Attached files
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2011
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to _____________
Commission File No. 333-149857
Global NuTech, Inc.
(Name of small business issuer in its charter)
Nevada 26-0338889
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5412 Bolsa Avenue, Suite D
Huntington Beach, CA 92649
(Address of principal executive offices) (Zip Code)
(714) 373-1930
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act: NONE.
Securities registered under Section 12(g) of the Exchange Act:
Shares of Common Stock, $0.00001 Par Value Per Share.
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
past 90 days. Yes [X] No [ ]
Indicate by check mark whether by check mark whether the registrant has
submitted electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months
or for such shorter period that the registrant was required to submit such
files). Yes [ ] No [X]
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", an "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act."
Large accelerated filer [ ] Accelerated filed [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller reporting company)
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 CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of May 11, 2011, the Issuer
had 514,287,619 Shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-Q (e.g. Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). Not applicable.
Global NuTech, Inc.
(Formerly known as Bio-Clean, Inc.
(A Development Stage Company)
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets as of March 31, 2011 (Unaudited) and
December 31, 2010 (Audited) 3
Statements of Operations for the three-month ended
March 31, 2011 and 2010, and from May 22, 2007 (Inception)
through March 31, 2011 (Unaudited) 4
Statements of Cash Flows as of March 31, 2011 and 2010, and from
May 22, 2007 (Inception) through March 31, 2011 (Unaudited) 5
Notes to the Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Item 4. Controls and Procedures 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 1A. Risk Factors 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. (Removed and Reserved) 16
Item 5. Other Information 16
Item 6. Exhibits 16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Global NuTech, Inc. and Subsidiary
(Formerly Known as Bio-Clean, Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2011 2010
------------ ------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 941 $ 989
------------ ------------
Total Current Assets 941 989
------------ ------------
Total Assets $ 941 $ 989
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accrued expenses $ 27,943 $ 1,266
Advance from related parties 149,886 122,559
Note payable to related party - current portion 8,913 29,956
------------ ------------
Total Current Liabilities 186,742 153,781
------------ ------------
Notes payable 20,000 20,000
------------ ------------
Total Liabilities 206,742 173,781
------------ ------------
Stockholders' Deficit
Capital stock:
Preferred Stock, $0.00001 par value, 100,000,000 shares authorized:
Preferred Stock, Series A, $0.00001 par value, 5,000,000 shares
authorized; 0 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively -- --
Preferred Stock, Series B, $0.00001 par value, 250,000 shares authorized;
0 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively -- --
Preferred Stock, Series C, $0.00001 par value, 80,000 shares authorized;
20,000 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively -- --
Common Stock, $0.00001 par value, 1,400,000,000 shares authorized;
514,287,619 and 188,810,000 shares issued and outstanding at
March 31, 2011 and December 31, 2010, respectively 2,889 1,889
Additional Paid in Capital 1,490,004 1,271,111
Deficit accumulated during the development stage (1,698,694) (1,445,792)
------------ ------------
Total Stockholders' Deficit (205,801) (172,792)
------------ ------------
Total Liabilities and Stockholders' Deficit $ 941 $ 989
============ ============
The accompanying notes are an integral part of these financial statements.
3
Global NuTech, Inc. and Subsidiary
(Formerly Known as Bio-Clean, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative From
May 22, 2007
For The Three Months Ended March 31, (Inception) to
----------------------------------- March 31,
2011 2010 2011
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
Operating Expenses
General and administrative 99,975 21,258 955,500
Compensation to officer for services 151,250 -- 163,250
------------ ------------ ------------
Total Operating Expenses 251,225 21,258 1,118,750
Other (Income) Expenses
Interest expense 877 -- 1,344
Impairment of investment in joint ventures -- -- 577,000
------------ ------------ ------------
877 -- 578,344
Loss from operations before income taxes (252,102) (21,258) (1,697,094)
Provision for income taxes 800 -- 1,600
------------ ------------ ------------
Net Loss $ (252,902) $ (21,258) $ (1,698,694)
============ ============ ============
Net loss per share - basic and diluted $ (0.00) $ (0.00)
============ ============
Weighted average number of common
shares outstanding 319,360,150 81,810,000
============ ============
The accompanying notes are an integral part of these financial statements.
