like “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar words or expressions that, by their nature, refer to future events.

 

In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential,” or “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements in an effort to conform these statements to actual results.

 

Business History

 

Pleasant Kids, Inc. (Formerly NYBD Holding, Inc.) was incorporated in September 2005 in Florida. Then on September 21, 2005, the Company entered into an Asset Purchase Agreement with Anthony Warner pursuant to which the Company acquired the domain name, www.leaguenow.com, its design, associated copyrights and trademarks and all business related to the website including the customer database. The Company originally intended to operate as an application service provider offering web-based services for the online video gaming industry.

 

The Company commenced offering services in October 2005 through a subscription basis. During 2007 the Company changed directions by using an advertising model. The Company was unable to generate additional revenue streams by charging registered users for the use of enhanced functionality to be incorporated into the site, access to specialized content, and e-commerce of merchandise related to the video console industry. The inability to generate revenue led to the decision that the Company would have to explore other options regarding the development of a new business plan and direction.

 

On May 29, 2009, the Company's stockholders approved a 1 for 6 reverse stock split for its common stock. As a result, stockholders of record at the close of business on July 1, 2009, received one share of common stock for every six shares held. Common stock, additional paid-in capital, share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

 

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On January 19, 2010, the Company's stockholders approved a 2 for 1 forward stock split for its common stock. As a result, stockholders of record at the close of business on January 19, 2010, received two shares of common stock for every one share held. Common stock, additional paid-in capital, share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

 

On April 26, 2010, the Company's stockholders approved a 1 for 3 reverse stock split for its common stock. As a result, stockholders of record at the close of business on June 1, 2010, received one shares of common stock for every three share held. Common stock, additional paid-in capital, share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

 

On October 4, 2010, the Company's stockholders approved a 16 for 1 forward stock split for its common stock. As a result, stockholders of record at the close of business on October 21, 2010, received sixteen shares of common stock for every one share held. Common stock, additional paid-in capital, share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

 

On October 6, 2010, the Company entered into a Share Exchange Agreement, dated October 6, 2010 (the “Share Exchange Agreement”) by and among League Now, James Pregiato, Pure Motion, Inc., a Texas corporation (“Pure Motion”) and the shareholders of Pure Motion (the “Pure Motion Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired 100% of the outstanding shares of common stock of Pure Motion (the “Pure Motion Stock”), in exchange for the Pure Motion Stock, the Pure Motion Shareholders acquired 24,009,008 shares of the Company’s common stock (the “Exchange Shares”).

 

Additionally, pursuant to the terms of the Share Exchange Agreement, as consideration for the cancellation of 38,048,000 of the 39,111,136 shares of League Now common shares owned by James Pregiato (“Pregiato”), Pure Motion agreed to pay a total cash payment of $250,000 to Pregiato (the “Cash Payment”) of which $100,000 (the “Initial Cash Payment”) was paid on the closing date and $150,000 (the “Final Cash Payment”) was to be paid within twelve weeks of the closing date. The 38,048,000 shares were being held in escrow until receipt of the Final Cash Payment. Mr. Pregiato agreed to extinguish all outstanding debt and liabilities of League Now outstanding as of the closing date upon receipt of the Cash Payment. Upon closing, Pure Motion became a wholly-owned subsidiary of the Company. The transaction was accounted for as a purchase by the Company of Pure Motion, Inc. Upon closing of the transaction, Mr. Pregiato resigned as an officer and director of the Company.

 

In May, 2011, the transaction with Pure Motion, Inc. was rescinded and the TOMI golf product and the patents and technology of the Company were returned to the Shareholders of Pure Motion, in exchange for the cancellation of shares that were to have been issued to them. The shares outstanding, at the present time, reflect the absence of any shares ever being issued to the Pure Motion, Inc. Shareholders, by the Company, either upon or subsequent to the closing of the transaction on October 6, 2010, since no such shares were ever issued by the Board following the acquisition of control by Pure Motion’s shareholders of the Company and its affairs. Simultaneously with the withdrawal and rescission of the acquisitive transaction of October 6, 2010, the Company entered into a license agreement (“the License Agreement”) with Pure Motion for the exclusive right to use and exploit its motion capture technology with respect to all medical applications (the Licensed Technology”). In addition to the License Agreement, the Company entered into a consulting agreement (“the Consulting Agreement”) with the former Chief Executive Officer, Mario Barton (who is also the CEO of Pure Motion, Inc.) to stay with the Company as a consultant with regard to the deployment of the medical applications licensed by Pure Motion to the Company, as well as an employment agreement (“the Employment Agreement”) which secure the continuation of his services as President and Chief Executive Officer of the Company for a period of twelve (12) months from the date thereof. The Consulting Agreement and the Employment Agreement provide for no payment of any compensation to Mr. Barton, other than payments which may be due him based upon the successful marketing and deployment of the Licensed Technology.

 

On January 20, 2012, the Company entered into a Stock Purchase Agreement and Share Exchange (the “Agreement”) with Infiniti Systems Group, Inc. (“Infiniti”). Pursuant to the Agreement, the Company agreed to issue 30 million common shares of the Company’s stock to the shareholders of Infiniti in exchange for 100% of the issued and outstanding capital stock of Infiniti. The shares issued to the shareholders of Infiniti represent 60% of our issued and outstanding capital stock on a fully diluted basis (the “Stock Consideration”). In addition, the Company’s Chief Executive Officer and Chief Financial Officer, Mario Barton, resigned. John Bianco, the Chief Executive Officer of Infiniti, agreed to serve as the Company’s new President and Chief Executive Officer. The Company’s new Treasurer and Chief Financial Officer is Lisa Bischof, and the new Secretary and Chief Operating Officer is D. Bruce Veness. The transactions contemplated by the Agreement were closed on January 31, 2012, with the Company issuing 30 million shares to Bianco, Veness and Bischof. Contemporaneously with the closing, Pregiato agreed to cancel 25,803,288 shares of the Company’s common stock which were held by him.

