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EXCEL - IDEA: XBRL DOCUMENT - AQUENTIUM INC | Financial_Report.xls |
EX-32.1 - CERTIFICATION - AQUENTIUM INC | aqnm_ex321.htm |
EX-31.1 - CERTIFICATION - AQUENTIUM INC | aqnm_ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2013
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
From transition period from ____ to ____
Commission File No.: 000-23402
AQUENTIUM, INC.
(Exact name of registrant as specified in its charter)
Delaware
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11-2863244
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
571 Crane Street, building A, Perris, California
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92530
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(Address of principal executive offices)
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(Zip Code)
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(951) 674-9200
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 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,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer
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o |
Accelerated filer
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o |
Non-accelerated filer
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o |
Smaller reporting company
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x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
As of October 3, 2013, the registrant had 93,957,403 shares of common stock outstanding.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
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Item 1: |
Financial Statements
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4 | |
Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and September 30, 2012 (Audited)
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5 | ||
Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2013 and 2012 (Unaudited) and from inception (April 30, 2001) to June 30, 2013
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6 | ||
Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2013 and 2012 (Unaudited) and from inception (April 30, 2001) to June 30, 2013
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7 | ||
Notes to Consolidated Financial Statements (Unaudited)
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8 | ||
Item 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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12 | |
Item 3: |
Quantitative and Qualitative Disclosures about Market Risk
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15 | |
Item 4: |
Controls and Procedures
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15 | |
PART II – OTHER INFORMATION
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Item 1: |
Legal Proceedings
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16 | |
Item 1A: |
Risk Factors
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16 | |
Item 2: |
Unregistered Sales of Equity Securities and Use of Proceeds
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16 | |
Item 3: |
Default on Senior Securities
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16 | |
Item 4: |
Mine Safety Information
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16 | |
Item 5: |
Other Information
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16 | |
Item 6: |
Exhibits
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16 | |
Signatures | 17 |
2
PART I – FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
The financial information set forth below with respect to our statements of operations for the three and nine month period ended June 30, 2013 and 2012 is unaudited. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three month period ended June 30, 2013, are not necessarily indicative of results to be expected for any subsequent period. Our year end is September 30.
3
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
June 30,
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September 30,
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|||||||
2013
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2012
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|||||||
(Unaudited)
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(Audited)
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ASSETS
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Current assets
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Cash
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$ | 10,638 | $ | 626 | ||||
Prepaid
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-- | 3,200 | ||||||
Total current assets
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10,638 | 3,826 | ||||||
Total assets
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$ | 10,638 | $ | 3,826 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities
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Accounts payable
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41,986 | 39,322 | ||||||
Accrued interest
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69,598 | 60.568 | ||||||
Accrued expense- litigation
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177,247 | 177,247 | ||||||
Advances-related party
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184,631 | 193,234 | ||||||
Accrued rent-related party
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168,000 | 168,000 | ||||||
Salaries payable- related party
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1,835,357 | 1,655,347 | ||||||
Total current liabilities
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2,476,820 | 2,293,728 | ||||||
Total liabilities
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2,476,820 | 2,293,728 | ||||||
Stockholders’ deficit
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Preferred shares, par value $0.00001
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10,000,000 authorized; none issued and outstanding
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-- | -- | ||||||
Common stock, par value $0.005
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authorized 100,000,000 shares,
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issued and outstanding 62,957,403
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as June 30, 2013 and 56,957,403
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September 30, 2012, respectively
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312,287 | 284,787 | ||||||
Additional paid-in capital
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1,019,971 | 972,471 | ||||||
Accumulated deficit during development stage
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(3,798,440 | ) | (3,547,160 | ) | ||||
Total stockholders’ deficit
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(2,466,182 | ) | (2,289,902 | ) | ||||
Total liabilities and stockholders’ deficit
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$ | 10,638 | $ | 3,826 |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
4
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT-STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
From
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Inception
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(April 30,