4
Global NuTech, Inc. and Subsidiary
(Formerly Known as Bio-Clean, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative From
May 22, 2007
For The Three Months Ended March 31, (Inception) to
----------------------------------- March 31,
2011 2010 2011
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of net loss to net cash
used in operating activities:
Net loss $ (252,902) $ (21,258) $ (1,698,694)
Issuance of stock to officers for services 86,250 -- 98,250
Impairment of stock issued for joint ventures -- -- 577,000
Issuance of stock to consultants for services 112,800 -- 742,800
(Increase) decrease in current assets and liabilities:
Increase (decrease) in accrued expenses 26,477 21,258 27,744
Increase in advances from related party 27,327 -- 179,841
------------ ------------ ------------
Net cash used in operating activities (48) -- (73,059)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from notes payable -- -- 20,000
Cash proceeds from sale of common stock -- -- 54,000
------------ ------------ ------------
Net cash provided by financing activities -- -- 74,000
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (48) -- 941
Cash and cash equivalents - beginning of the period 989 -- --
------------ ------------ ------------
Cash and cash equivalents - end of the period $ 941 $ -- $ 941
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest $ -- $ -- $ --
============ ============ ============
Income taxes $ -- $ -- $ --
============ ============ ============
SUPPLEMENTAL DISCLOSURE ON NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Conversion of debt to Note Payable $ -- $ -- $ 29,756
============ ============ ============
Conversion of note payable to common stock $ 20,843 $ -- $ 20,843
============ ============ ============
The accompanying notes are an integral part of these financial statements.
5
GLOBAL NUTECH, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements
March 31, 2011
(Unaudited)
1. ORGANIZATION AND BUSINESS OPERATIONS
Global NuTech, Inc., formerly Bio-Clean, Inc., ("the Company") was incorporated
under the laws of the State of Nevada, U.S. on May 22, 2007. In September 2010,
the Company changed its name to Global NuTech, Inc. In September 2009, the
Company effectuated a nine for one forward stock split of its common stock. The
Company is in the development stage as defined under Development Stage
Enterprises (ASC 15). From it's inception, the Company has been engaged in the
marketing and distribution of various products. Initially, the Company was
involved with the marketing and distribution of beauty products in North
America. In the fall of 2010, the Company shifted it's focus to the marketing
and sales of dietary supplements for both humans and animals. The Company has
not generated any revenue to date and consequently its operations are subject to
all risks inherent in the establishment of a new business enterprise. For the
period from inception, May 22, 2007 through March 31, 2011, the Company has
accumulated losses of $1,698,694.
On September 15, 2010, the Company acquired 100% ownership interest in E-Clean
Acquisitions Corporation ("EAC"), a Nevada corporation for an investment of
$100. The purpose of acquisition of EAC was for this wholly-owned entity to
acquire other entities or enter into joint venture business partnerships.
GOING CONCERN
The Company's consolidated financial statements are prepared using the accrual
method of accounting and have been prepared in accordance with generally
accepted accounting principles in the United States of America. The financial
statements have been prepared on a going concern basis which assumes the Company
will be able to realize its assets and discharge its liabilities in the normal
course of business for the foreseeable future. The Company has incurred losses
since inception resulting in an accumulated deficit of $1,698,694 as of March
31, 2011 and further losses are anticipated in the development of its business
raising substantial doubt about the Company's ability to continue as a going
concern. The ability to continue as a going concern is dependent upon the
Company generating profitable operations in the future and/or to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they come due. Management intends to
finance operating costs over the next twelve months with loans from related
parties and or private placement of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Global NuTech,
Inc. and its wholly-owned subsidiary E-Clean Acquisitions Corporation. All
material intercompany transactions have been eliminated in the consolidation.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
FOREIGN CURRENCY TRANSLATION
The Company's functional currency and its reporting currency is the United
States dollar.
6
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurements and Disclosures, requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. ASC 820 establishes a fair value hierarchy based on the
level of independent, objective evidence surrounding the inputs used to measure
fair value. A financial instrument's categorization within the fair value
hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. ASC 820 prioritizes the inputs into three levels that
may be used to measure fair value:
LEVEL 1
Level 1 applies to assets or liabilities for which there are quoted prices in
active markets for identical assets or liabilities.
LEVEL 2
Level 2 applies to assets or liabilities for which there are inputs other than
quoted prices that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for
identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
LEVEL 3
Level 3 applies to assets or liabilities for which there are unobservable inputs
to the valuation methodology that are significant to the measurement of the fair
value of the assets or liabilities.
The Company's financial instruments consist principally of cash, amounts
receivable, accounts payable and amounts due to related parties. Pursuant to ASC
820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments,
the fair value of our cash equivalents is determined based on "Level 1" inputs,
which consist of quoted prices in active markets for identical assets. The
Company believes that the recorded values of all of the other financial
instruments approximate their current fair values because of their nature and
respective maturity dates or durations.
STOCK-BASED COMPENSATION
In accordance with ASC 718, Compensation - Stock Compensation, the Company
accounts for share-based payments using the fair value method. All transactions
in which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. To date, the Company has not adopted a
stock option plan and has not granted any stock options.