 

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On February 27, 2013, the Company, then known as League Now Holdings, Inc. consummated a share exchange with NYBD Holdings, Inc. (NYBD) pursuant to which 100% of the equity in NYBD was exchange for 28,500,000 shares of the Company’s common stock, which was previously held by the Company’s former CEO, John Bianco. As a result of the transaction, the shareholders of NYBD became the majority owners of the Company and NYBD became a wholly owned subsidiary. The Company concurrently agreed to sell the operations of League Now to Mr. Bianco in exchange for the assumption by Mr. Bianco of all associated liabilities with the exception the notes payable due Asher Enterprises, Inc. For accounting and reporting purposes, this transaction will be treated as a reverse merger with NYBD being the surviving entity. All balances as of and for the period ended December 31, 2012 are those of League Now exclusive of NYBD. The financial statements for March 31, 2013 and thereafter will reflect the historical balances and results of operations for NYBD, exclusive of League Now. The details of this transaction were previously reported on Form 8-K, filed March 6, 2013, and an 8K/A filed on May 2, 2013.

 

NYBD Holding, Inc. was incorporated in March 16, 2012 with a Fiscal Year ending of December 31. NYBD Holding, Inc. operates two deli restaurants that specialize in providing a wide variety of Bagels and cream cheese spread toppings along with a full service juice bar and large salad bar. The restaurants are located in downtown Miami located at 350 NE 24 th St. and at 155 E. Flagler St.

 

On September 20, 2013, NYBD Holding, Inc. entered into a share exchange agreement with Pleasant Kids, Inc. and all of its stockholders, and as a result of the closing of this agreement, Pleasant Kids, Inc. became the surviving Company. NYBD Holding, Inc. will close both of its deli restaurants at the closing of this agreement and adopt the operation of Pleasant Kid’s. Based on the terms of the share exchange agreement, the controlling stockholder of Pleasant Kids sold all 1,000 issued and outstanding shares of common stock and 10,000,000 million shares of Class A Preferred stock of Pleasant Kids, Inc. to NYBD Holding, Inc. in consideration for the issuance of 1,000 shares of the common shares and 10,000,000 of the Preferred A shares of NYBD Holding, Inc.

 

Following the closing of the share exchange agreement on September 20, 2013, control and management of the Company is that as Pleasant Kids, Inc. For accounting and reporting purposes, this transaction will be treated as a reverse recapitalization, with Pleasant Kids as the acquirer. As such, the financial information, including the operating and financial results, included in this 10K are that of Pleasant Kids rather than that of NYBD Holding, Inc. prior to the completion of the transactions described herein.

 

On June 18, 2004, the board of directors of Pleasant Kids, Inc., officially changed its name from NYBD Holding, Inc. to Pleasant Kids, Inc. The name change became effective August 9, 2014 with FINRA but did not become effective until October 7, 2014 in the state of Florida. The Company also changed the symbol from NYBD to PLKD effective August 18, 2014.

 

Overview

 

Pleasant Kids, Inc. (Formerly NYBD Holding, Inc.) was incorporated in July 17 th , 2013 with a Fiscal Year Ending of September 30 th . Pleasant Kids is a Florida Corporation engaged in the business of producing, marketing and distributing naturally balanced alkalized water for children, including and not limited to organic natural juices.

 

Principal Products

 

The Company offers retail consumers naturally balanced alkalized spring bottled water for children in an 8oz. bottle through our brand “Pleasant Kids”.

 

The Company sources our naturally balanced alkalized spring water, throughout the United States. The product requirements are to bottle naturally balanced alkalized spring water with a minimum of 8.0 of pH, without the use of any chemicals, or ionize machinery.

 

The main reason parents and consumers drink the Company’s product is for the perceived benefit that a proper pH balance helps fight disease and boosts the immune system and the perception that alkaline water helps to maintain a proper body pH and keeps cells young and hydrated.

 

17
 

 

Operations

 

Pleasant Kids, operates primarily as a manufacturing, marketing and distribution company. The Company has created a branding company called Pleasant Kids Extra, Inc. that will be branding and managing the “Pleasant Kids Characters” in merchandizing and promotional products including licensing/branding agreements with other manufactures. The Pleasant Kids Characters where created by PowerHouse Creative, Inc. a computer consulting team focused on the internet, mobile apps and graphic designs. Pleasant Kids, Inc. logo and characters are presently pending trademark and copyright approval from the USPTO and the US Copyright.

  

Sample production, market research and consumer product acceptance of our product began in mid-2012. The Company has focused on pre-launch market evaluation of our product in California and Orlando/South Florida for year 2014. The product is currently at the introduction phase of its lifecycle. In April of 2013 Pleasant Kids did market research on the demand for naturally balance alkalized bottle water in Los Angeles, California. In June of 2013 the Company repeated the processes in Orlando, Florida. Pleasant Kids launched its online store in August of 2014 on Amazon.com. The Company intends enter the California market some-time in the future.

 

Our Market

 

The Company plans to target the parents of children between the ages of newborn to 9 years of age in the continental United States primarily through independent brokers and distributors. At present the sales efforts are focused in Orlando/South Florida, but the Company expects to expand to California in the future.

 

 

Results of operations for the six months ended March 31, 2015 and 2014.

 

Revenue

 

Sales for the six months ended March 31, 2015, were $33,863 comprised of direct sales to stores and sales on the internet through Amazon.com., compared to sales of $244 for the six months ended March 31, 2014. Sales for the three months ended March 31, 2015, were $22,888 compared to $0 for the three months ended March 31, 2014.

