Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2011
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION FROM ____________ TO ___________
Commission File Number: 000-53807
SavWatt USA Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
1100 Wicomico Street, Baltimore MD
(Address of principal executive offices)
(866) 641-3507
(Registrant's telephone number)
27-2478133
(I.R.S. Employer Identification 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 Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.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 [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
As of May 19, 2011 , there were 669,761,367 outstanding shares of the
Registrant's Common Stock, $0.0001 par value.
OTHER PERTINENT INFORMATION
When used in this report, the terms "SavWatt." the Company", " we", "our", and
"us" refers to SavWatt USA, Inc., a Delaware corporation formerly known as
Ludvik Capital, Inc., and our subsidiary. The information which appears on our
web site is not part of this report.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-looking
statements that are subject to known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements were based on various factors and were derived utilizing numerous
assumptions and other factors that could cause our actual results to differ
materially from those in the forward-looking statements. These factors include,
but are not limited to, our ability to raise sufficient capital to fund our
ongoing operations and satisfy our obligations as they become due, including
approximately $1 million of past due notes, our ability to generate any
meaningful revenues, our ability to compete within our market segment, our
ability to implement our strategic initiatives, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate
risk, U.S. and global competition, and other factors. Most of these factors are
difficult to predict accurately and are generally beyond our control. You should
consider the areas of risk described in connection with any forward-looking
statements that may be made herein. Readers are cautioned not to place undue
reliance on these forward-looking statements and readers should carefully review
this report in its entirety, as well as our annual report on Form 10-K for the
year ended December 31, 2010 including the risks described in Part I. Item 1A.
Risk Factors of that report. Except for our ongoing obligations to disclose
material information under the Federal securities laws, we undertake no
obligation to release publicly any revisions to any forward-looking statements,
to report events or to report the occurrence of unanticipated events. These
forward-looking statements speak only as of the date of this report, and you
should not rely on these statements without also considering the risks and
uncertainties associated with these statements and our business.
2
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 4
Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and
December 31, 2010 (Audited) 4
Consolidated Statements of Operations for the Three Months
ended March 31, 2011 and 2010 and, for the Period from
October 20, 2006 (Inception) to March 31, 2011 (Unaudited) 5
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2011 and 2010, and for the Period from October 20, 2006
(Inception) to March 31, 2011 (Unaudited) 6
Notes to Consolidated Financial Statements as of
March 31, 2011 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 18
Item 3. Quantitative and Qualitative Disclosures about Market Risk 19
Item 4. Controls and Procedures 20
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. (Removed and Reserved) 20
Item 5. Other Information 20
Item 6. Exhibits 21
SIGNATURES 21
3
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
March 31, December 31,
2011 2010
------------ ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash $ 27,163 $ 2,422
Accounts receivable 1,835 619
Inventory 42,853 42,853
Related party receivable 207 --
Other current assets 85,741 32,200
------------ ------------
TOTAL CURRENT ASSETS 157,799 78,094
------------ ------------
Equipment 22,985 10,803
------------ ------------
TOTAL ASSETS $ 180,784 $ 88,897
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 171,986 $ 112,318
Due to related party 666,253 504,600
Stockholder loan payable 502,771 1,129,698
Accrued interest - stockholder 220,552 175,596
Loan payable 100,000 50,000
Convertible debt, net of debt discount of $91,000 and $0 367,273 200,000
------------ ------------
TOTAL CURRENT LIABILITIES 2,028,835 2,172,212
------------ ------------
Long term convertible debt, net of debt disount of $25,000 and $0 -- --
------------ ------------
TOTAL LIABILITIES 2,028,835 2,172,212
------------ ------------
STOCKHOLDERS' DEFICIT
Preferred stock, $0.0001 par value, 200,000,000 shares authorized;
5,000,000 issued and outstanding 500 --
Common stock, $0.0001 par value, 2,000,000,000 shares authorized,
326,837,722 issued and 307,133,826 outstanding and 167,531,786
shares issued and outstanding, respectively 30,712 16,752
Additional paid-in capital (38,705,652) 37,120,142
Accumulated deficit during development stage (40,526,561) (39,203,264)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIT - SAVWATT USA (1,789,697) (2,066,370)
------------ ------------
Noncontrolling interests (58,353) (16,945)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIT (1,848,050) (2,083,315)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 180,784 $ 88,897
============ ============
See accompanying notes to unaudited financial statements.
