Attached files
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EX-32.1 - CERTIFICATION - SONNEN Corp | exhibit321.htm |
EX-32.2 - CERTIFICATION - SONNEN Corp | exhibit322.htm |
EX-31.2 - CERTIFICATION - SONNEN Corp | exhibit312.htm |
EXCEL - IDEA: XBRL DOCUMENT - SONNEN Corp | Financial_Report.xls |
EX-31.1 - CERTIFICATION - SONNEN Corp | exhibit311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012.
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
.
Commission file number: 000-52803
SONNEN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada
98-0514037
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133
(Address of principal executive offices) (Zip Code)
(305) 529-4888
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 o
No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§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 o No þ
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 o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes þ No o
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuers common stock, $0.0001 par value (the only class
of voting stock), at April 19, 2013, was 67,893,000.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
3
Consolidated Balance Sheets as of March 31, 2012 (Unaudited) and June 30, 2011
4
Unaudited Consolidated Statements of Operations and Comprehensive Loss for the
5
three and nine months ended March 31, 2012 and 2011 and cumulative amounts
from development stage activities (November 16, 2006 through March 31, 2012)
Unaudited Consolidated Statements of Cash Flows for the three and nine months
6
ended March 31, 2012 and 2011 and cumulative amounts from development stage
activities (November 16, 2006 through March 31, 2012)
Notes to Unaudited Consolidated Financial Statements
7
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
18
Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
22
Item 4.
Controls and Procedures
23
PART II-OTHER INFORMATION
Item 1.
24
Item 1A.
24
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
24
Item 3.
Defaults Upon Senior Securities
24
Item 4.
Mine Safety Disclosures
24
Item 5.
24
Item 6.
24
25
26
2
PART I FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS.
As used herein, the terms Company, we, our, and us, refer to Sonnen Corporation, a Nevada
corporation, unless otherwise indicated. In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of operations for the periods presented.
The results of operations for the periods presented are not necessarily indicative of the results to be
expected for the full year.
3
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
June 30,
2012
2011
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents
$
32 $
159
Prepaid expenses (Note 4)
-
1,099
Total Current Assets
$
32 $
1,258
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable
$
127,716 $
131,505
Accounts payable - related parties
465,692
319,379
Accrued payroll
13,283
13,283
Notes payable - related parties (including accrued
interest of $527 - March 31, 2012 and $93 - June 30, 2011)
12,127
11,693
Notes payable (including accrued interest of $25,818
- March 31, 2012 and $16,655 - June 30, 2011)
184,701
167,763
Loans from shareholder (including accrued interest of $24,811
- March 31, 2012 and $15,604 - June 30, 2011)
177,008
166,264
Total Current Liabilities
980,527
809,887
COMMITMENTS AND CONTINGENCIES (Note 11)
-
-
STOCKHOLDERS' DEFICIT (Note 8)
Preferred stock, $0.0001 par value, 50,000,000 shares
authorized, none issued and outstanding
-
-
Common stock, par value $0.0001, 250,000,000 shares
authorized, 67,893,000 issued and outstanding
6,789
6,789
Paid-in capital
3,143,864
2,841,575
Accumulated deficit during the development stage
(4,131,148)
(3,656,993)
Total Stockholders' Deficit
(980,495)
(808,629)
Total Liabilities and Stockholders' Deficit
$
32 $
1,258
The accompanying notes are an integral part of these consolidated financial statements.
4
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Cumulative
amounts from
development
stage activities
For the three months ended
For the nine months ended
(November 16,
March 31,
March 31,
2006 through
2012
2011
2012
2011
March 31, 2012)
REVENUES
$
-
$
- $
- $ -
$
-
GENERAL & ADMINISTRATIVE
EXPENSES
General and administrative
89
201
286
2,216
96,339
Professional fees
9,725
19,683
29,085
76,802
381,561
Consulting fees
-
-
-
-
179,727
Consulting and professional fees - related
parties
30,000
54,000
122,000
154,000
620,250
Stock based compensation
-
-
-
-
101,000
Compensation and related taxes and benefits
100,770
150,030
302,289
450,091
1,898,080
Transfer fees
313
350
963
955
10,267
Depreciation
-
154
-
463
1,044
Research & development
-
-
-
107
167,666
Total General & Administrative Expenses
140,897
224,418
454,623
684,634
3,455,934
Loss before other income (expense)
(140,897)
(224,418)
(454,623)
(684,634)
(3,455,934)
Interest income/ (expense)
(6,432)
(6,475)
(19,532)
(18,356)
(50,854)
Loss on foreign currency exchange
-
-
-
-
(1,551)
Loss on disposal of assets
-
-
-
-
(809)
Impairment loss on asset
-
-
-
-
(672,000)
Other income
-
-
-
-
50,000
Loss before provision for income taxes
(147,329)
(230,893)
(474,155)
(702,990)
(4,131,148)
Provision for income taxes
-
-
-
-
-
NET LOSS
$
(147,329) $
(230,893) $
(474,155) $
(702,990) $
(4,131,148)
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
67,893,000
67,893,000
67,893,000
67,893,000
The accompanying notes are an integral part of these consolidated financial statements
5
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cumulative
amounts from
development stage
activities
For the nine months ended
(November 16, 2006
March 31,
through
2012
2011
March 31, 2012)
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES
