Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
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Commission File Number: 000-31165
ECOLOCAP SOLUTIONS INC.
(Exact Name of Small Business Issuer as specified in its charter)
NEVADA
(State or other Jurisdiction of Incorporation or Organization)
1250 S. Grove Ave, Suite 308
Barrington, Illinois, 60010
(Address of principal executive offices)
866-479-7041
(Issuer’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to section 12(g) of the Act:
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None
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Common Stock
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES [X] NO [ ]
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
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.
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Large Accelerated Filer
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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer
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[ ]
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Smaller Reporting Company
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[X]
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of June 30, 2010: $7,297,349.
As of April 15, 2011, 120,511,092 shares of the registrant’s common stock were outstanding.
TABLE OF CONTENTS
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Page
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Business.
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3
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Risk Factors.
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6
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Unresolved Staff Comments.
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8
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Properties.
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8
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Legal Proceedings.
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8
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Market Price for the Registrant’s Common Equity, Related Stockholders Matters and
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Issuer Purchases of Equity Securities.
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9
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Selected Financial Data.
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11
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Management’s Discussion and Analysis of Financial Condition and Results of Operation.
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11
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Quantitative and Qualitative Disclosures About Market Risk.
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14
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Financial Statements and Supplementary Data.
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14
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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30 | |
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Evaluation of Disclosure Controls and Procedures.
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30 | |
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Other Information.
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31 | |
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Directors and Executive Officers, Promoters and Corporate Governance.
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31 | |
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Executive Compensation.
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34 | |
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Security Ownership of Certain Beneficial Owners and Management and Related
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37 | |
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Stockholder Matters.
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38 | |
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Certain Relationships and Related Transactions, and Director Independence.
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39 | |
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Principal Accounting Fees and Services.
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Exhibits and Financial Statement Schedules.
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40 | |
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ITEM 1. BUSINESS.
EcoloCap Solutions Inc. is an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop, manufacture and sell cleaner alternative energy products. We bring together the technology, engineering, and operational management for the successful development of environmentally significant products and projects.
We plan to develop economically feasible renewable energy.
History of the Business
We were incorporated in the State of Nevada on March 18, 2004, as Cygni Systems Corporation. We were originally formed with the intent of raising funds and entering into business as a software design company. From the date of our incorporation until June 17, 2005, we were in the development stage of online and network security management software and online and network security consulting services.
A change of control occurred on June 17, 2005. On August 19, 2005, we entered into and closed a Share Exchange Agreement (the "XL Share Exchange Agreement") with XL Generation AG. Pursuant to the terms of the XL Share Exchange Agreement, we acquired all of the issued and outstanding shares of common stock of XL Generation AG. On August 23, 2005, we filed a Certificate of Amendment with the State of Nevada, changing our name to "XL Generation International Inc."
XL Generation was the holding company of a Swiss entity, XL Generation AG, which was the marketer of an artificial sport surface called “XL Turf.” We aspired to become a leading global force in the artificial turf and flooring markets by building both the strength of the XL brand and strategic partnerships with key regional turf and flooring providers. Our vision was to develop a variety of products other than for sports, aimed at all types of play space, including for landscape and playgrounds. Due to litigation and because of the severe deterioration of our brand name and the poor quality of the products produced at XL Generation AG’s request by its subcontract manufacturer, who produce a poor quality which did not meet the specifications XL Generation AG requested. Also for each shipment the quality surveyor’s at the production plant failed causing deterioration of the brand name XL Turf and XL Generation AG in particular in the European market., our board of directors decided that it was in our best interest to initiate a complete and total withdrawal from the artificial flooring sector, artificial turf and all related business.
Following our withdrawal from the artificial flooring sector, artificial turf and all related business and after identifying new business opportunities, we changed our name from “XL Generation International Inc.” to “Ecolocap Solutions Inc.”
On November 13, 2007, we filed a Certificate of Amendment with the State of Nevada, changing our name to "EcoloCap Solutions Inc." Our shares of common stock are traded on the Bulletin Board operated by the Financial Industry Regulatory Authority under the symbol ECOS.
On September 10, 2009, the Company completed the acquisition of 55% of Micro Bubble Technologies (MBT), a provider of Nano technology, for a purchase price of $7,172,000 in common shares of the Company. This acquisition was funded from common stock. The final purchase price remains subject to post-closing working capital adjustments. The purchase price allocation is considered preliminary; additional adjustments may be recorded during the allocation period specified by “SFAS 141”, as additional information becomes known or payments are made.
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Micro Bubble developed and manufactures M-Fuel, an innovative suspension fuel that far exceeds all conventional fuels’ costs and efficiencies and the NPW machine that converts waste organic oils into biodiesel and pure glycerine. It also developed the Carbon Nano Tube Battery (CNT-Battery), and the Nano Li- Battery both fully recyclable, rechargeable batteries that far exceeds the performance capabilities of any existing battery on the market at this time. The acquisition of this business will enable the Company to expand its reference in an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop, manufacture and sell cleaner alternative energy products.
On November 4, 2010, the Company transferred all of its shares of Ecolocap Solutions (Canada) Inc. to DT Crystal Holdings Ltd in exchange of the reduction of $100,000 of its debts.
Change in Shell Company Status
Since November 2007, the Company changed its orientation (mission) and plan to develop economically feasible renewable energy. The Company changed its name to Ecolocap Solutions in December 2007. The Company has hired a new CEO. The Company has 5 employees and has over 25 employees through subcontracting of part of its development work (scouting, projects documentation work, contracts negotiations).
The Company has signed a new lease and has moved to new offices and the Company has revised and reconstructed its web site: Ecolocap.com.
Our Business
We are a development stage company. Ecolocap Solutions Inc. is an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop, manufacture and sell cleaner alternative energy products. We bring together the technology, engineering, and operational management for the successful development of environmentally significant products and projects. Our business approach combines science, innovation, and market-ready solutions to achieve environmentally sustainable and economically advantageous, power and energy management practices in the following areas:
MBT M-Fuel
EcoloCap Solutions Inc., through its subsidiary Micro Bubble Technologies Inc. (MBT), developed and manufactures M-Fuel, an innovative emulsion fuel that far exceeds all conventional fuels’ costs and efficiencies. This environmentally-friendly and economical product is designed to offer fully scalable and customizable fuel solutions that will increase efficiency, lower operating costs, and reduce emissions. M -Fuel is a emulsion of 60% heavy oil, 38%, and a 2% stabilizing additive for external combustion engines and 70% heavy oil, 28% water and 2% stabilizing additive. The production of M-Fuel takes place in our Nano Processing Units (NPU), a self contained device that is sized for output. The NPU’s can be configured to operate in conjunction with an engine or burner to sully M-Fuel on demand, or pre-manufactured for delivery. Independent tests conducted in the US, Korea and Australia demonstrate M-Fuels unique burning process facilitates increased efficiency, resulting in average reduced NOx emissions by 60%, particulate emissions by 98% reduces fuel consumption by 30% to 40%%, and cut costs by up to 20%..
The Clean Air Act specifies that any emulsion diesel fuel that has 14% or greater water is eligible for a 19.7% rebate on the fuel tax. The end user of M-Fuel may in some cases, save money on prices for diesel.
Nano Li Battery
Independent tests have demonstrated that the Nano Li battery utilizing new anode and cathode technologies and only requiring 10% by weight Li is the least expensive and highest Whr/Kg of any comparable type battery at 25% of the cost/KwHr. Independent tests
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Volumetric energy density
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Wh/l
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496.29
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Mass
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Kg
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5.45
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Mass energy density
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Wh/Kg
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215.80
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Watt power density
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W/kg
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Voltage
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V
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4.20
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NPW Machine
NPW Series biodiesel processing machines will allow customers to utilize cheaper waste feedstock (high free fatty acid organic oils such as trap grease, beef tallow, chicken fat, algae) , reduce production cost /gallon, and produce biodiesel exceeding all ASTM specs. Most equipment providers must first approve feedstock to ensure biodiesel quality. We do not need to approve the biodiesel feedstock and there is no limit on the degree of waste oil that can be processed. (up to 99.2% FFA Feedstock). A secondary process is recovers glycerin as a production by product. We also have an additional Glycerin Refining Machine that can make several grades of glycerin to meet applications designated by the customer.
Our Current Operations
Ecolocap has sold its first NPW system is presently undergoing contract negotiations for multiple installations.
The Nano Li Battery promise to change the panorama of the energy storage market in the near-term by offering superior performance compared to existing lithium-ion batteries and greatly reduced prices. Several industries, including the telecommunications industry, have been receptive with either substantial orders or serious demonstrations of interest. We have signed MOU’s for production facilities in Vietnam and Holland.
MBT has also developed a new process that blends non-miscible liquids (oil and water) on a submicron level in order to create a new non-emulsified fuel product that it calls EM-Fuel. Tests conducted in the City of Brisbane, Australia have verified all claims to emissions and savings. We are in the process of signing a distribution contract for M-Fuel in Australia and New Zealand. Additionally, contracts are under negotiation for a large power plant in Chile and possible implementation of M-Fuel in the Ukraine.
Given the turmoil in the Mideast M-Fuel is being evaluated by African and Caribbean nations where the diesel is the main source of power generation as the immediate way to reduce costs, and as an ancillary benefit is the reduction of emission.
Ecolocap Solutions has conducted an analysis of MBT M-Fuels impact on the environment in relation to its carbon credit earning potential, and the economic significance for M-Fuel users.
The CNT battery has been put on hold for the time being as the new Nano battery is actually easier to build, less expensive and has higher profit margins.
Our Vision
EcoloCap brings together the innovation, engineering, and industry knowledge to create products that have a significant—constructive and quantifiable—impact on the environment, while cost-effectively enhancing intrinsic performance characteristics. With these ground-breaking alternative energy products, EcoloCap is uniquely positioned to unleash the power of nanotechnology and revolutionize the world largest markets.
EcoloCap Solutions Inc. is an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop, manufacture and sell cleaner alternative energy products. We bring together the technology, engineering, and operational management for the
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successful development of environmentally significant products and projects. Our business approach combines science, innovation, and market-ready solutions to achieve environmentally sustainable and economically advantageous, power and energy management practices in the following areas:
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On-Road Transportation: EV/PHEV, trucks, buses, public fleets, mass transit fleets, private fleets
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Off-Road Transportation: marine engines, locomotives, construction equipment
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Power Generation: cell towers, data centers, apartments complexes, hospitals, universities
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Grid Stabilization: utilities, energy services, systems operators, merchant operators, municipalities
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Industrial: power plants, manufacturing plants, boilers, furnaces, turbines, driers, kilns
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Government: military, defense contractors, systems integrators, aerospace, propulsion systems
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Regulation
The MBT batteries will be undergoing full destructive testing and should be completed by the end of the 3rd quarter. At the present time the only regulations that may affect the MBT Nano Li battery is the transportation by passenger plane. Once destruction testing demonstrates the safety of the batteries they should be allowed to be transported passenger plane.
We will be seeking final approval by the EPA for the M-Fuel additive.
There are many battery manufactures and types of batteries. The battery market is defined by the mission and cost. To date there is no direct comparison for our batteries and we plan to initially impact the mission sensitive projects.
The M-Fuel technology is unique and is superior to any type of emulsion fuel at reduced selling process than the pre-processed fuel. In our process we recover the free SOx and NOx present in fuel before processing. No other emulsion process eliminates heavy metals, S and N from the fuel prior to processing of the fuel. This process will also be marketed as a standalone process for the elimination of Sulphur from fuel oil.
The bio-diesel processing system makes diesel biodiesel from wasted fats. The MBT process is superior to competing process and at 25% of the cost. The MBT process is the only process that produces 99% pure glycerine by product.
The markets in which we do business are highly competitive. In the market in which we operate, there are many competitors, some of which are significantly larger, have access to much more important resources or capital than us, or have established reputations among potential customers.
ITEM 1A. RISK FACTORS.
Our proposed business is speculative and we have just begun operations in CNT Battery and M-Fuel technology.
Our plan of operation is speculative. We have appointed officers and directors; they do not have a vast experience in CNT Battery and M-Fuel technology. The likelihood of achieving our plans is remote, and it is possible that you could lose your entire investment.
Need for substantial additional capital.
We are in need of substantial additional capital, without which our ability to continue as a going concern will be jeopardized. In order to fund our ongoing, day-to-day operations, we will continue to require significant amounts of additional capital, and the failure to obtain such additional capital will materially adversely affect our operations. In order to fully implement our plan of operation, it will be necessary to raise at least an additional
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$2,000,000. There is no assurance that we will be successful in raising additional capital. If we raise additional capital through the sale of common stock, you could experience significant dilution. If we are unsuccessful in raising such additional capital, you could lose your entire investment.
Changes in laws and regulations over which we have no control can significantly affect our business and results of operations.
Any change of governmental entity that regulates our operations of the concerned country may enact new legislation or adopt new laws and regulations or policies at any time, and new judicial decisions may change the interpretation of existing legislation or regulations at any time
Our reliance on third-party suppliers and service providers poses significant risks to our business and prospects.
We intend to contract with third parties for goods and services that will be essential to our operations. If the scopes of services or pricing are not commercially reasonable, we may incur additional costs. For example:
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one or more suppliers or service providers could make strategic changes in the services they offer; and
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some of our suppliers will be small companies which are more likely to experience financial and operational difficulties than larger, well-established companies, because of their limited financial and other resources.
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As a result of any of these factors, we may be required to find alternative suppliers for the services on which we rely. Accordingly, we may experience delays in obtaining appropriate services on a timely basis and in sufficient time from such alternative suppliers at a reasonable price, which could delay services to our customers and adversely affect our revenues, financial condition, and results of operations, cash flow and liquidity.
Our auditors have issued a going concern opinion meaning there is substantial uncertainty whether we will continue operations.
Our auditors have issued a going concern opinion in their report dated March 31, 2011. This means that, as of the time of the opinion, there was substantial doubt that we could continue as an ongoing business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business.
We lack an operating history and have losses that we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment.