 

Cost of Goods Sold

 

The Company is reporting Cost of Goods Sold of $26,629 for the six months ended March 31, 2015, compared to $0.00 for the six months ended March 31, 2014. There were no cost of goods sold for the six months ended March 31, 2014 because the Company had not made any sales and was in the process of setting up its co-packing agreements. The Cost of Goods Sold for the three month period ending March 31, 2015, are $19,469 compared to $0 for the three month period ending March 31, 2014. Again there were no cost of goods sold for the three months ended March 31, 2014 because the Company had not made any sales and was in the process of setting up its co-packing agreements.

 

Operating Expenses

 

Operating expenses for the six months ended March 31, 2015, were $240,459 compared to $299,289 for the six months ended March 31, 2014. Operating expenses were greater in the six months ended March 31, 2014 due mainly to a one time consulting fee charge of $63,650. The operating expenses for the three months ended March 31, 2015 were $133,170 compared to $122,696 for the three months ended March 31, 2014.

Professional Fees . For the six months ended March 31, 2015, professional fees were $10,663 compared to $78,800 for the six months ended March 31, 2014. The March 31, 2014 included a one-time fee to promote the Company. Professional fees for the three months ended March 31, 2015, were $2,117 compared to $4,000 for the three months ended March 31, 2014.

Officer Compensation . For the six months ended March 31, 2015, officer compensation was $181,998 compared to $68,900 for the six month period ended March 31, 2014. Unpaid salaries were not accrued for the six month period ending March 31, 2014 which accounts for the difference. For the three months ended March 31, 2015, officer compensation was $94, 749 compared to $66,400 for the same period March 31, 2014. Again, the difference in the two periods was that the unpaid salary was not accrued. On October 1, 2013, the Company entered into employment agreements with Robert Rico, CEO and Calvin Lewis, VP. The contracts each have a term of 5 years with a base salary plus a bonus of 2% of sales annually. The annual base salaries are as follows:

 

Robert Rico   $ 175,000  
Calvin Lewis   $ 150,000  

 

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Selling, General and Administrative Expense . For the six months ended March 31, 2015, selling, general and administrative expense was $47,798 compared to $151,589 for the six months ended March 31, 2014. The six month period ending March 31, 2014, was much larger due to a one-time charge of $63,650 for consulting fees. Also, Travel and Meals and Entertainment expense was $18,000 higher in March 31, 2014 than in March 31, 2015. Selling, general and administrative expense for the three months ended March 31, 2015, was $36,304 compared to $52,296 for the three months ended March 31, 2014. The expenses for the three months ended March 31, 2014 were higher as well and that was mostly due to the Travel and Meals and Entertainment being higher by $10,000.

Loss from Operations :

 

Loss from operations was $233,225 for the six months ended March 31, 2015, compared to Loss from Operations of $299,045 for the six months ended March 31, 2014. The loss from operations for the three months ended March 31, 2015, was $129,751 compared to $122,696 for the three months ended March 31, 2014.

 

Interest Expense:

 

Interest expense for the six months ended March 31, 2015, was $195,116, and is derived from the convertible debenture debt carried by the Company. For the six months ended March 31, 2014, the interest expense was $26,346. The interest expense for the six months ended March 31, 2015, is higher due to a $27,500 interest penalty assessed on one of the debentures along with the recognition of financing costs in the change in fair value of embedded derivative liability. The interest expense for the three months ended March 31, 2015, is $192,019 compared to $21,796 for the three months ended March 31, 2014. The three months ended March 31, 2015 is higher again due to the interest penalty assessed on one of the debentures of $27,500 plus the recognition of financing costs in the change in fair value of embedded derivative liability.

 

Net Loss:

 

Net Loss from operations for the six months ended March 31, 2015, was $100,425compared to a loss of $1,667,315 for the six months ended March 31, 2014. The greater loss for the six months ended March 31, 2014 is due mainly to derivative expense of $1,266,924 compared to a gain on the change in fair value of embedded derivative liability and loss on assumption of debt of $75,000. The net loss from operations for the three months ended March 31, 2015, was $89,035 compared to $1,387,823 for the three months ended March 31, 2014. The greater loss in the three months ended March 31, 2014, again is due to the increased derivative expense of $1,168,331 compared to a gain on the change in fair value of embedded derivative liability and the loss on assumption of debt of $75,000.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of March 31, 2015, the Company had net current liabilities of $778,919 compared to $1,543,317 as of September 30, 2014. The decrease in net current liability is due mainly to decrease in derivative liability of $642,476. The Company has a bank overdraft of $1,225 for the period ended March 31, 2015, compared to positive cash balance of $8,799 as of September 30, 2014.

 

Operational Activities

 

The Company had cash used in operating activities of $171,284 in the six months ended March 31, 2015, and $182,463 for the six months ended March 31, 2014. The Company’s primary uses of cash have been for professional support, marketing expenses and working capital. All cash received has been expended in the furtherance of growing future operations.

 

Investing Activities

 

The Company had cash used in investing activities of $23,820 in the six months ended March 31, 2015, and $19,720 in the six months ended March 31, 2014, which was for the purchase of furniture, equipment and a vehicle.

 

Financing Activities

 

The Company had cash provided in financing activities of $186,305 in the six months ended March 31, 2015, and $182,821 in the six months ended March 31, 2014, which was basically proceeds from convertible debentures. The Company had cash provide from mostly proceeds from convertible debentures in financing activities of $124,364 for the three months ended March 31, 2015, and $140,533 for the three months ended March 31, 2014.

 

19
 

 

 

The Company may not have sufficient resources to fully develop any new products or expand our inventory levels unless it is able to raise additional financing. The Company can make no assurances these required funds will be available on favorable terms, if at all. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Additionally, these conditions may increase costs to raise capital and/or result in further dilution. The failure to raise capital when needed, will adversely affect our business, financial condition and results of operations, and could force the Company to reduce or cease operations.