INCOME TAXES
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No. 109 (ASC 740), Accounting for Income Taxes. A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss carry-forwards. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion
of all of the deferred tax assets will be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.
BASIC AND DILUTED NET LOSS PER SHARE
In February 1997, the FASB issued ASC 260, "Earnings Per Share", which specifies
the computation, presentation and disclosure requirements for earnings (loss)
per share for entities with publicly held common stock. ASC 260 supersedes the
provisions of APB No. 15, and requires the presentation of basic earnings (loss)
per share and diluted earnings (loss) per share. The Company has adopted the
provisions of ASC 260 effective May 22, 2007 (inception date).
7
Basic net loss per share amount is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share because diluted earnings per share
gives effect to all potentially dilutive common shares outstanding during the
period. Diluted EPS excludes all potentially dilutive shares since their effect
is anti-dilutive.
COMPREHENSIVE LOSS
ASC 220, Comprehensive Income, establishes standards for the reporting and
display of comprehensive income (loss) and its components in the consolidated
financial statements. As at March 31, 2011 and 2010, the Company has no items
that represent a comprehensive income (loss) and, therefore, has not included a
schedule of comprehensive income (loss) in the consolidated financial
statements.
RECENT ACCOUNTING PRONOUNCEMENTS
We have reviewed all the recent accounting pronouncements through ASU 2010-19
and do not believe any of these pronouncements will have a material impact on
the Company.
3. INVESTMENT IN SUBSIDIARY
On September 15, 2010, the Company acquired 100% ownership interest in EClean
Acquisition Corporation (EAC) from an officer of the Company for a consideration
of $100. EAC had no assets, no liabilities and accumulated loss of $100. On
February 22, 2011, the Company issued 225,500,000 shares of its common stock to
EAC for acquisition of business entities. EAC did not make any acquisitions and
held the shares issued as of March 31, 2011.
4. INVESTMENT IN JOINT VENTURES AND IMPAIRMENT
On September 29, 2010, the Company's wholly-owned subsidiary EAC entered into an
agreement to invest in a Joint Venture ("JV") with Robert Kavanaugh d/b/a Biotec
Foods, a/k/a Agrigenic Food Company ("Agrigenic"). Both the parties mutually
agreed to amend the closing date of the JV to October 8, 2010. Under the terms
of the JV, EAC will provide marketing, distribution and sales for Agrigenic,
including its lines of dietary supplements for humans and animals for a period
of ten years. Pursuant to the terms of the JV, net profits will be divided 60%
to Agrigenic and 40% to EAC. On October 8, 2010, the Company issued 50,000,000
restricted shares of its common stock valued at $325,000 pursuant to Rule 144
restrictions of the Securities and Exchange Act of 1933, for EAC's 40% share of
investment in the JV. At December 31, 2010, the Company recorded an impairment
of $325,000 in its financial statements for its investment in the JV. As of
March 31, 2011, the business activities in the JV have not started and it is not
known to both the parties when the JV is expected to start their business
operations.
On October 31, 2010, the Company's wholly owned subsidiary EAC entered into a
Joint Venture Agreement with HIGA Corporation ("HIGA") for a ten year term.
Under the Joint Venture Agreement, the Company will provide marketing,
distribution and sales for HIGA, including various rubber products, both generic
in design and custom designed for specific product specifications. Net profits
of the Joint Venture will be divided 80% to HIGA and 20% to the Company. On
November 30, 2010, the Company issued 36,000,000 shares of its restricted common
stock valued at $252,000 for EAC's 20% investment in the Joint Venture as
provided for in the Joint Venture Agreement. At December 31, 2010, the Company
recorded an impairment of $252,000 in its financial statements for its
investment in the joint venture. As of March 31, 2011, the business activities
of the joint venture have not started and it is not known to both the parties
when the joint venture is expected to start its business operations.
5. RELATED PARTY TRANSACTIONS
A related party paid Company's obligations to vendors amounting to $149,886 to
fund its operations as of March 31, 2011. Advances from related parties of
$149,886 and $122,559, are due on demand, non-interest bearing and unsecured,
and are recorded as a current liability in the accompanying financial statements
as of March 31, 2011 and December 31, 2011, respectively.
8
On September 15, 2010, the Company acquired 100% of ownership interest in EAC
from an officer of the Company for $100. The Company has recorded $100 as
payable to related party in the accompanying financial statements as of March
31, 2011and December 31, 2010.