Our recent financial statements may not provide sufficient information to assess our future prospects. Our likelihood of success must be considered in light of all of the risks, expenses and delays inherent in establishing a new business, including, but not limited to, unforeseen expenses, complications and delays, established competitors and other factors. Irrespective of the quality of products and skills of management, we may still never achieve profitable operations.
Because there is an extremely limited public trading market for our common stock, you may not be able to resell your stock.
There is currently an extremely limited public trading market for our common stock, and there may never be a broad public trading market. Therefore, investors may not be able to resell their common stock.
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We Are Highly Dependent On Our Executive Management And Other Key Employees. Should We Lose Executive Management Or Other Key Employees Due To Death, Disability, And Retirement Or Otherwise, Such Loss Could Adversely Affect Our Management And Operations.
We rely heavily on our executive management and key employees to provide services and for continued business development, including, in particular, our officers and directors, Mr. Tri Vu Truong, Mr. Michel St-Pierre, Mr. Claude Pellerin, Mr. Mark Lawson, Albert Beerli, Michael Siegel, Robert Egger and Jeung Kwak. At the present time, we do not have employment agreements with any of our officers and directors. Our business could be materially adversely affected if a number of our executive officers, managers and other key employees were to leave us and if we were unable to attract and retain qualified replacements.
Because the SEC imposes additional sales practice requirements on brokers who deal in penny stocks, some brokers may be unwilling to trade our shares. This means that you may have difficulty reselling your shares and this may cause the price of the shares to decline.
Our shares would be classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 and the rules promulgated thereunder which impose additional sales practice requirements on brokers/dealers who sell our securities. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale for you.
Because of the imposition of these additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
FINRA sales practice requirements may limit a stockholder's ability to buy and sell our stock.
The Financial Industry Regulation Authority (FINRA) has adopted rules that apply to broker/dealers in recommending an investment to a customer. The broker/dealers must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend our common stock to their customers, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing our stockholder's ability to resell shares of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
We do not own any real estate. We do not plan on investing in real estate in the near future. We are currently renting office space in Barrington IL for 1,850 per month. The Company believes that its current office facilities will not be sufficient for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS.
We are not presently a party to any litigation.
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MARKET PRICE FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Market Information
Our shares of common stock are traded on the Bulletin Board operated by the Financial Industry Regulatory Authority (FINRA) under the symbol "ECOS".
The following table sets forth for the periods indicated the high and low close prices for the Common Shares in U.S. Dollars. These quotations reflect only inter dealer prices, without retail mark up, mark down or commissions and may not represent actual transactions.
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Quarter Ended
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High
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Low
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December 31, 2010
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$
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0.10
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$
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0.02
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September 30,2010
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$
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0.20
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$
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0.095
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June 30, 2010
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$
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0.47
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$
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0.16
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March 31, 2010
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$
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0.50
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$
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0.26
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December 31, 2009
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$
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0.66
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$
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0.17
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September 30, 2009
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$
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0.25
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$
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0.11
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June 30, 2009
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$
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0.39
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$
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0.04
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March 31, 2009
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$
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0.25
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$
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0.03
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December 31, 2008
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$
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0.46
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$
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0.11
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September 30, 2008
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$
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0.85
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$
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0.30
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June 30, 2008
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$
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0.80
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$
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0.42
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March 31, 2008
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$
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1.40
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$
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0.45
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December 31, 2007
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$
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1.88
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$
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0.55
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September 30, 2007
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$
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0.55
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$
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0.32
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June 30, 2007
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$
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1.34
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$
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0.25
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March 31, 2007
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$
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0.35
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$
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0.35
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Holders
As of March 31, 2011, we had thirty seven stockholders of record.
Dividends
We have never declared or paid cash dividends. There are currently no restrictions which limit our ability to pay dividends in the future.
Securities authorized for issuance under equity compensation plans
On March 31, 2008, we filed a new Equity Incentive Plan (the “Plan”), effective as of March 31, 2008. On March 30, 2006, we adopted the 2006 Equity Incentive Plan (the “Plan”), effective as of March 24, 2006. Under the Plan, we may issue options, stock appreciation rights, restricted shares, deferred shares or performance shares. The maximum number of such shares of our common stock that may be issued under the Plan is 2,000,000 shares. Our officers, directors, employees and consultants, as well as those of our subsidiaries, may participate in the Plan, as our Compensation Committee may deem to be advisable and in our best interests. No one individual may be awarded options to purchase more than 500,000 shares in any one fiscal year. No one individual may be granted more than 250,000 shares in any one fiscal year. The terms and conditions of each grant shall be as set forth in an award agreement approved by the Compensation Committee.
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Equity Compensation Plan Information
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Plan category
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Number of securities issued upon exercise of outstanding options, warrants and rights
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Weighted-average exercise price of outstanding options, warrants and rights
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Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
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(a)
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(b)
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(c)
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Equity compensation plans approved by security holders
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n/a
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n/a
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n/a
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Equity compensation plans not approved by security holders
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365,000
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1.10
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1,465,000
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Total
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365,000
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1.10
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1,465,000
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Registration Statement
On November 17, 2010, a Registration Statement on Form S-8 (the “Registration Statement”) was filed by Ecolocap Solutions, Inc., a Nevada corporation (the “Company” or the “Registrant”), and the Ecolocap Solutions Inc. 2010 Non-Qualified Stock Option Plan (the “Plan”) relating to 10,000,000 shares of its Common Stock, par value $0.001 per share (the “Common Stock”), to be offered and sold to accounts of eligible persons of the Company under the Plan.
As of December 31, 2010, 1,645,025 shares of common stock have been sold.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Company and Affiliated Purchasers
None.
Section 15(g) of the Securities Exchange Act of 1934
Our company’s shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser’s written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as “bid” and “offer” quotes, a dealers “spread” and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
The application of the penny stock rules may affect your ability to resell your shares.
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ITEM 6. SELECTED FINANCIAL DATA.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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Operations
The following discussion of the financial condition and results of our operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2010 (this “Report”). This Report contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this Report, including, without limitation, statements containing the words "believes", "anticipates," "expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbour provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.
On November 13, 2007, we changed our name from “XL Generation International Inc.” to “Ecolocap Solutions Inc.” Our shares of common stock are traded on the Bulletin Board operated by the Financial Industry Regulatory Authority under the symbol ECOS.
Business Plan
MBT is in the process of locating a site to build its first battery factory in Korea. MBT is also in discussion with various international companies for joint ventures in battery production. MBT will be delivering 60 test batteries to an international communications company and a European bus company.
MBT is negotiating with a factory in Korea that would enable the Company to build 6 NPU and NPW’s machine per month.
Results of Operations
For the Twelve Month Period ended December 31, 2010
Overview
We posted net losses of $8,851,600 for the year ended December 31, 2010 as compared to net losses of $975,857 last year. The loss resulted mainly from impairment loss on Intangible Assets and Goodwill and research and product development of the Nano Li Battery and the M-Fuel technology.
Development Stage Expenditures
Development stage expenditures for the year ended December 31, 2010, were $441,150 in salaries, $34,900 in travel, $23,400 in rent, $391,335 in compensation expense, $477,923 in research & development and $108,900 in professional fees.
-11-
Sales
For the year ended December 31, 2010 we had 469,840 in gross revenues as compared to no gross revenues in 2009.
Total Cost and Expenses
For the year ended December 31, 2010, we incurred total costs and expenses of $8,869,440. This compared to $975,857 for last year. The increase in total cost and expenses resulted mainly from the impairment loss on Intangible Assets and Goodwill.
Selling, General and Administration
For the year ended December 31, 2010, we incurred selling, general and administration expenses of $731,443. This compared $285,025 for last year. The increase resulted from the management salaries being accrued for a complete year, salaries of new salesmen and consulting fees.
Interest
We calculate interest in accordance with the respective note payable. For the year ended December 31, 2010, we charged $60,375. This compared to $42,705 for last year. The increase is caused by short term loans with high interest.
Liquidity and Capital Resources
At December 31, 2010, we had $25,920 in cash, as opposed to $1,944 in cash at December 31, 2009. Total cash requirements for operations for the twelve month period ended December 31, 2010 was $83,409. As a result of its new business plan, management estimates that cash requirements through the end of the fiscal year ended December 31, 2011 will be between $2.0 million to $5.5 million. As of the date of this Report, we do not have available resources sufficient to cover the expected cash requirements through the end of the third quarter of 2011 or the balance of the year. As a result, there is substantial doubt that we can continue as an ongoing business without obtaining additional financing. Management's plans for maintaining our operations and continued existence include selling additional equity securities and borrowing additional funds to pay operational expenses. There is no assurance we will be able to generate sufficient cash from operations, sell additional shares of Common Stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our financial position, results of operations and our ability to continue our existence. If our losses continue and we are unable to secure additional financing, we may ultimately be required to seek protection from creditors under applicable bankruptcy laws.
At December 31, 2010, we had total assets of $6,518,707 compared to total assets of $13,705,275. The decrease is mainly due to impairment loss on Intangible assets and Goodwill ($6,852,140).
At December 31, 2010, we had total current liabilities of $2,424,388 compared to total current liabilities of 2,295,558 at December 31, 2009. The liabilities are mainly due to (i) accrued operational costs ($1,238,322), (ii) customer deposit ($175,000), (iii) notes payable ($156,886) and (iv) loan notes from shareholders ($854,180).
We are party to a lease for our Montreal office (the “Montreal Lease”), at a minimum annual rent of approximately $64,000 per year. The Montreal Lease expires in February 15, 2014. The Company has vacated the premises and according to the lease, a six month rent might have to be paid if the landlord intends a lawsuit against the Company. The six month rent amount has been provisioned in the Financial Statements.
-12-
Our financial condition raises substantial doubt about our ability to continue as a going concern. Management's plan for our continued existence includes selling additional stock through private placements and borrowing additional funds to pay overhead expenses while maintaining marketing efforts to raise our sales volume. Our future success is dependent upon our ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that we will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our financial position, results of operations and our ability to continue as a going concern.
This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Memorandum. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
We Have Only Had Operating Losses Which Raise Substantial Doubts About Our Viability To Continue Our Business And Our Auditors Have Issued An Opinion Expressing The Uncertainty Of Our Company To Continue As A Going Concern. If We Are Not Able To Continue Operations, Investors Could Lose Their Entire Investment In Our Company.
Limited Operating History
We have a history of operating losses, and may continue to incur operating losses. We experienced losses during the year ending December 31, 2010. With respect to the audited year ending December 31, 2010, we incurred losses of $8,851,600 (compared with losses of $975,857 for the same period last year). We had negative working capital for the year ending December 31, 2010 of $2,223,468 (compared with $1,668,483 for the same period last year), and a stockholders' deficiency of $1,018,475 unaudited as of December 31, 2010 (compared with a stockholders' deficiency of $5,835,523 audited as of December 31, 2009). All of these developments raise substantial doubt about our ability to continue as a going concern. As a result of these losses and the losses incurred as of December 31, 2010, our auditors may issue an opinion in their audit report for the year ended December 31, 2010 expressing uncertainty about the ability of our Company to continue as a going concern. This means that there is substantial doubt whether we can continue as an ongoing business without additional financing and/or generating profits from our operations.
Contractual Obligations
The Company is a party to a lease for its Barrington office, at a minimum annual rent of approximately $23,000 per year. The Barrington Lease expires in May, 2013.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements other than as described above.
We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
-13-
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
F-1
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|
F-2
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F-3
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F-4
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F-4
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F-5
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-14-
REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
Board of Directors
Ecolocap Solutions, Inc.
Barrington, IL
We have audited the accompanying consolidated balance sheets of EcoloCap Solutions. Inc. (a development stage company) (the "Company") as of December 31, 2010 and 2009 and the related consolidated statements of operations, stockholders' equity (deficiency) and cash flows for the year then ended and from inception (January 1, 2007) through December 31, 2010. These consolidated financial statements are the responsibility of Ecolocap Solutions, Inc.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit
We conducted our audits in accordance with the standards of the Public Company Accounting Overnight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes consideration of internal control for financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s control over financial reporting. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial Statements. An audit also includes assessing the accounting principles used and significant estimates made management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EcoloCap Solutions, Inc. (a development stage company) as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended and for the period from inception (January 1, 2007) to December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, as of December 31, 2010 the Company has negative working capital of $2,223,468 and a stockholders’ deficit attributable to the Company of $1,018,475. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern unless it is able to, among other things, attain profitable operations and generate sufficient cash flows to meet its obligations and sustain its operations. Management’s plans in regard to these matters are also described in Note 3. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
PARITZ & COMPANY P.A.
