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EX-31.1 - SECTION 302 CERTIFICATION - SavWatt USA, Inc.ex31-1.txt
EX-31.2 - SECTION 906 CERTIFICATION - SavWatt USA, Inc.ex32-1.txt

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

                               AMENDMENT NO. 4 TO
                                    FORM 10-Q

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

                  For the quarterly period ended September 30, 2010
                                       or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

               FOR THE TRANSITION FROM ____________ TO ___________

                        Commission File Number: 000-53807


                                SavWatt USA Inc.
             (Exact name of registrant as specified in its charter)

           Delaware                                              27-2478133
(State or other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

    6801 Eastern Avenue, Suite 203
            Baltimore, MD                                          21224
(Address of principal executive offices)                         (Zip code)

                                 (866) 641-3507 (Registrant's telephone number)

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

Indicate by check mark whether the registrant has submitted electronically and
posted on its Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [ ] 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" 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 [ ] No [X]

          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant  filed all  documents and reports
required to be filed by Section 12, 13 or 15(d) of the  Exchange  Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of October 25, 2010, there were
116,807,508 outstanding shares of the Registrant's Common Stock, $0.0001 par
value.

INDEX PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements................................................. 4 Balance Sheets as of September 30, 2010 (Unaudited) and December 31, 2009 (Audited)................................................................... 4 Statements of Operations for the Three months and Nine months ended September 30, 2010 and, September 30, 2009, and for the Period from October 20, 2006 (Inception) to September 30, 2010 (Unaudited)................................ 5 Statements of Cash Flows for the nine Months Ended September 30, 2010 and September 30, 2009, and for the Period from October 20, 2006 (Inception) to September 30, 2010(Unaudited)................................................ 6 Notes to Financial Statements as of September 30, 2010 (Unaudited)........... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................... 14 Item 3. Quantitative and Qualitative Disclosures about Market Risk.......... 17 Item 4. Controls and Procedures............................................. 17 PART II - OTHER INFORMATION Item 1. Legal Proceedings................................................... 18 Item 1A. Risk Factors....................................................... 18 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds......... 18 Item 3. Defaults Upon Senior Securities..................................... 18 Item 4. Submission of Matters to a Vote of Security Holders................. 18 Item 5. Other Information................................................... 18 Item 6. Exhibits............................................................ 18 SIGNATURES.................................................................. 19 2
PART I - FINANCIAL INFORMATION EXPLANATORY NOTE This Amendment No. 4 on Form 10-Q/A ("Amendment No. 4") amends the Quarterly Report on Form 10-Q of SavWatt USA, Inc. ("Company") for the quarter ended September 30, 2010 ("Original 10-Q"). This Amendment No. 4 is being filed for the purpose of clarifying Note 2 to the financial statements. This Amendment No. 4 may be relied on as the final Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, and should be read in conjunction with the Company's other filings made with the SEC in 2010. The filing of this Amendment No. 4 is not an admission that the Original 10-Q, Amendment No. 1 or No. 2 or Amendment No. 3, when filed, included any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein not misleading. 3
ITEM 1. FINANCIAL STATEMENTS. SavWatt USA, Inc. f/k/a Ludvik Capital, Inc. (A Development Stage Company) BALANCE SHEET September 30, December 31, 2010 2009 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash $ 11 $ -- Subscription receivable 25,000 -- Due from related party 214,325 -- Other receivable 26,200 -- ------------ ------------ TOTAL CURRENT ASSETS 265,536 -- Computer Equipment 8,957 -- ------------ ------------ TOTAL ASSETS $ 274,493 $ -- ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accrued expenses $ 51,310 $ -- Due to related party 174,777 -- Stockholder loan payable -- 685,750 Convertible loan payable-stockholder 1,503,167 -- Accrued interest - stockholder 112,738 429,082 ------------ ------------ TOTAL LIABILITIES 1,841,992 1,114,832 ------------ ------------ STOCKHOLDERS' DEFICIT Common stock, $0.0001 par value, 2,000,000,000 and 100,000,000 shares authorized, 116,807,508 and 79,474,175 shares issued and outstanding, respectively 11,679 7,947 Additional paid-in capital 35,567,616 35,256,348 Accumulated deficit during development stage (37,146,794) (36,379,127) ------------ ------------ TOTAL STOCKHOLDERS' DEFICIT (1,567,499) (1,114,832) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 274,493 $ -- ============ ============ See Notes to the Unaudited Financial Statements 4
