Florida
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20-3217152
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
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525 Plymouth Road, Suite 310
|
|
Plymouth Meeting, PA 19462 | (954) 731-2002 |
(Address of principal executive office) (Zip Code) | (Registrant’s telephone number including area code) |
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
x
|
(Do not check if a smaller reporting company)
|
PAGE
|
|||||
PART I
|
|||||
Item 1.
|
Business
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4
|
|||
Item 1A.
|
Risk Factors
|
7
|
|||
Item 1B.
|
Unresolved Staff Comments
|
12
|
|||
Item 2.
|
Properties
|
12
|
|||
Item 3.
|
Legal Proceedings
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12
|
|||
Item 4.
|
(Removed and Reserved)
|
12
|
|||
PART II
|
|||||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
13
|
|||
Item 6.
|
Selected Financial Data
|
13
|
|||
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14
|
|||
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
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17
|
|||
Item 8.
|
Financial Statements and Supplementary Data
|
18
|
|||
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
|
19
|
|||
Item 9A.
|
Controls and Procedures
|
19
|
|||
Item 9B.
|
Other Information
|
21
|
|||
PART III
|
|||||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
21
|
|||
Item 11.
|
Executive Compensation
|
22
|
|||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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24
|
|||
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
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24
|
|||
Item 14.
|
Principal Accounting Fees and Services
|
25
|
|||
PART IV
|
|||||
Item 15.
|
Exhibits, Financial Statement Schedules
|
26
|
|||
Signatures
|
27
|
||||
•
|
Steady sales growth through brand equity establishing WaterPure as the quality brand;
|
|
•
|
Reduce production cost by volume buying and increased manufacturing efficiency;
|
|
•
|
Introducing new products in both larger and smaller capacities; and
|
|
•
|
Expand our marketing channels through a growing network of distributors and other methods.
|
·
|
that a broker or dealer approve a person's account for transactions in penny stocks; and
|
·
|
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
|
·
|
obtain financial information and investment experience objectives of the person; and
|
·
|
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
|
·
|
sets forth the basis on which the broker or dealer made the suitability determination; and
|
·
|
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
|
Period
|
High
|
Low
|
||||||
Fiscal Year Ended June 30, 2010:
|
||||||||
First Quarter
|
$ | 0.020 | $ | 0.006 | ||||
Second Quarter
|
0.020 | 0.008 | ||||||
Third Quarter
|
0.021 | 0.011 | ||||||
Fourth Quarter
|
0.025 | 0.010 | ||||||
Fiscal Year Ended June 30, 2009:
|
||||||||
First Quarter
|
$ | 0.140 | $ | 0.020 | ||||
Second Quarter
|
0.039 | 0.004 | ||||||
Third Quarter
|
0.025 | 0.004 | ||||||
Fourth Quarter
|
0.020 | 0.010 |
Page
|
|||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-1
|
||
FINANCIAL STATEMENTS
|
|||
Balance Sheets
|
F-2
|
||
Statements of Operations
|
F-3
|
||
Statement of Changes in Stockholders’ Equity (Deficiency)
|
F-4
|
||
Statements of Cash Flows
|
F-9
|
||
Notes to Financial Statements
|
F-10 to F-26
|
WATERPURE INTERNATIONAL, INC.
