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EX-32 - CEO & CFO 906 CERTIFICATION - SATUSA Corpexhibit32.txt
EX-31.2 - CFO CERTIFICATION - SATUSA Corpexhibit312.txt
EX-31.1 - CEO CERTIFICATION - SATUSA Corpexhibit311.txt

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2010

                        Commission file number 333-162824

                                 ESSENSE WATER, INC.
             (Exact name of registrant as specified in its charter)

                                      Nevada
         (State or other jurisdiction of incorporation or organization)

                               3638 N Rancho Drive
                              Las Vegas, NV  89130
          (Address of principal executive offices, including zip code)

                                  (509)448-4946
                     (Telephone number, including area code)

                             Mr. Jeffrey Nichols, Esq.
                                  811 6th Avenue
                               Lewiston, ID  83501
                        (415)314-9088/(800)778-3290 (FAX)
                     (Name and Address of Agent for Service)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the last 90 days.
YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer, "accelerated
filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-
2 of the Exchange Act.

Large accelerated filer [ ]                     Accelerated filer [ ]

Non-accelerated filer [ ]                       Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 12,000,000 shares as of
January 4, 2011.

                                      -1-

ITEM 1. FINANCIAL STATEMENTS. The financial statements for the quarter ended November 30, 2010 immediately follow. Essense Water, Inc. (A Development-Stage Company) Unaudited Interim Condensed Balance Sheets As of November 30, 2010 (Unaudited) ASSETS November 30, August 31, 2010 2010 ---- ---- Current Assets Cash $ 872 $ 696 --- --- Total Current Assets 872 696 === === LIABILITIES Current Liabilities Accrued Liabilities 3,750 1,750 Payable to Affiliates 11,900 9,973 ------ ----- Total Current Liabilities 15,650 11,723 ====== ====== STOCKHOLDERS' EQUITY(DEFICIT) Common Stock: Paid-In Capital, Par Value $0.0001 per Share, 75,000,000 Shares Authorized, 12,000,000 Shares Outstanding 1,200 1,200 Additional Paid In Capital 800 800 Deficit Accumulated During Development Stage (16,778) (13,027) ------ ------ Total Shareholders' Equity (14,778) (11,027) ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT) $ 872 $ 696 === === The accompanying notes are an integral part of these financial statements. -2-
Essense Water, Inc. (A Development-Stage Company) Unaudited Interim Condensed Statements of Operations January 29, 2009 Three Months Three Months (inception) Ended Ended Through November 30, November 30, November 30, 2010 2009 2010 ---- ---- ---- Income: Operating Revenues $ 0 $ 0 $ 0 - - - Total Income 0 0 0 - - - Expenses: General & Administrative 3,751 1,781 16,778 ----- ----- ------ Total Expenses 3,571 1,781 16,778 ----- ----- ------ Provision for Income Taxes 0 0 0 Net Income (Loss) $ (3,571) $ (1,781) $ (16,778) ===== ===== ====== Net Loss per Common Share - Basic and Diluted $ (0.00) $ (0.00) ==== ==== Weighted Average Number of Shares Outstanding - Basic and Diluted 12,000,000 12,000,000 ========== ========== The accompanying notes are an integral part of these financial statements. -3-
Essense Water, Inc. (A Development-Stage Company) Unaudited Condensed Statements of Cash Flows January 29, 2009 Three Months Three Months (inception) Ended Ended Through November 30, November 30, November 30, 2010 2009 2010 ---- ---- ---- Operating Activities: Net Income (Loss) $ (3,751) $ (1,781) $ (16,778) Adjustments to reconcile net loss to net cash flow provided by (used in) operating activities: Changes in operating liabilities: Increase (decrease) in Accrued Payables 2,000 (1,750) 3,750 ----- ----- ----- Net Cash Provided By (Used In) Operating Activities (1,751) (3,531) (13,028) ----- ----- ------ Cash Flows from Financing Activities: Advances from Affiliate 7,500 2,000 17,574 Repayment to Affiliate (5,573) 0 (5,674) Proceeds from Sale of Common Stock 0 0 2,000 - - ----- Net Cash Flows Provided by Financing Activities 1,927 2,000 13,900 ----- ----- ------ Net Increase (Decrease) in Cash 176 (1,531) 872 Cash - Beginning of Period 696 1,952 0 --- ----- - Cash - End of Period $ 872 $ 421 $ 872 === === === Supplemental Disclosure of Cash Flow Information: Cash Paid For: Interest $ - $ - $ - Income Taxes $ - $ - $ - The accompanying notes are an integral part of these financial statements. -4-