SavWatt USA, Inc. f/k/a Ludvik Capital, Inc. (A Development Stage Company) STATEMENTS OF OPERATIONS From Inception Three Months Ended Nine months ended (October 20, 2006) ----------------------------- ----------------------------- through September 30, September 30, September 30, September 30, September 30, 2010 2009 2010 2009 2010 ------------ ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) REVENUES $ -- $ -- $ -- $ -- $ -- ------------ ------------ ------------ ------------ ------------ EXPENSES General and administrative 20,625 -- 105,819 -- 123,230 Professional fees 165,776 90,000 255,776 320,000 1,488,376 Stock based compensation -- -- -- 350,001 34,700,044 ------------ ------------ ------------ ------------ ------------ Total Expenses 186,401 90,000 361,595 670,001 36,311,650 ------------ ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (186,401) (90,000) (361,595) (670,001) (36,311,650) ------------ ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE) Interest income 5,000 -- 5,000 -- 5,010 Interest expense (67,642) (46,109) (411,072) (138,327) (840,154) ------------ ------------ ------------ ------------ ------------ Total Other Income (Expense) (62,642) (46,109) (406,072) (138,327) (835,144) ------------ ------------ ------------ ------------ ------------ NET LOSS $ (219,043) $ (136,109) $ (767,667) $ (808,328) $(37,146,794) ============ ============ ============ ============ ============ NET LOSS PER SHARE, BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.01) $ (0.01) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED 108,927,074 79,474,175 91,777,095 78,908,482 ============ ============ ============ ============ See Notes to the Unaudited Financial Statements 5
SavWatt USA, Inc. f/k/a Ludvik Capital, Inc. (A Development Stage Company) STATEMENTS OF CASH FLOWS From Inception Nine months ended (October 20, 2006) ----------------------------- through September 30, September 30, September 30, 2010 2009 2010 ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (767,667) $ (808,328) $(37,146,794) Adjustments to reconcile net loss to net cash used in operating activities: Stock issued for services -- 50,000 60,001 Stock based compensation -- 350,001 34,700,044 Changes in operating assets and liabilities: Other receivable (26,200) -- (26,200) Accrued expenses 51,310 -- 51,310 Due from related party (39,548) -- (39,548) Stockholder loan payable 90,000 270,000 1,260,000 Accrued interest 411,073 138,327 840,155 ------------ ----------- ------------ Net cash used in operating activities (281,032) -- (301,032) ------------ ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of computer equipment (8,957) -- (8,957) ------------ ----------- ------------ Net cash provided by financing activities (8,957) -- (8,957) ------------ ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 290,000 -- 310,000 ------------ ----------- ------------ Net cash provided by financing activities 290,000 -- 310,000 ------------ ----------- ------------ NET DECREASE IN CASH 11 -- 11 CASH, BEGINNING OF PERIOD -- -- -- ------------ ----------- ------------ CASH, END OF PERIOD $ 11 $ -- $ 11 ============ =========== ============ SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ -- $ -- $ -- ============ =========== ============ Income taxes paid $ -- $ -- $ -- ============ =========== ============ Subscription receivable $ 25,000 $ -- $ 45,000 ============ =========== ============ Stock issued for repayment of shareholder loan $ -- $ -- $ 484,250 ============ =========== ============ Stockholder loan and accrued interest exchanged for a short term convertible loan $ 1,503,167 $ -- $ 1,503,167 ============ =========== ============ See Notes to the Unaudited Financial Statements 6
SavWatt USA, Inc. f/k/a Ludvik Capital, Inc Notes to the Unaudited Financial Statements NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Ludvik Capital, Inc. (hereinafter "the Company") was incorporated on October 20, 2006 under the laws of the State of Delaware for the purpose of becoming a successor corporation by merger with Patriot Advisors, Inc. and Templar Corporation, pursuant to a plan of reorganization and merger approved by the United States Bankruptcy Court, District of Maine in Case No. 04-20328 whereby Ludvik Capital, Inc is the continuing entity. The Company's business plan consisted of investing in public and private companies, providing long term equity and debt investment capital to fund growth and acquisitions and recapitalizations of small and middle market companies in a variety of industries primarily located in the United States. Since inception, the Company has had minimal operations and no revenues earned. On April 5, 2010, the Company amended its articles of incorporation and changed its name to SavWatt USA, Inc. SavWatt USA, Inc. ("SavWatt") business plan is to capitalize on the largely unaddressed commercial and consumer market for energy-efficient LED lighting by investing in product and corporate marketing. With public relations and advertising throughout the media, a recognized, popular consumer LED brand will be cultivated, spearheading and establishing