Net (loss) from development stage activities
$
(474,155) $
(702,990) $
(4,131,148)
Adjustments to reconcile net loss to net cash
provided (used) by development stage activities:
Depreciation
-
463
1,044
Stock options vested
302,289
450,091
1,808,114
Stock issued for services
-
-
101,000
Loss on disposal of assets
-
-
809
Impairment loss on asset
-
-
672,000
Changes in operating assets and liabilities:
Increase in prepaid expenses
1,099
7,233
-
Increase in accounts payable
5,349
31,704
174,215
Increase in accounts payable - related parties
146,312
161,834
465,691
Increase in accrued liabilities
-
-
13,283
Increase in accrued interest
18,979
17,908
51,156
Total adjustments
474,028
669,233
3,287,312
NET CASH USED BY DEVELOPMENT STAGE ACTIVITIES
(127)
(33,757)
(843,836)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
-
-
(1,853)
NET CASH USED BY INVESTING ACTIVITIES
-
-
(1,853)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable, net
-
37,000
280,660
Proceeds from notes payable - related parties
-
-
45,600
Repayments from notes payable - related party
-
(4,000)
(50,079)
Proceeds from sale of common stock, net of offering costs
-
-
569,540
NET CASH PROVIDED BY FINANCING ACTIVITIES
-
33,000
845,721
NET INCREASE/ (DECREASE) IN CASH AND CASH
EQUIVALENTS
(127)
(757)
32
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
159
840
-
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
32 $
83 $
32
Supplemental Disclosures:
Cash paid for income taxes
$
- $
- $
-
Cash paid for interest
$
- $
- $
-
Non-cash Disclosures:
Payments made by related party on behalf of the Company:
Increase in notes payable - related parties
$
- $
- $
21,079
Decrease in accounts payable - related parties
$
- $
- $
(11,079)
Increase in prepaid expenses
$
- $
- $
(10,000)
To apply balance owed to a related party to accounts receivable:
$
Decrease in accounts receivable - related party
$
- $
- $
40,000
Repayments of note payable - related party
$
- $
- $
(40,000)
Stock issued for licensing agreement rights
$
- $
- $
672,000
The accompanying notes are an integral part of these consolidated financial statements
6
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 1 BUSINESS
Sonnen Corporation was incorporated in the state of Nevada on November 16, 2006 as Simple Tech,
Inc. Sonnen Corporation and its wholly-owned subsidiary, Sonnen One, Inc., are referred to herein as the
Company. By June 2009, the Company had been unable to realize its original business objective. In July
2009, the Company entered into a licensing agreement to research, develop and market products that rely
upon a novel process for energy generation consisting of specific materials and proprietary material
combinations.
On November 3, 2009, the Company amended its articles of incorporation to change its name from Simple
Tech, Inc. to Sonnen Corporation and to decrease the number of its authorized common stock from one
billion five hundred million (1,500,000,000) shares (par value $0.0001) to two hundred fifty million
(250,000,000) shares (par value $0.0001) without affecting the number of issued and outstanding shares.
The Companys subsidiary changed its name from Sonnen Corporation to Sonnen One, Inc.
On November 9, 2009, the Company formed a Scientific Advisory Board to support the Company with its
research, development, and commercialization efforts through advice, counsel, and direct participation
utilizing the industry expertise and professional and academic backgrounds of its Scientific Advisory Board
members pursuant to its current business plan.
On February 6, 2010, the licensor of the licensing agreement notified the Company of a purported breach of
contract terms, including a breach of confidentiality, insufficient funding for research and development
activities and failure to provide direct access to our patent attorneys. The license agreement allowed for a
ninety day period in which to cure purported breaches. The Company subsequently learned that the licensor
was not the rightful owner of the license and had no rights to grant the license to the Company.
Since the licensor failed to remedy the breach of the licensing agreement, the Company filed a legal
complaint on March 8, 2010 and impaired the entire $672,000 book value of the licensing agreement.
The Company has since been seeking to litigate an outcome of the dispute.
7
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles (GAAP) for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information
and footnotes required by GAAP for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the
Companys financial position as of March 31, 2012, and the results of its operations and cash flows for the
nine months ended March 31, 2012, have been made. Operating results for the nine months ended March
31, 2012 are not necessarily indicative of the results that may be expected for the year ended June 30, 2012.
These consolidated financial statements should be read in conjunction with the financial statements and
notes for the year ended June 30, 2011, thereto contained in the Companys Form 10-K.
Development Stage Enterprise
At March 31, 2012, the Companys business operations had not fully developed and the Company is highly
dependent upon funding and therefore is considered a development stage enterprise.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Sonnen Corporation and
Sonnen One, Inc., its wholly-owned subsidiary. All material intercompany accounts and transactions
between the Companies for the periods presented have been eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets, the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ
from those estimates and assumptions.