Hackensack, New Jersey
April 14, 2011
F-1
-15-
ECOLOCAP SOLUTIONS INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31,
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
|
||||||||
|
CURRENT ASSETS
|
||||||||
|
Cash
|
$ | 25,920 | $ | 1,944 | ||||
|
Taxes Receivable
|
- | 730 | ||||||
|
Deposit on machinery
|
175,000 | 609,823 | ||||||
|
Prepaid expenses and sundry current assets
|
- | 14,578 | ||||||
|
TOTAL CURRENT ASSETS
|
200,920 | 627,075 | ||||||
|
|
||||||||
|
INTANGIBLE ASSETS ( note 2 and 5 )
|
2,616,485 | 6,056,252 | ||||||
|
GOODWILL ( note 2 )
|
3,233,928 | 7,008,721 | ||||||
|
PROPERTY AND EQUIPMENT, AT COST, LESS ACCUMULATED
|
||||||||
|
DEPRECIATION
|
467,374 | 13,227 | ||||||
|
|
||||||||
|
TOTAL ASSETS
|
$ | 6,518,707 | $ | 13,705,275 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Customer deposits
|
$ | 175,000 | $ | 454,940 | ||||
|
Notes payable (note 7)
|
156,886 | 47,386 | ||||||
|
Notes payable-stockholders (note 8)
|
854,180 | 1,402,055 | ||||||
|
Accrued expenses and sundry current liabilities (note 6)
|
1,238,322 | 391,177 | ||||||
|
TOTAL CURRENT LIABILITIES
|
$ | 2,424,388 | $ | 2,295,558 | ||||
|
STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
|
Common stock
|
$ | 176,433 | $ | 162,848 | ||||
|
500,000,000 shares authorized, par value $0.001, 120,511,092 and 99,924,662 shares, respectively
|
||||||||
|
issued and outstanding
|
- | |||||||
|
Additional paid in capital
|
31,794,473 | 30,271,856 | ||||||
|
Accumulated Deficit
|
(25,059,593 | ) | (25,059,593 | ) | ||||
|
Retained Earnings (Deficit) accumulated during development period
|
(7,929,788 | ) | 460,412 | |||||
|
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)
|
$ | (1,018,475 | ) | $ | 5,835,523 | |||
|
Less Non-controlling interest
|
5,112,794 | 5,574,194 | ||||||
| 4,093,319 | 11,409,717 | |||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
(DEFICIENCY)
|
$ | 6,518,707 | $ | 13,705,275 | ||||
F-2
-16-
ECOLOCAP SOLUTIONS INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
Stockholders’ Equity
|
Common
|
||||||||||||||
|
Stock
|
||||||||||||||
|
Authorized
|
Deficit
|
Other
|
||||||||||||
|
500,000,000
|
accumulated
|
Comprehen-
|
||||||||||||
|
Shares,
|
Additional
|
during
|
sive
|
|||||||||||
|
Stockholders
|
Par value
|
paid in
|
Accumulated
|
Development
|
Income
|
Non-controlling
|
||||||||
|
Deficiency
|
Shares
|
$0.001
|
Capital
|
Deficit
|
Stage
|
(Loss)
|
Subtotal
|
interest
|
Total
|
|||||
|
January 1, 2007
|
34,578,268
|
$
|
97,502
|
$
|
13,329,355
|
$
|
(25,059,593)
|
-
|
$
|
220,463
|
(11,412,273)
|
$
|
(11,412,273)
|
|
|
Proceeds from
the issuance of
Common stock
|
990,000
|
990
|
1,002,410
|
-
|
-
|
1,003,400
|
1,003,400
|
|||||||
|
Stock options
|
1,372,897
|
1,372,897
|
1,372,897
|
|||||||||||
|
Net Income
|
-
|
-
|
6,306,507
|
6,306,507
|
6,306,507
|
|||||||||
|
Other comprehensive
Income
|
(220,463)
|
(220,463)
|
(220,463)
|
|||||||||||
|
December 31,2007
|
35,568,268
|
$
|
98,492
|
$
|
15,704,662
|
$
|
(25,059,593)
|
6,306,507
|
$
|
-
|
(2,949,932)
|
$
|
(2,949,932)
|
|
|
Shares issued for settlement of services
|
4,500,000
|
4,500
|
3,834,500
|
3,839,000
|
3,839,000
|
|||||||||
|
Shares issued following exercise of stock options
|
25,000
|
25
|
225
|
250
|
250
|
|||||||||
|
Proceeds from
the issuance of
Common stock
|
250,000
|
250
|
74,750
|
-
|
-
|
75,000
|
75,000
|
|||||||
|
Shares issued for settlement of a debt
|
3,470,471
|
3,470
|
3,133,830
|
3,137,300
|
3,137,300
|
|||||||||
|
Net Loss
|
-
|
-
|
(4,939,044)
|
(4,939,044)
|
(4,939,044)
|
|||||||||
|
December 31,2008
|
43,813,739
|
$
|
106,737
|
$
|
22,747,967
|
$
|
(25,059,593)
|
1,367,463
|
$
|
-
|
(837,426)
|
$
|
(837,426)
|
|
|
Shares issued following acquisition
|
54,000,000
|
54,000
|
7,118,000
|
7,172,000
|
7,172,000
|
|||||||||
|
Shares issued for services
|
1,650,000
|
1,650
|
266,350
|
268,000
|
268,000
|
|||||||||
|
Non-controlling interest pursuant to acquisition (see Note 2)
|
5,643,000
|
5,643,000
|
||||||||||||
|
Proceeds from
the issuance of
Common stock
|
460,923
|
461
|
139,539
|
140,000
|
||||||||||
|
Net Loss
|
-
|
-
|
(907,051)
|
(907,051)
|
(68,806)
|
(975,857)
|
||||||||
|
December 31,2009
|
99,924,662
|
$
|
162,848
|
$
|
30,271,856
|
$
|
(25,059,593)
|
460,412
|
$
|
-
|
5,835,523
|
$
|
5,574,194
|
11,409,717
|
|
Shares issued for services
|
825,000
|
825
|
91,675
|
92,500
|
||||||||||
|
Shares issued for settlement of a debt
|
15,399,276
|
8,398
|
1,211,188
|
1,219,586
|
||||||||||
|
Proceeds from
the issuance of
Common stock
|
4,362,154
|
4,362
|
213,638
|
218,000
|
||||||||||
|
Imputed interest on non-interest bearing stockholders loans
|
6,116
|
6,116
|
||||||||||||
|
Net Loss
|
(8,390,200)
|
(461,400)
|
(8,851,600)
|
|||||||||||
|
December 31,2010
|
120,511,092
|
$
|
176,433
|
$
|
31,794,473
|
$
|
(25,059,593)
|
(7,929,788)
|
$
|
-
|
(1,018,475)
|
$
|
5,112,794
|
4,093,319
|
F-3
-17-
ECOLOCAP SOLUTIONS INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
|
December 31,
|
December 31,
|
Beginning of
development
stage, January 1,
2007, through
|
||||||||||
|
2010
|
2009
|
December 2010
|
||||||||||
|
SALES
|
$ | 469,840 | $ | - | $ | 469,840 | ||||||
|
Cost of sales
|
452,000 | - | 452,000 | |||||||||
|
|
||||||||||||
|
Gross Profit
|
17,840 | - | 17,840 | |||||||||
|
COSTS AND EXPENSES:
|
- | - | - | |||||||||
|
Selling, general and administrative
|
731,443 | 285,025 | 2,293,500 | |||||||||
|
Depreciation and amortization ( note 5 )
|
404,273 | 170,173 | 579,148 | |||||||||
|
Research and Development
|
477,923 | 477,923 | ||||||||||
|
Gain on settlement debts-foreign Subsidiary
|
- | (8,013,125 | ) | |||||||||
|
Impairment Loss Intangible Assets
|
3,077,347 | 3,077,347 | ||||||||||
|
Impairment Loss Goodwill
|
3,774,793 | 3,774,793 | ||||||||||
|
Compensation expense ( Note 9)
|
121,407 | 258,000 | 5,591,304 | |||||||||
|
Debt conversion inducement expense (Note 8)
|
269,928 | 269,928 | ||||||||||
|
Interest
|
60,375 | 42,705 | 455,699 | |||||||||
|
Foreign exchange loss (gain)
|
208 | 34,503 | (165,877 | ) | ||||||||
|
|
||||||||||||
|
|
||||||||||||
|
TOTAL COSTS AND EXPENSES
|
8,917,697 | 790,406 | (8,340,640 | ) | ||||||||
|
|
||||||||||||
|
Loss from continuing operations
|
$ | (8,899,857 | ) | $ | (790,406 | ) | $ | (8,322,800 | ) | |||
|
Loss from discontinued operations
|
$ | - | $ | (185,451 | ) | (185,451 | ) | |||||
|
Gain on Sale of discontinued operations ( note 12 )
|
48,257 | - | 48,257 | |||||||||
|
Net loss
|
(8,851,600 | ) | (975,857 | ) | (8,459,994 | ) | ||||||
|
Attributable to:
|
||||||||||||
|
Ecolocap Solutions Inc.
|
$ | (8,390,200 | ) | $ | (907,051 | ) | $ | (7,929,788 | ) | |||
|
Non-controlling interest
|
$ | (461,400 | ) | $ | (68,806 | ) | $ | (530,206 | ) | |||
|
Loss Per Share
|
||||||||||||
|
Continuing operations
|
$ | (0.08 | ) | (0.01 | ) | N/A | ||||||
|
Discontinued operations
|
- | (0.00 | ) | N/A | ||||||||
|
Gain on sale of discontinued operations
|
(0.00 | ) | - | N/A | ||||||||
| $ | (0.08 | ) | $ | (0.01 | ) | $ | N/A | |||||
|
Average weighted Number of Shares Outstanding
|
107,174,035 | 60,744,295 | N/A | |||||||||
F-4
-18-
|
ECOLOCAP SOLUTIONS INC.
|
||||||||||
|
(A Development Stage Company)
|
||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||
|
Year ended December 31, 2010 and 2009
|
||||||||||
|
Beginning of
development
stage, January 1,
2007, through
|
||||||||||
|
2010
|
2009
|
December 2010
|
||||||||
|
Net loss
|
$ | (8,390,200 | ) | $ | (907,051 | ) | $ | (8,150,251 | ) | |
|
Adjustment to reconcile net loss to net cash used in operating activities
|
||||||||||
|
Depreciation and amortization
|
404,273 | 170,173 | 579,148 | |||||||
|
Imputed interest on shareholders loans
|
6,116 | 6,116 | ||||||||
|
Impairment Loss Intangible Assets
|
3,077,347 | 3,077,347 | ||||||||
|
Impairment Loss Goodwill
|
3,774,793 | 3,774,793 | ||||||||
|
Stock based Compensation
|
121,407 | 121,407 | ||||||||
|
Debt conversion inducement expense
|
269,928 | 269,928 | ||||||||
|
Issuance of common stock for services
|
- | 132,300 | 3,269,600 | |||||||
|
Accrued interest stockholders
|
||||||||||
|
Non-controlling interest
|
(461,400 | ) | (68,806 | ) | (530,206 | ) | ||||
|
Changes in operating assets and liabilities
|
||||||||||
| - | ||||||||||
|
Accounts receivable
|
||||||||||
|
Taxes receivable
|
730 | 30,928 | - | |||||||
|
Prepaid expenses and sundry current assets
|
14,578 | (8,577 | ) | 41,345 | ||||||
|
Deposit on machinery
|
434,823 | (64,423 | ) | 370,400 | ||||||
|
Customer deposit
|
(279,940 | ) | - | (279,940 | ) | |||||
|
Accrued expenses and sundry current liabilities
|
944,136 | 172,653 | (2,026,051 | ) | ||||||
|
Net cash provided by (used in) operating activities
|
$ | (83,409 | ) | $ | (542,803 | ) | $ | 5,735,533 | ||
|
Investing activities
|
||||||||||
|
Cash acquired during acquisition
|
- | 38,115 | 38,115 | |||||||
|
Acquisitions of property and equipment
|
(496,000 | ) | - | (491,003 | ) | |||||
|
Net cash provided by (used in) investing activities
|
$ | (496,000 | ) | $ | 38,115 | $ | (452,888 | ) | ||
|
Financing activities
|
||||||||||
|
Stock payable
|
- | - | (1,000,000 | ) | ||||||
|
Issuance of common stock
|
195,760 | 140,000 | 411,010 | |||||||
|
Sale of common stock
|
1,003,400 | |||||||||
|
Proceeds of loans payable
|
109,500 | (250,000 | ) | 109,500 | ||||||
|
Proceeds of loans payable shareholder
|
298,125 | 592,845 | (5,909,242 | ) | ||||||
|
Net cash provided by (used in) financing activities
|
$ | 603,385 | $ | 482,845 | $ | (5,385,332 | ) | |||
|
Increase (decrease) in cash
|
23,976 | (21,843 | ) | (102,687 | ) | |||||
|
Cash- beginning of period
|
1,944 | 23,787 | 128,607 | |||||||
|
Cash - end of period
|
$ | 25,920 | $ | 1,944 | $ | 25,920 | ||||
|
Supplemental Disclosure of Cash Flow information
|
||||||||||
|
Non cash financing activities
|
||||||||||
|
Conversion of debt to Equity
|
$ | 269,928 | $ | - | $ | 269,928 | ||||
F-5
-19-
ECOLOCAP SOLUTIONS INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS
EcoloCap Solutions Inc. is an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop and sell cleaner alternative energy products. We bring together the technology, engineering, and operational management for the successful development of environmentally significant products and projects. Our business approach combines science, innovation, and market-ready solutions to achieve environmentally sustainable and economically advantageous, power and energy management practices in the following areas:
MBT M-Fuel
EcoloCap Solutions Inc., through its subsidiary Micro Bubble Technologies Inc. (MBT), developed M-Fuel, an innovative suspension fuel that far exceeds all conventional fuels’ costs and efficiencies. This environmentally-friendly and economical product is designed to offer fully scalable and customizable fuel solutions that will increase efficiency, lower operating costs, and reduce emissions. M -Fuel is a suspension mixture of 60% heavy oil, 40% H plus O2 molecules, and a 0.3% stabilizing additive. The production of M-Fuel takes place in our Nano Processing Units (NPU), a self contained device that is sized for output. The NPU’s can be configured to operate in conjunction with an engine or burner to sully M-Fuel on demand, or pre-manufactured for delivery. M-Fuels unique burning process facilitates increased efficiency, resulting in reduced emissions by 60%, reduced fuel consumption by 40%, and cut costs by up to 25%.
MBT -Batteries
EcoloCap Solutions Inc., through its subsidiary Micro Bubble Technologies Inc. (MBT), developed the Carbon Nano Tube Battery (CNT-Battery), a fully recyclable, rechargeable battery that far exceeds the performance capabilities of any existing battery on the market at this time. This environmentally-friendly and economical product is designed to offer fully scalable and customizable power solutions that will increase efficiency, lower operating costs, and reduce emissions. Our proprietary technology modifies the fabrication of lead acid batteries by applying a highly-conductive carbon nano tube coating to the anode and cathode cells. As a result, conductive surface area is increased by a factor of billions and electricity is carried out more efficiently. The CNT-Battery’s advanced technology demonstrates eight times the reserve capacity of traditional lead acid batteries, two and a half times the energy density of lithium-ion batteries, and a recharge time of just five minutes; all at a fraction of the cost of lithium-ion batteries.
