Cuentas Inc. - Quarter Report: 2013 December (Form 10-Q)

New Authoritative Accounting Guidance

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.

NOTE 4 – SHARE EXCHANGE AGREEMENT

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 a wholly owned subsidiary of the Company.

In connection with the closing of the share exchange agreement, Haim Yeffet, a shareholder and director of NYBD Holding, Inc. returned 13,000,000 shares of the common stock and 100,000 share of the Series A Preferred Stock of NYBD Holding, Inc to the treasury of NYBD Holding, Inc. Mr. Yeffet received 2,000,000 of the 10,000,000 shares of Series A Preferred Stock, 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.

The agreement noted above was treated a reverse merger and recapitalization of the company. The Company has adjusted its financial statements and presented its financial information using the standard accounting practices for a reverse merger. The financial statements reflect those of the new operating company, Pleasant Kids, Inc. Comparative information, or lack thereof, presented in the financial statements has been retroactively adjusted to reflect those of Pleasant Kids, Inc.

NOTE 5 - INVENTORY

Inventory stated at cost at December 31, 2013 and September 30, 2013 consisted of the following:

The Company values its inventory using the FIFO method. The Company has had no write downs since its inception on July 13, 2013.

NOTE 6 – NOTES PAYABLE

On March 19, 2013, NYBD Holding, Inc sold and issued a Convertible Promissory Note to Asher Enterprises, Inc. in the principal amount of $153,500 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The Note, together with accrued interest at the annual rate of eight percent (8%), is due on December 22, 2013. The Note is convertible into the Company's common stock commencing one hundred eighty (180) days from the date of issuance at a conversion price equal to 58% of the Market Price of the Company's common stock on the date of conversion. "Market Price" is defined in the Note as the average of the lowest three (3) trading prices for the Company's common stock during the ten (10) trading days prior to the conversion date. The Company has the right to prepay the Note at any time from the date of issuance until the 180th day the Note was issued at an amount equal to130% to150% (depending on the time period paid) of the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date. During the quarter ending December 31, 2013 Asher converted $74,430 of this note into 40,783,912 shares of the Company’s common stock. The balance remaining to be paid on this note as of December 31, 2013 is $79,070.

On May 9, 2013, NYBD Holding, Inc sold and issued a Convertible Promissory Note to Asher Enterprises, Inc. in the principal amount of $53,000 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The Note, together with accrued interest at the annual rate of eight percent (8%), is due on February 13, 2014. The Note is convertible into the Company's common stock commencing one hundred eighty (180) days from the date of issuance at a conversion price equal to 58% of the Market Price of the Company's common stock on the date of conversion. "Market Price" is defined in the Note as the average of the lowest three (3) trading prices for the Company's common stock during the ten (10) trading days prior to the conversion date. The Company has the right to prepay the Note at any time from the date of issuance until the 180th day the Note was issued at an amount equal to130% to150% (depending on the time period paid) of the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date.

On July 17, 2013, NYBD Holding, Inc sold and issued a Convertible Promissory Note to Asher Enterprises, Inc. in the principal amount of $53,000 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The Note, together with accrued interest at the annual rate of eight (8%), is due on April 22, 2014.. The Note is convertible into the Company's common stock commencing one hundred eighty (180) days from the date of issuance at a conversion price equal to 45% of the Market Price of the Company's common stock on the date of conversion. "Market Price" is defined in the Note as the average of the lowest three (3) trading prices for the Company's common stock during the ten (30) trading days prior to the conversion date. The Company has the right to prepay the Note at any time from the date of issuance until the 180th day the Note was issued 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.

On November 25, 2013, NYBD Holding, Inc sold and issued a Convertible Promissory Note to LG Capital Funding, LLC, for the principal amount of $22,000 pursuant to the terms of a Securities Purchase Agreement of even date therewith. The note is to be discounted by 10% with a $1,500 deduction for legal expense for a net total payout of $18,500. The Note, together with accrued interest at the annual rate of eight (8%), is due on November 25, 2014. The Note is convertible into the Company's common stock commencing one hundred eighty (180) days from the date of issuance at a conversion price equal to 58% 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 December 31, 2013, the Company has three convertible notes due to Asher Enterprises which total $207,070.