4
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
--------------------------------------------------------------------------------
From Inception
Three Months Three Months (October 20, 2006)
Ended Ended through
March 31, March 31, March 31,
2011 2010 2011
------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
REVENUES $ 3,784 $ -- $ 7,843
------------ ------------ ------------
EXPENSES
General and administrative 292,143 90,000 586,421
Professional fees 170,965 -- 1,888,171
Bad debt expense-related party -- -- 218,636
Stock based compensation 62,250 -- 36,073,619
------------ ------------ ------------
TOTAL EXPENSES 525,358 90,000 38,766,847
------------ ------------ ------------
LOSS FROM OPERATIONS (521,574) (90,000) (38,759,004)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
Other income -- -- 5,010
Interest expense (34,109) -- (67,329)
Interest expense-stockholder (44,956) (298,335) (947,969)
Loss on settlement of related party debt (10,000) -- (10,000)
Amortization of debt discount (359,000) -- (359,000)
Debt conversion expense (395,066) -- (446,622)
------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSE) (843,131) (298,335) (1,825,910)
------------ ------------ ------------
NET LOSS (1,364,705) (388,335) (40,584,914)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 41,408 -- 58,353
------------ ------------ ------------
NET LOSS ATTRIBUTABLE TO SAVWATT USA, INC $ (1,323,297) $ (388,335) $(40,526,561)
============ ============ ============
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.01) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING,
BASIC AND DILUTED 215,601,052 79,474,175
============ ============
See accompanying notes to unaudited financial statements.
5
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
From Inception
(October 20, 2006)
For the Three Months through
March 31, March 31, March 31,
2011 2010 2011
------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,323,297) $ (944,437) $(40,526,561)
Adjustments to reconcile net loss to net cash
used in operating activities:
Net loss attributable to non controlling interest (41,408) -- (58,353)
Stock issued for services 62,250 50,000 1,433,576
Stock issued for interest 14,000 -- 35,249
Stock based compensation -- 350,001 34,700,044
Bad debt expense - related party -- -- 218,636
Loss on settlement of related party debt 10,000 -- 10,000
Amortization of debt discount 359,000 -- 359,000
Debt modification expense 395,066 -- 446,622
Increase (decrease) in cash flows as a result of
changes in asset and liability account balances:
Related party receivable (207) -- (207)
Accounts receivable (1,214) -- (1,835)
Inventory -- -- (42,852)
Other current assets (53,541) -- (85,741)
Accounts payable and accrued expenses 59,665 -- 171,983
Due to related party 436,653 -- 722,618
Stockholder loan payable -- 360,000 1,260,000
Accrued interest-stockholder 44,956 184,436 947,969
------------ ------------ ------------
TOTAL ADJUSTMENTS 1,285,220 944,437 40,116,709
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (38,077) -- (409,852)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of computer equipmnet (12,182) -- (22,985)
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES (12,182) -- (22,985)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock -- -- 335,000
Proceeds from issuance of convertible debt 75,000 -- 75,000
Proceeds from issuance of loan payable -- -- 50,000
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 75,000 -- 460,000
------------ ------------ ------------
NET INCREASE IN CASH 24,741 -- 27,163
CASH, BEGINNING OF PERIOD 2,422 -- --
------------ ------------ ------------
CASH, END OF PERIOD $ 27,163 $ -- $ 27,163
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ -- $ -- $ --
============ ============ ============
Income taxes paid $ -- $ -- $ --
============ ============ ============
Stock issued for repayment of shareholder loan $ 35,000 $ -- $ 519,250
============ ============ ============
Subscription receivable $ -- $ -- $ 20,000
============ ============ ============
Stockholder loan assigned $ 580,000 $ -- $ 953,469
============ ============ ============
Common stock issued as a result of debt conversion $ 368,654 $ -- $ 542,123
============ ============ ============
Debt discount of convertible debt $ 475,000 $ -- $ 475,000
============ ============ ============
Stockholder loan and accrued interest exchanged
for a short term convertible note $ -- $ -- $ 1,503,167
============ ============ ============
See accompanying notes to unaudited financial statements.
6
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
SavWatt USA. Inc. formerly known as Ludvik Capital, Inc. (hereinafter "the
Company") was incorporated on October 20, 2006 under the laws of the State of
Delaware for the purpose of becoming a successor corporation by merger with
Patriot Advisors, Inc. and Templar Corporation, pursuant to a plan of
reorganization and merger approved by the United States Bankruptcy Court,
District of Maine in Case No. 04-20328 whereby Ludvik Capital, Inc is the
continuing entity.
The Company's business plan consisted of investing in public and private
companies, providing long term equity and debt investment capital to fund growth
and acquisitions and recapitalizations of small and middle market companies in a
variety of industries primarily located in the United States.
