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EXCEL - IDEA: XBRL DOCUMENT - AQUENTIUM INC | Financial_Report.xls |
EX-32 - CERTIFICATION - AQUENTIUM INC | aqnm_ex32.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, 2014
¨ 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 |
|
11-2863244 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
571 Crane Street, building A, Perris, California |
|
92530 |
(Address of principal executive offices) |
|
(Zip Code) |
(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 ¨
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 ¨ 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 |
¨ |
Accelerated filer |
¨ |
Non-accelerated filer |
¨ |
Smaller reporting company |
x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of October 24, 2014, the registrant had 93,457,403 shares of common stock outstanding.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION |
|||||
Item 1: |
Financial Statements |
3 |
|||
|
Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and September 30, 2013 (Audited) |
4 |
|||
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Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2014 and 2013 (Unaudited) |
5 |
|||
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Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2014 and 2013 (Unaudited) |
6 |
|||
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Notes to Consolidated Financial Statements (Unaudited) |
7 |
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Item 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 |
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Item 3: |
Quantitative and Qualitative Disclosures about Market Risk |
14 |
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Item 4: |
Controls and Procedures |
14 |
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PART II – OTHER INFORMATION |
|||||
Item 1: |
Legal Proceedings |
15 | |||
Item 1A: |
Risk Factors |
15 | |||
Item 2: |
Unregistered Sales of Equity and Use of Proceeds |
15 | |||
Item 3: |
Default on Senior Securitas |
15 | |||
Item 4: |
Mine Safety Information |
15 | |||
Item 5: |
Other Information |
15 | |||
Item 6: |
Exhibits |
16 |
|||
Signatures |
17 |
2
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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.
PART I – FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
The financial information set forth below with respect to our statements of operations for the nine months period ended June 30, 2014 and 2013 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 nine months period ended June 30, 2014, are not necessarily indicative of results to be expected for any subsequent period. Our year end is September 30.
3
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AQUENTIUM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ |
164 |
$ |
-- |
||||
Total current assets |
164 |
-- |
||||||
Total assets |
$ |
164 |
$ |
-- |
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
32,872 |
$ |
42,315 |
||||
Accrued interest |
81,638 |
72,608 |
||||||
Note payable |
8,000 |
-- |
||||||
Accrued expense- litigation |
177,247 |
177,247 |
||||||
Total current liabilities |
299,757 |
292,170 |
||||||
Long term liabilities |
||||||||
Convertible Notes payable - related party |
1,107,988 |
914,313 |
||||||
Debt discount |
(961,124 |
) |
(914,313 |
) |
||||
Total liabilities |
446,620 |
292,170 |
||||||
Stockholders’ deficit |
||||||||
Preferred shares, par value $0.00001 |
||||||||
10,000,000 authorized; none issued and outstanding |
-- |
-- |
||||||
Common stock, par value $0.005 authorized 100,000,000 shares, issued and outstanding 93,457,403 as June 30, 2014 and September 30, 2013, respectively |
467,287 |
467,287 |
||||||
Additional paid-in capital |
3,367,959 |
3,174,284 |
||||||
Accumulated deficit |
(4,281,702 |
) |
(3,933,741 |
) |
||||
Total stockholders’ deficit |
(446,456 |
) |
(292,170 |
) |
||||
Total liabilities and stockholders’ deficit |
$ |
164 |
$ |
-- |
The accompanying notes are an integral part of the consolidated financial statements.
4
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AQUENTIUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Expense |
||||||||||||||||
Officer Compensation |
$ |
60,000 |
$ |
60,000 |
$ |
180,000 |
$ |
180,000 |
||||||||
Selling, general and administrative expenses |
6,865 |
21,279 |
20,204 |
62,251 |
||||||||||||
Loss from operations |
(66,865 |
) |
(81,279 |
) |
(200,204 |
) |
(242,251 |
) |
||||||||
Other income (expense) |
||||||||||||||||
Debt forgiveness on settlement of debt |
8,135 |
-- |
8,135 |
-- |
||||||||||||
Interest expense |
(55,282 |
) |
(3,010 |
) |
(155,893 |
) |
(9,030 |
) |
||||||||
Total other income (expense) |
(47,147 |
) |
(3,010 |
) |
(147,758 |
) |
(9,030 |
) |
||||||||
Net loss |
$ |
(114,013 |
) |
$ |
(94,289 |
) |
(348,962 |
) |
(251,281 |
) |
||||||
Loss per common share |
||||||||||||||||
Basic |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
||||
Basic weighted average number of common shares outstanding |
93,457,403 |
57,385,974 |
93,457,403 |
57,266,227 |
The accompanying notes are an integral part of the consolidated financial statements.