Accrued Interest

At December 31, 2013, the Company has an accrued interest balance of $13,137 pertaining to the outstanding convertible notes.

Derivative Liability

At December 31, 2013, the Company has a derivative liability of $1,393,026 pertaining to the outstanding convertible notes. The Company uses the Black Scholes Model to calculate derivate liability.

NOTE 7 – SHAREHOLDER LOAN

Two officers of the Company have advanced funds to the Company for working capital purposes at 0% interest, payable on demand. At December 31, 2013, the Company had a shareholder loan balance of 134,383. The amount incurred by Calvin Lewis is 22,102 and the amount incurred by Robert Rico is $112,281.

NOTE 8 - RELATED PARTY TRANSACTIONS

Shareholder loan

At December 31, 2013 the Company has a shareholder loan balance of $134,383 from two officers of the Company.

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. The Company has also rented a small space in the independent packer’s warehouse and the Company has recognized an expense of $2,000 in the quarter ended December 31, 2013 for this space.

NOTE 9 – 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.

As disclosed in Note 10, on January 8, 2014 the Company drafted a second amendment to replace the first amendment to its corporate articles of incorporation section E (Designation of Series A Preferred Stock). Holders of Series A Preferred Stock shall be entitled to 25 votes per 1 vote of common stock, voting together with the holders of common stock. Holders of Series A Preferred Stock will also be entitled to convert 1 share of Series A Preferred Stock into 25 shares of common stock at any time.

On May 8, 2013, the Company issued 100,000 shares of Preferred Stock, Series A to Haim Yeffet for services rendered. As part of the merger with Pleasant Kids, Inc., these shares were returned to the Company.

As part of the share exchange agreement between NYBD Holding, Inc and Pleasant Kids, Inc., 10,000,000 shares of Series A Preferred Stock were issued to the principals of Pleasant Kids, Inc.

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.

From April 2013 to June 2013, the Company issued 30,207,226 common shares to Asher Enterprises, Inc. for the conversion and reduction of $76,100 in convertible debt and $2,120 in accrued interest.

In July 2013, the Company issued 3,553,571 common shares to Asher Enterprises, Inc. for the conversion and reduction of $4,200 in convertible debt.

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

During the quarter ended December 31, 2013, the Company issued 40,783,912 common shares to Asher Enterprises, Inc. for the conversion and reduction of $74,430 in convertible debt.

During the quarter ended December 31, 2013, the Company issued 10,000,000 common shares to JMZ group in payment of a stock payable of $21,000.

During the quarter ended December 31, 2013, the Company issued 13,000,000 for services rendered. The Company has recognized an expense of $72,800 for these services but the services were never rendered. The Company has cancelled this agreement and is in the process of getting the shares back.

During the quarter ended December 31, 2013, the Company issued 3,500,000 shares for assuming a portion of the debt that NYBD Holding, Inc. had with John Bianco.

Stock Payable

Pursuant to the share exchange, the Company will issue 1,000 shares of common stock and 10,000,000 shares of Series A Preferred Stock. As of the September 30, 2013, the Company has issued the 10,000,000 Series A Preferred Stock but has not yet issued the 1,000 shares of common stock. Therefore the Company recorded as stock payable of $1.

At the time of the share exchange agreement on September 20, 2013, the Company agreed to convert a consulting agreement with JMZ Group into 23,000,000 common shares. The value of these shares at the time of the agreement was $.0021 which resulted in a stock for services expense of $48,300. The services provided by JMZ Group were completed prior to September 20, 2013 yet the shares were not issued. The Company recorded a $48,300 stock payable pertaining to this transaction. During the quarter ended December 31, 2013 the JMZ Group received 10,000,000 shares of common stock reducing the stock payable by $21,000 leaving a stock payable of $27,300

NOTE 10 – 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.