|
||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||
FOR THE FISCAL YEARS ENDED JUNE 30, 2010 AND JUNE 30, 2009 AND FOR THE PERIOD FROM JULY 22, 2005
|
||||||||||||
(INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||
July 22, 2005
|
||||||||||||
Year
|
Year
|
(inception)
|
||||||||||
ended
|
ended
|
through
|
||||||||||
June 30,
|
June 30,
|
June 30,
|
||||||||||
2010
|
2009
|
2010
|
||||||||||
REVENUES
|
$ | 45,524 | $ | 120,372 | $ | 237,826 | ||||||
COST OF GOODS SOLD
|
32,054 | 90,478 | 193,599 | |||||||||
Gross profit
|
13,470 | 29,894 | 44,227 | |||||||||
EXPENSES
|
||||||||||||
General and administrative expenses
|
1,062,391 | 1,256,707 | 5,686,995 | |||||||||
LOSS FROM OPERATIONS
|
(1,048,921 | ) | (1,226,813 | ) | (5,642,768 | ) | ||||||
Gain on restucturing of troubled debt
|
(339,137 | ) | - | (339,137 | ) | |||||||
Interest expense
|
26,700 | 13,417 | 70,457 | |||||||||
Accretion of accrued royalties and licensing fees
|
96,529 | 100,163 | 228,201 | |||||||||
Amortization expense
|
89,778 | 83,002 | 210,859 | |||||||||
Loss before provision for income taxes
|
(922,791 | ) | (1,423,395 | ) | (5,813,148 | ) | ||||||
Provision for income taxes
|
- | - | - | |||||||||
Net loss
|
$ | (922,791 | ) | $ | (1,423,395 | ) | $ | (5,813,148 | ) | |||
Net loss per share basic and diluted
|
$ | (0.01 | ) | $ | (0.03 | ) | $ | (0.12 | ) | |||
Weighted average per common share
|
114,891,338 | 54,972,043 | 46,892,311 |
WATERPURE INTERNATIONAL, INC.
|
||||||||||||||||||||||||||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||||||
FOR THE PERIOD FROM JULY 22, 2005 (INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||||||||||||||||||||||||||
Common stock to-be-issued
|
Common stock issued and outstanding
|
Preferred series A issued and outstanding
|
Additonal paid-in-capital
|
Deficit accumulated during the development stage
|
Total stockholders' equity (deficiency)
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance July 22, 2005 (inception)
|
- | $ | - | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Common stock to be issued in connection with Incoproation (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 |
WATERPURE INTERNATIONAL, INC.
|
||||||||||||||||||||||||||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||||||
FOR THE PERIOD FROM JULY 22, 2005 (INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||||||||||||||||||||||||||
Common stock to-be-issued
|
Common stock issued and outstanding
|
Preferred series A issued and outstanding
|
Additonal paid-in-capital
|
Deficit accumulated during the development stage
|
Total stockholders' equity (deficiency)
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
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 as 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 | ) |
WATERPURE INTERNATIONAL, INC.
|
||||||||||||||||||||||||||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||||||
FOR THE PERIOD FROM JULY 22, 2005 (INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||||||||||||||||||||||||||
Common stock to-be-issued
|
Common stock issued and outstanding
|
Preferred series A issued and outstanding
|
Additonal paid-in-capital
|
Deficit accumulated during the development stage
|
Total stockholders' equity (deficiency)
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Cancellation of common stock to-be-issued | (1,500,000 | ) | (330,000 | ) | - | - | - | - | - | - | (330,000 | ) | ||||||||||||||||||||||||
Issuance of shares
|
(250,000 | ) | (25,000 | ) | 20,849,999 | 2,085 | - | - | 113,615 | - | 90,700 | |||||||||||||||||||||||||
Issuance of shares as repayment of amount due to officers
|
- | - | 1,000,000 | 100 | - | - | 49,900 | - | 50,000 | |||||||||||||||||||||||||||
Issuance of shares as repayment of amount due to stockholders
|
- | - | 666,111 | 67 | - | - | 41,483 | - | 41,550 | |||||||||||||||||||||||||||
Beneficial conversion of loan discount
|
- | - | - | - | - | - | 22,500 | - | 22,500 | |||||||||||||||||||||||||||
Common stock issued for consulting services
|
- | - | 38,436,000 | 3,843 | - | - | 697,038 | - | 700,881 | |||||||||||||||||||||||||||
Issuance of options as compensation
|
- | - | - | - | - | - | 1,492 | - | 1,492 | |||||||||||||||||||||||||||
Common stock to-be-issued
|
500,000 | 2,500 | - | - | - | - | - | - | 2,500 | |||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (1,423,395 | ) | (1,423,395 | ) | |||||||||||||||||||||||||
Balance June 30, 2009
|
500,000 | $ | 2,500 | 92,423,986 | $ | 9,242 | - | $ | - | $ | 3,924,174 | $ | (4,890,357 | ) | $ | (954,441 | ) |
WATERPURE INTERNATIONAL, INC.
