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PLPL > SEC Filings for PLPL > Form 10-K/A on 29-Apr-2014All Recent SEC Filings

Show all filings for PLANDAI BIOTECHNOLOGY, INC.



Annual Report





For the fiscal year ended June 30, 2013, sales were $359,143 compared to sales of $0 for the fiscal year ended June 30, 2012. Sales during 2013 consisted of avocado, macadamia nuts and timber from the company's farming operations in South Africa. The company has not commenced sales of its botanical extracts and does not anticipate having product available for market until early 2014.


Our total expenses for the fiscal year ended June 30, 2013 were $1,973,698 compared to $3,912,812 in the prior year. Of the prior year amount, $2,977,700 resulted from recording the fair value of stock issued for services previously rendered, which was recorded as salary and professional services. In 2013, the company also commenced recording rent expense of $320,927 and depreciation of $135,039 as assets were placed in service.


For the years ended June 30, 2013 and 2012, the Company reported interest expense of $265,245 and $28,586, respectively, an increase of $236,659. The increase was primary due to the interest accrued on the Land Bank loans.

For the years ended June 30, 2013 and 2012, the Company reported derivative interest expense of $45,227 and $0, respectively, an increase of $45,227. The increase was due to the issuance of convertible debenture issued in May, 2013.


For the fiscal year ended June 30, 2013; the Company's cash used in operating activities totaled $1,846,334, which was primarily attributable to operational costs in South Africa associated with getting the Senteeko estate operational. Cash used in investing activities was $1,986, 908, which consisted almost entirely of leasehold improvements and fixed asset acquisitions in South Africa. Cash provided by financing activities was $4,327,047, the majority of which was provided by a bank loan of $3,944,712 that was used to purchase equipment and leasehold improvements for the South African operations. As of June 30, 2013, the Company had current assets of $518,994 compared to current liabilities of $823,729. Cash on hand was $498,917.


The Company executed a 49-year notarial lease, giving it control over 8,000 acres of plantation properties in South Africa. Plandaí plans to use a proprietary extraction process to create bio-available extracts using the farm produce from the plantation, with an initial emphasis on green tea and citrus extracts. During the fiscal year ended June 30, 2013 commenced rehabilitation efforts on the plantation, which involved removing overgrowth, paring the tea bushes, refurbishing housing for the laborers, and repairing the roads and bridges. The company also commenced construction on a 3,000m2 extraction facility which was completed in September 2013. Management currently estimates that tea harvesting and extract production will commence in December 2013.

Plandaí also commenced several laboratory trials in preparation for releasing product to market. These trials focus on bioavailability, anti-inflammation, topical absorption, weight loss, and malaria. The Company expects to release product to market in early 2014 under Phytofare™ brand name.

Plandaí has entered into several distribution agreements covering nutriceutical sales in North America, Europe and parts of Africa, with additional markets opening in the coming months.

The Company's long-term existence is dependent upon our ability to execute our operating plan and to obtain additional debt or equity financing to fund payment of obligations and provide working capital for operations. In April 2012, the Company through majority-owned subsidiaries of Dunn Roman Holdings, Inc., executed final loan documents on a 100 million Rand (approx. $13 million USD) financing with the Land and Agriculture Bank of South Africa.


The company does not anticipate making any acquisitions in the coming twelve months.


Green tea and green tea extracts have become ever-present in consumer products throughout Europe, Asia and the Americas. Every major beverage manufacturer has a green tea-infused product, but there are also countless other green tea-derived products that have flooded the market in recent years, including:

º Ice cream º Soda
º Shampoo & conditioner
º Lotion and skin care products
º Nail polish
º Vitamins
º Weight loss supplements
º Food additive º Soap

A 2008 published report estimated that the market for green tea extract would grow by more than 13% for the next seven years as demand increases in Europe and the United States. Worldwide, sales for antioxidants, primarily green tea, was $34 billion in 2010. Sports supplements have also surged in recent years. In 2010, total worldwide sales were $4.7 billion, of which the US market comprised 66%, and growing at a rate of 15$ per year.

The Phytofare™ Citrus Limonoid Glycoside Complex targets multiple markets including sports medicine and nutrition, dietary supplements, and cold symptom relief. The market for nutriceutical market is even larger, with $176 billion being spent on food, beverages and supplements fortified with bioactive ingredients including proteins, vitamins and minerals. Of this amount, $48.8 billion is spent on dietary supplements alone. The United States comprises 32.8% of the worldwide market for nutriceuticals.

Initially, Plandaí will focus on developing markets within the following target industries:

· Fortification of food and beverages

· Wellness

· Dietary supplements

· Nutri-cosmetics

· Cosmeceutics

· Botanical drugs

· Athletic supplements

As food and beverage additives, Phytofare™ extracts can be added to virtually any consumable product, or converted into tablet/capsule form, to provide the health benefits in a highly bioavailable form. This creates a nearly limitless opportunity for food and beverage companies to incorporate Phytofare™-infused products into their product line. Likewise, supplement manufactures, who have long-touted antioxidant infused-products can now begin incorporating an extract that actually delivers on their claims.