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

General

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. This information should also be read in conjunction with the information contained in our Form 8-K/A filed with the Securities and Exchange Commission (the “Commission”) on January 7, 2014, including the audited financial statements and notes included therein as of and for the year ended September 30, 2013, which reports are incorporated herein by reference. The reported results will not necessarily reflect future results of operations or financial condition.

Caution Regarding 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.

Corporate Overview and History of NYBD Holding, Inc..

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.

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.

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 a wholly owned subsidiary. 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.

Overview

Pleasant Kids, 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.

Operations

Pleasant Kids, will operate 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, intends to launch its online store by mid 2014. The Company intends enter the California market at the same time.

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. We expect to expand to California starting in mid 2014.

Industry Overview

There is an average of 4 million children born every year in America. The US Census estimates 64,000,000 million children from the ages of 0 to 9 years old. California and Texas are the most populous states and New York City the most populous city in the United States. The average child population has increased 40% compared to a decade ago.

The Council of Better Business Bureaus and 10 leading food and beverage companies launched the Children's Food and Beverage Advertising Initiative in November 2006. The goal of the Initiative is to shift the mix of advertising primarily directed to children (“child-directed advertising”) to encourage healthier dietary choices and healthy lifestyles.  On December 31, 2013, new CFBAI-developed uniform nutrition criteria will go into effect and become the new foundation for child-directed food advertising.  The Initiative covers child-directed advertising on traditional media (TV, radio, print and Internet) as well as on new and emerging media, such as mobile media and video games. The promotion of a healthy diet will of course help promote the Company’s product.

Taking advantage of our USP “Unique Selling Position”, The Company intends to avail its self of the promotional activities of the competition and expand throughout the same retail markets that they establish. The Company anticipates that the initial marketing thrust will be to support the retailers and distribution partners with point of sales displays and other marketing materials, strategically adding an extensive PR program as circumstances dictate.

Even though the Company has a USP “Unique Selling Position” in the market and expects to be first in the market for this unique niche, the beverage industry is extremely competitive. The principal areas of competition include pricing, packaging, development of new products and flavors, and marketing campaigns. Our product will be competing directly with a wide range of drinks produced by a relatively large number of manufacturers. Most of these brands have enjoyed broad, well-established national recognition for years, through well-funded ads and other marketing campaigns. In addition, companies manufacturing these products generally have far greater financial, marketing, and distribution resources than that of our Company.

Growth Strategy

Over the coming fiscal year, the company will employ an aggressive strategy in taking its product to market. The Pleasant Kids brand and the characters that go along with it will be an integral part of our plan in developing customer and brand loyalty. The Company is also working at establishing a large number of distributors through a broker-distributor-retailer network, whereby brokers represent the Company’s products to distributors and retailers. Our target retail markets are: (a) chain and independent health food stores; (b) grocery stores; (c) convenience stores; (d) drug stores; and the mass online retail market. We have initially concentrated on the Southeast United States but will soon be adding distribution networks in the western United States/

Results of Operations

Results of operations for the period from September 30, 2013 to December 31, 2013.

Revenue:

The Company started operations on July 15, 2013 and there were no sales as of the period from July 15, 2013 to September 30, 2013. The Company has not recorded sales in the quarter ended December 31, 2013 as well but has bottled up 1,000 cases and has sold all inventory in the subsequent quarter. The Company was not in existence in 2012, and as a result there were no activities to compare to in 2012.

Cost of Goods Sold

The Company is not reporting any Cost of Goods Sold for the period from October 1 2013 to December 31, 2013. The Company paid for raw materials but this was accounted for as inventory. There were no activities in the fiscal year 2012 to compare to.

Operating Expenses:

Operating expenses for the quarter ended December 31, 2013 were $176,593. This total was made up of professional services of $77,300 and G&A expenses of $99,293. The G&A expenses of $99,293 is made up of mostly of consulting fees of ($63,650) legal professional fees of ($11,715), Meals and entertainment ($3,945), Advertising ($3,628), commission & fees of ($3,500), rent or lease expense of ($2,733) and Internet ($2,344). There were no activities in the comparative period ending December 31, 2012.

