Florida
|
20-3217152
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
(Do
not check if a smaller reporting company)
|
INDEX
|
|||
PART
I.
|
FINANCIAL
INFORMATION
|
||
Explanatory Note |
3
|
||
ITEM
1.
|
Balance
sheets as of September 30, 2008 ( restated ) and
June 30, 2008
|
4
|
|
Statements
of operations for the three-months ended September 30, 2008
( restated ) and 2007, and cumulative from July 22, 2005
(inception) through September 30, 2008 ( restated )
|
5
|
||
Statement
of changes in stockholders’ equity (deficiency) for the period from July
22, 2005 (inception) through September 30, 2008
( restated )
|
6
|
||
Statements
of cash flows for the three month periods ended September 30, 2008
( restated ) and 2007, and cumulative from July 22, 2005
(inception) through September 30, 2008 ( restated )
|
8
|
||
Notes
to financial statements (unaudited)
|
15
|
||
ITEM
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16-18
|
|
ITEM
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
19
|
|
ITEM
4T.
|
Controls
and Procedures
|
19
|
|
PART
II.
|
OTHER
INFORMATION
|
||
ITEM
1.
|
Legal
Proceedings
|
20
|
|
ITEM
1A.
|
Risk
Factors
|
20
|
|
ITEM
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
|
ITEM
3.
|
Defaults
Upon Senior Securities
|
20
|
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders
|
20
|
|
ITEM
5.
|
Other
Information
|
20
|
|
ITEM
6.
|
Exhibits
|
20
|
|
SIGNATURES
|
21
|
As
Filed
|
Adjustment
|
As
Restated
|
||||||||||
Statement
of Operations
|
||||||||||||
Accretion
of accrued royalties
|
$ | (28,509 | ) | $ | 57,018 | $ | 28,509 | |||||
Net
Loss
|
(401,536 | ) | (57.018 | ) | (458,554 | ) | ||||||
Balance
Sheet
|
||||||||||||
Current
liabilities
|
$ | 589,028 | $ | (74,106 | ) | $ | 514,922 | |||||
Accrued
royalties payable – non-current
|
597,975 | 135,349 | 733,324 | |||||||||
Licensing
fees – non-current
|
331,897 | (4,225 | ) | 327,672 | ||||||||
Deficit
accumulated during the
|
||||||||||||
development
stage
|
|
(3,868,498 | ) | (57,018 | ) | (3,925,516 | ) |
September
30,
|
June
30,
|
|||||||
2008
|
2008
|
|||||||
( Restated )
|
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | - | $ | 5,421 | ||||
Accounts
receivable - net of allowance ($5,602 at Sepember 30, 2008 and $2,762
at June 30, 2008)
|
19,416 | - | ||||||
Inventories
|
71,177 | 87,957 | ||||||
Total
current assets
|
90,593 | 93,378 | ||||||
Trademark
|
325 | 325 | ||||||
Intangible
asset - license, net of accumulated amortization
|
1,043,543 | 1,056,785 | ||||||
Total
assets
|
$ | 1,134,461 | $ | 1,150,488 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 86,739 | $ | 122,641 | ||||
Accrued
expenses
|
154,496 | 133,921 | ||||||
Accrued
royalties payable - current
|
13,794 | - | ||||||
Licensing
fees - current
|
4,592 | 230,000 | ||||||
Notes
payable
|
25,000 | 25,000 | ||||||
Convertible
debt
|
87,500 | 50,000 | ||||||
Due
to officers
|
52,032 | 98,053 | ||||||
Due
to stockholders
|
90,769 | 105,169 | ||||||
Total
current liabilities
|
514,922 | 764,784 | ||||||
Accrued
royalties payable - non current
|
733,324 | 496,373 | ||||||
Licensing
fees - non current
|
327,672 | - | ||||||
STOCKHOLDERS'
EQUITY (DEFICIENCY)
|
||||||||
Common
stock, par value $.0001 per share; 100,000,000 authorized
|
3,989 | 3,147 | ||||||
Common
stock to-be-issued
|
- | 355,000 | ||||||
Additional
paid-in-capital
|
3,480,070 | 2,998,146 | ||||||
Deficit
accumulated during the development stage
|
(3,925,516 | ) | (3,466,962 | ) | ||||
Total
stockholders' deficiency
|
(441,457 | ) | (110,669 | ) | ||||
Total
liabilities and stockholders' equity (deficiency)
|
$ |
1,134,461
|
$ | 1,150,488 |
July
22, 2005
|
||||||||||||
Three
months
|
Three
months
|
(inception)
|
||||||||||
ended
|
ended
|
through
|
||||||||||
September
30,
|
September
30,
|
September
30,
|
||||||||||
2008