On September 15, 2010, the Company issued 20,000 shares of preferred stock
Series C, $0.00001 par value, valued at $12,000, to an officer of the Company
for services performed. The shares were valued at the fair value on the date of
issuance. These preferred shares shall be entitled to convert into 2,000,000
shares of common stock fully-paid and non-assessable shares at any time. The
officer shall have super voting rights and for voting purposes, each Series C
preferred share issued shall be counted as 10,000 shares of common stock per one
(1) share of Series C preferred stock.
On November 22, 2010, the Company issued a promissory note in exchange of loans
made by a related party amounting to $29,756. The terms and provisions of the
promissory note allowed for the related party to demand payment of this note, in
its sole discretion, in the form of cash or shares of common stock of the
Company to cancel all or part of the principal amount of the note. Upon the
related party's election to receive payments on the note in the form of shares
of Company's common stock, the number of shares called for to be issued at any
one time is to be determined by dividing the unpaid principal balance and
accrued interest thereon, of the outstanding indebtedness, by a factor of
$0.0003, subject to a limitation that at no time will this provision result in
any holder of this note being issued or holding more than 4.99% of the total
number of shares of the Company's common stock which shall be issued and
outstanding at the time of such conversion and exchanges. During the three
months ended March 31, 2011, the related party converted $20,843 of the
promissory note into 69,477,619 common shares. The Company recorded an interest
expense of $477 on the promissory note as of March 31, 2011. The principal
balance due on the promissory note amounted to $8,913 and interest accrued on
the promissory note amounted to $795 as of March 31, 2011.
The Company sub-leases its office facilities under a non-cancellable lease from
a related party starting January 1, 2010. The sub-lease term expires on July 1,
2011. Monthly rent of the sub-lease was $780 per month for the nine months ended
September 30, 2010. Monthly rent increased to $2,030 per month starting October
1, 2010 due to the Company sub-leasing additional office space from the related
party. Rent expense from related party recorded in the accompanying financial
statements for the three months ended March 31, 2011 and 2010 amounted to $6,090
and $2,340, respectively. Future minimum sub-lease of rent payment commitment
for the year ended December 31, 2011 amounted to $6,090.
6. CONVERTIBLE NOTES PAYABLE
On November 2, 2010, the Company executed a convertible promissory note for
$10,000 with 8% interest per annum, payable quarterly after the first year, such
principal and interest all due and payable at the end of three (3) years from
date hereof. The Company granted the Holder full recourse. The option granted by
the Company to Holder, as additional consideration for said value received, is
that the repayment for funds provided by Holder shall, at the sole election of
Holder, be made in whole or in part at any time at Holder's discretion, in the
form of shares of common stock of the Company in lieu of cash payments due;
restricted under SEC Rule 144, but granting the Holder piggy back registration
rights to have the Company include such shares for resale on any future
registration of common stock of the Company, including but not limited to
Regulation A. Upon election and notification by Holder, the Company shall cancel
principal and interest payments due and convert such amounts to common
restricted shares of Holder at a set conversion price; such conversion price for
cancellation of amounts of payment for principal and interest due as described
hereunder is set at a price per share reflecting a 20% discount from the average
closing bid price for trading of such common shares for the previous ten
business day period; however, at no time will this provision result in Holder
being issued or holding more than a limit of 5% of the Company's issued and
outstanding total common shares at the time of such conversions. The Company
recorded an interest expense of $200 for the three month period ended March 31,
2011. The principal balance outstanding on the convertible note payable and
accrued interest payable at March 31, 2011 was $10,000 and $312, respectively.
9
On December 22, 2010, the Company executed a convertible promissory note for
$10,000 with 8% interest per annum, payable quarterly after the first year, such
principal and interest all due and payable at the end of three (3) years from
date hereof. The Company granted the Holder full recourse. This option granted
by the Company to Holder, as additional consideration for said value received,
is that the repayment for funds provided by Holder shall, at the sole election
of Holder, be made in whole or in part at any time at Holder's discretion, in
the form of shares of common stock of the Company in lieu of cash payments due;
restricted under SEC Rule 144, but granting the Holder piggy back registration
rights to have the Company include such shares for resale on any future
registration of common stock of the Company, including but not limited to
Regulation A. Upon election and notification by Holder, the Company shall cancel
principal and interest payments due and convert such amounts to common
restricted shares of Holder at a set conversion price; such conversion price for
cancellation of amounts of payment for principal and interest due as described
hereunder is set at a price per share reflecting a 20% discount from the average
closing bid price for trading of such common shares for the previous ten
business day period; however, at no time will this provision result in Holder
being issued or holding more than a limit of 5% of the Company's issued and
outstanding total common shares at the time of such conversions. The Company
recorded an interest expense of $200 for the three months ended March 31, 2011.