Essense Water, Inc. (A Development-Stage Company) Unaudited Condensed Statements of Shareholders' Equity For the Period From Inception (January 29, 2009) Through November 30, 2010 Deficit Accumulated ------Paid-In Capital ----- During Excess Development Shares Amount of Par Stage Total ------ ------ ------- ----- ----- BALANCE, 1/29/2009 0 $ 0 $ 0 $ 0 $ 0 Sale of Common Shares 12,000,000 1,200 800 - 2,000 To Founder for Cash on May 29, 2009 Deficit - thru August 31, 2009 (3,911) (3,911) ---------------------------------------------------------------------------- BALANCE, 8/31/2009 12,000,000 1,200 800 (3,911) (1,911) ---------------------------------------------------------------------------- Deficit - Year Ended August 31, 2010 (9,117) (9,117) ---------------------------------------------------------------------------- BALANCE, 8/31/2010 12,000,000 1,200 800 (13,027) (11,027) ---------------------------------------------------------------------------- Deficit - Three Months Ended November 30, 2010 (3,751) (3,751) ---------------------------------------------------------------------------- BALANCE, 11/30/2010 12,000,000 $ 1,200 $ 800 $ (16,778) $(14,778) ---------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. -5-
Essense Water, Inc. (A Development-Stage Company) Notes to Unaudited Condensed Financial Statements ------------------------------------------------------------------------ NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by Essense Water, Inc. (the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at November 30, 2010, and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's August 31, 2010 audited financial statements. The results of operations for the period ended November 30, 2010 are not necessarily indicative of the operating results for the full year. NOTE 2 - GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and other investors sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. -6-
NOTE 3 - SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date that the financial statements were issued. There were no significant subsequent events that need to be disclosed. NOTE 4 - CANCELLATION OF COMPANY'S STOCK OFFERING On June 9, 2010, the Company received approval from the U.S. Securities and Exchange Commission to sell up to 8,000,000 shares of its common stock at $0.025 per share in an effort to raise a total of $200,000 in funding. The Company was unable to raise the minimum level of funding set forth in the stock offering and, as a result, cancelled the offering effective November 24, 2010. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. FORWARD LOOKING STATEMENTS This report contains forward-looking statements that involve risk and uncertainties. We use words such as "anticipate", "believe", "plan", "expect", "future", "intend", and similar expressions to identify such forward-looking statements. Investors should be aware that all forward- looking statements contained within this filing are good faith estimates of management as of the date of this report and actual results may differ materially from historical results or our predictions of future results. RESULTS OF OPERATIONS We are still in our exploration stage and have generated no revenue to date. We incurred operating expenses of $3,751 for the three months ended November 30, 2010. Our expenses during the period consisted of $2,000 in accounting services, $1,000 for legal fees/services, $650 for state corporate filings, and $101 for miscellaneous expenses. Our net loss from inception (January 29, 2009) through November 30, 2010 totals $16,778. In May 2009, a total of 12,000,000 shares of common stock were issued in exchange for $2,000, or $.0017 per share. These securities were issued to Kevin Nichols, the sole officer and director of the Company. The following table provides selected financial data about our Company for the period ended November 30, 2010. Balance Sheet Data: 11/30/10 ------------------- -------- Cash $ 872 Total Assets $ 872 Total Liabilities $ 15,650 Shareholders' Equity $ (14,778) -7-
LIQUIDITY AND CAPITAL RESOURCES Our cash balance at November 30, 2010 was $872. In order to achieve and meet the objectives of our business plan, we will require additional funding. The Company had planned to receive sufficient funding its offering of registered shares pursuant to a Registration Statement filed on Form S-1 which became effective on June 9, 2010. The Company was unsuccessful in this endeavor, failing to raise the "minimum" level of funds called for by the offering. As a result, the offering was cancelled by the Company on November 24, 2010. The Company will thus continue to utilize funds provided by our sole officer/director, who has agreed to advance funds for operations until such time as we receive sufficient funding from other source(s). However we have no formal commitment, arrangement(s), or legal obligation with him to advance or loan funds to us. As of November 30, 2010 our officer/director has loaned and paid expenses directly on the Company's behalf totaling $11,900. These funds are payable upon demand and bear no interest. As a result of its unsuccessful offering of shares per the S-1 stock offering, the Company will be focusing efforts to raise additional funding by other means, such as a private placement(s) of its shares or by another stock offering. In the meantime, it will be relying on loans/advances by its funder, as previously discussed, to keep it operational. PLAN OF OPERATION Our plan of operation for the 12 to 24 months consists of the following steps/stages: 1. Seek additional funding by means other than through the S-1 stock offering that had been the Company's focus over the previous six month period. The focus now will be upon private placement(s) of its