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Three Months
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Nine Months
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2001) to
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Ended June 30,
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Ended June 30,
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June 30,
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2013
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2012
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2013
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2012
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2013
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Income
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$ | -- | $ | 5,750 | -- | $ | 10,775 | $ | 22,160 | |||||||||||
Cost of goods sold
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-- | (2,650 | ) | -- | (4,034 | ) | (5,434 | ) | ||||||||||||
Gross margin
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-- | 3,100 | -- | 6,741 | 16,726 | |||||||||||||||
Selling, general and administrative expenses
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81,279 | 80,770 | 242,251 | 245,203 | 5,383,354 | |||||||||||||||
Impairment loss
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-- | -- | 15,000 | |||||||||||||||||
Depreciation
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- | - | -- | 3,973 | ||||||||||||||||
Loss from operations
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(81,279 | ) | (77,670 | ) | (242,251 | ) | (238,462 | ) | (5,385,601 | ) | ||||||||||
Other income (expense)
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Gain on debt settlement
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-- | -- | -- | 1,533 | 3,511 | |||||||||||||||
Gain on sale of investment /business
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-- | -- | -- | -- | 370,000 | |||||||||||||||
Rental income
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-- | -- | -- | -- | 1,471,279 | |||||||||||||||
Expense- litigation settlement
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-- | -- | -- | -- | (177,247 | ) | ||||||||||||||
Interest expense
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(3,010 | ) | (3,010 | ) | (9,030 | ) | (9,030 | ) | (80,382 | ) | ||||||||||
Total other income (expense)
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(3,010 | ) | (3,010 | ) | (9,030 | ) | (7,477 | ) | 1,587,161 | |||||||||||
Net loss
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$ | (84,289 | ) | $ | (80,680 | ) | (251,281 | ) | (245,939 | ) | $ | 3,798,440 | ) | |||||||
Loss per common share
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Basic
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
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Basic weighted average number
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of common shares outstanding
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57,385,974 | 51,743,117 | 57,266,227 | 48,109,417 |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
5
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months
Ended June 30,
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From inception
(April 30, 2001) to
June 30,
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2013
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2012
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2013
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Cash Flows From Operating Activities:
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Net loss
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$ | (251,281 | ) | $ | (245,939 | ) | $ | (3,798,440 | ) | |||
Adjustments to reconcile net loss to
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net cash used in operating activities:
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Depreciation
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-- | -- | 3,973 | |||||||||
Stock for services
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25,000 | -- | 740,755 | |||||||||
Stock for joint venture
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-- | -- | 6,000 | |||||||||
Gain on exchange of stock
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-- | -- | (370,000 | ) | ||||||||
Disposition of subsidiary
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-- | -- | 18,465 | |||||||||
Stock option compensation
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-- | -- | 100,000 | |||||||||
Impairment expenses
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-- | -- | 18,638 | |||||||||
Changes in operating assets and liabilities:
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Bank overdraft
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-- | (16 | ) | -- | ||||||||
Accrued rent
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-- | 43,200 | 168,000 | |||||||||
Accrued expense-litigation payable
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-- | -- | 177,247 | |||||||||
Accounts payable
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2,666 | 4,047 | 42,791 | |||||||||
Accrued interest
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9,030 | 9.030 | 81,523 | |||||||||
Prepaid
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3,200 | -- | -- | |||||||||
Salaries payable-related party
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180,000 | 180,000 | 2,312,253 | |||||||||
Net cash used in operating activities
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(31,385 | ) | (9,678 | ) | (498,795 | ) | ||||||
Cash Flows From Investing Activities:
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Investment in joint venture
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(15,000 | ) | ||||||||||
Purchase of fixed assets
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-- | -- | (3,973 | ) | ||||||||
Net cash used in investing activities
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-- | -- | (18,973 | ) | ||||||||
Cash Flows From Financing Activities:
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Stock issued for cash
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50,000 | 12,500 | 62,500 | |||||||||
Note payable-related party
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-- | -- | 137,860 | |||||||||
Advances – related party
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(8,603 | ) | (440 | ) | 318,546 | |||||||
Capital contribution – founder
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-- | -- | 500 | |||||||||
Capital contribution – office space
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-- | -- | 9,000 | |||||||||
Net cash provided by financing activities
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41,397 | 12,060 | 528,406 | |||||||||
Net increase in cash
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10,012 | 2,382 | 10,638 | |||||||||
Cash at beginning of period
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626 | -- | -- | |||||||||
Cash at end of period
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$ | 10,638 | $ | 2,382 | $ | 10,638 |
The accompanying notes an integral part of the unaudited consolidated financial statements.