NOTE 3 GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will
continue as a going concern. The Company has a cumulative net loss for the period from inception
(November 16, 2006) through March 31, 2012 of $4,131,148, a working capital deficit of $980,495 and
negative cash flows from development stage activities of $127. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The Company's continuation as a going concern
is dependent on its ability to meet its obligations, to obtain additional debt and/or equity financing as may
be required and ultimately to attain profitability. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
8
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 4 PREPAID EXPENSES
Prepaid expenses comprise of the following at:
June 30, 2011
Haynes and Boone, LLP Prepayment retainer for legal fees
$
1,099
Total
$
1,099
NOTE 5 LICENSING AGREEMENT
The Company entered into a licensing agreement (the Agreement) with PT Group, Limited (PT Group),
an unrelated entity, on July 27, 2009, that granted the Company an exclusive, non-transferable license to use
PT Groups intellectual property of a certain technology and licensed products to be used in achieving the
Companys business objectives. The terms of the agreement would have continued until the expiry of
protections afforded for the intellectual property, provided that the Company was not in breach or default of
any of the terms or conditions contained in the Agreement. During the term of the licensing agreement, the
PT Group retained sole and beneficial propriety of the intellectual property including any improvements
made to any licensed products or future products, regardless of the source.
In exchange for use of the license, the PT Group was issued common shares equal to 5% of the issued and
outstanding common shares, 3,360,000 shares of the Company at a value of $0.20 per share on the
execution date, which was estimated to be $672,000. Additionally, upon the Company cumulatively raising
$50 million in equity financing, the Company guaranteed that PT Group would own no less than 2.5% of
the issued and outstanding shares of its common shares.
Breach of Contract Claim
On February 6, 2010, PT Group notified the Company of a purported breach of contract terms, including a
breach of confidentiality, insufficient funding for research and development activities and failure to provide
direct access to our patent attorneys. The license agreement allowed for a ninety day period in which to cure
purported breaches. During the quarter ended March 31, 2010, the Company learned that PT Group was not
the rightful owner of the license and had no rights to grant the license to the Company. Since PT Group has
not remedied the breach in accordance with the Agreement, the Company filed a legal complaint. (Note 11).
As a result of this discovery, the Company impaired the entire $672,000 book value of the license
agreement.
9
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 6 NOTES PAYABLE
On January 5, 2010, the Company received an advance on an interest bearing promissory note of $100,000
from an unrelated entity. The note is due and payable on January 11, 2011, and bears an interest rate of 8%
per annum. Interest of $6,110 and $6,088 for the periods ended March 31, 2012 and 2011 has been accrued
and is outstanding as of March 31, 2012. Subsequent to March 31, 2012, this note was extended to
December 12, 2014.
On August 29, 2009, the Company received an advance on an interest bearing promissory note of $10,000
from an unrelated third party. The note was due and payable on February 28, 2010, and bears an interest rate
of 1% per month. On November 17, 2009, we made a principal payment of $5,000. On March 1, 2010, the
Company executed a new note for $5,000 to the same unrelated third party. The new note is due and
payable on March 1, 2011, and bears an interest rate of 8% per annum. Interest of $306 and $304 for the
periods ended March 31, 2012 and 2011, respectively, has been accrued and is outstanding as of March 31,
2012. Subsequent to March 31, 2012, this note was extended to January 3, 2015.
On June 10, 2010, the Company received an advance on an interest bearing promissory note of $5,983 for a
payment made on behalf of the Company from an unrelated entity. The note is due and payable on June 10,
2011, and bears an interest rate of 8% per annum. Interest of $366 and $364 for the periods ended March
31, 2012 and 2011, respectively, has been accrued and is outstanding as of March 31, 2012. On June 18,
2010, the Company received another advance on an interest bearing promissory note of $10,000 in cash
from the same unrelated entity. The note is due and payable on June 18, 2011, and bears an interest rate of
8% per annum. Interest of $611 and $609 for the periods ended March 31, 2012 and 2011, respectively, has
been accrued and is outstanding as of March 31, 2012. On June 30, 2010, the Company received an advance
on an interest bearing promissory note of $5,300 for a payment made on behalf of the Company from the
same unrelated entity. The note is due and payable on June 30, 2011, and bears an interest rate of 8% per
annum. Interest of $324 and $323 for the periods ended March 31, 2012 and 2011, respectively, has been
accrued and is outstanding as of March 31, 2012. Subsequent to March 31, 2012, each of these notes were
extended to January 3, 2015.
On September 20, 2010, the Company received an advance on an interest bearing promissory note of
$25,000 from an unrelated entity. The note is due and payable on September 20, 2011, and bears an interest
rate of 8% per annum. Interest of $1,528 and $1,067 for the periods ended March 31, 2012 and 2011,
respectively, has been accrued and is outstanding, as of March 31, 2012. Subsequent to March 31, 2012, this
note was extended to January 3, 2015.
10
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 7 LOANS FROM SHAREHOLDERS
On February 14, 2012, the Company received two advances on interest bearing promissory notes for an
aggregate total of $9,137 for three payments made on behalf of the Company from the unrelated entity. The
notes are due and payable on demand, and bear an interest rate of 8% per annum. Interest of $93 for the
period ended March 31, 2012 has been accrued and is outstanding as of March 31, 2012.