|
2007
|
2008
|
||||||||||
(Restated)
|
(Restated)
|
|||||||||||
REVENUES
|
$ | 48,012 | $ | 17,179 | $ | 119,942 | ||||||
COST
OF GOODS SOLD
|
31,088 | 14,656 | 102,155 | |||||||||
Gross
profit
|
$ | 16,924 | $ | 2,523 | $ | 17,787 | ||||||
EXPENSES
|
||||||||||||
General
and administrative expenses
|
428,977 | 227,686 | 3,796,874 | |||||||||
LOSS
FROM OPERATIONS
|
412,053 | (225,163 | ) | (3,779,087 | ) | |||||||
Interest
expense
|
2,250 | 3,000 | 32,590 | |||||||||
Accretion
of accrued royalties
|
28,509 | - | 60,018 | |||||||||
Amortization
expense
|
15,742 | - | 53,821 | |||||||||
Loss
before provision for income taxes
|
( 458,554 | ) | (228,163 | ) | ( 3,925,516 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
loss
|
$ | ( 458,554 | ) | $ | (228,163 | ) | $ | ( 3,925,516 | ) | |||
Net
loss per share basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.17 | ) | |||
Weighted
average per common share
|
36,403,752 | 21,382,891 | 22,701,912 |
Common
stock to-be-issued
|
Common
stock issued and outstanding
|
Additonal
paid-in-
|
Deficit
accumulated during the
|
Total
stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|
capital
|
development
stage
|
equity (deficiency)
|
|||||||||||||||||||||
Balance
July 22, 2005 (inception)
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Common
stock to be issued in connection with Incorporation (July 22,
2005)
|
4,000,000 | 10,000 | - | - | - | - | 10,000 | |||||||||||||||||||||
Common
stock to be issued for consulting services
|
16,150,000 | 40,375 | - | - | - | - | 40,375 | |||||||||||||||||||||
Common
stock issued - private placement, net of issuance costs of
$58,255
|
461,750 | 126,445 | - | - | - | - | 126,445 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (64,361 | ) | (64,361 | ) | |||||||||||||||||||
Balance
June 30, 2006
|
20,611,750 | 176,820 | - | - | - | (64,361 | ) | 112,459 | ||||||||||||||||||||
Issuance
of shares
|
(20,611,750 | ) | (176,820 | ) | 20,611,750 | 2,061 | 174,759 | - | - | |||||||||||||||||||
Beneficial
conversion of loan discount
|
- | - | - | - | 18,750 | - | 18,750 | |||||||||||||||||||||
Common
stock issued for consulting services
|
- | - | 660,000 | 66 | 622,334 | - | 622,400 | |||||||||||||||||||||
Issuance
of options for compensation
|
- | - | - | - | 231,300 | - | 231,300 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (1,113,231 | ) | (1,113,231 | ) | |||||||||||||||||||
Balance
June 30, 2007
|
- | - | 21,271,750 | 2,127 | 1,047,143 | (1,177,592 | ) | (128,322 | ) | |||||||||||||||||||
Common
stock to-be-issued
|
1,750,000 | 355,000 | - | - | - | - | 355,000 | |||||||||||||||||||||
Issuance
of shares
|
- | - | 4,330,000 | 433 | 468,567 | - | 469,000 | |||||||||||||||||||||
Issuance
of shares as repayment of amount due to stockholders
|
- | - | 467,626 | 47 | 70,097 | - | 70,144 | |||||||||||||||||||||
Common
stock issued for consulting services
|
- | - | 5,277,500 | 528 | 829,101 | - | 829,629 | |||||||||||||||||||||
Issuance
of options for compensation
|
- | - | - | - | 582,937 | - | 582,937 | |||||||||||||||||||||
Exercise
of options
|
- | - | 125,000 | 12 | 301 | - | 313 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (2,289,370 | ) | (2,289,370 | ) | |||||||||||||||||||
Balance
June 30, 2008
|
1,750,000 | $ | 355,000 | 31,471,876 | $ | 3,147 | $ | 2,998,146 | $ | (3,466,962 | ) | $ | (110,669 | ) |
Common
stock to-be-issued
|
Common
stock issued and outstanding
|
Additonal
paid-in-
|
Deficit
accumulated during the
|
Total
stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
development
stage
|
equity (deficiency)
|
||||||||||||||||||||||
Cancellation
of common stock to-be-issued (unaudited)
|
(1,750,000 | ) | (355,000 | ) | - | - | - | - | (355,000 | ) | ||||||||||||||||||
Issuance
of shares (unaudited)
|