Since inception, the Company has had minimal operations and no revenues earned.
On April 5, 2010, the Company amended its articles of incorporation and changed
its name to SavWatt USA, Inc.
SavWatt USA, Inc. ("SavWatt") business plan is to capitalize on the largely
unaddressed commercial and consumer market for energy-efficient LED lighting by
investing in product and corporate marketing. With public relations and
advertising throughout the media, a recognized, popular consumer LED brand will
be cultivated, spearheading and establishing a leading market share in the
growing energy-efficient bulb sector during the next three to five years.
SavWatt has the exclusive marketing rights in the United States to sell LED
street lighting for a number of asian companies.
The Company is a development stage enterprise.
THE COMPANY'S YEAR END IS DECEMBER 31.
The Company's corporate headquarters were originally located in Virginia but are
currently located in Baltimore MD.
GOING CONCERN AND BASIS OF PRESENTATION
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the financial
statements, the Company incurred net losses of $1,323,297 for the three months
ended March 31, 2011. In addition, the Company has incurred a net loss from
inception (October 20, 2006) through March 31, 2011 and accumulated deficit
amounting to $40,526,561. Since its inception, the Company has generated minimal
revenues and has minimal cash resources.
These circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Management's
efforts have been directed towards the development and implementation of a plan
to generate sufficient revenues to cover all of its present and future costs and
expenses.
Management is taking steps to address this situation. The Company has determined
that it cannot continue with its business operations as outlined in its original
business plan because of a lack of financial resources; therefore, management
has redirected their focus towards identifying and pursuing options regarding
the development of a new business plan and direction. The Company intends to
explore various business opportunities that have the potential to generate
positive revenue, profits and cash flow in order to financially accommodate the
costs of being a publicly held company. The Company is in the process of raising
capital by implementing its business plan in Led lighting and expects to
generate sufficient revenue by the fourth quarter of 2011 with a positive cash
flow. Until then, the Company the Company will not have the required capital
resources or credit lines available that are sufficient to fund operations.
7
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
The Company has minimal operating costs and expenses at the present time due to
its limited business activities. The Company, however, will be required to raise
additional capital over the next twelve months to meet its current
administrative expenses, and it may do so in connection with or in anticipation
of possible acquisition transactions. This financing may take the form of
additional sales of its equity securities and/or loans from its directors. There
is no assurance that additional financing will be available, if required, or on
terms favorable to the Company.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
The foregoing unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, these financial statements do not include all of the disclosures
required by generally accepted accounting principles in the United States of
America for complete financial statements. These unaudited interim financial
statements should be read in conjunction with the audited financial statements
for the period ended December 31, 2010. In the opinion of management, the
unaudited interim financial statements furnished herein include adjustments, all
of which are of a normal recuing nature, necessary for a fair statement of the
results for all the interim periods presented. Operating results for the
three-month period ending March 31, 2011 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2011.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in
understanding the accompanying financial statements. The financial statements
and notes are representations of the Company's management, which is responsible
for their integrity and objectivity. These accounting policies conform to
accounting principles generally accepted in the United States of America and
have been consistently applied in the preparation of the financial statements.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
SavWatt USA, Inc., as well as Pro Eco Solutions, LLC for the period from
November 1, 2010 through March 31, 2011 and are prepared in accordance with
accounting principles generally accepted in the United States ("US GAAP"). All
significant intercompany accounts and transactions between the Company and its
subsidiary have been eliminated upon consolidation.
NONCONTROLLING INTERESTS
Noncontrolling interests in our subsidiary are recorded in accordance with the
provisions of ASC 810, "Consolidation" and are reported as a component of
equity.
8
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since its formation.
From the Company's inception through March 2010, the Company was engaged in the
business of providing long-term equity and debt investment capital to fund
growth, acquisitions and recapitalizations of small and middle market companies
in a variety of industries, primarily located in the United States. The Company
during this time frame had been very active and had conducted substantial
operations, as discussed in our numerous reports with the SEC during 2007
through the present.
In 2010, the Company changed its name to SavWatt USA, Inc. to reflect our new
primary business of producing, marketing and selling Light Emitting Diode
("LED") lighting. In furtherance of our new business, we have obtained the
exclusive marketing rights in the United States to sell LED street lighting for
Unilumin, a Chinese company as well as setting up its distribution and
production center in Maryland.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
short-term debt with original maturities of three months or less to be cash
equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments may include cash, accounts receivable,
inventory, other assets, loans payable and related accrued interest, and
accounts payable. All such instruments are accounted for on a historical cost
basis, which, due to the short maturity of these financial instruments,
approximates fair value at March 31, 2011 and December 31, 2010.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are stated at the amount the Company expects to collect. The
Company provides an allowance for doubtful accounts equal to the estimated
uncollectible amounts. The Company's estimate is based on historical collection
experience and a review of the current status of trade accounts receivable. It
is reasonably possible that the Company's estimate of the allowance for doubtful
accounts will change.