Loss from Operations:

Loss from operations was $176,349 for the quarter ending December 31, 2013. There were no operations in 2012 to compare to.

Net Loss:

Loss from operations was $279,492 for the quarter ending December 31, 2013. This was due to an operating loss of $176,349 along with non-operating interest expense of $4,550 and a derivative liability of $98,593. There were no operations in 2012 to compare to.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2013, the Company had net current liabilities of $1,831,581. This liability is mostly made up of a derivative liability of $1,393,026. The cash balance at December 31, 2013 was $53. And the working capital is a negative $1,796,920. There are no comparative figures for the quarter ended December 31, 2012.

Operational cash flow

The Company had operating cash outflows in the quarter ended December 31, 2013, of $46,894. The Company’s primary uses of cash have been for professional support and marketing expenses, and working capital. All cash received has been expended in the furtherance of growing future operations.

Financing cash flows

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 $1,796,920 and a stockholders’ deficiency of $1,796,920, as of December 31, 2013. 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:

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.

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

None

ITEM 1A. RISK FACTORS

The Company is a relatively new company without much history and has a stockholders’ deficit of 1,796,920. The Company’s survival is dependent upon its ability to raise sufficient capital and to be able to implement its business plan.

Risks Relating to Our Business

If the Company fails to develop and maintain an effective system of internal controls, the Company may not be able to accurately report financial results or prevent fraud; as a result, current and potential shareholders could lose confidence in the financial reports, which could harm our business and the trading price of our common stock.

Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002 requires Companies to evaluate and report on internal controls over financial reporting. The Company plans to prepare for compliance with Section 404 by strengthening, assessing and testing our system of internal controls to provide the basis for our reporting. The process of strengthening internal controls and complying with Section 404 is expensive and time consuming, and requires significant management attention, especially given that the Company has not yet undertaken any efforts to comply with the requirements of Section 404. The Company cannot be certain that the measures taken will ensure that the Company will maintain adequate controls over the financial processes and reporting in the future. Furthermore, if the Company is able to rapidly grow our business, the internal controls that are needed will become more complex, and significantly more resources will be required to ensure internal controls remain effective. Failure to implement required controls, or difficulties encountered in their implementation, could harm operating results or cause the Company to fail to meet reporting obligations. If the Company or its auditors discover a material weakness in internal controls, the disclosure of that fact, even if the weakness is quickly remedied, could diminish investors’ confidence in the financial statements and harm the stock price. In addition, non-compliance with Section 404 could subject us to a variety of administrative sanctions, including the suspension of trading, ineligibility for listing on one of the Nasdaq Stock Markets or national securities exchanges, and the inability of registered broker-dealers to make a market in the Company’s common stock, which would further reduce the stock price of the Company.

We will incur increased costs as a public company which may affect our profitability and an active trading market.

As a public company, the Company will incur significant legal, accounting and other expenses that it did not incur as a private company. SEC disclosures generally involve a substantial expenditure of financial resources. In addition, the Sarbanes-Oxley Act of 2002 and new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. The Company expects that full compliance with these new rules and regulations will significantly increase legal and financial compliance costs and make some activities more time-consuming and costly. For example, the Company will be required to create additional board committees and adopt policies regarding internal controls and disclosure controls and procedures. Such additional reporting and compliance costs may negatively impact the financial results. To the extent earnings suffer as a result of the financial impact of SEC reporting or compliance costs, the ability to develop an active trading market for the Company’s securities could be harmed.

There is no guarantee the Company can achieve or maintain profitability, and if the Company cannot generate sufficient revenues and profitability, it will be unable to build a sustainable business and you could lose your entire investment.