a leading market share in the growing energy-efficient bulb sector during the next three to five years. SavWatt has the exclusive marketing rights in the United States to sell LED street lighting for Unilumin (www.unilumin.com). The Company is a development stage enterprise. The Company's year end is December 31. The Company's corporate headquarters were originally located in Virginia but are currently located in Baltimore MD. The foregoing unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2009. In the opinion of management, the unaudited interim financial statements furnished herein include adjustments, all of which are of a normal recuing nature, necessary for a fair statement of the results for all the interim periods presented. Operating results for the six-month period ending September 30, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist in understanding the accompanying financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. 7
Accounting Method The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Development Stage Activities The Company has been in the development stage since its formation. From the Company's inception through March 2010, the Company was engaged in the business of providing long-term equity and debt investment capital to fund growth, acquisitions and recapitalizations of small and middle market companies in a variety of industries, primarily located in the United States. The Company during this time had been very active and had conducted substantial operations, as discussed in our numerous reports filed on Form 8-K filed with the SEC during 2007-2010. In 2010, the Company changed its name to SavWatt USA, Inc. to reflect our new primary business of producing, marketing and selling Light Emitting Diode ("LED") lighting. In furtherance of our new business, we have obtained the exclusive marketing rights in the United States to sell LED street lighting for Unilumin, a Chinese company as well as setting up its distribution and production center in Maryland. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements, the Company incurred net losses of $37,146,794 for the period from inception, October 20, 2006 through September 30, 2010. In addition, the Company had an accumulated deficit of $37,146,794 at September 30, 2010. Since its inception, the Company has not generated any revenues and has minimal cash resources. These circumstances raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management's efforts have been directed towards the development and implementation of a plan to generate sufficient revenues to cover all of its present and future costs and expenses. Management is taking steps to address this situation. The Company has determined that it cannot continue with its business operations as outlined in its original business plan because of a lack of financial resources; therefore, management has redirected their focus towards identifying and pursuing options regarding the development of a new business plan and direction. The Company intends to explore various business opportunities that have the potential to generate positive revenue, profits and cash flow in order to financially accommodate the costs of being a publicly held company. The Company is in the process of raising capital by implementing its business plan in Led lighting and expects to generate sufficient revenue by the fourth quarter of 2010 with a positive cash flow. Until then, the Company the Company will not have the required capital resources or credit lines available that are sufficient to fund operations. The Company has minimal operating costs and expenses at the present time due to its limited business activities. The Company, however, will be required to raise additional capital over the next twelve months to meet its current administrative expenses, and it may do so in connection with or in anticipation of possible acquisition transactions. This financing may take the form of additional sales of its equity securities and/or loans from its directors. There is no assurance that additional financing will be available, if required, or on terms favorable to the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The accompanying financial statements have been prepared, in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). 8
Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt with original maturities of three months or less to be cash equivalents. Fair Value of Financial Instruments The Company's financial instruments may include cash, subscription receivable, loans payable and related accrued interest, and accounts payable. All such instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2010 and December 31, 2009. Revenue Recognition Revenue is recognized when all of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller's price to the buyer is fixed and determinable; and, (4) collectability is reasonably assured. The Company has not earned any revenue since inception. Use of Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. Provision for Taxes Income taxes are provided based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the "more likely than not" standard to allow recognition of such an asset. Basic and Diluted Earnings (Loss) Per Share Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding, is not presented separately as it is anti-dilutive. The average number of common shares outstanding for the period ended September 30, 2010 has been retroactively adjusted for the 2:1 forward stock split effective August 17, 2007. Stock Based Compensation - The Company accounts for stock based compensation transactions with employees under the provisions of ASC Topic No. 718, "Compensation, Stock Compensation" ("Topic No. 718"). Topic No. 718 requires the recognition of the fair value of equity-based compensation in net income. The fair value of the Company's equity instruments are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards granted to employees is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of Topic No. 718. 9