  

The Company believes that it will be able to meet the costs of growth and public reporting with funds generated from operations and additional amounts generated through debt and equity financing, Although management believes that the required financing to fund product development and increasing inventory levels can be secured at terms satisfactory to the Company, there is no guarantee these funds will be made available, and if funds are available, that the terms will be satisfactory to the Company.

 

Impact of Inflation

 

The Company does not expect inflation to be a significant factor in operation of the business.

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

  

Going Concern

 

The Company has a working capital deficiency of $721,405 and accumulated deficit of $695,699 as of March 31, 2015. These factors raise substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the company is unable to continue as a going concern.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based upon The Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Some of the critical accounting estimates are detailed below.

 

Critical Accounting Estimates and New Accounting Pronouncements

 

Critical Accounting Estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

 

  it requires assumptions to be made that were uncertain at the time the estimate was made, and
     
 

changes in the estimate or different estimates that could have been selected could have

a material impact on our results of operations or financial condition.

 

 

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The Company base estimates and judgments on experience, current knowledge, and beliefs of what could occur in the future, observation of trends in the industry, information provided by customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following accounting policies and estimates as those that are believed to be the most critical to the financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, and derivative financial instruments.

 

Share-Based Compensation Expense.  We calculate share-based compensation expense for option awards and warrant issuances (“Share-based Awards”) based on the estimated grant/issue-date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”), and recognize the expense on a straight-line basis over the vesting period, net of estimated forfeitures. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period of the Share-based Award in determining the fair value of Share-based Awards. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period.

 

  Income Taxes.  As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes. A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited or charged to income tax expense.

 

The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. In spite of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.

 

New Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures . We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, and as discussed in greater detail below, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, disclosure controls and procedures were effective:

 

●  to give reasonable assurance that the information required to be disclosed in reports that are file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and

 

●  to ensure that information required to be disclosed in the reports that are file or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our CEO and our Treasurer, to allow timely decisions regarding required disclosure.

 

Changes in Internal Control over Financial Reporting.  There are no changes in internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

During the fiscal year ended September 30, 2014, Pleasant Kids, Inc, (formerly NYBD Holdings, Inc.) failed to answer a lawsuit from Franjose Yglesias-Bertheau for unpaid salary. The lawsuit was based on the 5 year contract that Mr. Yglesias-Bertheau had with the Company and based on the Company not answering the suit Mr. Ylgesias-Bertheau was awarded a $622,968 judgment. Due to the frivolous nature of the claim the $622,968 judgment was reversed. The Company is in the process of settling the final amount owed Mr. Yglesias-Bertheau but does not think that the claim will be in excess of the accrued salary amount of $34,609 that the Company has accrued on its books.

 

Also, Company management is aware of a claim that could result in future litigation. A party that loaned money to the previous Company (NYBD Holdings, Inc.) was not paid and the amount owed was not disclosed at the time of the merger. The amount of the claim is for $40,000 and present management is in contact with the party to try and get this matter resolved. Management will seek to minimize disputes with its customers and others but recognizes the inevitability of legal action in today’s business environment as an unfortunate price of conducting business.

ITEM 1A. RISK FACTORS

 

Not applicable.

 

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Based on the share exchange agreement, and on the closing date of September 20, 2013, the controlling stockholder of Pleasant Kids, sold all 1,000 issued and outstanding shares of common stock of Pleasant Kids, Inc. to NYBD Holding, Inc. in consideration for the issuance of 1,000 shares of the common shares of NYBD Holding, Inc. Such

 

securities were not registered under the Securities Act.  These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance of securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. The Company has not undertaken an offering in which it sold a high number of securities to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

 

During the fiscal year ended September 30, 2014, the Company increased the authorized number of Common shares four times: On January 14, 2014 the Company increased the authorized from 750,000,000 to 1,500,000,000 shares of common stock; on March 31, 2014, the Company increased the authorized from 1,500,000,000 common stock to 2,500,000,000 shares of common; on May 16, 2014, the Company increased the authorized from 2,500,000,000 common stock to 4,,000,000 shares of common stock; and on September 9, 2014, the Company increased the authorized from 4,000,000 shares of common to 10,000,000,000 shares of common. During the quarter ended December 31, 2014, the Company reduced the authorized from 10,000,000,000 shares of common to 5,000,000,000 shares of common. On February 25, 2015, the Company increased the authorized shares of Common Stock from 5,000,000,000 shares of Common Stock to 9,500,000,000 Shares of Common Stock.

 

During the six months ended March 31, 2015, the company issued 3,838,805,000 shares of Common Stock in settlement of $202,840 of debt and $6,116 of interest. The total number of shares issued and outstanding for the company is 7,321,459,232 as of March 31, 2015.

  

ITEM 3. DEFAULTS UPON SENIOR DEBT

 

None

 

ITEM 4. [Removed and Reserved]

 

None

 

ITEM 5. OTHER INFORMATION

 

Pursuant to the share exchange agreement on September 20, 2013, the controlling stockholder of Pleasant Kids sold all 1,000 issued and outstanding shares of common stock of Pleasant Kids, Inc. to NYBD Holding, Inc. in consideration for the issuance of 1,000 common shares and 10,000,000 Series A Preferred shares of NYBD Holding, Inc. The share exchange was accounted for as a reverse merger whereby the stock history presented in the Statement of Stockholders’ Equity will only show the stock history of the new operating company, Pleasant Kids, Inc., at the time of and just prior to the recapitalization.