The Company’s ability to successfully develop its products, and to realize consistent, meaningful revenues and profit has not been established and cannot be assured. Pleasant Kids, has not realized any significant revenues and does not expect to do so in the near future. For The Company to achieve success, our products must receive broad market acceptance by consumers. Without this market acceptance, we will not be able to generate sufficient revenue to continue our business operation. If the Company’s products are not widely accepted by the market, the business may fail. The Company’s ability to achieve and maintain profitability and positive cash flow is dependent upon the ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors.

Potential investors should be aware of the problems, delays and expenses encountered by an enterprise in its development stage, many of which are beyond the Company’s control.  These include unanticipated manufacturing, marketing, operational and/or competitive problems, among others.  Revenues may be substantially lower, and costs and expenses may be substantially higher, than current estimates.  Potential investors should be aware of the difficulties normally encountered by new enterprises and the high rate of failure of such enterprises.  The likelihood of success must be considered in light of the expenses, difficulties, complications, delays and competition encountered in connection with the development of a business in the specialty beverage business.

The Company needs significant additional financing to fund its operations, and if adequate funds are not available or are not available on acceptable terms, the Company’s ability to fund its expansion, take advantage of potential opportunities, develop or enhance products or otherwise respond to competitive pressures would be limited significant.

To date, the Company has financed its operations principally through capital infusions from its founders and a small group of investors.  The Company needs to raise additional funds through financing in order to be able to implement its business plan. There is no assurance that such financing will be available on commercially acceptable terms, or at all. If additional funds are raised through the issuance of shares, convertible debt or similar securities of the Company, the percentage of ownership of the Company’s shareholders will be reduced, and such securities may have rights or preferences superior to those of the Company’s securities issued pursuant to a new offering.  If adequate funds are not available or are not available on acceptable terms, the Company’s ability to fund its expansion, take advantage of potential opportunities, develop or enhance products or otherwise respond to competitive pressures would be limited significantly.

The Company’s products and services may not achieve market acceptance and the failure of the Company to achieve broad acceptance of its products and services would have a material adverse effect on the Company’s business, financial condition and results of operations

The nonalcoholic beverage business environment is rapidly evolving as a result of, among other things, changes in consumer preferences, including changes based on health and nutrition considerations and obesity concerns; shifting consumer tastes and needs; changes in consumer lifestyles; and competitive product and pricing pressures. In addition, the nonalcoholic beverage retail landscape is very dynamic and constantly evolving, not only in emerging and developing markets, where modern trade is growing at a faster pace than traditional trade outlets, but also in developed markets, where discounters and value stores, as well as the volume of transactions through e-commerce, are growing at a rapid pace. If the Company is unable to successfully adapt to the rapidly changing environment and retail landscape, our share of sales, volume growth and overall financial results could be negatively affected.

Current and potential competitors, some of whom have greater resources and experience than the Company, may develop products and services that may cause demand for, and the prices of, its products to decline.

The commercial retail beverage industry, and in particular its nonalcoholic beverage segment is highly competitive. Market participants are of various sizes, with various market shares and geographical reach, some of whom have longer operating histories, significantly greater financial, technical, product development and marketing resources, greater name recognition and larger customer bases than Pleasant Kids.  We will compete generally with all liquid refreshments, including bottled water and numerous specialty beverages, such as: SoBe; Snapple; Arizona; Vitamin Water; Gatorade; and Powerade.

The Company will compete indirectly with major international beverage companies including but not limited to: the Coca-Cola Company; PepsiCo, Inc.; Nestlé Dr Pepper Snapple Group; Groupe Danone; Kraft Foods Group, Inc.; and Unilever. These companies have established market presence in the United States, and offer a variety of beverages that are substitutes for our product. The Company faces potential direct competition from such companies, because they have the financial resources, and access to manufacturing and distribution channels to rapidly enter the alkaline water market.

The Company will compete directly with other alkaline water producers and brands focused on the emerging alkaline beverage market including: Eternal; Essentia; Icelandic; Real Water; Aqua Hydrate; Mountain Valley; Qure; Penta; and Alka Power. These companies could bolster their position in the alkaline water market through additional expenditure and promotion.