The Company accounts for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, "Equity-Based Payments to Non-Employees" ("Topic No. 505-50"). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, which ever is more reliably measurable. When the equity instrument is utilized for measurement the fair value of the equity instrument is estimated using the Black-Scholes option valuation model. In general, the Company recognizes an asset or expense in the same manner as if it was to receive cash for the goods or services instead of paying with or using the equity instrument. Forward stock split All references to the Company's outstanding shares, and options, have been adjusted to give effect to the 2 for 1 forward stock split effective August 17, 2007. Recently Issued Accounting Pronouncements Affecting the Company The Financial Accounting Standards Board's ("FASB") Accounting Standards Codification (ASC) became effective on July 1, 2009. At that date, the ASC became FASB's officially recognized source of authoritative U.S. generally accepted accounting principles ("GAAP") applicable to all public and non-public non-governmental entities, superseding existing FASB, American Institute of Certified Public Accountants ("AICPA"), Emerging Issues Task Force ("EITF") and related literature. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch to the ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure. In February 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-08--Technical Corrections to Various Topics. This update's purpose is to eliminate GAAP inconsistencies, update outdated provisions, and provide needed clarifications. The adoption of ASU No. 2010-08 will not have a material impact on the Company's financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, could have a material effect on the accompanying financial statements. NOTE 3 - FAIR VALUE MEASUREMENTS The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company's financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data 10
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions. The Company did not have any Level 1, Level 2 or Level 3 assets or liabilities as of September 30, 2010 and December 31, 2009. The Company discloses the estimated fair values for all financial instruments for which it is practicable to estimate fair value. As of September 30, 2010 and December 31, 2009, the fair value short-term financial instruments including subscriptions receivable, loans payable, accounts payable and accrued expenses, approximates book value due to their short-term duration. In addition, the Financial Accounting Standards Board ("FASB") issued, "The Fair Value Option for Financial Assets and Financial Liabilities," effective for January 1, 2008. This guidance expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments NOTE 4 - RELATED PARTY DEBT AND TRANSACTIONS On December 14th 2006, the Company entered into an Advisory Agreement with Ludvik Nominees Pty Ltd (a Company 100% owned by Frank Kristan) for services to be rendered which were payable based on 3% assets under management and 20% of net profits of Ludvik Capital. The term of the agreement was approximately 11 years, maturing on December 31, 2017. Frank Kristan served as President and Chief Executive Officer of the Company from inception, October 20, 2006 through March 31, 2010 and is also the President of Ludvik Nominees Pty Ltd. On March 31, 2010 the original 2006 agreement was terminated and a settlement agreement was created to resolve any outstanding obligations with respect to the 2006 agreement. In accordance with the settlement agreement both parties agreed that since advisory fees under the December 14th 2006 Agreement were based on the assets under management that had no value, the Advisor had the option to get paid a fee of $30,000 per month starting October 2006 including interest. Furthermore, the remaining principal balance plus accrued interest as of March 31, 2010 was rolled over into a Secured Convertible Note amounting to $1,503,167. From the period from inception, October 20, 2006 through the termination of the original agreement, March 31, 2010, the Company issued its advisors 32,394,269 shares of common stock as payment for services amounting to $484,250 The parties agreed that following components made up the balance of the Secured Convertible Note as of March 31, 2010: Advisory Fees $ 1,260,000 Accrued Interest 727,417 Payment for shares issued (484,250) ----------- $ 1,503,167 =========== 11