- | - | 250,000 | 25 | 24,975 | - | 25,000 | |||||||||||||||||||||
Beneficial
conversion of loan discount
|
- | - | - | - | 15,000 | - | 15,000 | |||||||||||||||||||||
Issuance
of shares as repayment of amount due to
officers (unaudited)
|
- | - | 1,000,000 | 100 | 49,900 | - | 50,000 | |||||||||||||||||||||
Issuance
of shares as repayment of amount due to stockholders
(unaudited)
|
- | - | 666,111 | 67 | 41,483 | - | 41,550 | |||||||||||||||||||||
Common
stock issued for consulting services (unaudited)
|
- | - | 6,502,600 | 650 | 350,566 | - | 351,216 | |||||||||||||||||||||
Net
loss (unaudited)
|
- | - | - | - | - | (458,554 | ) | (458,554 | ) | |||||||||||||||||||
Balance
September 30, 2008
|
- | $ | - | 39,890,587 | $ | 3,989 | $ | 3,480,070 | $ | (3,925,516 | ) | $ | (441,457 | ) |
July
22, 2005
|
||||||||||||
Three
months
|
Three
months
|
(inception)
|
||||||||||
ended
|
ended
|
through
|
||||||||||
September
30,
|
September
30,
|
September
30,
|
||||||||||
2008
|
2007
|
2008
|
||||||||||
( Restated )
|
( Restated )
|
|||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | ( 458,554 | ) | $ | (221,163 | ) | $ | ( 3,925,516 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
|
||||||||||||
activities:
|
||||||||||||
Accretion
of accrued royaties
|
28,509 | - | 60,018 | |||||||||
Amortization
of intangible asset - license
|
13,242 | 51,321 | ||||||||||
Common
stock issued for consulting services
|
351,216 | 69,688 | 1,843,620 | |||||||||
Issuance
of stock options - employee
|
- | - | 814,237 | |||||||||
Amortization
of beneficial conversion discount
|
2,500 | - | 21,250 | |||||||||
Changes
in operating assets and liabilities
|
||||||||||||
(Increase)/Decrease
in:
|
||||||||||||
Accounts
receivable
|
(19,416 | ) | 2,894 | (19,416 | ) | |||||||
Other
receivables
|
- | 7,000 | - | |||||||||
Inventories
|
16,780 | (40,586 | ) | (71,177 | ) | |||||||
Increase/(Decrease)
in:
|
||||||||||||
Accounts
payable and accrued expenses
|
(8,327 | ) | 28,400 | 241,235 | ||||||||
Net
cash used in operating activities
|
(74,050 | ) | (153,767 | ) | (984,428 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of license
|
(12,500 | ) | - | (75,500 | ) | |||||||
Trademark
|
- | - | (325 | ) | ||||||||
Net
cash used in investing activities
|
(12,500 | ) | - | (75,825 | ) | |||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Net
proceeds from private placement
|
- | - | 126,445 | |||||||||
Proceeds
from sale of founders shares
|
- | - | 10,000 | |||||||||
Net
proceeds from sale of stock and exercise of stock options
|
- | 50,000 | 494,313 | |||||||||
Proceeds
from notes payable
|
- | - | 50,000 | |||||||||
Repayment
of notes payable
|
- | - | (25,000 | ) | ||||||||
Advances
from officers
|
3,979 | 47,590 | 102,032 | |||||||||
Advances
from stockholders
|
27,150 | 51,253 | 202,463 | |||||||||
Proceeds
from convertible debt
|
50,000 | - | 100,000 | |||||||||
Net
cash provided by financing activities
|
81,129 | 148,843 | 1,060,253 | |||||||||
NET
INCREASE/(DECREASE) IN CASH
|
(5,421 | ) | (4,924 | ) | - | |||||||
CASH,
beginning of period
|
5,421 | 10,918 | - | |||||||||
CASH,
end of period
|
$ | - | $ | 5,994 | $ | - |
Supplemental
disclosures of cash flow
information:
|
2008
|
||||
Amended
value of license described above
|
$ | 1,094,864 | ||
Less:
accumulated amortization
|
51,321 | |||
License,
net
|
$ | 1,043,543 |
Issue
date
|
June
30, 2007
|
January
1, 2008
|
June
30, 2008
|
Options
issued
|
500,000
|
3,000,000
|
100,000
|
Risk-free
interest rate
|
5%
|
3%
|
3%
|
Expected
option life
|
5
years
|
5
years
|
5
years
|
Dividend
yield
|
0%
|
0%
|
0%
|
Volatility
|
120%
|
157%
|
194%
|
Exercise
price
|
$0.55
|
$0.10
|
$0.07
|
·
|
The
risk free interest rate for the period within the contractual life of the
option is based on the 5-year U.S. Treasury yield at the time of the
grant.