6
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
Nine Months
Ended June 30, |
From inception
(April 30, 2001) to
June 30,
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2013
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2012
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2013
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Non-Monetary Transactions
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Stock for debt settlement 5,292,549 and 2,200,000 shares
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issued at $0.0255 and $0.02 per share respectively
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$ | -- | $ | -- | $ | 135,000 | ||||||
Stock for interest 467,631
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shares issued at $0.0255 per share
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$ | -- | $ | -- | $ | 11,925 | ||||||
Stock for officer salaries payable 7,039,820 and 3,000,000 shares respectively
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shares issued $0.0255 and $0.02 per share respectively
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$ | -- | $ | -- | $ | 239,515 | ||||||
Stock for licensing agreement 100,000
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shares issued at $0.06 per share
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$ | -- | $ | -- | $ | 6,000 | ||||||
Stock issued for services 500,000 shares
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at $0.05 per share
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$ | 25,000 | -- | -- | ||||||||
Stock for acquisitions 1,150,000
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shares issued at $0.02 per share
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$ | -- | $ | -- | $ | 23,000 | ||||||
Stock issue for salary 10,000,000
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shares issued at $0.006 per share
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$ | -- | $ | -- | $ | 60,000 | ||||||
Stock for patent pending 4,000
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shares issued at 1.00 per share
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$ | -- | $ | -- | $ | 4,000 | ||||||
Reduction of liability to a related
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party by an exchange in investment
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$ | -- | $ | -- | $ | 375,000 |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
7
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation of these financial statements have been included.
The results for the periods presented are not necessarily indicative of the results for the full year and should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2012 included in our Annual Report on Form 10-K, filed on December 27, 2012.
NOTE 2 – GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $3798,440 and has limited revenues to cover its operating costs. This uncertainty raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company's plan. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.
NOTE 3 – BUSINESS DESCRIPTION
A. Business
Aquentium, Inc. (a Delaware corporation) is a diversified holding company in the development stage. (See Note 4B "Development Stage Company"). Its holdings include a solar energy company for solar farms, residential and commercial buildings (Aquentium Solar, Inc.), a company for research and development of algae energy projects, (New American Energy, Inc.), a Waste-To-Energy company for the development of waste-to-energy projects and recycling systems (Environmental Waste Management, Inc.), a housing company for the development of emergency and re-deployable housing structures (H.E.R.E. International, Inc.), an early-stage entertainment company that for the development of motion pictures, music, print publications, and consumer products (Canby Group, Inc.), and (Aquentium De Mexico) for any housing, energy, and water treatment business done in the Country of Mexico. The subsidiaries were not active during the period ending June 30, 2013.
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. There was no activity in any of the subsidiaries.
8
B. Development-Stage Company
The accompanying consolidated financial statements have been prepared in accordance with Financial Accounting Standards Board’s Accounting Standard Codification (FASB ASC) 915-205 “Development-Stage Enterprises". A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenue there from. Development-stage companies report cumulative costs from the enterprise’s inception.
C. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.
D. Loss per Share
Basic earnings (loss) per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company. Dilutive earnings (loss) per share are equal to that of basic earnings (loss) per share as the effects of stock options and warrants have been excluded as they are anti-dilutive.
E. Revenue Recognition
The Company recognizes revenue upon shipment of a product to the customer or upon completion of the service the Company is providing.
NOTE 5 – RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on the Company’s financial statements.
NOTE 6 – STOCK ISSUED
On May 14, 2012 the Company issued 10,000,000 shares of common stock with a value of $60,000 ($0.006 per share) for accrued salary.
On June 8, 2012 the Company issued 500,000 shares of common stock with a value of $12,500 ($0.025 per share) for cash.
On February 22, 2013 the Company issued 500,000 shares of common stock with a value of $25,000 ($0.05 per share) for service.
On March 27, 2013 the Company issued 5,000,000 shares of common stock with a value of $50,000 ($0.01 per share) for cash
9
NOTE 7 – RELATED PARTY TRANSACTIONS
Mark T. Taggatz, President, CEO and Chairman of the Board had the following transactions with the Company:
a)
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Mr. Taggatz is the majority shareholder and an officer and director of Ozone Safe Food (OSF). Through OSF, Mr. Taggatz has advanced funds to pay for expenses on behalf of the Company. Mr. Taggatz and affiliates have a total outstanding balance of $184,631 as of June 30, 2013.