On February 17, 2010, the Company received an advance on an interest bearing promissory note of $93,660
in cash and a payment made on behalf of the Company of $5,000 for a total of $98,660 from an unrelated
shareholder. The note is due and payable on February 17, 2011, and bears an interest rate of 8% per annum.
Interest of $6,029 and $6,007 for the periods ended March 31, 2012 and 2011, respectively, has been
accrued and is outstanding as of March 31, 2012. On May 6, 2010, the Company received another advance
on an interest bearing promissory note of $35,000 in cash and a payment made on behalf of the Company of
$5,000 for a total of $40,000 from the same shareholder. The note is due and payable on May 6, 2011, and
bears an interest rate of 8% per annum. Interest of $2,444 and $2,436 for the periods ended March 31, 2012
and 2011, respectively, has been accrued and is outstanding as of March 31, 2012. On July 8, 2010, the
Company received another advance on an interest bearing promissory note of $12,000 from the same
shareholder. The note is due and payable on July 8, 2011, and bears an interest rate of 8% per annum.
Interest of $733 and $709 for the periods ended March 31, 2012 and 2011, respectively, has been accrued
and is outstanding. Subsequent to March 31, 2012, each of these notes was extended to January 3, 2015.
NOTE 8 STOCKHOLDERS' EQUITY
Common Shares Authorized
The Company has 250,000,000 common shares authorized at a par value of $0.0001 per share and
50,000,000 shares of preferred stock, par value $0.0001 per share. All common stock shares have equal
voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and,
therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all the
directors of the Company.
As of March 31, 2012 and 2011, there are 67,893,000 shares issued and outstanding, respectively.
As of March 31, 2012, there are no classes of preferred stock designated and none are outstanding.
Common Stock Issuances and Warrants Granted
For the nine months ended March 31, 2012 there were no share issuances.
11
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 9 STOCK BASED COMPENSATION
On August 31, 2009, the Company adopted the Companys 2009, Stock Option Plan (the Plan) in an
effort to promote the interests of the Company by providing eligible persons and companies with the
opportunity to acquire or increase a proprietary interest in the Company through the grant of up to five
million (5,000,000) non-statutory stock options (the Options) as an incentive for the eligible persons to
continue their employment or service.
On August 31, 2009, the Company authorized the grant of an aggregate of one million eight hundred
thousand (1,800,000) Options with an exercise price of $1.00 per share pursuant to the Plan. This block of
Options vest over a three year period through August 31, 2012, in equal increments of one-third of
potentially exercisable Options each year or in full if involuntarily terminated.
During the nine months ended March 31, 2012, there have been no additional grants of stock options under
the plan.
12
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 9 STOCK BASED COMPENSATION - CONTINUED
A summary of the Options granted to employees and others under the Plan and changes since inception of
the Plan is presented below:
Weighted
Average
Number of
Exercise
Aggregate
Options
Price
Intrinsic Value
Balance at July 1, 2010
2,000,000 $
1.03 $
2,038,908
Options Granted
-
-
-
Options Exercised
-
-
-
Options Forfeited or Expired
(50,000) $
1.25
(62,844)
Balance at June 30, 2011
1,950,000 $
1.01 $
1,976,064
Exercisable at June 30, 2011
1,149,960 $
1.01 $
1,170,027
Weighted average fair value of Options
granted through June 30, 2011
$
1.01
Weighted
Average
Number of
Exercise
Aggregate
Options
Price
Intrinsic Value
Balance at July 1, 2011
1,950,000 $
1.01 $
1,976,064
Options Granted
-
-
-
Options Exercised
-
-
-
Options Forfeited or Expired
-
-
-
Balance at March 31, 2012
1,950,000 $
1.01 $
1,976,064
Exercisable at March 31, 2012
1,549,920 $
1.01 $
1,572,985
Weighted average fair value of Options
granted through March 31, 2012
$
1.01
13
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 9 STOCK BASED COMPENSATION - CONTINUED
The following table summarizes information about stock Options under the Plan that were outstanding at
March 31, 2012:
Outstanding Options
Weighted
Average
Number
Remaining
Weighted
Outstanding
Contractual
Average
Exercise
at March
Life in
Exercise
Intrinsic
Price
31, 2012
Years
Price
Value
$
1.00
1,800,000
7.50 $
1.00 $ 1,813,493
$
1.25
150,000
7.70 $
1.25 $
162,572
1,950,000
7.60 $
1.01 $ 1,976,064
Options Exercisable
Number
Weighted
Exercisable
Average
Aggregate
Exercise
at March 31,
Exercise
Intrinsic
Price
2012
Price
Value
$
1.00
1,399,920 $
1.00 $ 1,410,413
$
1.25
150,000 $
1.25 $
162,572
1,549,920 $
1.01 $ 1,572,985
During the nine months ended March 31, 2012 and 2011, the Company recorded $302,289 and $450,091,
respectively, in stock-based compensation on the statements of operations.