DEVELOPMENT STAGE COMPANY
The Company was an active business from 2005 through 2006 and was involved in the artificial sport surface. From 2007 through September 2010, the Company was looking for new business and commenced the Carbon Credits (CER’S) business. In the 2009, the Company acquired a participation in Micro Bubble Technologies Inc. and became an integrated and complementary network of environmentally focused technology company. The Company currently has operations but limited revenues and, in accordance with the relevant authoritive guidance is considered a Development Stage Enterprise. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from January 1, 2007 to the current balance sheet date.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its subsidiary Micro Bubble Technologies Inc. after the elimination of inter-company accounts and transactions.
F-6
-20-
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with original maturities not exceeding three months to be cash equivalents.
The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts.
FAIR VALUE MEASUREMENTS
The Company adopted the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures", which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents, deposits, prepaid expenses, notes payable, and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
MC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. MC 820 describes three levels of inputs that may be used to measure fair value:
|
·
|
level l - quoted prices in active markets for Identical assets or liabilities
|
|
·
|
level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable
|
|
·
|
level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
|
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
USE OF ESTIMATES
In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenue and expenses in the income statement. Actual results could differ from those estimates.
REVENUE RECOGNITION
The Company sells machinery used to prepare M-fuel. The machinery is manufactured for the Company by a third-party in Korea. Revenue is recognized at the time of shipment and when title changes hands to the buyer.
LOSS PER COMMON SHARE
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed by dividing the net loss, adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
F-7
-21-
STOCK BASED COMPENSATION
The Company accounts for stock options and similar equity instruments issued in accordance with SFAS No. 123(revised), "Share-Based Payment". Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. Transactions in which goods or services are received in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.
GOODWILL, OTHER INTANGIBLES AND LONG-LIVED ASSETS
The Company records as goodwill the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired. Current authoritative guidance requires that goodwill not being amortized, but to be tested for impairment annually as well as when an event or change in circumstance indicates an impairment may have occurred. Goodwill is tested for impairment by comparing the fair value of the Company’s individual reporting units to their carrying amount to determine if there is potential goodwill impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value.
Long-lived assets, including fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows, as well as the estimated fair value of long-lived assets, involves significant estimates on the part of management. In order to estimate the fair value of a long-lived asset, the Company may engage a third-party to assist with the valuation. If there is a material change in economic conditions or other circumstances influencing the estimate of future cash flows or fair value, the Company could be required to recognize impairment charges in the future.
Impairment:
At each reporting date, the Company assesses whether there is any indication that its intangible assets, or property, plant and equipment are impaired. If any such indication exists, the Group estimates the recoverable amount of the asset and the impairment loss if any. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. If an asset does not generate cash flows that are independent from those of other assets or groups of assets, recoverable amount is determined for the cash-generating unit to which the asset belongs. The recoverable amount of an asset is the higher of its fair value less cost to sell and its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash- generating unit that have not been reflected in the estimation of future cash flows. If the recoverable amount of an intangible or tangible asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. A reversal of an impairment loss on intangible assets (excluding goodwill) or property, plant and equipment is recognised as it arises provided the increased carrying value does not exceed that which it would have been had no impairment loss been recognised. Impairment losses on goodwill are not reversed. During the year ended December 31, 2010, we incurred an intangible assets impairment loss of $3,077,793. This impairment loss relates to our acquisition for MICRO BUBBLE TECHNOLOGIES INC. as our management has adjusted downward our Customer Relationship agreements because the two agreements have been terminated over the past year. We incurred a goodwill impairment loss of $3,774,793.
F-8
-22-
PROPERTY AND EQUIPMENT AND DEPRECIATION POLICY
Property and equipment are recorded at cost. Depreciation is provided for in amounts sufficient to amortize the costs of the related assets over their estimated useful lives on the straight-line and accelerated methods for both financial reporting and income tax purposes.
Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized.
RESEARCH AND DEVELOPMENT
Research and development costs are charged to expense as incurred.
ACQUISITION OF MICRO BUBBLE TECHNOLOGIES INC.
On September 10, 2009, the Company completed the acquisition of 55% of MBT, engaged in the business of manufacturing, marketing, distributing, setting up sub-distributors, and selling products based on nano technologies, for a purchase price of $7,172,000 in common shares of the Company. This acquisition was funded from common stock.
The acquisition was accounted for using the purchase method of accounting in accordance with the relevant authoritive guidance. The purchase price has been assigned to the assets acquired and liabilities assumed based on their estimated fair values. The intangible assets are being amortized over periods ranging from ten to fifteen years. The weighted average amortization period in total is 15.0 years. The weighted average amortization period by major asset class is: customer relationship 10.0 years; technology batteries 15.0 years and technology M-Fuel 15.0 years. In connection with the acquisition, the Company recorded $7,425,000 of goodwill. The Company’s financial statements include the results of operations of Micro Bubble subsequent to the acquisition date.
MBT developed and manufactures M-Fuel, an innovative suspension fuel that far exceeds all conventional fuels’ costs and efficiencies. It also developed and manufactures the Carbon Nano Tube Battery (CNT-Battery), a fully recyclable, rechargeable battery that far exceeds the performance capabilities of any existing battery on the market at this time. The acquisition of this business will enable the Company to expand its reference in an integrated and complementary network of environmentally focused technology companies that utilize advanced nanotechnology to design, develop, manufacture and sell cleaner alternative energy products.
The acquisition was accounted for as follows (in thousands):
|
Assets:
|
||||
|
Cash
|
38 | |||
|
Technology Batteries
|
2,790 | |||
|
Technology EM Fuel
|
80 | |||
|
Customer Relationships
|
3,350 | |||
|
Goodwill
|
7,009 | |||
| $ | 12,915 | |||
|
Liabilities:
|
||||
|
Accrued Liabilities
|
452 | |||
|
Minority interest
|
$ | 5,643 | ||
|
Total Purchase Price
|
$ | 7,172 | ||
Business Combinations
In 2008, prior to the acquisition of MBT, MBT had no income or expenses incurred and accordingly no pro-forma information are presented.
New accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
F-9
-23-
NOTE 3 – GOING CONCERN
The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company posted net loss of $8,851,600 for the year ended December 31, 2010.The Company has negative working capital of $2,223,468 at December 31, 2010 and a stockholders’ deficiency attributable to the Company of $1,018,475 at December 31, 2010. These factors among others raise substantial doubt about the Company's ability to continue as a going concern.
Management's plans for the Company's continued existence include selling additional stock and borrowing additional funds to pay overhead expenses.
With the opportunities created by the Batteries and M Fuel, management has begun the process of redeploying its assets, identifying business strategies that offers above average profit potential and identifying the resources necessary to successfully execute it new strategic direction.
Recognizing the opportunity this new market represents, the Company has developed an integrated development approach that focuses upon both existing and needed infrastructure facilities to produce substantial new value.
The Company's future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds.
The Company's inability to obtain additional cash could have a material adverse effect on its financial position, results of operations and its ability to continue in existence. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4 – PROPERTY & OFFICE EQUIPMENT
Equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the assets ranging from 3 to 7 years.
|
December 31
|
December 31,
|
|||||||
|
2010
|
2009
|
|||||||
|
Testing equipment
|
$ | 496,000 | $ | - | ||||
|
Computer equipment
|
11,654 | 11,654 | ||||||
|
Furniture & fixtures
|
12,701 | 12,701 | ||||||
| $ | 520,355 | $ | 24,355 | |||||
|
Less: accumulated depreciation
|
52,981 | $ | 11,128 | |||||
|
Balance
|
$ | 467,374 | $ | 13,227 | ||||
NOTE 5 – INTANGIBLE ASSETS
The intangible assets are being amortized over periods ranging from ten to fifteen years. The weighted average amortization period by major asset class is: customer relationship 10.0 years; technology batteries 15.0 years and technology M-Fuel 15.0 years.
F-10
-24-
|
December 31,
|
December 31,
|
|||||||
|
2010
|
2009
|
|||||||
|
Technology Batteries
|
2,790,000 | 2,790,000 | ||||||
|
Technology EM Fuel
|
80,000 | 80,000 | ||||||
|
Customer Relationships
|
- | 3,350,000 | ||||||
| $ | 2,870,000 | $ | 6,220,000 | |||||
|
Less : accumulated amortization
|
253,515 | 163,748 | ||||||
|
Balance December 31, 2010
|
$ | 2,616,485 | $ | 6,056,252 | ||||
NOTE 6 – ACCRUED EXPENSES AND SUNDRY CURRENT LIABILITIES
Accrued expenses consisted of the following at December 31:
|
2010
|
2009
|
|||||||
|
Accrued interest
|
$ | 42,177 | $ | 80,532 | ||||
|
Accrued operating expenses
|
1,196,145 | 310,645 | ||||||
| $ | 1,238,322 | $ | 391,177 | |||||
NOTE 7 – NOTES PAYABLE
In 2008, the Company received loans from Carnavon Trust REG (“Carnavon”) in the amount of $250,000. These loans carry an interest of 10% and are payable on demand. On July 28, 2009, Carnavon and Larinton Investments S.A.(“Larinton”) signed an agreement whereby Carnavon transferred its loans plus the accrued interest ($287 500) to Larinton On July 28, 2009, Larinton converted loans of $287 500 into 2,875,000 common shares of the Company.
In 2010, the Company received loans from Capex Investments Limited in the amount of $19,500. In 2009, the Company received loans from Capex Investments Limited in the amount of $47,386. The amount owed to Capex Investments Limited at December 31 is $66,886 Capex Investments Limited. These loans carry an interest of 10% and are payable on demand.
In 2010, the Company received a loan from Asher Enterprises Inc. in the amount of $90,000. The amount owed to Asher Enterprises Inc. at December 31, 2010 is $90,000. The loan is convertible, over a one year period, into restricted common shares of the Company at a fix price. The price of the shares of the Company is equal to 61% of the market price of the common shares of the Company at the date of the execution of the conversion. This loan carries an interest of 8% and is payable on demand. The Company believes that the effect of this beneficial conversion is immaterial to the Company financial statements.
NOTE 8 – NOTES PAYABLE – STOCKHOLDERS
In 2008, the Company received loans from POMA Management Inc.(“POMA”), a shareholder, in the amount of $450,000. In 2009, the Company received additional loans from POMA in the amount of $1,000. These loans carry an interest of 10% and are payable on demand. On July 28, 2009, POMA and Toniland S.A and DT Crystal Holdings Ltd (“DT Crystal”) signed an agreement whereby POMA transferred its loans plus the accrued interests ($490 490) to Toniland S.A ($220 720) and DT Crystal ($269 770). On July 28, 2009, Toniland S.A has elected to convert loans of $220 720 into 2,207 206 common shares of the Company and DT Crystal has elected to convert loans of $269 770 into 2,697 697 common shares of the Company. The common shares were issued on February 14, 2010. In 2009, the Company received additional loans from DT Crystal of $117,454. In 2010, the Company received loans from DT Crystal in the amount of $319,950. The amount owed to DT Crystal at December 31, 2010 is $337,404. These loans carry an interest of 10% and are payable on demand.
F-11
-25-
In 2009, the Company received loans from a stockholder in the amount of $57,000. In 2010, the Company received additional loans from stockholder of $144,224. The loans are convertible, over a one year period, into restricted common shares of the Company at a fix price. The price of the shares of the Company is equal to $0.024 per common shares of the Company. The amount owed to a stockholder at December 31, 2010 is $201,224. These loans carry an interest of 8% and are payable on demand.
In 2009, the Company received loans from stockholders in the amount of $447,096. In 2010, the Company received additional loans from stockholders of $157,831. On January 5, 2010, the stockholders signed an agreement where they transferred part of their debt ($417,725). The amount owed to stockholders at December 31, 2010 is $212,202. These loans carry an interest of 5.00% and are payable on demand.
In 2009, the Company received loans from Hanscom K. Inc. in the amount of $67,034. In 2010, the Company received additional loans from stockholders of $2,120. On January 5, 2010, Hanscom K. Inc. signed an agreement where it transferred part of its debt ($65,804). The amount owed to stockholders at December 31 is $3,350. These loans have no interest and are payable on demand.
In 2009, the Company received loans from SRD Inc. in the amount of $12,471. On January 5, 2010, SRD Inc. signed an agreement where it transferred its debt ($12,471).These loans have no interest and are payable on demand.
On August, 2009, Black Mountain Equities Inc. and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($25,000) to Black Mountain Equities Inc. On September 23, 2010, Black Mountain Equities Inc. d elected to convert loans of $13,000 into 174,348 common shares of the Company. The price of the shares of the Company was computed to equal to $0.0745635 per common shares of the Company and the market price was equal to 0.11 per common shares of the Company which results in a debt conversion inducement expense of $6 178.
On December 28, 2010, Black Mountain Equities Inc. elected to convert loans of $12,000 into 750,000 common shares of the Company. The price of the shares of the Company was computed to equal $0.016 per common shares of the Company and the market price was equal to 0.061 per common shares of the Company which results in a debt conversion inducement expense of $33 750. The amount owed to Black Mountain Equities Inc. at December 31, 2010 is $0.
On August 30, 2010, Barclay Lyons and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($25,000) to Barclay Lyons. On September 23, 2010, Barclay Lyons has elected to convert loans of $25,000 into 600,000 common shares of the Company. The price of the shares of the Company was computed to equal to $0.041666 per common shares of the Company and the market price was equal to 0.11 per common shares of the Company which results in a debt conversion inducement expense of $41 000.
On October 22, 2010, Barclay Lyons and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($10,000) to Barclay Lyons. On October 25, 2010, Barclay Lyons elected to convert loans of $10,000 into 500,000 common shares of the Company. The price of the shares of the Company was computed to equal $0.02 per common shares of the Company and the market price was equal to 0.05 per common shares of the Company which results in a debt conversion inducement expense of $15 000.
On November 1, 2010, Barclay Lyons and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($25,000) to Barclay Lyons. On November 12, 2010, Barclay Lyons elected to convert loans of $25,000 into 1,750,000 common shares of the Company. The price of the shares of the Company was computed to equal to $0.0142857per common shares of the Company and the market price was equal to 0.048 per common shares of the Company which results in a debt conversion inducement expense of $59 000.