 

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ITEM 6. EXHIBITS

 

Exhibit No.   Description   Location
2   Articles of Merger- NYBD Holding, Inc/Pleasant Kids, Inc.   (1)
3.1   Articles of Incorporation- League Now Holdings, Corporation, dated September 21, 2005   (1)
3.2   Articles of incorporation – Pleasant Kids, Inc., dated July 19, 2013   (1)
3.3   Amendment to articles of incorporation, dated May 9,2013   (1)
3.4   Amendment to articles of incorporation, dated September 14, 2014   (2)
3.5   Amendment to articles of incorporation, dated October 7, 2014   (2)
3.6   Amendment to articles of incorporation, dated February 4, 2014   (2)
3.7   Amendment to articles of incorporation, dated May 8, 2014   (2)
3.8   Amendment to articles of incorporation, dated May 19, 2014   (2)
3.9   Amendment to articles of incorporation, dated February 25, 2015   Filed herewith
3.10   Amendment to articles of incorporation, dated March 19, 2015   Filed herewith
4.1   Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and other Special Rights and the Qualifications, Limitations, Restrictions and other Distinguishing Characteristics of Series A Preferred Stock   (1)
4.2   Board minutes amending Series A Preferred Stock   (1)
4.3   Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and other Special Rights and the Qualifications, Limitations, Restrictions and other Distinguishing Characteristics of Series B Preferred Stock   Filed herewith
4.4   Approval by Board of Directors to a reverse stock split of the common stock of the Company   Filed herewith
4.5   Written consent of shareholders approving a reverse stock split of the common stock of the Company   Filed herewith
10.1   Employment Contract – Robert Rico, dated October 1, 2013   (1)
10.2   Employment Contract – Calvin Lewis, dated October 1, 2013   (1)
10.3   Employment Contract – Franjose Yglesias- Bertheau, dated October 1, 2013   (1)
10.4   Convertible Debenture for $153,000 dated 3/19/13 to Asher Enterprises   (1)
10.5   Convertible Debenture for $53,000 dated 5/9/13 to Asher Enterprises   (1)
10.6   Convertible Debenture for $53,000 dated  7/17/13 to Asher Enterprises   (1)
10.7   Convertible debenture for 22,000 dated 11/25/13 issued to LG Capital Funding, LLC   (2)
10.8   Convertible Debenture for 20,000 dated 12/3/13 issued to JMJ Financial   (2)
10.9   Convertible Debenture for $26,000 dated 1/17/14 to Asher Enterprises   (2)
10.10   Convertible Debenture for $125,000 dated 1/17/14 to Redwood Management LLC   (2)
10.11   Convertible Debenture for $50,000 dated 1/17/14 issued to Redwood Management, LLC   (2)
10.12   Convertible Debenture for $32,500 dated 2/20/14 issued to Asher Enterprises   (2)
10.13   Convertible Debenture for $26,000 dated 3/5/14 issued to LG Capital Funding, LLC   (2)
10.14   Convertible Debenture for $53,000 dated 5/8/14 issued to KBM Worldwide, Inc.   (2)
10.15   Convertible Debenture for $22,000 dated 5/27/14 issued to LG Capital Funding, LLC   (2)
10.16   Convertible Debenture for $52,500 dated 7/3/14 issued to LG Capital Funding, LLC   (2)
10.17   Convertible Debenture for $27,500 dated 8/4/14 issued to KBM Worldwide, Inc.   (2)
10.18   Convertible Debenture for $26,500 dated 9/3/14 issued to LG Capital Funding, LLC   (2)
10.19   Convertible Debenture for $52,500 dated 12/31/14 issued to LG Capital Funding, LLC   Filed herewith
10.20   Convertible Debenture for $72,450 dated 2/13,15 issued to LG Capital Funding, LLC   Filed herewith
10.21   Agreement for conversion of indebtedness to series B voting preferred dated March 20, 2015   Filed herewith
14   Code of Ethics for Executives and Senior Officers adopted September 30, 2013   (1)
14.1   Board of Directors Corporate Governance Principals adopted September 30, 2013   (1)
31.1   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Filed herewith
31.2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Filed herewith
32.1   Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   Filed herewith
32.2   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   Filed herewith

 

(1) Incorporated by reference from Pleasant Kid’s Annual Report on Form 10-KSB for the Fiscal Year Ended September 30, 2013 filed on January 14, 2014. 

 

(2) Incorporated by reference from Pleasant Kid’s Annual Report on Form 10-KSB for the Fiscal Year Ended September 30, 2014 filed on January 14, 2015. 

 

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Pleasant Kids, Inc.
  (Registrant)
   
   
Date: May 20, 2015  By: /s/ Robert Rico
    Chief Executive Officer

 

 By: /s/ Kenneth C. Wiedrich
    Chief Financial Officer

 

 

25

 

 

PLEASANT KIDS, INC. 10-Q

 

Exhibit 3.9

 

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PLEASANT KIDS, INC. 10-Q

 

Exhibit 3.10

 

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PLEASANT KIDS, INC. 10-Q

 

Exhibit 4.3

 

CERTIFICATE OF DESIGNATION, NUMBER, POWERS

PREFERENCES AND RELATIVE, PARTICIPATING OPTION, AND

OTHER SPECIAL RIGHTS AND THE QUALIFICATIONS,

LIMITATIONS, RESTRICTIONS, AND OTHER DISTINGUISHING

CHARACTERISTICS OF SERIES B PREFERRED STOCK OF

PLEASANT KIDS, INC.  

 

It is hereby certified that:

 

1. The name of the corporation (hereinafter called the “Corporation”) is Pleasant Kids, Inc.

  

2. The certificate of incorporation authorizes the issuance of 60,000,000 shares of Preferred Stock with a par value to be determined by the Board of Directors and expressly vests in the Board of Directors of the Corporation the authority provided therein to issue any or all of said shares in one or more series and by resolution or resolutions, the designation, number full or limited voting powers, or the denial of voting powers, preferences and relative participating, option, and other special rights and the qualifications, limitations restrictions, and other distinguishing characteristics of each series to be issued.