The principal balance outstanding on the convertible note payable and accrued
interest payable at March 31, 2011 was $10,000 and $237, respectively.
7. COMMITMENTS AND CONTINGENCIES
A securities lawyer claims that the prior control group of the Company
contracted with him on behalf of the Company to perform securities legal work
during the year ended December 31, 2009. The attorney claims he was paid $15,000
and is still owed $3,000. However, the attorney has not provided the new control
group with a contract obligating the Company to pay. Accordingly, neither the
$18,000 of expense, nor the $3,000 in liability, has been reflected in the
Company's financial statements as of March 31, 2011 and December 31, 2010,
respectively.
8. STOCKHOLDERS' EQUITY
The authorized capital of the Company as of March 31, 2011 consists of (a)
100,000,000 preferred shares with a par value of $0.00001 per share, of which
5,000,000 shares are designated as Series A preferred shares with a par value of
$0.00001; 250,000 shares are designated as Series B preferred shares with a par
value of $0.00001; and 80,000 shares are designated as Series C preferred shares
with a par value of $0.00001, and (b) 1,400,000,000 common shares with a par
value of $0.00001 per share.
On October 8, 2010, the Company amended its Articles of Incorporation to
increase its authorized capital for a total of One Billion Five Hundred Million
(1,500,000,000) shares, One Billion Four Hundred Million (1,400,000,000) shares
of which are of common stock, $0.00001 par value per share, and One Hundred
Million (100,000,000) shares of preferred stock, $0.00001 par value, with Five
Million (5,000,000) shares of preferred stock having previously been designated
as Series A, Two Hundred Fifty Thousand (250,000) shares of preferred stock
having previously been designated as Series B and Eighty Thousand (80,000)
shares of preferred stock previously designated as Series C.
COMMON STOCK
In July 2007, the Company issued 45,000,000 shares of common stock at a price of
$0.0001 per share for total cash proceeds of $5,000. In August 2007, the Company
issued 36,000,000 shares of common stock at a price of $0.001 per share for
total cash proceeds of $40,000. In December 2007, the Company also issued
810,000 shares of common stock at a price of $0.010 per share for total cash
proceeds of $9,000. During the period May 22, 2007 (inception) to December 31,
2007, the Company sold a total of 81,810,000 shares of common stock for total
cash proceeds of $54,000.
On March 29, 2010, the Company filed with the Nevada Secretary of State a
Certificate of Designations designating 5,000,000 shares of Series A Preferred
Stock, $0.00001 par value per share. Each share is convertible at any time into
$1.00 of Common Stock of the Company, has a liquidation value of $1.00 per
share, is not entitled to any dividends and has no voting rights other than
those prescribed the laws of the State of Nevada.
10
On March 29, 2010, the Company filed with the Nevada Secretary of State a
Certificate of Designations designating 250,000 shares of Series B Preferred
Stock, $0.00001 par value per share. Each share is convertible at any time into
$1.00 of Common Stock of the Company, has a liquidation value of $1.00 per
share, is not entitled to any dividends and has no voting rights other than
those prescribed the laws of the State of Nevada.
On March 29, 2010, the Company filed with the Nevada Secretary of State a
Certificate of Designations designating 80,000 shares of Series C Preferred
Stock, $0.00001 par value per share. Each share is convertible into 100 shares
of Common Stock of the Company, has liquidation rights equal to those of the
Company's common shares on an "as converted" basis, is not entitled to any
dividends and has voting rights which shall be counted on an "as converted"
basis times 100.
On October 8, 2010, the Company issued to Enzyme Bio Sciences LLC 50,000,000
shares of its common stock valued at $325,000 for its 40% share of investment in
a joint venture. On November 30, 2010, the Company issued to HIGA Inc.
36,000,000 shares of its common stock valued at $252,000 for its 20% share of
investment. The shares were issued at a fair value on the date issuance pursuant
to the terms of joint venture agreements.
During November 30, 2010 and December 6, 2010, the Company issued 21,000,000
shares of its common stock valued at $630,000 to certain consultants and
business advisors for services. The common shares issued were valued at their
fair value on the date of issuances.
During the three months ended March 31, 2011, the Company issued (a) 9,500,000
shares of its common stock to consultants for services, valued at $54,150, (b)
12,500,000 shares of its common stock to officers and directors as compensation
for services, valued at $86,250, (c) 8,500,000 shares of its common stock to
independent contractors for services valued at $58,650, (d) 225,500,000 shares
of its common stock to its wholly owned subsidiary E Clean Acquisition
Corporation valued at $1,555,950 for acquisition of business entities, and (e)
69,477,619 shares of common stock to satisfy indebtedness of $20,843 towards a
related party promissory note of $29,956 dated November 22, 2010.