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b)
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The Company recorded compensation of $180,000 as salary payable for the nine month periods ending June 30, 2013 and 2012 which are accrued but not paid. Total salaries payable as of June 30, 2013 and September 30, 2012 was $1,835,357 and $1,655,347 respectively.
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c)
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The Company entered into a lease agreement with Sani Dri and has accrued rent payable of $168,000 as of June 30, 2013. (See Note 12 “Lease Agreement”). Sani Dri is a Company Mr. Taggatz controls. The lease terminated as of September 30, 2012.
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NOTE 8 – ACCRUED INTEREST
As a result of arbitration during the fiscal year 2007, a former landlord was awarded a judgment against the Company totaling $177,247. The Company is accruing interest on the judgment at an annual rate of seven percent on the outstanding balance. During the nine month period ended June 30, 2013 the Company accrued interest of $9,030 for the outstanding judgment resulting in total interest accrued as of June 30, 2013 of $69,598 (See Note 9: Commitments and Contingencies)
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Effective September 1, 2004, the Company exercised an option to lease 84,772 square feet of building space on an average monthly basis of $31,897 per month. The Company was assigned the lease rights of the other tenants in the building and collected rents from those tenants. For the years ending September 30, 2009 and 2008, the Company recorded no lease expenses in connection with these leases. The Company had an option to purchase the building for $5.1 million. The largest tenant in the building was eFoodsafety.com.
During the year ended September 30, 2007, the Company was party to an arbitration hearing with the landlord pertaining to the lease of the building and the sub-lease of portions of the building to its sub-tenants. On April 11, 2007, the arbitrator granted legal fees to the landlord in the amount of $47,000. On April 19, 2007 and June 29, 2007, amended notices of ruling were heard by the Superior Court of California, County of Riverside resulting in a judgment awarded on September 21, 2007 to the landlord of $146,917 including fees and interest. Additionally, on August 17, 2007, the landlord received a judgment against the Company of $29,692 pertaining to termination of the Company’s occupancy of the building.
The Company was a plaintiff in suits against the individual sub-tenants pertaining to rent withheld by the sub-tenants. No determination of these cases has been concluded. As of June 30, 2013, $177,247 for the judgment plus accrued interest of $69,598 has been accrued by the Company for a total liability of $246,845.
On February 2, 2010 the Company entered into agreements with two municipalities in China to convert waste material into energy. Under the terms of the agreement the municipalities would provide the waste material to the Company, land for the Company to build the conversion plant and buy the resulting energy produced from the Company. These projects will require substantial funding which must be arranged and provided by the Company along with the conversion plant construction and operations. As of this date no activity beyond the signing of the agreements has been completed.
10
On March 1, 2010, the Company signed a consulting agreement with an individual giving the individual 100,000 shares of common stock with a value of $5,000. Under the terms of the agreement the individual can earn additional shares of the Company stock plus commissions based on the sales initiated by the individual.
NOTE 10 – JOINT VENTURES
In March 2004, Aquentium entered into 50/50 joint venture. Aquentium Hong Kong, Ltd., a Chinese limited liability company, was formed to manufacture market and sell Aquentium's products and/or services, if any, in Asia for a period of 10 years. As of June 30, 2013, the joint venture had no further activity.
On August 18, 2008, the Company signed a business development agreement with Megaros, Inc. Under the terms of the agreement Megaros will receive commissions starting at five (5) percent of the first $1,000,000 of sales and decreasing one (1) percent for each $1,000,000 of additional sales of the Company’s products.
On July 28, 2009, the Company signed a joint venture agreement with an individual for the production and harvesting of algae on property owned by the individual. Under the terms of the agreement the Company is required to raise substantial capital within twenty four months of the date of the agreement plus manage the joint venture on behalf of both parties. The Company was obligated to a one-time fee of $15,000, which has been paid, plus an annual fee of $250,000 payable to the individual, once production commences. As there has been no activity and the obligation of the Company has not been met, the Company has impaired the investment of $15,000 at September 30, 2010.