At March 31, 2012 there was $167,950 of total unrecognized compensation cost related to stock options
granted under the Plan. That cost is expected to be recognized pro-rata according to the vesting schedules
through August 31, 2012.
14
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 10 RELATED PARTY TRANSACTIONS
Notes payable related parties
On April 29, 2010, the Company received an advance on a non-interest bearing promissory note of $8,500
from a related entity. The note is due and payable on demand. On July 15, 2010, the Company repaid
$4,000 of the balance of this note. The remaining balance of $4,500 is outstanding as of March 31, 2012 for
which the Company has not yet received a demand.
On May 2, 2011, the Company received an advance on an interest bearing promissory note of $7,100 from a
related entity. The note is due and payable on June 2, 2012, and bears an interest rate of 8% per annum.
Interest of $434 for the nine months ended March 31, 2012 has been accrued and is outstanding. Subsequent
to March 31, 2012, this note was extended to January 3, 2015.
Consulting Agreements
On October 1, 2009, the Company entered into a consulting agreement with Prosper Financial, Inc., a
company owned by the spouse of the Companys President and Chief Executive Officer and 37% owner of
the Company. The agreement calls for monthly payments of $2,500 for consulting services rendered and
$1,200 per month in rental payments for the use of Prosper Financial, Inc.s office space. The agreement
extended through October 31, 2010, and was subsequently extended on a month to month basis for the
consulting services. As of March 31, 2012 and June 30, 2011, this related party had a balance due of
$50,564 and $26,064, respectively, and is reflected in accounts payable related parties.
On August 1, 2009, the Company entered into a consulting agreement with a director and officer that calls
for monthly compensation of $7,500 and extended through December 31, 2009, after which it was extended
on a month to month basis. As of March 31, 2012 and June 30, 2011, this related party had a balance due of
$169,019 and $101,706, respectively, which is reflected in accounts payable related parties.
On July 1, 2009, the Company entered into a consulting agreement with a shareholder, director and officer
of the Company that calls for an annual base fee of $96,000 through June 30, 2010, after which it was
continued on a month to month basis. As of March 31, 2012, this related party had a total balance due of
$182,969, comprised of $169,350 due for consulting fees, and $13,619 for business expenses, all of which
is reflected in accounts payable related parties. As of June 30, 2011, this related party had a total balance
due of $150,969, comprised of $137,350 due for consulting fees, and $13,619 for business expenses, all of
which is reflected in accounts payable related parties.
On October 1, 2009, the Company entered into a consulting agreement with the former Head of Research
that calls for monthly compensation of $6,000 through December 31, 2009, this contract was not renewed
or extended. As of March 31, 2012 and June 30, 2011, this related party had a balance due of $1,840, which
is reflected in accounts payable related parties.
15
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 10 RELATED PARTY TRANSACTIONS - CONTINUED
On October 1, 2009, the Company entered into an agreement with a consultant to provide bookkeeping
services, the monthly compensation is $5,000 through October 1, 2010 in addition the consultant was
entitled to 100,000 incentive stock options upon signing through October 1, 2010. On April 1, 2010, we
entered into a new agreement with the same consultant, the monthly compensation was amended to be
$2,500 per month, all other terms remained the same through April 1, 2011 This contract was not renewed
or extended. As of March 31, 2012 and June 30, 2011, this related party had a balance due of $47,500 and
$25,000, respectively, which is reflected in accounts payable related parties.
On December 1, 2009, the Company entered into a consulting agreement with the son of our President to
provide business consulting services that called for monthly compensation of $2,000 through November 30,
2010. This contract was not renewed or extended. As of December 31, 2011 and June 30, 2011, this related
party had a balance due of $9,000, which is reflected in accounts payable related parties.
NOTE 11 COMMITMENTS AND CONTINGENCIES
Contingencies
On February 6, 2010, PT Group notified the Company of a purported breach of contract terms including a
breach of confidentiality, insufficient funding for research and development activities and failure to provide
direct access to our patent attorneys. The licensing agreement allows for a ninety day period in which to
cure purported breaches. The Companys management and board of directors have reason to believe that PT
Group may not be the rightful owner of the intellectual property licensed under the licensing agreement.
(Note 5)
On March 8, 2010, the Company filed a complaint in the Circuit Court of the 11th Judicial Court In and For
Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of the
licensing agreement dated July 27, 2009. The complaint seeks: (i) damages for fraud that stem from
reliance on PT Group's claim of ownership over certain proprietary information, (ii) the return of Company
shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief sought to prohibit
Mr. Leonards use of confidential information to which he is not entitled, and (iv) reasonable attorneys
fees. Mr. Leonard responded to the complaint in an answer dated November 19, 2012 asserting that had no
knowledge of the subject matter of the suit. The Company has been unable to serve PT Group to date.
Should the relief sought be adjudicated, the Company expects to succeed on the merits of its claims.
16
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2012
NOTE 12 SUBSEQUENT EVENTS
In accordance with Accounting Standards Codification (ASC) topic 855-10 Subsequent Events, the
Company has evaluated subsequent events through the date which the financial statements were available to
be issued. The Company has determined that there were no such events that warrant disclosure or
recognition in the financial statements, other than these below:
Note payables extensions
Subsequent to period end, all of the Companys notes payables due dates were extended as discussed above
in Notes 6 and 7.