In September 2009, the Company forward-split its common shares 9 for 1. As of
March 31, 2011 and December 31, 2010, the Company had 514,287,619 and
188,810,000 shares of common stock outstanding taking into effect of the
forward-split of its common shares 9 for 1.
PREFERRED STOCK SERIES C
The Company's Articles of Incorporation authorize the issuance of 80,000 shares
of $0.00001 par value Class C Preferred Stock. Under the Company's Articles, the
Board of Directors has the power, without further action by the holders of the
Common Stock, to designate the relative rights and preferences of the preferred
stock, and issue the preferred stock in such one or more series as designated by
the Board of Directors. The designation of rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the interest of
the holders of the Common Stock or the Preferred Stock of any other series. The
issuance of Preferred Stock may have the effect of delaying or preventing a
change in control of the Company without further shareholder action and may
adversely affect the rights and powers, including voting rights, of the holders
of Common Stock. In certain circumstances, the issuance of preferred stock could
depress the market price of the Common Stock.
The Series C preferred shares shall not be entitled to receipt of any dividend
and the Company's board of directors shall not declare any dividends in respect
of the Series C preferred shares. The holders of Series C preferred shares shall
be entitled to convert each whole number of Series C preferred share into 100
shares of common stock issuable upon conversion. The holders of Series C
preferred shares and the holders of common stock shall vote together and not as
separate classes. For voting purposes, each Series C preferred share shall be
counted as 10,000 shares of common stock per one (1) share of Series C preferred
11
stock. For the purposes of calculating the number of shares to be voted and only
for such purpose, the Series C preferred shares shall be deemed not to be
subject to any reverse split of the common stock of the Company. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of Series C preferred shares shall have liquidation
preference equal to that of the holders of common stock of the Company, and each
Series C preferred share shall be counted as 10,000 shares of common stock per
one (1) share of Series C preferred share. All shares of Series C preferred
stock shall be junior rank to all shares of Series A and Series B preferred
shares in respect to all preferences as to distributions and payments upon the
liquidation, dissolution and winding up of the Company.
The Company shall not effectuate any conversion of any Series C preferred share
and no holder of any Series C preferred share shall have the right to convert
and Series C preferred share to the extent that after giving effect to such
conversion such person (together with such person's affiliates) (a) would
beneficially own in excess of 4.9% of the outstanding shares of the common stock
following such conversion and (B) would have acquired, through conversion of any
Series C preferred share or otherwise (including without limitation, exercise of
any warrant), in excess of 4.9% of the outstanding shares of the common stock
following such conversion.
On September 15, 2010, the Company issued 20,000 shares of preferred stock
Series C, $0.00001 par value, valued at $12,000, to an officer of the Company
for services performed. These preferred shares shall be entitled to convert into
2,000,000 shares of common stock fully-paid and non-assessable shares at any
time. The officer shall have super voting rights and for voting purposes, each
Series C preferred share issued shall be counted as 10,000 shares of common
stock per one (1) share of Series C preferred stock.
As of March 31, 2011, 20,000 shares of preferred stock Series C remain
outstanding.
9. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through May 10, 2011, the date which
the financial statements were available to be issued.
On May 5, 2011, the Company issued a news release concerning the cancellation of
its joint venture with HIGA Corporation effective May 9, 2011. As a part of the
restructuring of the Company's business opportunities, this will result in the
cancellation of 36 million shares of common stock previously issued to the joint
venture will be returned to the Company and treated as treasury stock.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2011 constitute "forward-looking statements."
These statements, identified by words such as "plan," "anticipate," "believe,"
"estimate," "should," "expect," and similar expressions include our expectations
and objectives regarding our future financial position, operating results and
business strategy. These statements reflect the current views of management with
respect to future events and are subject to risks, uncertainties and other
factors that may cause our actual results, performance or achievements, or
industry results, to be materially different from those described in the
forward-looking statements. Such risks and uncertainties include those set forth
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operation" and elsewhere in this Quarterly Report. We advise you
to carefully review the reports and documents we file from time to time with the
Securities and Exchange Commission (the "SEC"), particularly our Annual Report
on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form
8-K.
As used in this Quarterly Report, the terms "we," "us," "our," "Global NuTech,"
and the "Company" refer to Global NuTech, Inc., formerly known as Bio-Clean,
Inc. and Nature of Beauty, Inc., unless otherwise indicated. All dollar amounts
in this Quarterly Report are expressed in U.S. dollars, unless otherwise
indicated.