In 2010, the Company received loans from Barclay Lyons in the amount of $50,000.The amount owed to Barclay Lyons at December 31, 2010 is $50,000.These loans carry an interest of 21.00% and are payable on demand.
F-12
-26-
On August 31, 2010, War Chest Capital and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($25,000) to War Chest Capital. On September 23, 2010, War Chest Capital elected to convert loans of $25,000 into 600,000 common shares of the Company. The price of the shares of the Company was computed to equal $0.041666 per common shares of the Company and the market price is equal was 0.11 per common shares of the Company which results in a debt conversion inducement expense of $41 000.
On October 22, 2010, War Chest Capital and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($10,000) to War Chest Capital. On October 25, 2010, War Chest Capital elected to convert loans of $10,000 into 500,000 common shares of the Company. The price of the shares of the Company was computed to equal $0.02 per common shares of the Company and the market price was equal to 0.05 per common shares of the Company which results in a debt conversion inducement expense of $15 000.
On November 01, 2010, War Chest Capital and a stockholder signed an agreement whereby the shareholder transferred part of its loans ($25,000) to War Chest Capital. On November 12, 2010, War Chest Capital elected to convert loans of $25,000 into 1,750,000 common shares of the Company. The price of the shares of the Company was computed to equal to $0.0142857 per common shares of the Company and the market price was equal to 0.048 per common shares of the Company which results in a debt conversion inducement expense of $59 000. In 2010, the Company received loans from War Chest Capital in the amount of $50,000. The amount owed to War Chest Capital at December 31, 2010 is $50,000. These loans carry an interest of 21.00% and are payable on demand.
|
Debt conversion inducement expense consist of:
|
|
|||
|
Black Mountain
|
$ | 39,928 | ||
|
Barclay Lyons
|
115,000 | |||
|
War Chest Capital
|
115,000 | |||
|
Total
|
$ | 269,928 | ||
NOTE 9 – CAPITAL STOCK
On November 30, 2009, at a special meeting of shareholders, our shareholders approved an amendment to our articles of incorporation whereby we increased our authorized shares of common stock from 100,000,000 shares to 500,000,000 shares with a par value of $0.001 per share of which 120,511,090 were issued and outstanding as of December 31, 2010.
On September 10, 2009, we completed our Securities Shares Exchange Agreement (the "Agreement") with shareholders of Micro Bubble Technologies Inc. and issued a total of 54,000,000 restricted shares of our common stock to nine shareholders of Micro Bubble Technologies Inc. ("Micro Bubble"). The foregoing nine shareholders delivered 1,100 shares of Micro Bubble which constituted 55% of the total outstanding shares of common stock of Micro Bubble. Micro Bubble thereby became a subsidiary corporation.
On December, 2010, we issued 995,025 shares of common stock to Michel St-Pierre, our chief financial officer, as consideration for salary payable. The price of the shares of the Company was equal to $0.0268 per common shares of the Company which results in a $26,667 of which $20,000 remains payable to him.
On December, 2010, Sinh Le paid eighty five thousand seven hundred and sixty dollars ($85,760) to purchase from the Company (i) 4,000,000 shares of the Company's common stock. The price of the shares of the Company was equal to $0.02144 per common shares of the Company and the market price was equal to 0.027 per common shares of the Company which results in a compensation expense of $22 240. The shares were formally issued on December 30, 2010.
F-13
-27-
NOTE 10 – STOCK-BASED COMPENSATION EXPENSE
On August 9, 2010, the Company entered into an agreement with Kodiak Capital Group LLC (“Kodiak”). The agreement was to provide advice to undertake for and consult with the Company concerning financing. Kodiak for its services was granted One Hundred and Seventy five Thousand (175,000) restricted shares of the Company’s common stock. The issuance of the restricted shares of the Company’s common stock generated a compensation expense of $21 000.
On August, 2010, the Company entered into an agreement with Patrick Edwards. The agreement was to provide advice to undertake for and consult with the Company concerning financing. M. Edwards for its services was granted Six Hundred and Fifty Thousand (650,000) shares of the Company’s common stock. The issuance of the restricted shares of the Company’s common stock generated a compensation expense of $71 500.
For the exclusivity of its services United Best was granted Three Million Five Hundred Thousand (3,500,000) restricted shares of the Company’s common stock, out of said Three Million Five Hundred Thousand (3,500,000) restricted shares, One Million (1,000,000) restricted shares will be put in escrow as provided in the executed Escrow Agreement.
| Stock based compensation cosists of: |
|
||
|
Michel St-Pierre
|
$ |
6,667
|
|
|
Sinh Le
|
22,240
|
||
|
Kodiak Capital Group LLC
|
21,000
|
||
|
Patrick Edwards
|
71,500
|
||
|
Total
|
$ |
121,407
|
A summary of option activity for the year ended December 31, 2010 is presented below:
|
Shares
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
||||
|
Outstanding at December 31, 2009
|
1,465,000
|
$
|
1.10
|
4.74
|
|||
|
Granted
|
-
|
-
|
|
-
|
|||
|
Exercised, forfeited, or expired
|
-
|
-
|
|
-
|
|||
|
Outstanding at December 31, 2010
|
1,465,000
|
|
$
|
1.10
|
|
3.74
|
|
|
|
|
|
|
|
|||
|
Exercisable at December 31, 2010
|
1,465,000
|
$
|
1.10
|
|
3.74
|
||
NOTE 11 – INCOME TAXES
As of December 31, 2010 the company had net operating loss carry forwards of approximately $11,220,000 of which approximately $5,710,000 were generated through foreign transactions and were already taken into account in the tax filing of the Foreign Subsidiary and are not available for US tax purpose. The remaining net operating losses are being carried forward for subsequent years. This results in no tax expense or provision for the year.
Components of deferred tax assets and liabilities at December 31, 2010 are as follows:
|
2010
|
2009
|
||||||
|
Deferred tax asset
|
$ | 5,505,152 | $ | 2,652,358 | |||
|
Valuation allowance
|
(5,505,152 | ) | (2,652,358 | ) | |||
|
Net deferred tax asset
|
$ | 0 | $ | 0 | |||
The Company has recorded a full valuation allowance against its deferred tax asset since it believes it is more likely than not that such deferred tax asset will not be realized.
F-14
-28-
NOTE 12 – DISCONTINUED OPERATIONS
On November 4, 2010, the Company transferred all of its shares of Ecolocap Solutions (Canada) Inc. to DT Crystal Holdings Ltd in exchange of the reduction of $100,000 of its debts.
The effects of this transaction beyond the Company’s exit from the Carbon Credit market within the Company’s balance sheet at December 31, 2010 are summarized below. The Company has recognized approximately $48,000 in gain on discontinued operations.
A condensed summary of the results of operations of the discontinued operations for the years ended December 31, 2010 and 2009 is as follows:
|
2010
|
2009
|
|||||||
|
Revenues
|
$ | - | $ | - | ||||
|
General and administrative expenses
|
$ | - | $ | 147,221 | ||||
|
Interest
|
$ | - | $ | 38,230 | ||||
| $ | - | $ | 185,451 | |||||
|
Net Loss
|
$ | - | $ | (185,451 | ) | |||
NOTE 13 – COMMITMENTS AND CONTINGENCIES
The Company is a party to a lease for its Montreal office, at a minimum annual rental of approximately $64,000 per year. The Company has vacated the premises and according to the lease, a six month rent might have to be paid if the landlord institutes a lawsuit against the Company. The six month rent amount has been accrued in the accompanying Financial Statements. The rent expense charged to operations for the year ended December 31, 2010 and 2009 was $23,400 and $71,400, respectively.
The Company is a party to a lease for its Barrington office, at a minimum annual rent of approximately $23,000 per year. The Barrington Lease expires in May, 2013.
NOTE 14 – RELATED PARTY TRANSACTIONS
In 2010, the Company received additional loans from DT Crystal Holdings Ltd in the amount of $319,950.
In 2010, the Company received loans from a stockholder in the amount of $144,224. These loans carry an interest of 1.63% and are payable on demand.
In 2010, the Company received loans from stockholders in the amount of $157,831. These loans carry an interest of 5.00% and are payable on demand.
In 2010, the Company received loans from Hanscom K. Inc. in the amount of $2,120. These loans have no interest and are payable on demand.
In 2010, the Company received loans from Black Mountain Equities Inc. in the amount of $25,000. These loans carry an interest of 10.00% and are payable on demand.
In 2010, the Company received loans from Barclay Lyons in the amount of $50,000. These loans carry an interest of 21.00% and are payable on demand.
In 2010, the Company received loans from War Chest Capital in the amount of $50,000. These loans carry an interest of 21.00% and are payable on demand.
NOTE 15 – SUBSEQUENT EVENTS
Management evaluated all activity of the Company through the issue date of the Consolidated Financial Statements and noted there were no material subsequent events as of that date.
F-15
-29-
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
There have been no disagreements on accounting and financial disclosures from the inception of our company through the date of this Form 10-K. Our financial statements for the period from inception to December 31, 2010, included in this report have been audited by Paritz & Company, PA, as set forth in this annual report.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.
Limitations on the Effectiveness of Controls
Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
CEO and CFO Certifications
Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
-30-
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of December 31, 2010, the Company’s internal control over financial reporting was effective based on those criteria.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Controls
We have also evaluated our internal controls for financial reporting, and there have been no changes in our internal controls or in other factors that could affect those controls subsequent to the date of their last evaluation.
ITEM 9B. OTHER INFORMATION.
None.
|
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE.
|
The following table presents information with respect to our officers, directors and significant employees as of the date of this Report:
-31-
|
Name
|
Age
|
Position
|
|
Michael Siegel
|
67
|
Chief Executive Officer
|
|
Jeung Kwak
|
64
|
Chairman, Director
|
|
Robert Egger, Jr.
|
39
|
Chief Operating Officer
|
|
Tri Vu Truong
|
63
|
Director
|
|
Claude Pellerin
|
41
|
Director
|
|
Mark Lawson
|
38
|
Director
|
|
Albert Beerli
|
68
|
Director
|
|
Michel St-Pierre
|
48
|
Acting Chief Financial Officer
|
Each director serves until our next annual meeting of the stockholders or unless they resign earlier. The Board of Directors elects officers and their terms of office are at the discretion of the Board of Directors.
Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. At the present time, members of the board of directors are not compensated for their services to the board.
Biographical Information Regarding Officers and Directors
Michael Siegel, Chief Executive Officer and President Studied Electrical Engineering at the University of Illinois in Champaign, Illinois, and following college joined the Marine Corps. He has over 30 years of experience in the technology, real estate and international business operations. On September 10, 2009, Michael Siegel was appointed president and principal executive officer. Mr. Siegel is currently a member of the board of directors.Since May 2008, Mr. Siegel has been president of Micro Bubble Technologies Inc., a Nevada corporation located in Barrington, Illinois. Micro Bubble Technologies Inc. is engaged in the business of manufacturing, marketing, distributing, setting up sub-distributors, and selling products based on nano technologies. He served as President and CEO of International Lottery and Gaming Inc. and Vietnam Telephone Co (Vietelco). From June 1975 to May 2008, Mr. Siegel was president of Siegel Research and Development, Inc., which created gaming, video and other technologies. He was also a general partner in 5 Hotels in the Chicago area. Between 2006 and 2008 Mr. Siegel was president of C Line, Inc.
Robert Egger Jr., Chief Operating Officer. On September 10, 2009, Robert Egger, Jr. was appointed to our board of directors and principal operating officer since July 2008, Mr. Egger has been chief executive officer of Micro Bubble Technologies Inc., our subsidiary corporation, located in Barrington, Illinois. Micro Bubble Technologies Inc. is engaged in the business of manufacturing, marketing, distributing, setting up sub-distributors, and selling products based on nano technologies. From January 2007 to March 2009, Mr. Egger was partner and general manager of the Liquor Outlet located in Davenport, Iowa. The Liquor Outlet is a wholesale liquor distributor in the State of Iowa. From March 1995 to January 2007, Mr. Egger held various positions with Qwest Communications International located in Denver, Colorado. His responsibilities included lineman, switchman and central office technician before being promoted to management in 2000 when he became a manager for network operations in Iowa overseeing occupational union employees. Mr. Egger holds a Bachelor of Science degree in Business Administration, Magna Cum Laude, from St. Ambrose University, Davenport, Iowa.
Jeung Kwak, Chairman and Director. Since June 16, 2009, Mr. Kwak has been Chairman of Ecolocpa Solutions Inc., Jeung Yeal Kwak has for over 25 years specialized in international trade in Korea, Asia, Russia, India, China and the US. Since 1992, he is President of Hanscom K Inc, specialized in international trade in steel products, including steel castings and fabrications and also concrete forms. In may 2008, he co-founded Micro Bubble Technologies Inc., a Nevada corporation located in Barrington, Illinois. Micro Bubble Technologies Inc. is engaged in the business of manufacturing, marketing, distributing, setting up sub-distributors, and selling products based on nano technologies. he attended Korea University and graduated in 1973 with a degree in Biology. Upon graduation, he immigrated to the United States and began his career in Chicago, Illinois.
-32-
Dr. Tri Vu Truong, Chief Executive Officer and President. Dr. Truong has served as a director since February 14, 2008. He was chief executive officer and president of the Company from February 14, 2008 until September 10, 2009. He has worked in the environmental sector since 1970, upon completion of his B. Engineering degree, complemented by a Master's degree in Chemical Engineering in 1971 and a Ph.D. degree in Civil Engineering with Environmental Option in 1975. His professional career includes the realization of many major scientific and technical studies and projects. Dr. Truong was responsible in 1977 for the creation and operation of the Permits & Inspections Division of the Montreal Urban Community––Environment Department. He has taught several post-graduate courses at the prestigious Universitéé de Montrééal's ÉÉcole Polytechnique. As President of the Sodexen Environmental Engineering Group since 1981, Dr. Truong has managed numerous major environmental impact projects, including: Comparative study of the environmental impact of dust-palliatives (MTQ 1988, 1989, 1990); Environmental decommissioning of a polystyrene production complex (BASF, 1988-1990); Solid waste management study relating to the closure of the Miron landfill (Montrééal, 1988-90), as well as various research & development projects in the area.