5
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AQUENTIUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Cash Flows From Operating Activities: |
||||||||
Net loss |
$ |
(348,962 |
) |
$ |
(251,281 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Stock compensation |
-- |
25,000 |
||||||
Accrued compensation and rent converted to a convertible note payable |
193,675 |
-- |
||||||
Debt discount |
146,864 |
-- |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts payable |
(9,443 |
) |
2,666 |
|||||
Accrued interest |
9,030 |
9,030 |
||||||
Prepaid |
-- |
3,200 |
||||||
Salaries payable-related party |
-- |
180,000 |
||||||
Net cash used in operating activities |
(7,836 |
) |
(31,385 |
) |
||||
Cash Flows From Financing Activities: |
||||||||
Common stock issued for cash |
-- |
50,000 |
||||||
Advances – related party |
-- |
(8,603 |
) |
|||||
Advance on loan payable |
8,000 |
-- |
||||||
Net cash provided by financing activities |
8,000 |
41,397 |
||||||
Net increase in cash |
164 |
10,012 |
||||||
Cash at beginning of period |
-- |
626 |
||||||
Cash at end of period |
$ |
164 |
$ |
10,638 |
The accompanying notes are an integral part of the consolidated financial statements.
6
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AQUENTIUM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
Aquentium, Inc. (a Delaware corporation) is a diversified holding 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, 2014.
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 and regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended September 30, 2013, filed with the SEC in October 15, 2014 (“Annual Report”). 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, 2013.
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 $4,281,702 and had no 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 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The Company has elected a fiscal year ending on September 30.
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Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Aquentium. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
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 income and expenses during the reporting period. Actual results could differ from those estimates.
Basic and diluted net loss per share
Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. Diluted loss per share calculations includes the dilutive effect of common stock. Basic and diluted net loss per share is the same due to the absence of common stock equivalents.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company’s accounting policy for issuing shares in a non-cash transaction is to issue the equivalent amount of stock equal to the fair market value of the assets or services received.
Revenue Recognition
Revenue is recognized when it is received in accordance with the basic FASB ASC 605-10 “Revenue Recognition”. The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. There was no activity in the Company’s subsidiaries.
Recent Accounting Pronouncements
On June 10, 2014, FASB issued Accounting Standards Update No. 2014-10, Development Stage Entities. The update removes the definition of a development stage entity from FASB ASC 915 and eliminates the requirement for development stage entities to present inception-to-date information on the statements of operations, cash flows and stockholders’ deficit. The Company early adopted this standard for the period covered by the report
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NOTE 4 - RELATED PARTY TRANSACTIONS
The President and CEO of the Company accrued compensation of $60,000 and $180,000 and rent expense of $4,150 and $13,475 and during the three and nine month period ended June 30, 2014. At the end of each quarter the Company issued five year convertible notes for the accrued compensation and accrued rent to the officer. The terms of the convertible notes are described below.
On September 30, 2013 the company issued a five year, non-interest bearing convertible note to the Mark Taggatz for $545,356 for the outstanding balance of accrued salary. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years
On September 30, 2013 the company issued a five year, non-interest bearing convertible note to the Mark Taggatz for $180,994 for the outstanding balance of advances to the Company. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years.
On September 30, 2013 the company issued a five year, non-interest bearing convertible note to the Sani Dri, Inc for $168,000 for the outstanding balance of accrued rent. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years. Mark Taggatz is the President and shareholder of Sani Dri, Inc.
On September 30, 2013 the company issued a five year, non-interest bearing convertible note to Ozone Safe Foods, Inc. for $19,963 for the outstanding balance of advances to the Company. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years. Mark Taggatz is the President and shareholder of Sani Dri, Inc.
On December 31, 2013 the company issued a five year, non-interest bearing convertible note to the Mark Taggatz for $64,800 for the outstanding balance of accrued salary and accrued rent. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years.
On March 31, 2014 the company issued a five year, non-interest bearing convertible note to the Mark Taggatz for $64,725 for the outstanding balance of accrued salary and accrued rent. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years.
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On June 30, 2014 the company issued a five year, non-interest bearing convertible note to the Mark Taggatz for $64,150 for the outstanding balance of accrued salary and accrued rent. The holder has the right at any time prior to maturity to convert the note to common stock at par value ($0.005) up to five percent of the outstanding shares of common stock of the Company at the date of conversion. This note is deemed to have a beneficial conversion feature with the fair value exceeding the value of the note. A discount was recorded for the full amount of the note that will be amortized in a straight line over five years.
The following table sets out the unamortized debt discount for each note for the period ended June 30, 2014.