INTRODUCTION
The Company was incorporated under the laws of the State of Nevada on May 22,
2007. The Company is in the development stage as defined under Statement on
Financial Accounting Standards No. 7, Development Stage Enterprises ("SFAS
No.7"). Historically, the Company has been engaged in the business of purchasing
and distributing all-natural and organic everyday skin care products from
Russia. As of the date of this Quarterly Report, we have not commenced business
operations and we have not generated any revenues from the beauty product
business. In the later part of 2009, the Company's management and Board of
Directors deemed it to be in the best interests of the Company and its
stockholders for the Company to diversify its holdings across a broader range of
industry segments. Doing so would provide greater growth potential as well as
balance cyclical downturns. On October 16, 2009, we changed our name to
Bio-Clean, Inc. and commenced work on developing "green" products and
technologies, including unique cleaning and environmental remediation products.
In September 2010, we again changed our name to Global NuTech, Inc. The name
change better denotes the multi-faceted lines of business in which we intend to
operate. With the increase in authorized shares of our common stock will permit
us to further expand our operations through future acquisitions or joint venture
arrangements. The change of name became effective on October 8, 2010.
RESULTS OF OPERATION
We are a development stage company and have not generated any revenue to date.
We have incurred recurring losses to date. Our financial statements have been
prepared assuming that we will continue as a going concern and, accordingly, do
not include adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should we be unable to
continue in operation. We expect we will require additional capital to meet our
long term operating requirements. We expect to raise additional capital through,
among other things, the sale of equity or debt securities.
The summarized financial data is derived from and should be read in conjunction
with our unaudited financial statements for the three-month period ended March
31, 2011, including the notes to those financial statements which are included
in this Quarterly Report. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward-looking statements.
Our unaudited financial statements are stated in United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
13
THREE-MONTH PERIOD ENDED MARCH 31, 2011 COMPARED TO THE THREE-MONTH PERIOD ENDED
MARCH 31, 2010.
Our net loss for the three-month period ended March 31, 2011 was $252,902
compared to a net loss of $21,258 during the same comparable period in 2010.
During the three-month period ended March 31, 2011, we did not generate any
revenue.
During the three-month period ended March 31, 2011, we incurred general and
administrative expenses of $99,975 as compared to $21,258 incurred during the
same comparable period in 2010. General and administrative expenses incurred
during the three-month period ended March 31, 2011, primarily related to
corporate overhead, financial and administrative contracted services such as
legal, professional, accounting and audit fees.
During the three-month period ended March 31, 2011, we incurred compensation to
officers for services of $151,250 compared to no compensation paid to officers
for services during the same comparable period in 2010.
Our net loss during the three-month period ended March 31, 2011 was $252,902 or
$0.00 per share compared to a net loss of $21,258 or $0.00 per share for the
comparable period in 2010. Our cumulative loss from May 22, 2007 (inception) to
March 31, 2011 amounted to $1,698,694. The weighted average number of common
shares outstanding was 319,360,150 and 81,810,000 for the three-month periods
ended March 31, 2011 and 2010, respectively.
LIQUIDITY AND CAPITAL RESOURCES
THREE-MONTH PERIOD ENDED MARCH 31, 2011
As of March 31, 2011, our current assets were $941 and our current liabilities
were $186,742, which resulted in negative working capital of $185,801 as
compared to negative working capital of $152,792 at December 31, 2010.
At March 31, 2011, current liabilities comprised of accrued expenses of $27,943,
a note payable of $8,913 and advances from related parties of $149,886 for a
total of $186,742 as compared to $153,781 in current liabilities at December 31,
2010. The increase in current liabilities during the three-month period ended
March 31, 2011 from December 31, 2010 was primarily due to advances from a
related party for payment of corporate and administrative overhead of the
Company.
Stockholders' equity decreased from a capital deficiency of $172,792 at December
31, 2010 to capital deficiency of $205,801 at March 31, 2011.
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash used by operating activities for the three-month period ended March 31,
2011 amounted to $48 due to issuances of common stock for services rendered by
officers and third parties totaling $199,050 and advancements made by a related
party for administrative expenses totaling $27,327.
CASH FLOWS FROM INVESTING AND FINANCING ACTIVITIES
We had no cash flows from investing activities and financing activities during
the three-month period ended March 31, 2011.
We expect that working capital requirements will continue to be funded through
loans or the further issuances of securities. Our working capital requirements
are expected to increase in line with the growth of our business.
