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SLNR > SEC Filings for SLNR > Form 10-K on 12-Sep-2013All Recent SEC Filings

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Form 10-K for SEALAND NATURAL RESOURCES INC


12-Sep-2013

Annual Report


Item 7. Management's Discussion and Analysis Of Financial Condition and Results Of Operations.

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

RESULTS OF OPERATIONS

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Fiscal Year Ended May 31, 2013 Compared To Fiscal Year Ended May 31, 2012.

Our net loss for the fiscal year ended May 31, 2013 was $647,258 compared to a net loss of $320,109 for the fiscal year ended May 31, 2012. During fiscal year ended May 31, 2013, the Company generated revenue of $285,896, as compared to 18,298 for fiscal 2012. Revenue increase was attributable to establishing new sales contracts with new vendors , both domestic and international, and creating an online sales order system for customers to directly order product.

During the fiscal year ended May 31, 2013, we incurred general and administrative expenses of $827,561 compared to $303,891 incurred for the fiscal year ended May 31, 2012. Expenses increased primarily due to: a) increased scale and scope of business operations; b) greater emphasis on marketing and advertising efforts, and: c) professional and related fees associated with the merger.

The weighted average number of shares outstanding was 2,105,000 for the fiscal year ended May 31, 2013 compared to 1,178,201for the fiscal year ended May 31, 2012.

LIQUIDITY AND CAPITAL RESOURCES

FISCAL YEAR ENDED MAY 31, 2013

As of May 31, 2013, our current assets were $396,959and our total liabilities were $650,959. As of May 31, 2013, current assets were comprised of $34,297 in cash, $246,817 of receivables, $113,345 of inventory, and $2,500 in prepaid expenses. As of May 31, 2013, total liabilities were comprised of $20,000 in loans from Director, $395,959 in accounts payable, and $235,000 of notes payable.

As of May 31, 2013, our total assets were $499,353 comprised of current assets, furniture/equipment of $62,394, and $40,000 of deposits. Stockholders' deficit increased from $35,233 as of May 31, 2012 to $151,606 as of May 31, 2013.

CASH FLOWS FROM OPERATING ACTIVITIES

We have not generated positive cash flows from operating activities. For the fiscal year ended May 31, 2013, net cash flows used in operating activities was $575,057. Net cash flows used in operating activities was $901,222 for the period from inception (May 13, 2012) to May 31, 2013.

CASH FLOWS FROM FINANCING ACTIVITIES

We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended May 31, 2013 net cash provided by financing activities was $672,811. For the period from inception (May 13, 2012) to May 31, 2013, net cash provided by financing activities was $1,000,874.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

MATERIAL COMMITMENTS

As of the date of this Annual Report, we do not have any material commitments.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our May 31, 2013 and May 31, 2012 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

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