NOTE 11 – LEASE AGREEMENT
On October 1, 2009, the Company entered into a lease agreement with Sani-Dri, Sani-Dri is controlled by the wife of Mr. Taggatz. The Company has exclusive distribution territories for the Sani-Dri ozone hand dryer. Under the terms of the agreement the Company is subleasing 8,000 square feet of commercial office and warehouse space for three years. They will pay the affiliate rent of $4,000 per month through the year ending September 30, 2010; $4,800 per month for year two ending September 30, 2011 and $6,000 per month for year three ending September 30, 2012. The lease has expired and was not renewed.
NOTE 12 – SUBSEQUENT EVENT
On August 29, 2013 the Company issued Mark Taggatz 30,000,000 shares of common stock at a value of $1,350,000 for accrued salary.
On August 29, 2013 the Company issued 1,000,000 shares of common stock with a value of $45,000 for services.
11
Reference in this report to “Aquentium’” “we,” “us,” and “our” refer to Aquentium, Inc. and its subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive Overview
Aquentium, Inc. is a holding company of six wholly-owned subsidiaries and we have interests in joint ventures, as well as business opportunities related to ozone equipment and structural insulated panels. During the past year, we have actively expanded our focus into providing green technologies and solutions to businesses throughout the world. We are expanding our business in the area of alternative energy and are currently pursuing Waste-to-Energy projects throughout the world as well as the production of algae bio-fuels. We have been focused on bringing Waste-to-Energy solutions to the countries in Europe, South America, Asia and the country of Mexico. Management is very optimistic about the worldwide demand for such technology.
On a daily basis Aquentium plans to sell and market our complete line of ozone sanitation equipment. This technology is designed for use in food processing, beverage processing, hotels, schools, hospitals, and veterinarian clinics. In addition to our distributors, the company also markets directly to these industries.
As of the date of this filing we have minimal operations and have recorded minimal revenues for the past two years. Our focus for the next twelve months will be to obtain additional funding to develop and expand our operations and new projects. Our success will depend on our ability to obtain funding through equity and/or debt transactions. However, with the downturn of the United States and world economies, we will encounter substantial competition for the limited financing that will be available in the market place. If we are unable to obtain financing, then we will likely delay further business development of any of our products, marketing and other projects and joint ventures. Potential investors must recognize that we have limited capital available for the development of our business plan and all risks inherent in a new and inexperienced enterprise are inherent in our plan to launch operations.
In summary, management continues to position the company in a way to best benefit from worldwide economic conditions, trends, events, and demand for new technologies.
12
Liquidity and Capital Resources
From inception (April 30, 2001) to June 30, 2013, we had an accumulated deficit of $3,798,441. We recorded a net loss of $84,289 and $251,281 for the three and nine months ending June 30, 2013 and $80,680 and $245,939 for the same periods in 2012. The increased loss was minimal in 2013 over 2012. Based on these numbers there is substantial doubt that we can continue as a going concern unless we obtain external funding. Management plans to continue limited operations until we obtain additional funding to expand our operations.
Working capital is a negative $2,466,182 as of June 30, 2013 compared to a negative $ 2,289,092 as of September 30, 2012. Cash used in operations totaled $31,385 during the period ending June 30, 2013 compared to $9,678 during the same period in 2012. Funds provided from financing activities were $41,397 in 2013 compared to $12,060 in 2012. Financing was provided by the sale of 5,000,000 shares of common stock to one individual for $50,000 cash in 2013 less $8,603 paid back to a related party in 2012.
During the past two fiscal years we have relied primarily on related party advances and loans and the issuance of our common stock to satisfy our cash requirements. During the nine month period ended June 30, 2013 we have received advances from our President, Mark T. Taggatz, who has a total outstanding balance of $166,594 plus an outstanding balance of $18,037 from Ozone Safe Food, Inc., a related party. The advances are used for operational expenses in the normal course of business. We anticipate that Mr. Taggatz or our affiliates may provide advances in the future; however, we have not entered into written agreements with any person and, therefore, no one is obligated to provide advances to us.
Management expects to continue to issue common stock to pay for acquisitions, services and agreements. Any issuance of common stock will likely be pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock.
We intend to rely on debt and equity financing, capital contributions from management and sales of our common stock to pay for costs, services, operating leases, litigation expense and future development of our business opportunities. Accordingly, our focus for the next twelve months will be to obtain additional funding through debt or equity financing, but as of the date of this filing we have not finalized agreements for additional funding. Our success in obtaining funding will depend upon our ability to sell our common stock or borrow on terms that are financially advantageous to us. If we are unable to obtain financing, then expansion of our operations will be delayed and our subsidiaries may remain inactive.