|
||||||||||||||||||||||||||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||||||
FOR THE PERIOD FROM JULY 22, 2005 (INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||||||||||||||||||||||||||
Common stock to-be-issued
|
Common stock issued and outstanding
|
Preferred series A issued and outstanding
|
Additonal paid-in-capital
|
Deficit accumulated during the development stage
|
Total stockholders' equity (deficiency)
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Issuance of shares
|
(500,000 | ) | $ | (2,500 | ) | 24,300,001 | $ | 2,430 | 110 | $ | - | $ | 426,070 | $ | - | $ | 426,000 | |||||||||||||||||||
Issuance of Preferred Stock as repayment of note payable | - | - | - | - | 12 | - | 30,000 | - | 30,000 | |||||||||||||||||||||||||||
Beneficial conversion of loan discount
|
- | - | - | - | - | - | 115,551 | - | 115,551 | |||||||||||||||||||||||||||
Common stock issued for consulting services
|
- | - | 31,058,333 | 3,106 | - | - | 406,470 | - | 409,576 | |||||||||||||||||||||||||||
Shares issued in connection with issuance of convertible debt
|
- | - | 1,250,000 | 125 | - | - | 21,125 | - | 21,250 | |||||||||||||||||||||||||||
Issuance of options as compensation
|
- | - | - | - | - | - | 1,800 | - | 1,800 | |||||||||||||||||||||||||||
Common stock to-be-issued
|
2,066,667 | 10,500 | - | - | - | - | - | - | 10,500 | |||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (922,791 | ) | (922,791 | ) | |||||||||||||||||||||||||
Balance June 30, 2010
|
2,066,667 | $ | 10,500 | 149,032,320 | $ | 14,903 | 122 | $ | - | $ | 4,925,190 | $ | (5,813,148 | ) | $ | (862,555 | ) |
WATERPURE INTERNATIONAL, INC.
|
||||||||||||
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||
STATEMENTS OF CASH FLOWS
|
||||||||||||
FOR THE FISCAL YEARS ENDED JUNE 30, 2010 AND JUNE 30, 2009 AND FOR THE
|
||||||||||||
PERIOD FROM JULY 22, 2005 (INCEPTION) THROUGH JUNE 30, 2010
|
||||||||||||
July 22, 2005
|
||||||||||||
Year
|
Year
|
(inception)
|
||||||||||
ended
|
ended
|
through
|
||||||||||
June 30,
|
June 30,
|
June 30,
|
||||||||||
2010
|
2009
|
2010
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (922,791 | ) | $ | (1,423,395 | ) | $ | (5,813,148 | ) | |||
Adjustments to reconcile net loss to net cash used in operating
|
||||||||||||
activities:
|
||||||||||||
Accretion of accrued royalties and licensing fees
|
96,529 | 100,163 | 228,201 | |||||||||
Gain on restructuring of troubled debt
|
(339,137 | ) | - | (339,137 | ) | |||||||
Amortization of intangible asset - license
|
65,935 | 64,564 | 168,578 | |||||||||
Common stock issued for consulting services
|
409,576 | 700,881 | 2,602,861 | |||||||||
Issuance of stock options - employee
|
1,800 | 1,492 | 817,529 | |||||||||
Amortization of beneficial conversion discount
|
23,843 | 18,438 | 61,031 | |||||||||
Changes in operating assets and liabilities
|
||||||||||||
(Increase)/Decrease in:
|
||||||||||||
Accounts receivable
|
(1,000 | ) | - | (1,000 | ) | |||||||
Inventories
|
(62,763 | ) | 71,997 | (78,723 | ) | |||||||
Security deposit
|
(6,000 | ) | - | (6,000 | ) | |||||||
Increase/(Decrease) in:
|
||||||||||||
Accounts payable and accrued expenses