As a result of both direct and indirect competition, the Company’s ability to successfully distribute, market and sell our product, and to gain sufficient market share in the United States to realize profits may be limited, and our business plan may not succeed.    

The Company relies on the services of key personnel, and the failure to attract, motivate and retain these employees could harm the Company’s business.

The Company’s future performance depends to a significant degree on the continued service of a few full and part time key technical and managerial personnel, including without limitation its Chief Executive, Vice President and Chief Operating Officer.  If the Company loses the services of any of these individuals, its business, operating results and financial condition could be materially and adversely effected.  The Company’s future success also depends on its continuing ability to attract and retain highly qualified sales, technical, customer support, and managerial personnel.  There can be no assurance that the Company will be able to retain its key employees, or that it can attract, assimilate and retain other highly qualified personnel in the future.  The failure to attract, motivate and retain these employees could harm the Company’s business.

Adverse general economic conditions also could reduce sales of our products and adversely affect our business.

Unfavorable general economic conditions, such as a recession or economic slowdown, in the United States could negatively affect the affordability of, and consumer demand for our product in the United States. Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of our products or by shifting away from our beverages to lower-priced products offered by other companies, including non-alkaline water. Consumers may also cease purchasing bottled water and consume tap water. Lower consumer demand for our product in the United States could reduce our profitability. A prolonged economic downturn could have a material adverse effect on our business, financial condition, and results of operations.

The Company relies upon third-parties, and the Company may not be able to maintain these relationships. The failure of the Company to maintain and renew these relationships on terms favorable to the Company could adversely affect its business, operating results and financial condition.

The Company’s distribution network and its success depend on the performance of third parties. Any non- performance or deficient performance by such parties may undermine our operations, profitability, and result in total loss to your investment. To distribute our product, we will use a broker-distributor-retailer network whereby brokers represent our products to distributors and retailers who will in turn sell our product to consumers. The success of this network will depend on the performance of the brokers, distributors and retailers of this network. There is a risk that a broker, distributor, or retailer may refuse to or cease to market or carry our product. There is a risk that the mentioned entities may not adequately perform their functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our product in localities that may not be receptive to our product. Furthermore, such third parties’ financial position or market share may deteriorate, which could adversely affect the Company’s distribution, marketing and sale activities. The Company also needs to maintain good commercial relationships with third-party brokers, distributors and retails so that they will promote and carry our product. Any adverse consequences resulting from the performance of third parties or our relationship with them could undermine our operations, and have a materially adverse effect on the Company’s business plan.

The Company may encounter difficulties in managing its growth, which could prevent it from executing its business strategy.

If the Company achieves its growth objectives, such growth would place a strain on its management systems and resources.  The Company’s ability to compete effectively and to manage future growth, if any, will require it to continue to improve its financial and management controls, reporting systems and procedures on a timely basis, and to expand, train and manage its employee work force.  There can be no assurance that the Company will be able to successfully do so, which could adversely affect its business, operating results and financial condition.

Health benefits of alkaline water is not guaranteed or proven, rather it is perceived by consumers.

Health benefits of alkaline water are not guaranteed and have not been proven. There is a perception that consuming alkaline water has beneficial health effects. Consequently, negative changes in consumers’ perception of the benefits of alkaline water or negative publicity surrounding alkaline water may result in loss of market share or potential market share and have a materially adverse effect on operating results .

Expansion of the alkaline beverage market or sufficient consumer demand in that market is not guaranteed.

The alkaline water market is an emerging market and there is no guarantee that this market will expand or that consumer demand will be sufficiently high to allow the company to successfully market, distribute and sell our product, or to successfully compete with current or future competition, all of which may result in total loss of your investment

Water scarcity and poor quality could negatively impact the Company’s production costs.

Water is the main ingredient in the Company’s product. It is also a limited resource, facing unprecedented challenges from overexploitation, increasing pollution, poor management, and climate change. As demand for water continues to increase, as water becomes scarcer, and as the quality of available water deteriorates, the company may incur increasing production costs or face capacity constraints that could adversely affect our profitability or net operating revenues in the long run.