Stock options
On December 31, 2012, all outstanding vested options had expired in accordance with the terms of their
respective stock option agreements or rescinded by mutual agreement between the Company and the
respective holders.
17
ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
This Managements Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this quarterly report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as anticipates, expects, believes,
plans, predicts, and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include, but are not limited to, those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
consolidated financial statements and related notes included in this report. Information presented herein is
based on the three and nine month periods ended March 31, 2012. Our fiscal year-end is June 30.
Discussion and Analysis of the Companys Plan of Operation
Our plan of operation over the next twelve months is to prosecute the Companys civil complaint against
PT Group and certain of the principals thereof and to consider alternative technologies for merger or
acquisition that might create value for our shareholders. Meanwhile, we have suspended our development
plan for the technology licensed from PT Group. While awaiting resolution of the uncertainties
surrounding the licensing agreement, the Company intends to identify, acquire and develop alternative
innovative technologies that it might advance to commercial applications. Management understands that
new technologies must meet several critical milestones in advance of commercialization. Milestones
include cost effectiveness, energy efficiencies, convenience of use and practicability. Any products that
we should develop will have to be able to effectively compete with todays accepted technologies by
optimizing low-cost manufacturing processes, ensuring enhanced energy efficiencies, and providing a
reliable product with the flexibility to rely on alternative fuel sources.
The Companys business development strategy is prone to significant risks and uncertainties which could
have an immediate impact on its efforts to generate a positive net cash flow and could deter the
development of advanced energy enhanced technology. Historically, the Company has not generated
sufficient cash flow to sustain operations and has had to rely on debt or equity financing to remain in
business. Therefore, we cannot offer that future expectations that any technology the Company might
develop will be commercially developed or that it will be sufficient to generate the revenue required for
its operations. Should we be unable to generate cash flow, the Company may be forced to seek additional
debt or equity financing as alternatives to the cessation of operations. The success of such measures can in
no way be assured.
We have not generated any revenue since inception.
Results of Operations
During the nine months ended March 31, 2012, our operations were focused on maintaining our civil
complaint against Paul R. Leonard and PT Group in connection with breaches of a licensing agreement
and considering alternative technologies for merger or acquisition that might create value for the
Companys shareholders.
Net Losses
For the period from inception (November 16, 2006) until March 31, 2012, the Company incurred net
losses of $4,131,148.
18
Net losses for the three months ended March 31, 2012 were $147,329 as compared to net losses of
$230,893 for the three months ended March 31, 2011. Net losses for the nine months ended March 31,
2012 were $474,155 as compared to net losses of $702,990 for the nine months ended March 31, 2011.
The decrease in net losses over the comparative three and nine month periods can be attributed to a
decrease in general and administrative expenses.
We expect to continue to realize net losses as operating costs accrue and management considers
alternative technologies to succeed that technology subject to litigation.
General and Administrative Expenses
For the period from inception until March 31, 2012, the Company incurred general and administrative
expenses of $3,455,934. General and administrative expenses for the three months ended March 31, 2012
were $140,897 as compared to $224,418 for the three months ended March 31, 2011. The decrease in
general and administrative expenses over the comparative three periods can be primarily attributed to a
decrease in professional fees to $9,725 from $19,683, a decrease in consulting fees for related parties to
$30,000 from $54,000, and a decrease in compensation benefits to $100,770 from $150,030.
General and administrative expenses for the nine months ended March 31, 2012 were $454,623 as
compared to $684,634 for the nine months ended March 31, 2011. The decrease in general and
administrative expenses over the comparative nine month periods can be primarily attributed to a
decrease in professional fees to $29,085 from $76,802, a decrease in consulting fees for related parties to
$122,000 from $154,000, a decrease in compensation benefits to $302,289 from $450,091.
We expect that our general and administrative expenses will continue to decrease as the Companys
operations slow in response to ongoing litigation with PT Group and the suspension of our research and
development operations.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward and
start up costs that will offset any future operating profit.
Capital Expenditures
The Company has not spent significant amounts of capital for the period from November 16, 2006
(inception) to March 31, 2012.
Liquidity and Capital Resources
The Company has been in the development stage since inception, and has experienced significant changes
in liquidity, capital resources, and stockholders equity.
The Company had total assets of $32 consisting of cash as of March 31, 2012.
The Company had current and total liabilities of $980,527, consisting of accounts payable, accounts
payable to related parties, accrued payroll, notes payable to related parties, notes payable and loans from a
shareholder as of March 31, 2012.
The Company had a stockholders deficit of $980,495 and a working capital deficit of $980,495 at March
31, 2012.