|
17,597 | 153,858 | 421,017 | |||||||||
Accrued royalties and licensing fee payable
|
(28,000 | ) | (25,500 | ) | (116,500 | ) | ||||||
Deferred revenue
|
87,700 | 100,200 | 187,900 | |||||||||
Net cash used in operating activities
|
(656,711 | ) | (237,302 | ) | (1,867,391 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Trademark
|
- | - | (325 | ) | ||||||||
Net cash used in investing activities
|
- | - | (325 | ) | ||||||||
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
|
436,500 | 93,200 | 1,024,013 | |||||||||
Proceeds from issuance of notes payable
|
120,000 | - | 170,000 | |||||||||
Repayment of notes payable
|
- | - | (25,000 | ) | ||||||||
(Repayments)/advances from officers
|
(14,721 | ) | 55,176 | 138,508 | ||||||||
Advances from stockholders
|
17,672 | 23,505 | 216,490 | |||||||||
Proceeds from issuance of convertible debt
|
155,000 | 60,000 | 265,000 | |||||||||
Repayment of convertible debt
|
(12,000 | ) | - | (12,000 | ) | |||||||
Net cash provided by financing activities
|
702,451 | 231,881 | 1,913,456 | |||||||||
NET INCREASE/(DECREASE) IN CASH
|
45,740 | (5,421 | ) | 45,740 | ||||||||
CASH, beginning of period
|
- | 5,421 | - | |||||||||
CASH, end of period
|
$ | 45,740 | $ | - | $ | 45,740 | ||||||
Supplemental disclosures of cash flow information:
|
June 30, 2010
|
June 30, 2009
|
|||||||
Raw materials
|
$ | 5,784 | $ | 15,960 | ||||
Work-in-progress
|
72,939 | -0- | ||||||
Finished goods
|
-0- | -0- | ||||||
Inventory
|
$ | 78,723 | $ | 15,960 |
March 31,
|
June 30,
|
|||||||
2010
|
2009
|
|||||||
Cost of license described above
|
$ | 1,094,864 | $ | 1,094,864 | ||||
Less: accumulated amortization
|
168,578 | 102,643 | ||||||
License, net
|
$ | 926,286 | $ | 992,221 |
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% | 164% | 194% | |||||||||
Exercise price
|
$ | 0.55 | $ | 0.10 | $ | 0.07 |
Issue date
|
June 30, 2009
|
November 4, 2009
|
April 1, 2010
|
|||||||||
Options issued
|
100,000 | 100,000 | 16,666 | |||||||||
Risk-free interest rate
|
2.54% | 0.36% | 0.42% | |||||||||
Expected option life
|
5 years
|
1 year
|
1 year
|
|||||||||
Dividend yield
|
0% | 0% | 0% | |||||||||
Volatility
|
290% | 192% | 165% | |||||||||
Exercise price
|
$ | 0.015 | $ | 0.005 | $ | 0.005 |
Issue date
|
April 29, 2010
|
April 30, 2010
|
May 10, 2010
|
|||||||||
Options issued
|
16,666 | 16,666 | 6,666,666 | |||||||||
Risk-free interest rate
|
0.42% | 0.41% | 0.22% | |||||||||
Expected option life
|
1 year
|
1 year
|
six months
|
|||||||||
Dividend yield
|
0% | 0% | 0% | |||||||||
Volatility
|
162% | 162% | 203% | |||||||||
Exercise price
|
$ | 0.005 | $ | 0.005 | $ | 0.05 |
Issue date
|
May 14, 2010
|
June 30, 2010
|
||||||
Options issued
|
3,333,333 | 100,000 | ||||||
Risk-free interest rate
|
0.22% | 1.79% | ||||||
Expected option life
|
six months
|
5 years
|
||||||
Dividend yield
|
0% | 0% | ||||||
Volatility
|
203% | 383% | ||||||
Exercise price
|
$ | 0.05 | $ | 0.018 |
·
|
The risk free interest rate for the period within the contractual life of the option is based on the U.S. Treasury yields at the time of the grants based on the expected option life.