This note is payable on June 30, 2010 and bears an interest rate of 18% per annum payable at the end of the term. After default, the upaid principal balance of this note and any accrued and unpaid interest bear interest at the rate of 18%. The outstanding balance and accrued interest, all or in part, is convertible at the option of the holder into the Company's common stock at a conversion price of 50% of the stock price, with a minimum of $.01 per share. As of September 30, 2010 and as of the date of this filing, this note is in default. As of September 30, 2010, the Company has accrued interest amounting to approximately $113,000. On March 31, 2010, Frank Kristan resigned as President and Director of the Company. At that time, Isaac H. Sutton was elected to the Board of Directors and currently serves as the Company's new President and sole director. In addition, Mr. Sutton currently has a consulting agreement for $60,000 per annum During the period, April 1, 2010 - September 30, 2010, the Company has funded SavWatt Industries, LLC, a related party $212,325 which is payable and due upon demand. Isaac H Sutton, The Company's President and Sole Director from March 31, 2010 until the present, is a 50% shareholder in SavWatt Industries, LLC During the Period of April 1, 2010 - September 30, 2010, the Company received short term funding from GoIP Global, Inc and Sutton Global Associates, Inc., which are also related parties. These companies are controlled by Isaac H. Sutton the Company's President and Sole Director. As of September 30, 2010, the Company owes these two companies $172,775. NOTE 5 - EQUITY TRANSACTIONS FROM INCEPTION TO THE FILING DATE On October 20, 2006, Ludvik Capital, Inc. was formed to be the successor corporation by merger of Patriot Advisors, Inc. and Templar Corporation. Pursuant to a court order in the US bankruptcy court and December 12th Stock Purchase Agreement between the Company and Ludvik Nominees Pty Ltd, Patriot Advisors, Inc. and Templar Corporation merged with the Ludvik Capital, Inc, whereby the surviving corporation became the registrant, Ludvik Capital, Inc. Ludvik Nominees Pty Ltd was issued 40,000,000 shares (post forward stock split), of which approximately 18 million shares of Ludvik common stock were issued to old creditors of Patriot Advisors and Templar Corp as payment for past outstanding services and approximately 22 million shares of Ludvik common stock were held by Ludvik Nominees Pty Ltd. for the initial capital of $20,000. On February 7, 2007 the United States Bankruptcy Court for the District of Maine entered an order confirming the December 12, 2006 agreement with the Debtor whereby, there were 40,000,000 (post forward stock split) unrestricted shares of the Company's Common Stock issued to creditors and plan participants (as disclosed in Note 6-Equity Transactions). On June 19, 2007, the Company issued 24,196 common shares for the acquisition of CyberSentry. This investment was assessed to have no value. On July 30, 2007, the Company issued 2,055,710 shares of common stock to unrelated parties, valued at $5.52 per share for $10,000 in services and an additional 11,340,000 was recorded as stock based compensation in the Company's statement of operations. On August 17, 2007, the Company effected a 2:1 forward stock-split of its issued and outstanding common stock. The issued and outstanding share capital increased from 21,042,098 shares of common stock to 42,084,196 shares of common stock. All per share amounts have been retroactively restated to reflect the forward stock-split. 12
On October 1, 2007, the Company issued 4,325,000 shares of common stock at $1.01 per share, totaling $4,368,250, in which $64,875 was for repayment of advisory fees payable to a related party, Ludvik Nominees Pty Ltd, and $4,303,375 was recorded as stock based compensation in the statement of operations. On October 3, 2007, the Company issued 10,000,000 shares of common stock at $1.01 per share, totaling $10,100,000 in which $150,000 was for repayment of advisory fees payable to a related party, Ludvik Nominees Pty Ltd, and $9,950,000 was recorded as stock based compensation in the statement of operations. On January 15, 2008, the Company issued 15,000,000 shares of common stock at $.52 per share, totaling $7,800,000 in which $225,000 was for repayment of advisory fees payable to a related party, Ludvik Nominees Pty Ltd, and $7,575,000 was recorded as stock based compensation in the statement of operations. On June 27, 2008, the Company issued 3,069,269 shares of common stock at $.40 per share, totaling $1,227,708 in which $44,375 was for repayment of advisory fees payable to a related party, Ludvik Nominees Pty Ltd, and $1,181,669 was recorded as stock based compensation in the statement of operations. On February 1, 2009, the Company issued 5,000,000 common shares to an unrelated party, valued at $.80 per share for $50,000 in services and an additional $350,001 was recorded as stock based compensation in the Company's statement of operations. On April 5, 2010, the Company amended its Articles of Incorporation changing the name of the Company to SavWatt USA, Inc and increasing the authorized capital stock from 100,000,000 to 2,000,000,000 shares of Common Stock and 200,000,000 shares of Preferred Stock, par value $.0001 per share. On May 31, 2010 and June 10, 2010 the Company sold a total of 24,000,000 common shares for $240,000. On July 10, 2010, the Company sold 5,000,000 shares of common stock for $50,000. On September 17, 2010 the Company sold 8,333,333 shares of common stock for $25,000. The cash was received after the balance sheet date, and therefore as of September 30, 2010 the Company recorded a subscription receivable amounting to $25,000. NOTE 6 - COMMITMENTS AND CONTINGENCIES On July 1, 2010, the Company entered into an employment agreement with Michael Haug, as the Company's CEO, which responsibilities include running the daily operations of SavWatt USA, Inc. The term of the agreement is for one year at a salary of $84,000, and may be renewed upon mutual agreement by the Company and the employee. 