Results of Operations
We recorded no revenue in the three and nine months ending June 30, 2013. The general and administrative expense during the three and nine months ended June 30, 2013 was $81,279 and $242,251 compared to $77,670 and $238,462 for the same periods in 2012. Management anticipates our general and administrative expenses will increase when we launch full operations related to the business opportunities we are currently investigating. Expenses for the three and nine months ended June 30, 2013 and 2012 were related to accrued salaries payable, interest expense due to outstanding loans and interest related to a legal settlement. Interest expense totaled $9,030 for the nine months ended June 30, 2013 and 2012, respectively. Management anticipates net losses will continue over the next two to three years as we develop our operations.
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Off-Balance Sheet Arrangements
None
Commitments and Contingent Liabilities
Prior to the 2007 year, we leased the Tennant Desert property in North Palm Springs, California. We subleased portions of this building and received rental income from the subleases. Due to a dispute with the landlord of the Tennant Desert property in August 2007, we moved to a new office. As a result of the legal action brought by the landlord, a judgment was filed against Aquentium and we have recognized an accrued a liability of $177,247, plus interest of $69,598 for a total of $246,845, related to the judgment awarded to the landlord of the Tennant Desert property.
On July 28, 2009, Aquentium entered into a joint venture agreement with Clinton Jim, an individual, to produce and harvest algae on 475.450 acres of land located near Standing Rock, New Mexico. Mr. Jim agreed to provide the land and Aquentium agreed to secure funding for the proposed budget of $44 million (US) for the development of this project. Under the agreement Aquentium provided an initial capital contribution of $15,000 to secure the use of the land and Aquentium agreed to manage the business operations. Also, Mr. Jim will receive an annual payment of $250,000 once production begins. If Aquentium fails to raise the necessary funding within 24 months of the effective date of the agreement, the joint venture agreement will become void. The joint venture agreement may be terminated by an agreed buyout, or expiration of its term, through July 27, 2108. As of the date of this filing, we have contributed $15,000 to secure the use of the land, but have not raised the necessary funds to move forward with this project. The $15,000 was impaired in the quarter ended December 31, 2011.
On February 2, 2011 the Company entered into agreements with two municipalities in China to convert waste material into energy. Under the terms of the agreement the municipalities would provide the waste material to the Company, land for the Company to build the conversion plant and buy the resulting energy produced from the Company. These projects will require substantial funding which must be arranged and provided by the Company along with the conversion plant construction and operations. As of this date no activity beyond the signing of the agreements has been completed.
On July 21, 2011, the Company entered into a joint venture with a company for construction waste to energy plants in Canada. Under the terms of the agreement the Company is responsible for the design and construction of the plants along with financing 50% of the joint venture. These projects may require substantial funding by the Company before any benefits are derived from the joint venture.
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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow timely decisions regarding required disclosure. Our Chief Executive Officer, who also acts in the capacity of principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and based on that evaluation he concluded that our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness of our internal control over financial reporting and determined that there were no changes made in our internal control over financial reporting during the first quarter of our 2012 fiscal year that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 1A: RISK FACTORS
Not applicable
ITEM 2: UNREGISTERED SALE OF UNREGISTERED SECURITIES AND USE OF PROCCEDS
On February 22, 2013 the Company issued 500,000 shares of common stock with a value of $25,000 ($0.05 per share) for service.
On March 27, 2013 the Company issued 5,000,000 shares of common stock with a value of $50,000 ($0.01 per share) for cash
ITEM 3: DEFAULT ON SENIOR SECURITIES
None
ITEM 4: MINE SAFETY INFORMATION
Note applicable
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS
No.
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Description | |
31.1 |
Chief Executive Officer Certification and Principal Financial Officer Certification
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32.1 |
Section 1350 Certification
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Extension Schema Document
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101.CAL **
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
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XBRL Taxonomy Extension Presentation Linkbase Document
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** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AQUENTIUM, INC.
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Date: October 3, 2013
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By:
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/s/ Mark T. Taggatz
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Mark T. Taggatz
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President
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Chief Executive Officer
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Principal Financial and Accounting Officer
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