|
·
|
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
|
100,000
|
.0150
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
Outstanding as of June 30, 2009
|
3,700,000
|
|
$
|
0.1577
|
|||
Granted
|
10,249,997
|
.0021 | |||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
Outstanding as of June 30, 2010
|
13,949,997
|
|
$
|
.0434
|
2010
|
2009
|
|||||||
Net deferred tax assets
|
||||||||
Net operating loss carry forward
|
$ | 1,666,680 | $ | 1,309,000 | ||||
Less Valuation allowance
|
(1,666,680 | ) | (1,309,000 | ) | ||||
Total net deferred tax assets
|
$ | - | $ | - |
2010
|
2009
|
|||||||
Federal Statutory Rate
|
35 | % | 35 | % | ||||
Other
|
(7 | )% | (7 | )% | ||||
Valuation allowance
|
(28 | )% | (28 | )% | ||||
Effective income tax (benefit) provision rate from continuing operations
|
- | - |
Year ending June 30, 2011
|
$ | 33,771 | ||
2012
|
$ | 36,230 | ||
2013
|
$ | 38,689 | ||
2014
|
$ | 41,147 | ||
2015
|
$ | 24,839 | ||
Total
|
$ | 174,676 |
a)
|
We did not have sufficient personnel in our accounting and financial reporting functions. As a result we were not able to achieve adequate separation of duties and were not able to provide for adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis;
|
b)
|
We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of U.S. GAAP commensurate with out complexity and our financial accounting and reporting requirements. This control deficiency is pervasive in nature. Further, there is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis as a result;
|
c)
|
We did not document or test our key controls over financial reporting in accordance with Section 404 of the Sarbanes Oxley Act of 2002. As a result, we cannot provide proper recording of the framework for our internal controls nor the results of such controls. There is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis without the ability to determine if our controls are effective.
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Name
|
Age
|
Position
|
|||
Paul S. Lipschutz
|
64
|
President, Chief Executive Officer and Director
|
|||
Robert F. Orr
|
44
|
Chief Financial Officer and Director
|
1.
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
|
4.
|
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Name and
Principal
Position
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-equity
Incentive Plan
Compensation
($)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||
Paul S. Lipschutz (President, CEO and
|
2010
|
150,000
|
-0-
|
36,000
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|||||||||||||||
Director) (1)
|
2009
|
150,000
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
(1)
|
The full amount of compensation due to Mr. Lipschutz has not been paid in the fiscal years ended June 30, 2010 and 2009. We and Paul Lipschutz have agreed to accrue his salary until there is
adequate cash flow to enable the Company to pay his salary.
|
Option/SAR Grants in Last Fiscal Year
|
Name and Position
|
Number of Units
|
|||
Robert F. Orr, Chief Financial Officer
|
100,000
|
|||
Executives as a Group
|
100,000
|
Outstanding Equity Awards at Fiscal Year-End Table.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
That Have
Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($)
|
Equity Incentive
Plan Awards: Number
of Unearned
Shares, Units or Other Rights That Have Not
Vested
(#)
|
Equity Incentive
Plan Awards: Market or Payout
Value of Unearned
Shares, Units or Other Rights That Have Not Vested
($)
|
||||||||||||
Paul S. Lipschutz
|
3,000,000
|
-0-
|
-0-
|
.10
|
01/01/2013
|
-0-
|
-0-
|
-0-
|
-0-
|
||||||||||||
Robert F. Orr
|
500,000
|
-0-
|
-0-
|
.55
|
06/30/2012
|
-0-
|
-0-
|
-0-
|
-0-
|
||||||||||||
100,000
|
-0-
|
-0-
|
.07
|
06/30/2013
|
-0-
|
-0-
|
-0-
|
-0-
|
|||||||||||||
100,000
|
-0-
|
-0-
|
.015
|
06/30/2014
|
-0-
|
-0-
|
-0-
|
-0-
|
|||||||||||||
100,000
|
-0-
|
-0-
|
.018
|
06/30/2015
|
-0-
|
-0-
|
-0-
|
-0-
|
·
|
by each person who is known by us to beneficially own more than 5% of our common stock;
|
·
|
by each of our officers and directors; and
|
·
|
by all of our officers and directors as a group.