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAUTIONARY FORWARD - LOOKING STATEMENT This Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the statements contained in this Form 10-Q for SavWatt USA, Inc., formerly known as Ludvik Capital, Inc. ("Company"), discuss future expectations, contain projections of results of operation or financial condition or state other "forward-looking" information. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. Management expresses its expectations, beliefs and projections in good faith and believes the expectations reflected in these forward-looking statements are based on reasonable assumptions; however, Management cannot assure current stockholders or prospective stockholders that these expectations, beliefs and projections will prove to be correct. Such forward-looking statements reflect the current views of Management with respect to the Company and anticipated future events. Management cautions current stockholders and prospective stockholders that such forward-looking statements, including, without limitation, those relating to the Company's future business prospects, demand for its products, revenues, capital needs, expenses, development and operation costs, wherever they occur in this Form 10-Q, as well as in the documents incorporated by reference herein, are not guarantees of future performance or results, but are simply estimates reflecting the best judgment of Management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by such forward-looking statements. Important factors that may cause actual results to differ from projections include, for example: * the success or failure of management's efforts to implement their business strategy; * the ability of the Company to raise sufficient capital to meet operating requirements; * the uncertainty of consumer demand for our products, services and technologies; * the ability of the Company to protect its intellectual property rights; * the ability of the Company to compete with major established companies; * the effect of changing economic conditions; * the ability of the Company to attract and retain quality employees; * the current global recession and financial uncertainty; and * other risks which may be described in future filings with the SEC. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such 14
forward-looking statements. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. GENERAL The Company was incorporated on October 20, 2006, under the name of Ludvik Capital, Inc. We changed our name to SavWatt USA, Inc. on April 5, 2010. On January 12, 2007, we filed a Form 10 registration statement under section 12(g) of the Securities Exchange Act of 1934, as amended ("Exchange Act"). As a consequence of filing our Form 10, we became subject to the periodic reporting requirements of the Exchange Act and were required to file Annual Reports of Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements pursuant to Regulation 14A and Schedule 14C Information Statements pursuant to the Exchange Act. Our prior management filed numerous Form 8-K Current Reports, but failed to file the requisite Annual Reports on Form 10-K for the fiscal years ended December 31, 2006, 2007, 2008 and 2009. In addition, our prior management failed to file Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2007, for the quarters ended March 31, June 30 and September 30, 2008, for the quarters ended March 31, June 30 and September 30, 2009. As a result of prior management's failure to file the above described periodic reports, our common stock is not eligible for quotation on the Over-the-Counter Bulletin Board. Instead our common stock is quoted on the "Pink Sheets." Our management is intent on taking all steps necessary to have our common stock quoted on the Over-the-Counter Bulletin Board and is filing this Form 10-Q Quarterly Report for the Quarter Ended September 30, 2010, and has filed the Form 10-K Annual Reports for the Fiscal Years Ended December 31, 2007, 2008 and 2009, and delinquent Form 10-Q Quarterly Reports described above. We are also seeking a market maker to file a Form 211 with FINRA in order for us to obtain a new trading symbol and have our shares quoted on the Over-the-Counter Bulletin Board. While this Form 10-Q contains narrative information about our Company that is current, this Form 10-Q contains unaudited financial statements for 2010, which are obviously outdated and do not present our current financial condition. THEREFORE, OUR SHAREHOLDERS AND PROSPECTIVE INVESTORS ARE URGED TO READ OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 PRIOR TO MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SHARES OF OUR COMMON STOCK. The financial statements included in this Form 10-Q have been prepared in accordance with generally accepted accounting principles for financial information and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for smaller reporting companies. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the period from October 20, 2006 (Inception) to September 30, 2010 have been reflected herein. The results of operations for the period from October 20, 2006 (Inception) to September 30, 2010 are not necessarily indicative of the results to be expected in the future. These statements should be read in conjunction with the 15