Claude Pellerin, Director. Mr. Pellerin has been reappointed to the Board on March 6, 2009 and is a member. Mr. Pellerin is a corporate attorney and was a partner in the law firm of Kaufman Laramee LLP between July 2008 and July 2009. Between December 2003 and July 2008 Mr. Pellerin was partner in the law firm of Hovington Pellerin S.e.n.c. Since 2002, Mr. Pellerin has served as Director, President, Treasurer and Secretary of Capex Investments ( Canada ) Limited, an investments and financing corporation based in Montreal , Quebec . From 2001-2002, Mr. Pellerin served as a Secretary for Equilar Capital Corporation, an Ontario Corporation listed on the Toronto Stock exchange. Between 2002 and 2004, Mr. Pellerin served as Vice President for legal affairs for Manaris Corporation, a Nevada corporation listed on the OTCBB. Since 2003, Mr. Pellerin has served as Secretary of Gourmet Flash Inc., a Quebec corporation, and from 2004-2005 served as a Director to Canadian Security Agency (2004) Inc. Mr. Pellerin served as the Company's President, Secretary and Treasurer from June 17, 2005 until August 19, 2005, at which time he resigned as an officer but remained a director of the Company until his resignation on October 20, 2008.
Mark Lawson, Director. Mr. Lawson has been working in corporate finance since 1995, upon completion of his Bachelor of Arts, Statistical Sciences, complemented by a Master's degree in Business Administration in 2005. Between 1996 and 2001 Mr. Lawson was employed as Mutual Fund Specialist by the Royal Bank of Canada Investments. In 2001 up until 2003, Mr. Lawson joined AIM Funds Management. Between 2003 and 2004 Mr. Lawson was employed as Director of Newhaven Corporate Finance. In 2005 Mr. Lawson joined the Global Investment Banking Coverage –– Healthcare department of Morgan Stanley.
Albert Beerli, Director. Mr. Beerli has served as a director of the Company since March 2006. Mr. Beerli is a scientist, having received his Ph.D in chemical engineering in 1969. Since 1988 Mr. Beerli has been the Chief Executive Officer of Zenwex AG in Zug, Switzerland. Zenwex AG provides consulting services on scientific and technical matters.
Michel St-Pierre, Acting Chief Financial Officer. Mr. St-Pierre has served as an officer of the Company since July 2006. Mr. St-Pierre is a registered chartered accountant in Quebec, Canada. Before working for the Company, Mr. St-Pierre has served as Chief Financial Officer of a public shell company, Tiger Renewable Energy Limited (formerly known as Tiger Ethanol International Inc. and Arch Management) since January, 2007 and held positions as the Finance Director (comparable to Corporate Treasurer) at SPB Canada Inc. from 2004-2006, Symbior Technologies Inc. from 2003-2004, and Boulangeries Comas Inc. from 2000-2003.
Compliance With Section 16(a) Of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms we received, we believe that during the fiscal year ended December 31, 2010.
-33-
Audit Committee
We have a separately-designated audit committee of the board. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee. A copy of our audit committee charter is filed as an exhibit to this report. Up to February 25, 2009, our Audit Committee consisted of Lim Ping Wai whom was independent director; the full board has carried out the functions and responsibilities since her resignation.
Compensation Committee
The full board carries out the functions and responsibilities of this committee. This committee acts on behalf of our board of directors to approve compensation arrangements for our management and review the compensation paid to our board of directors. A copy of our Compensation Committee Charter was filed with our last 10KSB on March 31, 2008.
Nominating and Corporate Governance Committee
The full board carries out the functions and responsibilities of the Nominating and Corporate Governance Committee. This committee acts on behalf of our board of directors and generally to identify and recommend nominees for our board and our committees, identify and recommend candidates for senior management, review and recommend to the board, or independently take, action on various company corporate governance issues, receive and respond to certain complaints raised by our employees regarding alleged illegal acts or behavior-related conduct by board members in violation of our Code of Business Conduct and Ethics, supervise our chief financial officer in the context of the Ethics Code and carry-out other assignments as designated by our board. A copy of the Nominating and Corporate Governance Committee was filed with our last 10KSB on March 31, 2008.
Code of Ethics
We adopted a code of ethics on March 26, 2008. We adopted eight Corporate Values (Focus, Respect, Excellence, Accountability, Teamwork, Integrity, Very Open Communications and Enjoying Our Work) to provide a framework for all employees in conducting themselves in their jobs. These policies are not intended to substitute for those Values, but will serve as guidelines in helping employee to conduct our business in accordance with its Values. Compliance requires meeting the spirit, as well as the literal meaning, of the law, the policies and the Values. It is expected that employee will use common sense, good judgment, high ethical standards and integrity in all their business dealings.
As of March 31, 2011 we had seven directors. Our board determined that Mr. Lawson is independent. We have adopted those standards for independence contained in the Nasdaq Marketplaces Rules, Rule 4350(d) and Rule 4200(a)(15). Messrs. Siegel, Kwak, Egger,Truong, Beerli and Pellerin are not independent.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation of Officers
Option award compensation is the fair value for stock options vested during the period, a notional amount estimated at the date of the grant using the Black-Scholes option-pricing model. The actual value received by the executives may differ materially and adversely from that estimated. A summary of cash and other compensation paid in accordance with management consulting contracts for our Principal Executive Officer and other executives for the most recent three years is as follows:
-34-
Executive Officer Compensation Table
|
Non-
|
Nonqualified
|
||||||||
|
Equity
|
Deferred
|
All
|
|||||||
|
Incentive
|
Compensa-
|
Other
|
|||||||
|
Stock
|
Option
|
Plan
|
tion
|
Compen-
|
|||||
|
Name and
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Earnings
|
sation
|
Total
|
|
|
Principal Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Michael Siegel (2)
|
2010
|
120,000
|
0
|
0
|
0
|
0
|
0
|
0
|
120,000
|
|
Chief Executive Officer
|
2009
|
60,000
|
0
|
0
|
1,960,200
|
0
|
0
|
0
|
2,020,000
|
|
and President
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
John Kwak, (3)
|
2010
|
120,000
|
0
|
0
|
0
|
0
|
0
|
0
|
120,000
|
|
Chairman and Director
|
2009
|
60,000
|
0
|
0
|
2,376,000
|
0
|
0
|
0
|
2,436,000
|
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
Robert Egger Jr. (4)
|
2010
|
60,000
|
0
|
0
|
0
|
0
|
0
|
0
|
60,000
|
|
Chief Operating Officer
|
2009
|
30,000
|
0
|
0
|
297,000
|
0
|
0
|
0
|
327,000
|
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
Tri Vu Truong (5)
|
2010
|
9,925
|
0
|
0
|
0
|
0
|
0
|
0
|
9,925
|
|
Chief Executive Officer
|
2009
|
8,000
|
0
|
0
|
200,500
|
0
|
0
|
0
|
208,500
|
|
and President, resigned
|
2008
|
190,689
|
0
|
0
|
0
|
0
|
0
|
0
|
190,689
|
|
Claude Pellerin, (6)
|
2010
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Director, President
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
and CEO
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Michel St-Pierre (7)
|
2010
|
50,000
|
0
|
20,000
|
0
|
0
|
0
|
0
|
70,000
|
|
CFO
|
2009
|
41,500
|
0
|
0
|
0
|
0
|
0
|
0
|
41,500
|
|
2008
|
108,644
|
0
|
0
|
0
|
0
|
0
|
0
|
108,644
|
|
(1)
|
Prior to the acquisition of XL Generation AG, the Company's fiscal year ended April 30th. XL Generation AG, our wholly-owned subsidiary, had a fiscal year ending December 31st. Following the acquisition of XL Generation AG, we adopted the fiscal year end of XL Generation AG.
|
|
(2)
|
Mr. Siegel has been appointed president and CEO on September 10, 2009.
|
|
(3)
|
Mr. Kwak has been appointed Chairman and director on June 16, 2009
|
|
(4)
|
Mr. Egger has been appointed COO on September 10, 2009.
|
|
(5)
|
Mr. Truong has been appointed president and CEO on February 14, 2008. He resigned has President and CEO on September 10, 2009.
|
|
(6)
|
Mr. Pellerin was our president, CEO and a director from June 17, 2005 until August 19, 2005. He remains a director of our company.
|
|
(7)
|
Mr. St-Pierre has been our chief financial officer since July 28, 2006.
|
|
(8)
|
Mr. Gilmour served as our principal executive office from August 22, 2007 to February 14, 2008.
|
During the fiscal year ended 2009 and until his resignation, Mr. Tri Vu Truong served as our President and CEO.
Employment Contracts
During the fiscal year ended December 31, 2009, we terminated a Consulting Agreement with Sodexen Inc. (“Sodexen”) pursuant to which, Sodexen was providing the services of its representative, Dr. Tri Vu Truong to serve in the capacity of President and Chief Executive Officer of our company. The “Engagement Period” was for one year.
-35-
Other Executive Officers
During 2010, other than those disclosed above, no other employment contracts have been executed by our company for any other executive officer.
Retirement, Resignation or Termination Plans
We sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our company or as a result of a change in the responsibilities of an executive following a change in control of our company.
Directors Compensation
The following table sets forth the compensation paid by us to our directors during our fiscal year ended December 31, 2010. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named directors.
Director’s Compensation Table
|
Fees
|
|||||||
|
Earned
|
Nonqualified
|
||||||
|
or
|
Non-Equity
|
Deferred
|
|||||
|
Paid in
|
Stock
|
Option
|
Incentive Plan
|
Compensation
|
All Other
|
||
|
Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
|
|
Name
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Michael Siegel
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Mark Lawson
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
John Kwak
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Robert Egger, Jr.
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Claude Pellerin
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Tri Vu Truong
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Albert Beerli
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Robert Clarke (resigned)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Michael J. Oliver (resigned)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Lim Ping Wai (resigned)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Our directors do not receive any compensation for serving as a member of the board of directors.
There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our sole director other than as described herein.
-36-
Indemnification
Pursuant to the articles of incorporation and bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in its best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorneys fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933 which may be permitted for directors or officers pursuant to the foregoing provisions, we are informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act and is therefore unenforceable.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this Report by (i) each of our directors, (ii) each of our officers named in the Summary Compensation Table, (iii) each person who is known by us to be the beneficial owner of more than five percent of our outstanding common stock, and (iv) all directors and executive officers as a group. Except as otherwise indicated below, each person named has sole voting and investment power with respect to the shares indicated. The percentage of ownership set forth below reflects each holder's ownership interest in the 119,688,015 shares of our common stock outstanding as of March 31, 2011.
Amount and Nature of Beneficial Ownership
|
Name of Beneficial Owner (1)
|
Shares
|
Options/ Warrants
|
Total
|
Percent
|
|
Michael Siegel (2)
|
21,070,000
|
0
|
21,070,000
|
17.60%
|
|
Jeung Kwak (3)
|
26,600,000
|
0
|
26,600,000
|
22.22%
|
|
Robert Egger Jr. (4)
|
2,700,000
|
0
|
2,700,000
|
2.26%
|
|
Tri Vu Truong (5)
|
4,900,000
|
0
|
4,900,000
|
4.09%
|
|
Claude Pellerin, (6)
|
0
|
200,000
|
200,000
|
0%
|
|
Albert Beerli (7)
|
1,500,000
|
100,000
|
1,600,000
|
1.25%
|
|
Michel St-Pierre (8)
|
1,495,025
|
700,000
|
2,195,025
|
1.83%
|
|
All executive officers and directors as a group (7 persons)
|
58,265,025
|
1,000,000
|
59,265,025
|
49.52%
|
|
Bradley Snower (9)
|
5,400,000
|
0
|
5,400,000
|
4.51%
|
|
United Best Technology Limited (5)
|
3,500,000
|
0
|
3,500,000
|
2.92%
|
|
Cede & Co (10)
|
35,257,663
|
0
|
35,257,663
|
29.46%
|
|
(1)
|
The mailing address for each of the listed individuals is c/o Ecolocap Solutions International Inc., 1250 S. Grove Ave, Suite 308, Barrington, Illinois, 60010.
|
|
(2)
|
Owner of 5% or more of our common stock. Mr.Siegel, is the President and Chief Executive Officer.
|
|
(3)
|
Owner of 5% or more of our common stock. Mr. Kwak, is Chairman of the Board of Directors.
|
|
(4)
|
Director. Mr.Egger, is the Chief Operating Officer.
|
|
(5)
|
Director. Mr. Truong, is the President and Chief Executive Officer of United Best Technology Limited.
|
|
(6)
|
Director
|
|
(7)
|
Director
|
-37-
|
(8)
|
Chief Financial Officer.
|
|
(9)
|
Owner of 5% or more of our common stock.
|
|
(10)
|
Owner of 5% or more of our common stock.
|
Securities Authorized For Issuance under Equity Compensation Plans
Equity Incentive Plan
On March 31, 2006, our Board of Directors adopted the 2006 Equity Incentive Plan, which authorizes us to issue options for the purchase of up to 2,000,000 shares of our common stock, pursuant to the terms and conditions set forth therein. The Equity Incentive Plan authorizes the issuance of incentive stock options (ISO) and non-qualified stock options (NQOs) to our employees, directors or consultants.
During the year ended December 31, 2006, we issued 1,455,000 stock options to our officers and directors with an average exercise price of $1.05 per share. Of the stock options issued, 320,000 were vested on September 6, 2006, 150,000 were vested on September 7, 2006, 25,000 were vested on September 15, 2006, 150,000 were vested on December 25, 2006, 660,000 will vest on September 6, 2007 and the balance will vest on September 6, 2008. These options expire on September 6, 2008 (240,000), September 15, 2008 (25,000), December 25, 2006 (150,000), September 6, 2013 (440,000) and September 6, 2016 (600,000). The options had a fair value of $1,526,989 at the date of grant.