PLAN OF OPERATION AND FUNDING
Our cash reserves are not sufficient to meet our obligations for the next twelve
month period. As a result, we will need to seek additional funding in the near
future. We currently do not have a specific plan of how we will obtain such
funding; however, we anticipate that additional funding will be in the form of
14
equity financing from the sale of shares of our common stock. We may also seek
to obtain short-term loans from our directors or unrelated parties, although no
such arrangements have been made. At this time, we cannot provide investors with
any assurance that we will be able to obtain sufficient funding from the sale of
our common stock or through a loan from our directors or unrelated parties to
meet our obligations over the next twelve months. We do not have any
arrangements in place for any future equity financing.
MATERIAL COMMITMENTS
As of March 31, 2011, we had no material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
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 are material to investors.
GOING CONCERN
The independent auditors' report accompanying our December 31, 2010 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
The Company, under the supervision and with the participation of its management,
including the Chief Executive Officer/Chief Financial Officer, evaluated the
effectiveness of the design and operation of the Company's "disclosure controls
and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act
of 1934, as amended, as of the end of the period covered by this report. Based
on that evaluation, the Chief Executive Officer/Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective
as of March 31, 2011. There has been no change in the Company's internal control
over financial reporting during the quarter ended March 31, 2011, that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings and, to our knowledge, no
such proceedings are threatened or contemplated.
ITEM 1A. RISKS FACTORS.
Not applicable.
15
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On February 22, 2011, the Company issued 10,000,000 shares of its common stock
to E. G. Marchi, our President, and 2,500,000 to Sean Stanowski, our Secretary,
as compensation for services rendered. On February 22, 2011, the Company issued
225,500,000 shares to its wholly owned subsidiary, E-Clean Acquisitions, Inc.
This stock was issued to allow the subsidiary entity to enter into and close
acquisitions of other business entities on behalf of the Company. During the
quarter ended March 31, 2011, the Company issued an aggregate of 18,000,000
shares of its common stock to unrelated third parties for services rendered to
the Company. During the quarter ended March 31, 2011, the Company issued an
aggregate of 69,477,619 shares of its common stock upon conversion of $20,843 of
the Promissory Note dated November 22, 2011 with an original principal balance
of $29,956. All of the shares of common stock were issued pursuant an exemption
provided by Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. (REMOVED AND RESERVED).
ITEM 5. OTHER INFORMATION.
On May 3, 2011, the Company announced that it had made a decision to focus its
business on the Technology and Energy markets and to undergo a major capital
restructuring of various joint venture entered into by its wholly owned
subsidiary, E-Clean Acquisitions, Inc. which will result in a cancellation of
approximately 350,000,000 shares of its common stock currently outstanding. In
connection with this restructuring, on May 5, 2011, the Company announced that
its joint venture with HIGA Corporation would be cancelled and 36,000,000 shares
of the Company's common stock issued to the joint venture would be returned to
the Company and treated as treasury stock.
ITEM 6. EXHIBITS.
The following exhibits are filed as part of this Quarterly Report.
Exhibit No. Description of Exhibit Location
----------- ---------------------- --------
3.1 Articles of Incorporation Incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1 as
filed with the Securities and Exchange Commission
on March 21, 2008, as subsequently amended.
3.2 Bylaws Incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-1 as
filed with the Securities and Exchange Commission
on March 21, 2008, as subsequently amended.
3.3 Certificate of Amendment to Certificate Incorporated by reference to the Schedule 14C
of Incorporation filed with the Nevada Definitive Information Statement filed with the
Nevada Secretary of State on October 8, Securities and Exchange Commission on October on
2009. October September 18, 2009.
3.4 Certificate of Designation of Series A Incorporated by reference to Exhibit 3.4 of the
Convertible Preferred Stock filed with Company's Annual Report on Form 10-K filed
the Nevada Secretary of State on March With the Securities and Exchange Commission on
29, 2010. May 17, 2010.
16
3.5 Certificate of Designation of Series B Incorporated by reference to Exhibit 3.5 of the
Convertible Preferred Stock filed with Company's Annual Report on Form 10-K filed
the Nevada Secretary of State on March With the Securities and Exchange Commission on
29, 2010. May 17, 2010.
3.6 Certificate of Designation of Series C Incorporated by reference to Exhibit 3.6 of the
Convertible Preferred Stock filed with Company's Annual Report on Form 10-K filed
the Nevada Secretary of State on March with the Securities and Exchange Commission on
29, 2010. May 17, 2010.
21.1 Subsidiaries. Included herein.
31.1 Certification of Chief Executive Officer Included herein.
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Included herein.
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Included herein.
pursuant to 18 U.S.C.Section 1350.
32.2 Certification of Chief Executive Officer Included herein.
pursuant to 18 U.S.C.Section 1350.
17
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GLOBAL NUTECH, INC.
Date: May 13, 2011 By: /s/ E. G. Marchi
-------------------------------------
E. G. Marchi
President
1