  

3. The Board of Directors of the Corporation, pursuant to the authority expressly vested in it as aforesaid, has adopted the following resolutions creating a Series B issue of Preferred Stock:

  

a. RESOLVED, that TEN MILLION (10,000,000) shares of the Preferred Stock of which, Sixty Million (60,000,000) Preferred shares are authorized (par value $0.001 per share), are authorized to be issued by this Corporation pursuant to its certificate of incorporation, and that there be and hereby is authorized and created a series of preferred stock, hereby designed as the Series B Preferred Stock, which shall have the voting powers, designations, preferences and relative participating, optional or other rights, if any, or the qualifications, limitations, or restrictions, set forth in such certificate of incorporation and in addition thereto, those following:

   

i. DESIGNATION. The Preferred Stock subject hereof shall be designated Series B Preferred Stock (“Series B Preferred”). No other shares of Preferred Stock shall be designated as Series B Preferred stock.

  

ii. DIVIDENDS. The Holder of Series B Preferred Stock will not be entitled to receive dividends of any kind, including but not limited to any dividends paid on Common Stock.

  

iii. CONVERSION. The Series B Preferred Stock shall not be convertible into Common Stock at any time.

 

iv. LIQUIDATION RIGHTS. The Series B Preferred Stock shall not have any rights with respect to liquidation preference upon the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary.

 

 
 

 

v. OTHER RESTRICTIONS. There shall be no conditions or restrictions upon the creation of indebtedness of the Corporation, or any subsidiary or upon the creation of any other series of preferred stock with any other preferences.

  

vi. VOTING.

  

1. Voting with Common Stock . Each share of the Series B Preferred Stock shall vote together with the holders of the Common Stock and have one thousand (1,000) votes on all matters on which shareholders of the Corporation shall be entitled to vote and be entitled to a vote on all matters submitted to the shareholders.  For example, if a matter is presented to the shareholders for a vote and there are 10,000 Series B Preferred shares outstanding and entitled to vote on the matter, then the Holder of the Series B Preferred Stock would be granted 10,000,000 votes.

 

2. Class Voting Rights . So long as the Series B Preferred Stock is outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of at least 51% of all outstanding Series B Preferred Stock voting separately as a class, (i) Amend, alter or repeal (by merger or otherwise) any provision of the Certificate of Incorporation or the By-laws of the Corporation, as amended, as to adversely affect the relative rights, preferences, qualifications, limitations, or restrictions of the Series B Preferred Stock, (ii) effect any reclassification of the Series B Preferred Stock.

 

3. A class vote on the part of the Series B Preferred Stock shall, without limitation, specifically not be deemed to be required (except as otherwise required by law or resolution of the Corporation’s Board of Directors) in connection with; (a) the authorization, issuance or increase in the authorized amount of any shares of any other class or series of stock which ranks junior to, or on a parity with, the Series B Preferred Stock in respect to the payment of dividends and distributions upon liquidation, dissolution or winding up of the Corporation; or (b) the authorization, issuance or increase in the amount of any bonds, mortgages, debentures or other obligation of the Corporation.

 

vii. STATED VALUE. The Shares of Series B Preferred shall have a stated value of $0.001 per share.

  

viii. OTHER-PREFERENCES. The shares of the Series B Preferred shall have no other preferences, rights, restrictions, or qualifications, except as otherwise provided by law or the certificate of incorporation of the Corporation.

 

 
 

 

FURTHER RESOLVED, that the statements contained in the foregoing resolution creating and designating the said Series B Preferred Stock and fixing the number, powers, preferences and relative, optional participating and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics thereof shall, upon the effective date of said series, be deemed to be included in and be a part of the certificate of incorporation of the Corporation.

 

Signed on March, 16, 2015. 

 

By Unanimous Written Consent of the Board of Directors:

 

 

/s/ Robert Rico   /s/ Calvin Lewis   /s/ Kenneth Wiedrich
         
Robert Rico – Director   Calvin Lewis – Director   Kenneth Wiedrich – Director

 

 
 

PLEASANT KIDS, INC. 10-Q

 

Exhibit 4.4

 

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PLEASANT KIDS, INC. 10-Q

 

Exhibit 4.5

 

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Pleasant Kids, Inc. 10-Q


Exhibit 10.19 

 

 
 

 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 
 

 

 

 

 

 
 

 

 

 

Pleasant Kids, Inc. 10-Q

Exhibit 10.20

 

 

 
 

 

 

 
 

 

 

 

 
 

 

 
 

 

 

PLEASANT KIDS, INC. 10-Q

 

Exhibit 10.21

 

AGREEMENT FOR CONVERSION OF

INDEBTEDNESS TO SERIES B VOTING PREFERRED STOCK

OF

PLEASANT KIDS, INC.

A FLORIDA CORPORATION

 

THIS AGREEMENT OF CONVERSION OF INDEBTEDNESS TO SERIES B PREFERRED VOTING STOCK (“Agreement”) is made and entered into the 20th day of March, 2015, by and between Pleasant Kids, Inc.(the “Company”), Robert Rico and Calvin Lewis (the “Holders”).

 

RECITALS

 

A. Pursuant to the provisions of that certain debt of unpaid salary, the Company is indebted to the Holders in the principal amount of $20,000.00 (the “Indebtedness”).

 

B. The Company and the Holders, and each of them, desire that the Holders convert the Indebtedness into 10,000,000 shares of the Company’s Series B Voting Preferred Stock, on the terms and subject to the conditions specified in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES, COVENANTS, AND UNDERTAKINGS SPECIFIED IN THIS AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WHICH THE INTENT TO BE OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES TO THIS AGREEMENT HEREBY REPRESENT, WARRANT AND AGREE AS FOLLOWS:

 

1. Recitals. The above recitals are true and correct and, by this reference, are made a part of this Agreement proper, as though specified completely and specifically at length in this Agreement proper

 

2. Conversion of Indebtedness. The Indebtedness shall be, and hereby is, converted to 10,000,000 shares of the Company’s Series B Voting Preferred Stock (the “Shares”).