audited financial statements for the year ended December 31, 2009 included in our previously filed Form 10-K. RESULTS OF OPERATIONS The Company has not generated any revenues since its inception on October 20,2006. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 The Company's operations for the three and nine months ended September 30, 2010 consist of General and administrative expenses incurred in the amount of $20,625 and $105,819 respectively and professional fees amounting to $165,774 and $255,774, respectively. FOR THE PERIOD FROM OCTOBER 20, 2006 (INCEPTION) TO September 30, 2010. Expenses from inception consist of professional fees of $1,488,376 and general and administrative expenses consisting of organization and related expenses of $123,230 and $34,700,044 related to stock based compensation. LIQUIDITY AND CAPITAL RESOURCES We have financed our operations from inception to date through the sale of common stock, amounting to $310,000. We had minimal cash on hand as of September 30, 2010 and a working capital deficiency of $1,576,456. We will continue to need additional cash during the following twelve months and these needs will coincide with the cash demands resulting from implementing our business plan and remaining current with our Securities and Exchange Commission filings. There is no assurance that we will be able to obtain additional capital as required, or obtain the capital on acceptable terms and conditions. GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has not begun generating revenue, is considered a development stage company, has experienced recurring net operating losses and had a net loss of $767,667 for the nine months ended September 30, 2010. These factors raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. We will need to raise funds or implement our business plan to continue operations. 16
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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. ITEM 4. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. Since the Company has securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), the Company is responsible for maintaining, and management is responsible for evaluating, the effectiveness of, disclosure controls and procedures as provided in Rule 13a-15(e) of the Exchange Act. Item 307 of the SEC's Regulation S-K requires that our principal executive and principal financial officer evaluate the effectiveness of the design and operation of our disclosure controls and procedures. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our management, including Isaac H. Sutton, our chief and principle executive and financial officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our principal executive and financial officer concluded as of September 30, 2010, that our disclosure controls and procedures have been improved and were effective as of September 30, 2010. (b) Changes in Internal Control over Financial Reporting During the quarter ended September 30, 2010, we did not make any changes in our internal controls over financial reporting. 17
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not aware of any threatened or pending litigation against the Company. ITEM 1A. RISK FACTORS Not applicable. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. (REMOVED AND RESERVED) None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS See Exhibit Index below for exhibits required by Item 601 of regulation S-K. 18
EXHIBIT INDEX List of Exhibits attached or incorporated by reference pursuant to Item 601 of Regulation S-K: Exhibit Description ------- ----------- 3.1* Certificate of Incorporation filed with the Secretary of State of Delaware on October 20, 2006 (Exhibit 3.1 to the Company's Registration Statement on Form 10 filed with the Commission on October 27, 2009). 3.2* By-laws of the Company (Exhibit 3.2 to the Company's Registration Statement on Form 10 filed with the Commission on October 27, 2009). 14* Code of Ethics (Exhibit 14 to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2009, filed with the Commission on March 5, 2010). 31.1** Certification under Section 302 of Sarbanes-Oxley Act of 2002. 32.1** Certification under Section 906 of Sarbanes-Oxley Act of 2002. ---------- * Exhibits incorporated herein by reference. File No. 000-53807. ** Filed herewith. SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized. SavWatt USA, Inc. Dated: March 14, 2011 /s/ Isaac H. Sutton ------------------------------------- By: Isaac H. Sutton Its: President and Chief Executive Officer In accordance with the Securities Exchange Act of 1934, this amended report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Dated: March 14, 2011 /s/ Isaac H. Sutton ------------------------------------- By: Isaac H. Sutton Its: President, Chief Financial Officer and Director (Principal Executive Officer) (Principal Financial Officer and Principal Accounting Officer) 1