Increase in the cost, distribution of supply or shortage of ingredients, other raw materials or packaging materials could harm the Company’s business.

The Company and its bottling partners, will use water, packaging materials for bottles such as plastic and paper products. The prices for these ingredients, other raw materials and packaging materials fluctuate depending on market conditions. Substantial increases in the prices of our or our bottling partners’ ingredients, other raw materials and packaging materials, to the extent they cannot be recouped through increases in the prices of finished beverage products, would increase our operating costs and could reduce our profitability. Increases in the prices of our finished products resulting from a higher cost of ingredients, other raw materials and packaging materials could affect the affordability of our product and reduce sales.

An increase in the cost, a sustained interruption in the supply, or a shortage of some of these ingredients, other raw materials, or packaging materials and containers that may be caused by a deterioration of our or our bottling partners’ relationships with suppliers; by supplier quality and reliability issues; or by events such as natural disasters, power outages, labor strikes, political uncertainties or governmental instability, could negatively impact our net revenues and profits.

Significant additional labeling or warning requirements or limitations on the availability of the Company’s product may inhibit sales of affected products.

Various jurisdictions may seek to adopt significant additional product labeling or warning requirements or limitations on the availability of our product relating to the content or perceived adverse health consequences of our product. If these types of requirements become applicable to our product under current or future environmental or health laws or regulations, they may inhibit sales of our product.

Changes in, or failure to comply with, the laws and regulations applicable to the Company’s products or the Company’s business operations could increase costs or reduce net operating revenues.

The advertising, distribution, labeling, production, safety, sale, and transportation in the United States of the Company’s product will be subject to: the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; competition laws; federal, state, and local workplace health and safety laws, such as the Occupational Safety and Health Act; various federal, state and local environmental protection laws; and various other federal, state, and local statutes and regulations. Legal requirements also apply in many jurisdictions in the United States requiring that deposits or certain ecotaxes or fees be charged for the sale, marketing, and use of certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other types of statutes and regulations relating to beverage container deposits, recycling, ecotaxes and/or product stewardship also apply in various jurisdictions in the United States. The Company anticipates that additional, similar legal requirements may be proposed or enacted in the future at the local, state and federal levels in the United States. Changes to such laws and regulations could increase our costs or reduce or net operating revenues.

In addition, failure to comply with environmental, health or safety requirements and other applicable laws or regulations could result in the assessment of damages, the imposition of penalties, suspension of production, changes to equipment or processes, or a cessation of operations at our or our bottling partners’ facilities, as well as damage to our image and reputation, all of which could harm our profitability.

The Company has never declared or paid a dividend, and does not anticipate paying cash dividends for the foreseeable future.

The Company has never declared or paid any cash dividends on its stock.  The Company currently intends to retain any future earnings for funding growth and, therefore, the Company does not currently anticipate paying cash dividends on its stock in the foreseeable future.  Any determination to pay dividends in the future will be at the discretion of the Board of Directors and will depend upon the Company’s results of operations, financial condition, and such other factors as the Board of Directors, in its discretion, deems relevant.

Legislative actions, higher insurance costs and potential new accounting pronouncements may impact our future financial position and results of operations.

There have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and there may potentially be new accounting pronouncements or additional regulatory rulings that will have an impact on our future financial position and results of operations. The Sarbanes-Oxley Act of 2002 and other rule changes, as well as proposed legislative initiatives, are likely to increase general and administrative costs and expenses. In addition, insurers are likely to increase premiums as a result of high claims rates over the past several years, which we expect will increase our premiums for insurance policies. Further, there could be changes in certain accounting rules. These and other potential changes could materially increase the expenses we report under generally accepted accounting principles, and adversely affect our operating results.

Future sales of shares of our common stock may decrease the price for such shares.