 

3. Ownership of the Indebtedness. The Holders are the owners of the Indebtedness and have not sold, assigned, transferred, conveyed, or otherwise disposed of the Indebtedness, or any portion thereof.

 

4. Due Diligence By the Holders. The Holders have relied solely upon such independent investigations and due diligence made by the Holders in making its decision to convert the Indebtedness to the Shares as the Holders have determined to be necessary or appropriate.

 

5. No Determination By Agency. No agency or regulatory authority has approved or made any finding or determination regarding the fairness of the conversion of the Indebtedness to the Shares.

 

6. Nature of Investment in the Shares. The Holders understand that the conversion of the Indebtedness to the Shares is a speculative investment and involves certain risks.

 

7. Forward Looking Information Regarding the Company. The Holders understand that the information provided to the Holders by the Company regarding the conversion of the Indebtedness to the Shares specifies certain forward looking and anticipatory information that involves risks and uncertainties including information regarding the Company’s business and expectations.  The Holders understand that such information, generally, is not based on historical facts and, therefore, the Company’s actual results may differ materially from those specified or contemplated by that information.  The Holders understand that the results of the Company’s operations, including, but not limited to, revenue and profits, may differ materially from those specified in or contemplated by that information.  The Holders understand that in evaluating that information, the Holders have considered various factors which may cause results to differ materially from any information provided to the Holders by the Company in connection with the conversion of the Indebtedness to the Shares.  The Holders understand that the forward looking, anticipatory information provided to the Holders by the Company in connection with the conversion of the Indebtedness to the Shares is made in good faith and based upon the current judgment of the Company regarding its proposed business.  The Holders understand that actual results from the operations of the Company will almost always vary, sometimes materially, from any future performance suggested or contemplated by that information.

 

 
 

 

 

8. Knowledge and Experience of the Holders. The Holders have the requisite knowledge and experience to evaluate the relative business and tax aspects and risks, or the Holders have relied upon the advice of experience advisors with regard to the relative business and tax aspects and risks, and other considerations involved in the conversion of the Indebtedness to the Shares.

 

9. Pre-existing Relationship Among the Holders and the Company. The Holders have a pre-existing relationship with the Company, and that pre-existing relationship was developed and formed prior to, and independent and not as a result of, the Holders’ decision to convert the Indebtedness to the Shares.  As a result of that pre-existing relationship with the Company and because of the Holders’ business or financial experience, it is reasonable for the Company to assume that the Holders have the capacity to protect the Holders’ interests in connection with the conversion of the Indebtedness to the Shares.

 

10. No Registration of the Shares. The Holders understand that the conversion of the Indebtedness to the Shares has not been registered with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Act”), because of that certain exemption from the registration and prospectus delivery requirements of the Act specified by the provisions of Section 3(a)(9) of the Act.  The Holders understand that the Holders have no right to require that the Shares be registered or qualified with any securities commission, regulator, administrator, or similar authority of any jurisdiction.  The Holders are aware that the Company has no obligation to assist the Holders in obtaining any exemption from any registration or qualification requirements imposed by applicable law or registering or qualifying the Shares in any jurisdiction.  The Holders are aware that the Holders shall be responsible for compliance with all conditions on transfer imposed by the Commission or any securities administrator or similar authority of any state of province.

 

11. Responsibility Re: Tax Consequences. The Holders understand that any tax consequences resulting from its conversion of the Indebtedness to the Shares will depend upon the Holders’ particular circumstances, and the Company will not be responsible or liable for any tax consequences resulting from the conversion of the Indebtedness to the Shares.

 

12. No Commission or Other Remuneration. No commission or other remuneration has been paid or has agreed to be paid or given, directly, or indirectly, for soliciting the exchange and conversion of the Indebtedness for the Shares.

 

13. Release of the Indebtedness. In consideration of the issuance by the Company to the Holders of the Shares, the Holders hereby irrevocably, unconditionally, and forever releases, acquits, and discharges the Company from any and all liability, debts, demands and rights relating to, and any cause of action that could have been asserted in connection with, the Indebtedness.

 

14. Capacity to Execute Agreement. Each party to this Agreement represents, warrants, and covenants that such party has the complete right and authority to enter into, execute, and deliver this Agreement, and the person executing this Agreement on behalf of such party has the complete right and authority to commit and obligate such party fully and completely as specified in this Agreement.

 

15. Lack of Duress. Each party to this Agreement represents, warrants, and covenants that such party executes and delivers this Agreement of such party’s free will and with no threat, menace, coercion or duress, whether economic of physical.  

 

Moreover, each party to this Agreement represents, warrants, and covenants that such party executes this Agreement acting on such party’s judgment and advice of such party’s counsel, without any representation, express or implied, of any kind from the other party to this Agreement, except as specified expressly in this Agreement.

 

 

 
 

 

16. Survival of Covenants, Representations and Warranties. All covenants, representations, and warranties made by the parties to this Agreement shall be deemed made for the purpose of inducing each such party to enter into and execute and deliver this Agreement.  The representations, warranties, and covenants specified in this Agreement shall survive any investigation by either such party, whether before or after the execution of this Agreement.  The covenants, representations, and warranties of the parties to this Agreement are made only to and for the benefit of those parties and shall not create or vest rights in other person.