During the month of December 2007, we issued 425,000 stock options to our officers and directors with an average exercise price of $1.25 per share. All of the stock options issued vested on December 12, 2007. The options had a fair value of $530,543 at the date of grant.
As of March 30, 2011, we had approximately seven directors and officers eligible to receive options under the Equity Incentive Plan. Options to buy 1,540,000 shares of common stock were outstanding under the Equity Incentive Plan and 120,000 shares remained available for grants under this plan.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
In 2010, the Company received additional loans from DT Crystal Holdings Ltd in the amount of $319,950.
In 2010, the Company received loans from a stockholder in the amount of $144,224. These loans carry an interest of 1.63% and are payable on demand.
In 2010, the Company received loans from stockholders in the amount of $157,831. These loans carry an interest of 5.00% and are payable on demand.
In 2010, the Company received loans from Hanscom K. Inc. in the amount of $2,120. These loans have no interest and are payable on demand.
In 2010, the Company received loans from Black Mountain Equities Inc. in the amount of $25,000. These loans carry an interest of 10.00% and are payable on demand.
In 2010, the Company received loans from Barclay Lyons in the amount of $50,000. These loans carry an interest of 21.00% and are payable on demand.
In 2010, the Company received loans from War Chest Capital in the amount of $50,000. These loans carry an interest of 21.00% and are payable on demand.
-38-
Law Firm of Pellerin Attorneys
In the fiscal year ended December 31, 2010, the law firm of Pellerin Attorneys (Montreal) received CAD$13,435 (approximately US $12,430) from our company for legal services rendered by Mr. Claude Pellerin S.N., one of our directors and corporate secretary.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
(1) Audit Fees
The aggregate fees billed for each of the last three fiscal years for professional services rendered by the principal accountant for our audit of annual consolidated financial statements and reviews of our interim consolidated financial statements included in our Form 10-Q and Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
2010 $ 14,150
2009 $ 14,150
(2) Audit-Related Fees
The aggregate fees billed in each of the last three fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported in the preceding paragraph:
2010 $ 0
2009 $ 0
(3) Tax Fees
The aggregate fees billed in each of the last three fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
2010 $ 0
2009 $ 0
(4) All Other Fees
The aggregate fees billed in each of the last three fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
2010 $ 0
2009 $ 0
(5) Our audit committees pre-approval policies and procedures described in paragraph (c) (7) (i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approves all accounting related activities prior to the performance of any services by any accountant or auditor.
(6) The percentage of hours expended on the principal accountants engagement to audit our consolidated financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountants full time, permanent employees, to the best of our knowledge, was 0%.
-39-
Audit Committee Pre-Approval Policies
Our Audit Committee reviewed the audit and non-audit services rendered by Paritz & Company, P.A. during the periods set forth above and concluded that such services were compatible with maintaining the auditors’ independence. All audit and non-audit services performed by our independent accountants are pre-approved by our Audit Committee to assure that such services do not impair the auditors’ independence from us.
PART IV. OTHER INFORMATION
ITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES.
The following is a complete list of exhibits filed as part of this annual report:
|
Incorporated by reference
|
|||||
|
Exhibit Number
|
Document Description
|
Form
|
Date
|
Number
|
Filed herewith
|
|
3.1
|
Articles of Incorporation, as amended.
|
SB-2
|
5/28/04
|
3.1
|
|
|
3.2
|
Bylaws.
|
SB-2
|
5/28/04
|
3.2
|
|
|
3.3
|
Certificate of Amendment to Articles of Incorporation.
|
10-QSB
|
12/30/05
|
3.3
|
|
|
3.4
|
Bylaws, as amended on March 17, 2006.
|
10-KSB
|
4/13/06
|
3.4
|
|
|
10.1
|
Letter of Intent with XL Generation AG.
|
8-K
|
7/6/05
|
99.1
|
|
|
10.2
|
Share Exchange Agreement with XL Generation AG.
|
8-K
|
8/19/05
|
99.1
|
|
|
10.3
|
Loan Agreement with Capex Investments.
|
8-K
|
9/14/05
|
99.1
|
|
|
10.4
|
Form of Indemnification Agreement with Capex Investments Limited.
|
8-K/A
|
11/1/05
|
10.4
|
|
|
10.5
|
Common Stock Purchase Agreement with Capex Investments Limited.
|
8-K
|
11/15/05
|
10.5
|
|
|
10.6
|
Common Stock Purchase Agreement with Aton Selct Fund Limited.
|
8-K
|
11/15/05
|
10.6
|
|
|
10.7
|
Common Stock Purchase Agreement with Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.7
|
|
|
10.8
|
Series A Warrant to Purchase Shares of Common Stock to Capex Investments Limited.
|
8-K
|
11/15/05
|
10.8
|
|
|
10.9
|
Series A Warrant to Purchase Shares of Common Stock to Aton Select Fund Limited.
|
8-K
|
11/15/05
|
10.9
|
|
|
10.10
|
Series A Warrant to Purchase Shares of Common Stock to Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.10
|
|
|
10.11
|
Registration Rights Agreement with Capex Investments Limited.
|
8-K
|
11/15/05
|
10.11
|
|
-40-
|
10.12
|
Registration Rights Agreement with Aton Select Fund Limited.
|
8-K
|
11/15/05
|
10.12
|
|
|
10.13
|
Registration Rights Agreement with Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.13
|
|
|
10.14
|
Amendment to the Common Stock Purchase Agreement with Aton Select Fund Limited.
|
8-K
|
12/08/05
|
10.14
|
|
|
10.15
|
Amendment to the Common Stock Purchase Agreement with Asset Protection Fund Limited.
|
8-K
|
12/08/05
|
10.15
|
|
|
10.16
|
Lease Agreement with 866 U.N. Plaza Associates LLC.
|
10-QSB
|
12/30/05
|
10.16
|
|
|
10.17
|
Exclusive Manufacturing License Agreement and Non-Exclusive Distribution Agreement with APW Inc.
|
10-QSB
|
12/30/05
|
10.17
|
|
|
10.18
|
Common Stock Purchase Agreement with Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.18
|
|
|
10.19
|
Series B Warrant to Purchase Shares of Common Stock to Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.19
|
|
|
10.20
|
Registration Rights Agreement with Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.20
|
|
|
10.21
|
Amended and Restated Common Stock Purchase Agreement with Bank Sal. Oppenheim Jr. & Cie. (Switzerland) Limited.
|
SB-2
|
1/13/06
|
10.21
|
|
|
10.22
|
Series B Warrant to Purchase Shares of Common Stock to Bank Sal. Oppenheim Jr. & Cie. (Switzerland) Limited.
|
SB-2
|
1/13/06
|
10.22
|
|
|
10.23
|
Agreement of Withdrawal from Stadium SA.
|
SB-2
|
1/13/06
|
10.23
|
|
|
10.24
|
License Agreement with WKF/5 Ltd.
|
SB-2
|
1/13/06
|
10.24
|
|
|
10.25
|
Amendment to License Agreement with WKF/5 Ltd and Alain Lemieux.
|
SB-2
|
1/13/06
|
10.25
|
|
|
10.26
|
Form of Subscription Agreement.
|
SB-2
|
5/28/04
|
99.1
|
|
|
10.27
|
Employment Agreement with Alain Lemieux.
|
10-KSB
|
4/13/06
|
10.27
|
|
|
10.28
|
Employment Agreement with Daniel Courteau.
|
10-KSB
|
4/13/06
|
10.28
|
|
|
10.29
|
Employment Agreement with Flemming Munck.
|
10-KSB
|
4/13/06
|
10.29
|
|
|
10.30
|
Employment Agreement with Eric Giguere.
|
10-KSB
|
4/13/06
|
10.30
|
|
|
10.31
|
Endorsement Agreement with La Societe 421 Productions.
|
10-KSB
|
4/13/06
|
10.31
|
|
-41-
|
10.32
|
Summary of terms and conditions of Oral Consulting Agreement with Greendale Consulting Limited.
|
10-KSB
|
4/13/06
|
10.32
|
|
|
10.33
|
Exclusive Manufacturing License Agreement with Polyprod Inc.
|
10-KSB
|
4/13/06
|
10.33
|
|
|
10.34
|
Management Fee Arrangement with Polyprod Inc.
|
10-KSB
|
4/13/06
|
10.34
|
|
|
10.35
|
Supply Contract with Febra- Kunststoffe GimbH and BASF Aktiengesellschaft.
|
10-KSB
|
4/13/06
|
10.35
|
|
|
10.36
|
Loan Agreement with Fiducie Alain Lemieux.
|
10-KSB
|
4/13/06
|
10.36
|
|
|
10.37
|
Confirmation of Debt.
|
10-KSB
|
4/13/06
|
10.37
|
|
|
10.38
|
Agreement with Daniel Courteau regarding Repayment of loans to Symbior Technologies Inc.
|
10-KSB
|
4/13/06
|
10.38
|
|
|
10.39
|
2006 Equity Incentive Plan.
|
10-KSB
|
4/13/06
|
10.39
|
|
|
10.40
|
Loan Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.40
|
|
|
10.41
|
Summary of terms and conditions of Loan Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.41
|
|
|
10.42
|
Lease Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.42
|
|
|
10.43
|
Memorandum regarding XL Generation Canada Inc.
|
10-KSB
|
4/13/06
|
10.43
|
|
|
10.44
|
Stock Purchase Agreement with XL Generation AG and Stadium SA.
|
10-KSB
|
4/13/06
|
10.44
|
|
|
10.45
|
Common Stock Purchase Agreement with Poma Management SA.
|
10-QSB
|
9/13/06
|
10.45
|
|
|
10.46
|
Common Stock Purchase Agreement with Aton Select Fund Limited.
|
10-QSB
|
9/13/06
|
10.46
|
|
|
10.47
|
Consulting Agreement by and between Ecolocap Solutions Inc. and Lakeview Consulting LLC.
|
8-K
|
11/11/08
|
10.47
|
|
|
10.48
|
“ERPA” with Hong Kong Construction Investment Joint Stock Company.
|
8-K
|
12/23/08
|
10.1
|
|
|
10.49
|
“ERPA” with Thuong Hai Joint Stock Company.
|
8-K
|
12/23/08
|
10.2
|
|
|
10.50
|
“ERPA” with Vietnam Power Development Joint Stock Company.
|
8-K
|
12/23/08
|
10.3
|
|
|
10.51
|
“ERPA” with Hop Xuan Investment Joint Stock Company, Vietnam.
|
8-K
|
12/23/08
|
10.4
|
|
-42-
|
10.52
|
“ERPA” with ThangLong Education Development and Construction Import Export Investment Joint Stock Company.
|
8-K
|
12/23/08
|
10.5
|
|
|
10.53
|
Revised Consulting Agreement with Sodexen Inc.
|
8-K
|
12/23/08
|
10.6
|
|
|
10.54
|
Agreement with United Best Technology Limited.
|
8-K
|
12/23/08
|
10.7
|
|
|
10.55
|
Escrow Agreement with United Best Technology Limited.
|
8-K
|
12/23/08
|
10.8
|
|
|
10.56
|
“ERPA” with Tan Hiep Phuc Electricity Construction Joint-Stock Company Vietnam.
|
8-K
|
12/23/08
|
10.9
|
|
|
10.57
|
“ERPA” with Tuan Anh Hydraulic Development and Construction Investment Corporation, Vietnam.
|
8-K
|
12/23/08
|
10.10
|
|
|
10.58
|
“ERPA” with Lao Cai Energy & Resources Investment Joint Stock Company, Vietnam.
|
8-K
|
12/23/08
|
10.11
|
|
|
10.59
|
“ERPA” with Xiangton Iron and Steel Group Co. Ltd.
|
8-K
|
12/23/08
|
10.12
|
`
|
|
10.60
|
“ERPA” with Hunan Valin Xiangton Iron & Steel Co. Ltd.
|
8-K
|
12/23/08
|
10.13
|
|
|
10.61
|
“ERPA” with Hebi Coal Industry (Group) Co. Ltd.
|
8-K
|
12/23/08
|
10.14
|
|
|
10.62
|
“ERPA” with Hebei Jinlong Cement Group Co., Ltd.
|
8-K
|
12/23/08
|
10.15
|
|
|
10.63
|
“ERPA” with Bao Tan Hydro Electric Joint-Stock Company.
|
8-K
|
12/23/08
|
10.16
|
|
|
10.64
|
“ERPA” with Construction and Infrastruction Development Joint-Stock Company Number Nine.
|
8-K
|
12/23/08
|
10.17
|
|
|
10.65
|
Greenhouse Gas Offset Management Services Representation Agreement.
|
8-K
|
12/23/08
|
10.18
|
|
|
10.66
|
“ERPA” with Xinjiang Xiangjianfeng Energy and Technology Development Co. Ltd.
|
8-K
|
12/23/08
|
10.19
|
|
|
10.67
|
Technical Service Agreement with Xinjiang Xiangjinfeng Energy and Technology Development Co., Ltd.
|
8-K
|
12/23/08
|
10.20
|
|
|
10.68
|
Technical Service Agreement with Hebei Fengda Metallized Pellet Co., Ltd.
|
8-K
|
12/23/08
|
10.21
|
|
|
10.69
|
“ERPA” with Hebei Fengda Metallized Pellet Co., Ltd.
|
8-K
|
12/23/08
|
10.22
|
|
|
10.70
|
“ERPA” with Shandong Chengzeyuan Environment Protection Engineering Co. Ltd.
|
8-K
|
12/23/08
|
10.23
|
|
|
10.71
|
Technical Services Agreement with Shandong Chengzeyuan Environment Protection Engineering Co., Ltd.
|
8-K
|
12/23/08
|
10.24
|
-43-
|
10.72
|
Technical Services Agreement with Leshan Kingssun Group Co. Ltd.
|
8-K
|
12/23/08
|
10.25
|
|
|
10.73
|
“ERPA” with Leshan Kingssun Group Co., Ltd.
|
8-K
|
12/23/08
|
10.26
|
|
|
14.1
|
Code of Ethics.