19
For the period from inception until March 31, 2012, net cash used in development stage activities was
$843,836. Net cash used in development stage activities for the nine month period ending March 31,
2012 was $127 as compared to $33,757 used in development stage activities for the nine months ended
March 31, 2011. Net cash used in development stage activities in the current nine month period can be
primarily attributed to general and administrative expenses, that include but are not limited to, personnel
costs, accounting fees, consulting expenses, and professional fees, such as for auditing purposes and legal
consultation, offset by vested stock options, which is a book expense item that does not affect the total net
cash used amount relative to actual cash used and actual cash items that do affect that actual cash used
that are not income statement related items, including pre-paid expenses, accounts payable, accounts
payable to related parties, and accrued interest. We expect to use net cash in development stage activities
until such time as net losses transition to net income, which transition is not anticipated until we realize
income producing activities.
For the period from inception until March 31, 2012, net cash used in investing activities was $1,853. Net
cash used in investing activities for the nine months ended March 31, 2012 for each of the nine months
ended March 31, 2012 and March 31, 2011 was zero. We expect to use net cash in investing activities on
returning to technology development activities.
For the period from inception until March 31, 2012, net cash provided by financing activities was
$845,721. Net cash provided by financing activities for the nine months ended March 31, 2012 was zero
as compared to $33,000 for the nine months ended March 31, 2011. Net cash flow provided by financing
activities in the prior period is attributable to proceeds from notes payable, offset by repayments on notes
payable to a related party. We expect net cash provided by financing activities in future periods to fund
litigation costs, regulatory compliance and daily operations.
Our current assets are insufficient to meet our current obligations or to satisfy our cash needs over the
next twelve months and as such the Company will require additional debt or equity financing. We had no
commitments or arrangements for financing at March 31, 2012 though we are pursuing a number of
prospective sources that include shareholder loans, the sale of equity, the procurement of long term debt
or the settlement of additional debt for equity. We face certain financial obstacles to attracting new funds
due to our historical and current record of net losses and working capital deficits. Therefore, despite our
efforts we can provide no assurance that the Company will be able to secure the financing required to
meet our stated objectives or even to continue as a going concern.
The Company does not expect to pay cash dividends in the foreseeable future.
The Company has a defined stock option plan and contractual commitments with all of its officers and
directors.
The Company has no current plans for any significant purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off Balance Sheet Arrangements
As of March 31, 2012, the Company had no 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 stockholders.
20
Going Concern
The Companys auditors have expressed an opinion as to its ability to continue as a going concern as a
result of continuing net operating losses. Our ability to continue as a going concern is dependent on
realizing funding from inside or outside sources. Managements plan to address the Companys ability to
continue as a going concern includes: (i) obtaining funding from the private placement of debt or equity;
and (ii) converting debt to equity. Management believes that it will be able to obtain funding to enable the
Company to remain a going concern through the methods discussed above, though there can be no
assurances that such methods will prove successful.
Forward- Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Results of Operations and Description of Business,
with the exception of historical facts, are forward looking statements. A safe-harbor provision may not be
applicable to the forward looking statements made in this current report. Forward looking statements
reflect our current expectations and beliefs regarding our future results of operations, performance, and
achievements. These statements are subject to risks and uncertainties and are based upon assumptions and
beliefs that may or may not materialize. These statements include, but are not limited to, statements
concerning:
our anticipated financial performance;
uncertainties related to the research and development of technology;
our ability to generate revenues through sales to fund future operations;
our ability to raise additional capital to fund cash requirements for future operations;
the volatility of the stock market; and
general economic conditions.
We caution readers that our operating results are subject to various risks and uncertainties that could cause
our actual results to differ materially from those discussed or anticipated. We advise readers not to place
any undue reliance on the forward-looking statements contained in this report, which reflect our beliefs
and expectations only as of the date of this report. We assume no obligation to update or revise these
forward-looking statements to reflect new events or circumstances or any changes in our beliefs or
expectations, other than as required by law.
Stock-Based Compensation
We have adopted Accounting Standards Codification, ASC 718, formerly SFAS No. 123R, Share-Based
Payments, which addresses the accounting for stock-based payment transactions in which an enterprise
receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprises equity instruments or that may be settled by the issuance of
such equity instruments.
We account for equity instruments issued in exchange for the receipt of goods or services from other than
employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable based on the Black-Scholes model. The value of equity instruments issued for
consideration other than employee services is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services.
21
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04 which relates to fair value measurement (FASB ASC
Topic 820), which amends current guidance to achieve common fair value measurement and disclosure
requirements in U.S. GAAP and International Financial Reporting Standards. The amendments generally
represent clarification of FASB ASC Topic 820, but also include instances where a particular principle or
requirement for measuring fair value or disclosing information about fair value measurements has
changed. The guidance also expands the disclosures for fair value measurements that are estimated using
significant unobservable (Level 3) inputs. This guidance is effective during interim and annual periods
beginning after December 15, 2011 and is to be applied prospectively. The adoption of this standard will
not materially impact the Company's financial statement statements.
In June 2011, the FASB issued Accounting Standards Update No. 2011-5, Presentation of Comprehensive
Income. This standard requires presentation of the items of net income and other comprehensive income
in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but
consecutive, statements of net income and other comprehensive income. The new requirements are
effective for fiscal years beginning after December 15, 2011. Early adoption is permitted and full
retrospective application is required. The Company does not expect a significant impact on the
Company's financial positions as a result of adoption of these new requirements.