 

17. Entire Agreement. This Agreement is the final written expression and complete and exclusive specification of all the agreements, conditions, promises, representations, warranties, and covenants among the parties to this Agreement with respect to the subject matter of this Agreement, and this Agreement supersedes all prior or contemporaneous agreements, negotiations, representations, warranties, covenants, understandings and discussion by and among those parties, their respective counsel, and any other person with respect to the subject matter specified in this Agreement.  This Agreement may be amended only by an instrument in writing which specifically refers to this Agreement and indicates that such instrument is intended to amend this Agreement and signed by each of the parties to this Agreement.

 

18. Captions and Interpretations. Captions of the sections of this Agreement are for convenience and reference only, and the words specified therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction, or meaning of the provisions of this Agreement.  The language in this Agreement, in all events, shall be construed in accordance with the fair meaning of that language, as if prepared by both parties to this Agreement and not strictly for or against either such party.  Each party to this Agreement has reviewed and read this Agreement carefully.  The rule of construction which requires a court to resolve any ambiguities against the drafting party shall not apply in interpreting the provisions of this Agreement.

 

19. Number and Gender.   Whenever the singular number is used in this Agreement and, when required by the context, the same shall include the plural, and vice versa; the masculine gender shall include the feminine and the neuter genders, and vice versa, and the word “person” shall include individual, company, sole proprietorship, corporation, joint venture, association, joint stock company, fraternal order, cooperative, league, club, society, organization, trust, estate, governmental agency, political subdivision or authority, firm, municipality, congregation, partnership, or other form of entity, whether active or passive.

 

20. Severability.  In the event any portion of this Agreement, for any reason, is determined to be invalid, such determination shall not affect the validity of any remaining portion of this Agreement, which remaining portion shall remain in complete force and effect, as if this Agreement had been executed with that invalid portion of this Agreement eliminated.  It is hereby declared the intention of the parties to this Agreement that those parties would have executed the remaining portion of this Agreement without including any portion which, for any reason, hereafter may be determined to be invalid.

 

21. Execution in Counterparts. This Agreement may be prepared in multiple copies and forwarded (by facsimile or electronic transmission) to each of the parties to this Agreement (or their counsel) for signature. The signatures of those parties may be affixed to one copy or to separate copies of this Agreement and when all such copies are received (by facsimile or electronic transmission) and signed by both such parties, those copies shall constitute one agreement which is not otherwise separable or divisible.

 

22. Expenses.  Each party to this Agreement shall pay such party’s costs and expenses incurred by such party in connection with the preparation, execution and delivery of this Agreement and the action contemplated by the provisions of this Agreement.

 

23. Further Assurances.  Each party, at any time and from time to time, at any other party’s request, shall execute, acknowledge, and deliver any and all instruments and take any and all action that may be necessary or proper to carry out, perform, and effectuate the intents and purposes of the provisions of this Agreement.  In the event of refusal or failure to do so by any party, any other such party shall have the power and authority, as attorney-in-fact for the party so refusing or failing, to execute, acknowledge, and deliver such instrument and take any and all such action.

 

24. Consent to Agreement. By executing this Agreement, each party represents that such party has read or caused to be read this Agreement in all particulars and consents to the rights, conditions, obligations, duties, and responsibilities imposed upon such party by the provisions of this Agreement.  Each party represents, warrants, and covenants that such party executes and delivers this Agreement of such party’s free will and with no threat, undue influence, menace, coercion or duress, whether economic or physical.  Moreover, each party represents, warrants, and covenants that such party executes this Agreement acting on such party’s independent judgment.

 

 
 

 

 

25. Choice of Law and Consent to Jurisdiction. This Agreement shall be deemed to have been entered into in the State of Florida. All questions concerning the validity, interpretation, or performance of any of the terms, conditions, and provisions of this Agreement or of any of the rights or obligations of the parties shall be governed by, and resolved in accordance with, the laws of the State of Florida, without regard to conflicts of law principles.

 

IN WITNESS WHEREOF the parties to this Agreement have executed this Agreement in duplicate and in multiple counterparts, each of which shall have the force and effect of an original, on the date specified in the preamble of this Agreement.

 

THE COMPANY:   THE HOLDERS:
         
Pleasant Kids, Inc.   By: /s/ Robert Rico
A Florida Corporation   the Indebtedness Holder

 

By: /s/ Robert Rico   By: /s/ Calvin Lewis
Its: President and Director   the Indebtedness Holder
         
By: /s/ Calvin Lewis      
Its: Executive Vice President      

 

 

 

 

 

PLEASANT KIDS, INC. 10-Q

 

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Robert Rico, certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Pleasant Kids, Inc.;

 

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

   
  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles;

     
  (c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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;
     
  (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.

 

   By: /s/ Robert Rico
    Chief Executive Officer
May 20, 2015

 

 

 

 

 

 

 

PLEASANT KIDS, INC. 10-Q

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Kenneth C. Wiedrich, certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Pleasant Kids, Inc.;

 

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

   
  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the

period in which this report is being prepared;

     
  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with

generally accepted accounting principles;

     
  (c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
  (d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s

internal control over financial reporting; and

 

(5)

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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.

 

  

   By: /s/ Kenneth C. Wiedrich
    Kenneth C. Wiedrich
Chief Financial Officer
    May 20, 2015

 

 

 

 

PLEASANT KIDS, INC. 10-Q

 

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 Quarterly Report of Pleasant Kids (the “Company”) on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission (the “Report”), I, Robert Rico, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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.

 

   By: /s/ Robert Rico
    Chief Executive Officer
May 20, 2015

 

 

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

PLEASANT KIDS, INC. 10-Q

 

 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 Quarterly Report of Pleasant Kids (the “Company”) on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission (the “Report”), I, Kenneth C. Wiedrich, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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.

 

 

   By: /s/ Kenneth C. Wiedrich
    Kenneth C. Wiedrich
Chief Financial Officer
    May 20, 2015

 

 

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.