|
10-KSB
|
3/31/08
|
14.1
|
|
|
31.1
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
31.2
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
32.1
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive Officer.
|
X
|
|||
|
32.2
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Financial Officer.
|
X
|
|||
|
99.1
|
Audit Committee Charter.
|
10-KSB
|
3/31/08
|
99.1
|
|
|
99.2
|
Executive Committee Charter.
|
10-KSB
|
3/31/08
|
99.2
|
|
|
99.3
|
Nominating and Corporate Governance Committee Charter.
|
10-KSB
|
3/31/08
|
99.3
|
|
|
99.4
|
Stock Option Plan.
|
10-KSB
|
3/31/08
|
99.4
|
-44-
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 14th day of April, 2011.
|
ECOLOCAP SOLUTIONS INC.
|
||
|
BY:
|
MICHAEL SIEGEL
|
|
|
Michael Siegel
|
||
|
Principal Executive Officer and a member of the
|
||
|
Board of Directors
|
||
|
BY:
|
MICHEL ST-PIERRE
|
|
|
Michel St-Pierre
|
||
|
Principal Financial Officer and Principal
|
||
|
Accounting Officer
|
||
In accordance with the Exchange Act, this amended report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dated indicated.
|
Signature
|
Title
|
Date
|
|
MICHAEL SIEGEL
|
President, Chief Executive Officer, Treasurer, Chief
|
April 14, 2011
|
|
Michael Siegel
|
Financial Officer, and a member of the Board of Directors
|
|
|
MARK LAWSON
|
Director
|
April 14, 2011
|
|
Mark Lawson
|
||
|
JOHN KWAK
|
Director
|
April 14, 2011
|
|
John Kwak
|
||
|
ROBERT EGGER JR.
|
Director
|
April 14, 2011
|
|
Robert Egger Jr.
|
||
|
CLAUDE PELLERIN
|
Director
|
April 14, 2011
|
|
Claude Pellerin
|
||
|
TRI VU TRUONG
|
Director
|
April 14, 2011
|
|
Tri Vu Truong
|
||
|
ALBERT BEERLI
|
Director
|
April 14, 2011
|
|
Albert Beerli
|
-45-
|
Incorporated by reference
|
|||||
|
Exhibit Number
|
Document Description
|
Form
|
Date
|
Number
|
Filed herewith
|
|
3.1
|
Articles of Incorporation, as amended.
|
SB-2
|
5/28/04
|
3.1
|
|
|
3.2
|
Bylaws.
|
SB-2
|
5/28/04
|
3.2
|
|
|
3.3
|
Certificate of Amendment to Articles of Incorporation.
|
10-QSB
|
12/30/05
|
3.3
|
|
|
3.4
|
Bylaws, as amended on March 17, 2006.
|
10-KSB
|
4/13/06
|
3.4
|
|
|
10.1
|
Letter of Intent with XL Generation AG.
|
8-K
|
7/6/05
|
99.1
|
|
|
10.2
|
Share Exchange Agreement with XL Generation AG.
|
8-K
|
8/19/05
|
99.1
|
|
|
10.3
|
Loan Agreement with Capex Investments.
|
8-K
|
9/14/05
|
99.1
|
|
|
10.4
|
Form of Indemnification Agreement with Capex Investments Limited.
|
8-K/A
|
11/1/05
|
10.4
|
|
|
10.5
|
Common Stock Purchase Agreement with Capex Investments Limited.
|
8-K
|
11/15/05
|
10.5
|
|
|
10.6
|
Common Stock Purchase Agreement with Aton Selct Fund Limited.
|
8-K
|
11/15/05
|
10.6
|
|
|
10.7
|
Common Stock Purchase Agreement with Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.7
|
|
|
10.8
|
Series A Warrant to Purchase Shares of Common Stock to Capex Investments Limited.
|
8-K
|
11/15/05
|
10.8
|
|
|
10.9
|
Series A Warrant to Purchase Shares of Common Stock to Aton Select Fund Limited.
|
8-K
|
11/15/05
|
10.9
|
|
|
10.10
|
Series A Warrant to Purchase Shares of Common Stock to Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.10
|
|
|
10.11
|
Registration Rights Agreement with Capex Investments Limited.
|
8-K
|
11/15/05
|
10.11
|
|
|
10.12
|
Registration Rights Agreement with Aton Select Fund Limited.
|
8-K
|
11/15/05
|
10.12
|
|
|
10.13
|
Registration Rights Agreement with Asset Protection Fund Limited.
|
8-K
|
11/15/05
|
10.13
|
|
|
10.14
|
Amendment to the Common Stock Purchase Agreement with Aton Select Fund Limited.
|
8-K
|
12/08/05
|
10.14
|
|
|
10.15
|
Amendment to the Common Stock Purchase Agreement with Asset Protection Fund Limited.
|
8-K
|
12/08/05
|
10.15
|
|
-46-
|
10.16
|
Lease Agreement with 866 U.N. Plaza Associates LLC.
|
10-QSB
|
12/30/05
|
10.16
|
|
|
10.17
|
Exclusive Manufacturing License Agreement and Non-Exclusive Distribution Agreement with APW Inc.
|
10-QSB
|
12/30/05
|
10.17
|
|
|
10.18
|
Common Stock Purchase Agreement with Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.18
|
|
|
10.19
|
Series B Warrant to Purchase Shares of Common Stock to Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.19
|
|
|
10.20
|
Registration Rights Agreement with Professional Trading Services SA.
|
SB-2
|
1/13/06
|
10.20
|
|
|
10.21
|
Amended and Restated Common Stock Purchase Agreement with Bank Sal. Oppenheim Jr. & Cie. (Switzerland) Limited.
|
SB-2
|
1/13/06
|
10.21
|
|
|
10.22
|
Series B Warrant to Purchase Shares of Common Stock to Bank Sal. Oppenheim Jr. & Cie. (Switzerland) Limited.
|
SB-2
|
1/13/06
|
10.22
|
|
|
10.23
|
Agreement of Withdrawal from Stadium SA.
|
SB-2
|
1/13/06
|
10.23
|
|
|
10.24
|
License Agreement with WKF/5 Ltd.
|
SB-2
|
1/13/06
|
10.24
|
|
|
10.25
|
Amendment to License Agreement with WKF/5 Ltd and Alain Lemieux.
|
SB-2
|
1/13/06
|
10.25
|
|
|
10.26
|
Form of Subscription Agreement.
|
SB-2
|
5/28/04
|
99.1
|
|
|
10.27
|
Employment Agreement with Alain Lemieux.
|
10-KSB
|
4/13/06
|
10.27
|
|
|
10.28
|
Employment Agreement with Daniel Courteau.
|
10-KSB
|
4/13/06
|
10.28
|
|
|
10.29
|
Employment Agreement with Flemming Munck.
|
10-KSB
|
4/13/06
|
10.29
|
|
|
10.30
|
Employment Agreement with Eric Giguere.
|
10-KSB
|
4/13/06
|
10.30
|
|
|
10.31
|
Endorsement Agreement with La Societe 421 Productions.
|
10-KSB
|
4/13/06
|
10.31
|
|
|
10.32
|
Summary of terms and conditions of Oral Consulting Agreement with Greendale Consulting Limited.
|
10-KSB
|
4/13/06
|
10.32
|
|
|
10.33
|
Exclusive Manufacturing License Agreement with Polyprod Inc.
|
10-KSB
|
4/13/06
|
10.33
|
|
|
10.34
|
Management Fee Arrangement with Polyprod Inc.
|
10-KSB
|
4/13/06
|
10.34
|
|
|
10.35
|
Supply Contract with Febra- Kunststoffe GimbH and BASF Aktiengesellschaft.
|
10-KSB
|
4/13/06
|
10.35
|
|
|
10.36
|
Loan Agreement with Fiducie Alain Lemieux.
|
10-KSB
|
4/13/06
|
10.36
|
|
-47-
|
10.37
|
Confirmation of Debt.
|
10-KSB
|
4/13/06
|
10.37
|
|
|
10.38
|
Agreement with Daniel Courteau regarding Repayment of loans to Symbior Technologies Inc.
|
10-KSB
|
4/13/06
|
10.38
|
|
|
10.39
|
2006 Equity Incentive Plan.
|
10-KSB
|
4/13/06
|
10.39
|
|
|
10.40
|
Loan Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.40
|
|
|
10.41
|
Summary of terms and conditions of Loan Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.41
|
|
|
10.42
|
Lease Agreement with Albert Beerli.
|
10-KSB
|
4/13/06
|
10.42
|
|
|
10.43
|
Memorandum regarding XL Generation Canada Inc.
|
10-KSB
|
4/13/06
|
10.43
|
|
|
10.44
|
Stock Purchase Agreement with XL Generation AG and Stadium SA.
|
10-KSB
|
4/13/06
|
10.44
|
|
|
10.45
|
Common Stock Purchase Agreement with Poma Management SA.
|
10-QSB
|
9/13/06
|
10.45
|
|
|
10.46
|
Common Stock Purchase Agreement with Aton Select Fund Limited.
|
10-QSB
|
9/13/06
|
10.46
|
|
|
10.47
|
Consulting Agreement by and between Ecolocap Solutions Inc. and Lakeview Consulting LLC.
|
8-K
|
11/11/08
|
10.47
|
|
|
10.48
|
“ERPA” with Hong Kong Construction Investment Joint Stock Company.
|
8-K
|
12/23/08
|
10.1
|
|
|
10.49
|
“ERPA” with Thuong Hai Joint Stock Company.
|
8-K
|
12/23/08
|
10.2
|
|
|
10.50
|
“ERPA” with Vietnam Power Development Joint Stock Company.
|
8-K
|
12/23/08
|
10.3
|
|
|
10.51
|
“ERPA” with Hop Xuan Investment Joint Stock Company, Vietnam.
|
8-K
|
12/23/08
|
10.4
|
|
|
10.52
|
“ERPA” with ThangLong Education Development and Construction Import Export Investment Joint Stock Company.
|
8-K
|
12/23/08
|
10.5
|
|
|
10.53
|
Revised Consulting Agreement with Sodexen Inc.
|
8-K
|
12/23/08
|
10.6
|
|
|
10.54
|
Agreement with United Best Technology Limited.
|
8-K
|
12/23/08
|
10.7
|
|
|
10.55
|
Escrow Agreement with United Best Technology Limited.
|
8-K
|
12/23/08
|
10.8
|
|
|
10.56
|
“ERPA” with Tan Hiep Phuc Electricity Construction Joint-Stock Company Vietnam.
|
8-K
|
12/23/08
|
10.9
|
|
-48-
|
10.57
|
“ERPA” with Tuan Anh Hydraulic Development and Construction Investment Corporation, Vietnam.
|
8-K
|
12/23/08
|
10.10
|
|
|
10.58
|
“ERPA” with Lao Cai Energy & Resources Investment Joint Stock Company, Vietnam.
|
8-K
|
12/23/08
|
10.11
|
|
|
10.59
|
“ERPA” with Xiangton Iron and Steel Group Co. Ltd.
|
8-K
|
12/23/08
|
10.12
|
`
|
|
10.60
|
“ERPA” with Hunan Valin Xiangton Iron & Steel Co. Ltd.
|
8-K
|
12/23/08
|
10.13
|
|
|
10.61
|
“ERPA” with Hebi Coal Industry (Group) Co. Ltd.
|
8-K
|
12/23/08
|
10.14
|
|
|
10.62
|
“ERPA” with Hebei Jinlong Cement Group Co., Ltd.
|
8-K
|
12/23/08
|
10.15
|
|
|
10.63
|
“ERPA” with Bao Tan Hydro Electric Joint-Stock Company.
|
8-K
|
12/23/08
|
10.16
|
|
|
10.64
|
“ERPA” with Construction and Infrastruction Development Joint-Stock Company Number Nine.
|
8-K
|
12/23/08
|
10.17
|
|
|
10.65
|
Greenhouse Gas Offset Management Services Representation Agreement.
|
8-K
|
12/23/08
|
10.18
|
|
|
10.66
|
“ERPA” with Xinjiang Xiangjianfeng Energy and Technology Development Co. Ltd.
|
8-K
|
12/23/08
|
10.19
|
|
|
10.67
|
Technical Service Agreement with Xinjiang Xiangjinfeng Energy and Technology Development Co., Ltd.
|
8-K
|
12/23/08
|
10.20
|
|
|
10.68
|
Technical Service Agreement with Hebei Fengda Metallized Pellet Co., Ltd.
|
8-K
|
12/23/08
|
10.21
|
|
|
10.69
|
“ERPA” with Hebei Fengda Metallized Pellet Co., Ltd.
|
8-K
|
12/23/08
|
10.22
|
|
|
10.70
|
“ERPA” with Shandong Chengzeyuan Environment Protection Engineering Co. Ltd.
|
8-K
|
12/23/08
|
10.23
|
|
|
10.71
|
Technical Services Agreement with Shandong Chengzeyuan Environment Protection Engineering Co., Ltd.
|
8-K
|
12/23/08
|
10.24
|
|
|
10.72
|
Technical Services Agreement with Leshan Kingssun Group Co. Ltd.
|
8-K
|
12/23/08
|
10.25
|
|
|
10.73
|
“ERPA” with Leshan Kingssun Group Co., Ltd.
|
8-K
|
12/23/08
|
10.26
|
|
|
14.1
|
Code of Ethics.
|
10-KSB
|
3/31/08
|
14.1
|
|
|
31.1
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
-49-
|
31.2
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
32.1
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive Officer.
|
X
|
|||
|
32.2
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Financial Officer.
|
X
|
|||
|
99.1
|
Audit Committee Charter.
|
10-KSB
|
3/31/08
|
99.1
|
|
|
99.2
|
Executive Committee Charter.
|
10-KSB
|
3/31/08
|
99.2
|
|
|
99.3
|
Nominating and Corporate Governance Committee Charter.
|
10-KSB
|
3/31/08
|
99.3
|
|
|
99.4
|
Stock Option Plan.
|
10-KSB
|
3/31/08
|
99.4
|
-50-