Critical Accounting Policies
In the notes to the audited consolidated financial statements the Company for the years ended June 30,
2011 and 2010, included in the Companys Form 10-K filed with the Securities and Exchange
Commission, the Company discussed those accounting policies that are considered to be significant in
determining the results of operations and financial position. The Companys management believes that
their accounting principles conform to accounting principles generally accepted in the United States of
America.
The preparation of financial statements requires management to make significant estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these
judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate our
estimates, including those related to bad debts, inventories, intangible assets, warranty obligations,
product liability, revenue, and income taxes. We base our estimates on historical experience and other
facts and circumstances that are believed to be reasonable, and the results form the basis for making
judgments about the carrying value of assets and liabilities. The actual results may differ from these
estimates under different assumptions or conditions.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required.
22
ITEM 4.
CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by
management, with the participation of the chief executive officer and the chief financial officer, of the
effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or submitted
under the Exchange Act is recorded, processed, summarized, and reported within the time periods
specified in the Commissions rules and forms and that such information is accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered by
this report, that the Companys disclosure controls and procedures were not effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and that such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
During the period ended March 31, 2012, there has been no change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect our internal control over
financial reporting.
23
PART II OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS.
On March 8, 2010, the Company filed a complaint in the Circuit Court of the 11th Judicial Court In and
For Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of
the licensing agreement dated July 27, 2009. The complaint seeks: (i) money damages for fraud that stem
from reliance on PT Group's claim of ownership over certain proprietary information, PT Groups
misrepresentation of efforts credited to prior research and development and PT Groups failure to provide
sufficient technical information on which to prepare patents to secure the technology, (ii) the return of the
Companys shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief
sought to prohibit Mr. Leonards use of confidential information to which he is not entitled, and (iv)
reasonable attorneys fees. Mr. Leonard responded to the complaint in an answer dated November 19,
2012 asserting that had no knowledge of the subject matter of the suit. The Company has been unable to
serve PT Group to date. Should the relief sought be adjudicated, the Company expects to succeed on the
merits of its claims.
ITEM 1A.
RISK FACTORS.
Not required of smaller reporting companies.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3.
DEFAULTS ON SENIOR SECURITIES.
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable
ITEM 5.
OTHER INFORMATION.
None.
ITEM 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page
26 of this Form 10-Q, and are incorporated herein by this reference.
24
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Sonnen Corporation
Registrant
April 19, 2013
/s/ Robert Miller
Date
Robert Miller
Chief Executive Officer and Director
April 19, 2013
/s/ Costas Takkas
Date
Costas Takkas
Chief Financial Officer, Principal Accounting Officer and Director
25
INDEX TO EXHIBITS
Exhibit
Description
3.1.1*
Articles of Incorporation, incorporated by reference to the Companys Form SB-2 filed with the
Commission on August 6, 2007.
3.1.2*
Amendment to the Articles of Incorporation, incorporated by reference to the Companys
Definitive 14C filed with the Commission on October 14, 2009.
3.2*
Bylaws, incorporated by reference to the Companys Form SB-2 filed with the Commission on
August 6, 2007.
10.1*
Licensing Agreement between the Company, the Companys wholly owned subsidiary, and P.T.
Group, Ltd., dated July 27, 2009, incorporated by reference to the Companys Form 10-K filed
with the Commission on August 3, 2009.
10.2*
Consulting Agreement between the Company and Costas Takkas, dated July 27, 2009,
incorporated by reference to the Companys Form 10-K filed with the Commission on August 3,
2009.
10.3*
Employment Agreement between the Company and Paul Leonard dated July 27, 2009,
incorporated by reference to the Companys Form 10-K filed with the Commission on August 3,
2009.
10.4*
Employment Agreement between the Company and David Greenbaum dated August 1, 2009,
incorporated by reference to the Companys Form 10-Q filed with the Commission on November
23, 2009.
10.5*
Consulting Agreement between the Company and Carol Laws dated August 1, 2009, incorporated
by reference to the Companys Form 10-Q filed with the Commission on November 23, 2009.
10.6*
Consulting Agreement between the Company and Backend Technologies, LLC dated August 5,
2009, incorporated by reference to the Companys Form 10-Q filed with the Commission on
November 23, 2009.
10.7*
Employment Agreement between the Company and Robert H. Miller dated January 1, 2010,
incorporated by reference to the Company Form 10-Q filed with the Commission on November
23, 2010.
21*
Subsidiaries of the Company, incorporated by reference to the Companys Form 10-K filed with
the Commission on August 3, 2009.
Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).
101. INS
XBRL Instance Document
101. PRE
XBRL Taxonomy Extension Presentation Linkbase
101. LAB
XBRL Taxonomy Extension Label Linkbase
101. DEF
XBRL Taxonomy Extension Label Linkbase
101. CAL
XBRL Taxonomy Extension Label Linkbase
101. SCH
XBRL Taxonomy Extension Schema
*
Incorporated by reference to previous filings of Allied.
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed furnished and
not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the
Securities Act of 1933, or deemed furnished and not filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, and otherwise is not subject to liability under these
sections.
26