Actual sales, or the prospect of sales by our shareholders, may have a negative effect on the market price of the shares of our common stock. The Company may also register certain shares of common stock that are subject to outstanding convertible securities, if any, or reserved for issuance under Company stock option plans, if any. Once such shares are registered, they can be freely sold in the public market upon exercise of the options. If any of the Company’s shareholders either individually or in the aggregate cause a large number of securities to be sold in the public market, or if the market perceives that these holders intend to sell a large number of securities, such sales or anticipated sales could result in a substantial reduction in the trading price of shares of our common stock and could also impede the Company’s ability to raise future capital.

Other Risks

Mergers of the type we just completed with Pleasant Kids are often heavily scrutinized by the SEC and the Company may encounter difficulties or delays in obtaining future regulatory approvals which would negatively impact the financial condition and the value and liquidity of your shares of common stock.

On June 29, 2005, the SEC adopted rules dealing with private company mergers into dormant or inactive public companies. As a result, it is likely that the Company will be scrutinized carefully by the SEC and possibly by the Financial Industry Regulatory Authority (“FINRA”) which could result in difficulties or delays in achieving SEC clearance of any future registration statements or other SEC filings that the Company may pursue, in attracting FINRA-member broker-dealers to serve as market-makers in our common stock, or in achieving admission to one of the Nasdaq stock markets or any other national securities market. As a consequence, financial condition and the value and liquidity of your shares of our common stock may be negatively impacted. 

The elimination of monetary liability against our directors, officers and employees under Florida law and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

Our Amended and Restated Bylaws contain specific provisions that eliminate the liability of our directors for monetary damages to the company and shareholders, and the Company is prepared to give such indemnification to the directors and officers to the extent provided by Florida law. The Company may also have contractual indemnification obligations under employment agreements with our officers. The foregoing indemnification obligations could result in the company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which the Company may be unable to recoup. These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit the company and shareholders.

The Company’s common stock is currently quoted on the OTCQB. Since none of our securities are registered under Section 12 of the Securities Act of 1933, as amended, our stock may be delisted from the OTCQB.

The OTCQB is an automated quotation system. One of the listing requirements for the OTCQB is that the issuer register its securities under Section 12 of the Securities Act of 1933, amended.  In view of these factors, our stock may be delisted from the OTCQB.  In such an event, we would be required to register our common stock under Section 12 and reapply to the OTCQB for quotation.

 The Company’s common stock is currently thinly traded.  You may be unable to sell at or near asking prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

Currently, our common stock is quoted on the OTCQB market; however it is thinly traded (meaning that there is not a great deal of daily volume in trades).  Any trading volume we may develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTCQB  stocks and certain major brokerage firms restrict their brokers from recommending OTCQB stocks because they are considered speculative, volatile and thinly traded. The OTCQB market is an inter-dealer market much less regulated than the major exchanges and our common stock is subject to abuses, volatility and shorting. Thus, there is currently no broadly followed and established trading market for our common stock. An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. Absence of an active trading market reduces the liquidity of the shares traded there.

The Company’s common stock has been thinly trading, and trading is likely to continue to be limited and sporadic. As a result of such trading activity, the quoted price for our common stock on the OTCQB may not necessarily be a reliable indicator of its fair market value. Further, if we cease to be quoted, holders would find it more difficult to dispose of our common stock or to obtain accurate quotations as to the market value of our common stock and as a result, the market value of our common stock likely would decline.

The Company’s common stock will be subject to price volatility unrelated to our operations.

The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on the Company’s common stock.

The Company’s common stock is classified as a “penny stock” as that term is generally defined in the Securities Exchange Act Of 1934, as amended, to mean equity securities with a price of less than $5.00. Our common stock will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

The Company will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.

Rule 3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

•      the basis on which the broker or dealer made the suitability determination, and

•      that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. 

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. We did not undertake an offering in which we 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 quarter ending December 31, 2013, the company issued 40,783,912 shares of restricted common stock in settlement of $74,430 of debt. The total number of shares issued and outstanding for the company is 141,491,271 as of December 31, 2013.

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

.

ITEM 6. EXHIBITS

Exhibits:

* Filed Herewith.

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.