|
NAME AND ADDRESS
OF OWNER
|
TITLE OF
CLASS
|
NUMBER OF
SHARES OWNED (1)
|
PERCENTAGE OF
CLASS (2)
|
||||||
Paul S. Lipschutz
|
Common Stock
|
32,162,382 (3)
|
19.68%
|
||||||
525 Plymouth Road, Suite 310
|
|||||||||
Plymouth Meeting, PA
|
|||||||||
Robert F. Orr
|
Common Stock
|
12,485,000 (4)
|
7.74%
|
||||||
525 Plymouth Road, Suite 310
|
|||||||||
Plymouth Meeting, PA
|
|||||||||
All Officers and Directors
|
Common Stock
|
44,647,382 (3) (4)
|
27.42%
|
||||||
As a Group (2 persons)
|
3.1
|
Articles of Incorporation, filed as an exhibit to the registration statement on Form SB-2 filed with the Securities and Exchange Commission on July 14, 2006 and incorporated herein by reference.
|
3.2
|
By-laws, filed as an exhibit to the registration statement on Form SB-2 filed with the Securities and Exchange Commission on July 14, 2006 and incorporated herein by reference.
|
3.3
|
Certificate of Amendment to the Articles of Incorporation, filed as an exhibit to the registration statement on Form SB-2 filed with the Securities and Exchange Commission on July 14, 2006 and incorporated herein by reference.
|
3.4
|
Certificate of Amendment to the Articles of Incorporation, filed as an exhibit to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 20, 2009 and incorporated herein by reference.
|
10.1
|
Employment Agreement by and between WaterPure International, Inc. and Paul S. Lipschutz, dated as of January 1, 2008.
|
10.2
|
Employment Agreement by and between WaterPure International, Inc. and Robert F. Orr, dated as of July 1, 2006.
|
10.3
|
License Agreement by and between WaterPure International, Inc. and Everest Water Ltd., dated as of December 7, 2007.
|
10.4
|
Amendment to License Agreement by and between WaterPure International, Inc. and Everest Water Ltd., dated as of August 1, 2008.
|
10.5
|
Amendment to License Agreement by and between WaterPure International, Inc. and Everest Water Ltd., dated as of March 29, 2010.
|
14.1
|
Code of Ethics, filed as an exhibit to the annual report on Form 10-KSB filed with the Securities and Exchange Commission on September 28, 2007 and incorporated herein by reference.
|
31.01
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.02
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.01
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Date: October 18, 2010
|
By:
/s/ PAUL S. LIPSCHUTZ
|
Paul S. Lipschutz
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
Date: October 18, 2010
|
By:
/s/ ROBERT F. ORR
|
Robert F. Orr
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
Name
|
Position
|
Date
|
||
/s/ PAUL S. LIPSCHUTZ
|
Chief Executive Officer (Principal Executive Officer) and Director
|
October 18, 2010
|
||
Paul S. Lipschutz
|
||||
/s/ ROBERT F. ORR
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
October 18, 2010
|
||
Robert F. Orr
|
1.
|
I have reviewed this amended annual report on Form 10-K/A of WaterPure International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
1.
|
I have reviewed this amended annual report on Form 10-K/A of WaterPure International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
By:
|
/s/ PAUL S. LIPSCHUTZ
|
|||
Date: October 18, 2010
|
Name:
|
Paul S. Lipschutz
|
||
Title:
|
Chief Executive Officer
|
By:
|
/s/ ROBERT F. ORR
|
|||
Date: October 18, 2010
|
Name:
|
Robert F. Orr
|
||
Title:
|
Chief Financial Officer
|