shares in return for capital, possible loan(s) from others or another stock offering, and possibly moving forward by remaining self-funded by the founder. While the Company had hoped to begin testing and formulation of its product once it received the minimum level of funding from the S-1 offering, it will now not be able to begin any level of operations, much beyond product formulation, until adequate outside funding is obtained. Management hopes that additional funding can be successfully raised within the next 90 day timeframe, but until such time as additional funds are actually obtained, the Company will have little time to work on or further other development in its business plan as the efforts of the Company's sole officer/director will be focused on raising additional funds. 2. Formulation of our drink product will be of foremost importance in the early stages of the Company's business cycle. As stated earlier, the drink will be formulated with added ingredients with the idea of making it better for you than plain water. We will most likely endeavor to develop one basic formula rather than several formulas, and then offer that formula in a few basic flavors. -8-
Efforts in this stage will likely be started once additional funding has been successfully raised. We expect this to be completed over the next three months. Once additional funds have been raised, this stage will most likely take three to six months to complete. 3. Once our drink formula has been somewhat developed and decided upon, we will begin working simultaneously on several other key areas in the furtherance of our business plan. In no particular order, these areas of development include the following: - develop contacts with third-party bottlers with the goal of selecting one to utilize in the manufacturing and bottling of the Company's product, - develop a name for the Company's product, - design labeling for the product, - research and select the form of packaging (i.e. bottle type), - research and decide upon the pricing model for the product; - design and develop the Company's web-site with a third-party web designer - meet with local area retailers and wholesalers regarding sale and distribution of the product, - plan other marketing and promotional means for getting knowledge and brand recognition of the product into the marketplace. This third stage of the business plan will most likely begin once the Company has neared completion of the development and formulation of the drink product and continue on for six to twelve months after product completion. It is late during this stage when the Company expects to begin producing any operating cash flows from the sale of its product. The Company has budgeted the following amounts, by expense category to be used in executing its business plan, based on "minimum" and "maximum" levels of projected proceeds from capital funding efforts. If Minimum If Maximum Raised Raised Expenses of the offering, including preparation and filing of Prospectus (1) $ 7,800 $ 7,800 Administrative expenses and legal/accounting services 5,500 13,000 Formulate and develop product, labeling, and packaging 4,200 30,000 Develop brand name and seek possible trademark, 500 10,000 Design website, plan sales/marketing campaign, and pursue trade channels 2,000 38,000 General corporate and working capital 0 101,200 ------ ------- Totals $ 20,000 $ 200,000 ------ ------- -9-
The above costs are management's estimates. To date, we have not commenced any operational phases. OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors. ITEM 4. CONTROLS AND PROCEDURES. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: - Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; - Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and - Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. -10-
As of November 30, 2010 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of November 30, 2010. Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. MANAGEMENT'S REMEDIATION INITIATIVES In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. -11-
We anticipate that these initiatives will be at least partially, if not fully, implemented by May 31, 2011. Additionally, we plan to test our updated controls and remediate our deficiencies by May 31, 2011. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. PART II. OTHER INFORMATION ITEM 6. EXHIBITS. Incorporated by Reference Exhibit No. Exhibit or Filed Herewith ---------- ------- ------------------------------------------- 3.1 Articles of Incorporation Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on May 20, 2010 File No. 333-162824 3.2 Bylaws Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on May 20, 2010 File No. 333-162824 31.1 Section 302 Certification of Filed herewith Chief Executive Officer 31.2 Section 302 Certification of Filed herewith Chief Financial Officer 32 Section 906 Certification of Filed herewith Chief Executive Officer and Chief Financial Officer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. January 4, 2011 Essense Water, Inc. /s/ Kevin Nichols ----------- By: Kevin Nichols (Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, President, Secretary, Treasurer & Sole Director) 12