The August 2013 license agreement with North-West University covering the use of Pheroid in animal and human use provides a stable delivery tool for getting Phytofare™ to the target tissues through topical creams, capsules, or an oral liquid. The Pheroid technology entraps nano particles and protects them until absorbed by cells. The process of glycolysis then breaks down the protective coating, releasing the phytonutrients into the tissues. This technology opens up several additional products lines for Plandaí products in the area of skin care, hair care and beverages.


The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions.
While there are a number of significant accounting policies affecting our financial statements, we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments.

Revenue recognition

The Company presently derives its revenue from the sale of timber and agricultural products produced on its farm and tea estate holdings in South Africa. Revenue is recognized when the product is delivered to the customer. Once production of the Company's Phytofare™ botanical extracts commence in 2014, revenues will be recognized when product is shipped.

Intangible and Long-Lived Assets

We follow Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, "Property Plant and Equipment", which establishes a "primary asset" approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Goodwill is accounted for in accordance with ASC Topic 350, "Intangibles - Goodwill and Other". We assess the impairment of long-lived assets, including goodwill and intangibles on an annual basis or whenever events or changes in circumstances indicate that the fair value is less than its carrying value. Factors that we consider important which could trigger an impairment review include poor economic performance relative to historical or projected future operating results, significant negative industry, economic or company specific trends, changes in the manner of our use of the assets or the plans for our business, market price of our common stock, and loss of key personnel. We have determined that there was no impairment of goodwill during 2013 or 2012.

Potential Derivative Instruments

We periodically assess our financial and equity instruments to determine if they require derivative accounting. Instruments which may potentially require derivative accounting are conversion features of debt and common stock equivalents in excess of available authorized common shares.

Principles of Consolidation

Plandaí Biotechnology, Inc. and its subsidiaries, are encompassed in the
following entities, which have been consolidated in the accompanying financial

Global Energy Solutions, Ltd.         100% owned by Plandaí Biotechnology, Inc.
Dunn Roman Holdings-Africa, Ltd       82% owned by Plandaí Biotechnology, Inc.
Breakwood Trading 22 (Pty) Ltd.       74% owned by Dunn Roman Holdings-Africa

Green Gold Biotechnologies (Pty) Ltd. 74% owned by Dunn Roman Holdings-Africa

During the year ended June 30, 2013, the Company determined that the entity, Global Energy Solutions, was unnecessary to operations and decided to dissolve that corporation, resulting in the stock of Dunn Roman Holdings-Africa being held directly by Plandaí. All liabilities were either satisfied or forgiven and all bank accounts closed. There were no operations in Global Energy Solutions during the years ended June 30, 2012 or 2013. Global Energy Solutions went through a "voluntary strikeoff", which then resulted in a formal dissolution.

Statement of Financial Accounting Standards No. 160, Non-controlling Interests in Consolidated Financial Statements, establishes standards for accounting for non-controlling interest, sometimes called a minority interest, which is that portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. FAS 160 requires that the non-controlling portion of equity and net income/loss from operations of consolidated entities be reflected in the financial statements. The Company previously adopted FAS 160 and has reflected the impact in the accompanying consolidated financial statements. All intercompany balances have been eliminated in consolidation.

Foreign Currency Translation

Financial Accounting Statement No. 52, Foreign Currency Translation (FAS 52), sets forth the appropriate accounting treatment under U.S. GAAP for companies that consolidate the results of foreign operations denominated in local currencies. FAS 52 requires that all assets and liabilities be translated at the current spot rate at the date of translation. Equity items, other than retained earnings, are translated at the spot rates in effect on each related transaction date. Retained earnings are translated at the weighted-average rate for the relevant year and income statement items are translated at the average rate for the period, except where specific identification is practicable. The resulting adjustment is not recognized in current earnings, but rather as a component of other comprehensive income. The Company adopted FAS 52 in the year ended June 30, 2012 and has chosen US dollars as the local currency. The effect of adopting FAS 52 have been reflected in the accompanying consolidated financial statements.


We have no off-balance sheet arrangements.


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 incurred a net loss for the years ended June 30, 2013 and 2012.
These conditions raise substantial doubt as to the Company's ability to continue as a going concern.

The Company's continued existence is dependent upon its ability 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.

The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. Management believes these efforts will generate sufficient cash flows from future operations to pay the Company's obligations and realize other assets. There is no assurance any of these transactions will occur.

Management does not consider our auditor's going concern opinion problematic because we have evaluated operating practices during the years ended 2013 and 2012, and have made modifications to our present-day operations accordingly.

We intend to expand our business through sales by introducing Phytofare™ branded products in the 2014 calendar year. We will also seek to obtain government grants to fund research and development and are exploring the potential to sell limited licenses to the Phytofare™ product. We expect to raise capital either through a debt or equity transaction, or through the sale of licenses.

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