|
·
|
The
expected term of the options granted represents the period of time that
the options granted are expected to be
outstanding.
|
·
|
Historically,
the Company has not paid a dividend on its common shares and does not
expect to do so in the future.
|
·
|
The
volatility assumption represents an expectation of the volatility of the
price of the underlying shares for the expected term of the option,
considering factors such as historical stock price and stock volatility of
other companies within the
industry.
|
Options
|
Weighted
Average Exercise Price
|
||||
Outstanding
as of July 22, 2005 (inception)
|
-
|
$
|
-
|
||
Granted
|
125,000
|
0.0025
|
|||
Exercised
|
-
|
-
|
|||
Forfeited
|
-
|
-
|
|||
Expired
|
-
|
-
|
|||
Outstanding
as of June 30, 2006
|
125,000
|
$
|
0.0025
|
||
Granted
|
500,000
|
0.5500
|
|||
Exercised
|
-
|
-
|
|||
Forfeited
|
-
|
-
|
|||
Expired
|
-
|
-
|
|||
Outstanding
as of June 30, 2007
|
625,000
|
$
|
0.4400
|
||
Granted
|
3,100,000
|
0.0990
|
|||
Exercised
|
125,000
|
0.0025
|
|||
Forfeited
|
-
|
-
|
|||
Expired
|
-
|
-
|
|||
Outstanding
as of June 30, 2008
|
3,600,000
|
$
|
0.1610
|
||
Granted
|
-
|
-
|
|||
Exercised
|
-
|
-
|
|||
Forfeited
|
-
|
-
|
|||
Expired
|
-
|
-
|
|||
Outstanding
as of September 30, 2008
|
3,600,000
|
$
|
0.1610
|
As
Filed
|
Adjustment
|
As
Restated
|
||||||||||
Statement
of Operations
|
||||||||||||
Accretion
of accrued royalties
|
$ | (28,509 | ) | $ | 57,018 | $ | 28,509 | |||||
Net
Loss
|
(401,536 | ) | (57.018 | ) | (458,554 | ) | ||||||
Balance
Sheet
|
||||||||||||
Current
liabilities
|
$ | 589,028 | $ | (74,106 | ) | $ | 514,922 | |||||
Accrued
royalties payable – non-current
|
597,975 | 135,349 | 733,324 | |||||||||
Licensing
fees – non-current
|
331,897 | (4,225 | ) | 327,672 | ||||||||
Deficit
accumulated during the
|
||||||||||||
development
stage
|
(3,868,498 | ) | (57,018 | ) | (3,925,516 | ) |
31.1
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
|
32.1
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Executive
Officer)
|
32.2
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Financial
Officer)
|
WATERPURE INTERNATIONAL, INC. | |||
Date: February
20, 2009
|
By:
|
/s/ PAUL S. LIPSCHUTZ | |
Paul
S. Lipschutz
|
|||
President
(Principal Executive Officer)
|
|||
Date: February
20, 2009
|
By:
|
/s/ ROBERT F. ORR | |
Robert
F. Orr
|
|||
Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer)
|
|||