Unamortized Debt Discount | ||||||||||||
Date of Note |
Amount of Note |
June 30, |
September 30, 2013 | |||||||||
September 30, 2013 |
$ |
545,356 |
$ |
463,552 |
$ |
545,356 |
||||||
September 30, 2013 |
180,994 |
153,844 |
180,994 |
|||||||||
September 30, 2013 |
168,000 |
142,800 |
168,000 |
|||||||||
September 30, 2013 |
19,963 |
16,969 |
19,963 |
|||||||||
As of September 30, 2013 |
914,313 |
-- |
914,313 |
|||||||||
December 31, 2013 |
64,800 |
58,320 |
-- |
|||||||||
March 31, 2014 |
64,725 |
61,489 |
-- |
|||||||||
June 30, 2014 |
64,150 |
64,150 |
- |
|||||||||
As of June 30, 2014 |
$ |
1,107,988 |
$ |
961,124 |
-- |
The loan payments over the next five years are as follows:
June 30, 2014 |
$ |
- |
||
June 30, 2015 |
- |
|||
June 30, 2016 |
- |
|||
June 30, 2017 |
- |
|||
June 30, 2018 |
1,107,988 |
|||
Total |
$ |
1,107,988 |
NOTE 5 - 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 three month period ended June 30, 2014 the Company accrued interest of $3,010 for the outstanding judgment resulting in total interest accrued as of June 30, 2014 of $81,638. (See Note 6: Commitments and Contingencies)
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NOTE 6 - 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 is 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, 2014, $177,247 for the judgment plus accrued interest of $81,638 has been accrued by the Company for a total liability of $258,885.
NOTE 7 - LEASE AGREEMENT
On September 30, 2013 the Company entered into a month to month lease with the CEO of the Company. Under the terms of the lease the Company pays $1,600 per month in rent for its space.
On March 15, 2014 the Company terminated its lease and entered into a new 12 month lease with the CEO. The rent on the new lease is $1,050 per month.
NOTE 8 - NOTE PAYABLE
During the period ending June 30, 2014 the Company received an advance of $8,000. The loan is non-interest bearing and matures on August 7, 2014.
NOTE 9 - SUBSEQUENT EVENT
On August 7, 2014 the Company issued a convertible non-interest bearing note for $20,000. Under the terms of the note the holder at their option may convert all or part of the note into common stock of the Company at the average 10 trailing closing pride of the Company’s common stock. At no time can the note holder convert more than an amount greater than 5% of the total outstanding shares of common stock of the Company at the time of conversion.
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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.
Liquidity and Capital Resources
As of June 30, 2014, we had an accumulated deficit of $4,281,702. We recorded a net loss of $ 114,013 and $ 348,962 for the three and nine months ending June 30, 2014 and $94,289 and $251,281 for the same periods in 2013. The loss in the period ended June 30, 2014 was greater due to the debt discount being amortized to interest expense in the amount of $55,282 and $146,864 for the three and nine months periods in 2014 compared to none in 2013. 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 $299,593 as of June 30, 2014 compared to a negative $ 292,170 as of September 30, 2013. Cash used in operations was $7,836 during the nine months period ending June 30, 2014 compared to $31,385 during the same period in 2013. Funds provided from financing activities were $8,000 for the nine months period ended June 30, 2014 and 41,397 in 2013.
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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 three and nine month period ended June 30, 2014 our President accrued rent of $6,150 and $13,475 and compensation of $60,000 and $180,000, respectively. At the end of each quarter the accrued expenses were converted to five year convertible notes. 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 month periods ending June 30, 2014 and 2013. The general and administrative expense decreased during the three and nine months periods ended June 30, 2014 from $66,865 and $200,204 compared to $81,279 and $242,251 for the same periods in 2013. Other expense for the three and nine months periods ended June 30, 2014 and 2013 were related to interest expense of $55,282 and $155,893 due to the amortization of debt discount to interest of $52,192 and $146,864 offset by settlement of debt income of $8,135. Management anticipates net losses will continue over the next two to three years as we develop our operations.
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 $81,638 for a total of $258,885 related to the judgment awarded to the landlord of the Tennant Desert property.
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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 not 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 2013 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
There have been no material changes to Aquentium's risk factors as previously disclosed in our most recent 10-K filing for the year ending September 30, 2013.
ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4: MINE SAFETY INFORMATION
None
ITEM 5: OTHER INFORMATION
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ITEM 6. EXHIBITS
No. |
|
Description |
|
|
|
31.1 |
|
Chief Executive Officer and Chief Financial Officer Certification |
|
|
|
32.1 |
|
Section 1350 Certification |
101.INS ** |
XBRL Instance Document |
|
101.SCH ** |
XBRL Taxonomy Extension Schema Document |
|
101.CAL ** |
XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.DEF ** |
XBRL Taxonomy Extension Definition Linkbase Document |
|
101.LAB ** |
XBRL Taxonomy Extension Label Linkbase Document |
|
101.PRE ** |
XBRL Taxonomy Extension Presentation Linkbase Document |
_____________
** 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. | |||
Date: October 24, 2014 | By: | /s/ Mark T. Taggatz | |
Mark T. Taggatz | |||
President Chief Executive Officer | |||
Principal Financial and Accounting Officer |
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