Accounts receivable are presented net of an allowance for doubtful accounts of
$0.
As of December 31, 2010 the Company wrote off a related party receivable
amounting to $218,636 and recorded a bad debt expense, based on management's
Company's evaluation of the balance and certainty that the balance would not be
collectible in the future.
PROPERTY AND EQUIPMENT AND DEPRECIATION
Property and equipment are recorded at cost. Expenditures for major additions
and improvements are capitalized and minor replacements, maintenance, and
repairs are charged to expense as incurred. When property and equipment are
disposed of, the cost and accumulated depreciation are removed from the accounts
and any resulting gain or loss is included in the results of operations for the
respective period.
Depreciation is provided for over the estimated useful lives of the related
asset using the straight-line method. As of March 31, 2011 the Company has not
recorded depreciation since the production equipment purchased has yet to be
utilized.
The estimated useful lives for significant equipment categories are from 3 to 5
years.
9
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
INVENTORY
The Company's inventory consists of entirely of finished goods, and is valued at
lower of cost or market price. Cost is determined on a first-in, first-out
("FIFO") basis. To ensure inventory is carried at the lower of cost or market,
the Company periodically evaluates the carrying value and also periodically
performs an evaluation of inventory for excess and obsolete items. Such
evaluations are based on management's judgment and use of estimates. Such
estimates incorporate inventory quantities on-hand, aging of the inventory,
sales forecasts for particular product groupings, planned dispositions of
product lines and overall industry trends.
REVENUE RECOGNITION
Revenue is recognized when all of the following criteria are met: (1) persuasive
evidence that an arrangement exists; (2) delivery has occurred or services have
been rendered; (3) the seller's price to the buyer is fixed and determinable;
and, (4) collectability is reasonably assured. The Company has earned minimal
revenue since inception.
USE OF ESTIMATES
The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts.
PROVISION FOR TAXES
Income taxes are provided based upon the liability method of accounting. Under
this approach, deferred income taxes are recorded to reflect the tax
consequences in future years of differences between the tax basis of assets and
liabilities and their financial reporting amounts at each year-end. A valuation
allowance is recorded against the deferred tax asset if management does not
believe the Company has met the "more likely than not" standard to allow
recognition of such an asset.
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
Basic earnings per share is calculated on the weighted effect of all common
shares issued and outstanding, and is calculated by dividing net income
available to common stockholders by the weighted average shares outstanding
during the period. Diluted earnings per share, which is calculated by dividing
net income available to common stockholders by the weighted average number of
common shares used in the basic earnings per share calculation, plus the number
of common shares that would be issued assuming conversion of all potentially
dilutive securities outstanding, is not presented separately as it is
anti-dilutive.
The average number of common shares outstanding for the period from Inception (
October 20, 2006) through March 31, 2011 has been retroactively adjusted for the
2:1 forward stock split effective August 17, 2007.
STOCK BASED COMPENSATION
The Company accounts for stock based compensation transactions with employees
under the provisions of ASC Topic No. 718, "Compensation, Stock Compensation"
("Topic No. 718"). Topic No. 718 requires the recognition of the fair value of
equity-based compensation in net income. The fair value of the Company's equity
instruments are estimated using a Black-Scholes option valuation model. This
model requires the input of highly subjective assumptions and elections
including expected stock price volatility and the estimated life of each award.
In addition, the calculation of equity-based compensation costs requires that
the Company estimate the number of awards that will be forfeited during the
vesting period. The fair value of equity-based awards granted to employees is
10
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
amortized over the vesting period of the award and the Company elected to use
the straight-line method for awards granted after the adoption of Topic No. 718.
The Company accounts for equity based transactions with non-employees under the
provisions of ASC Topic No. 505-50, "Equity-Based Payments to Non-Employees"
("Topic No. 505-50"). Topic No. 505-50 establishes that equity-based payment
transactions with non-employees shall be measured at the fair value of the
consideration received or the fair value of the equity instruments issued, which
ever is more reliably measurable. When the equity instrument is utilized for
measurement the fair value of the equity instrument is estimated using the
Black- Scholes option valuation model. In general, the Company recognizes an
asset or expense in the same manner as if it was to receive cash for the goods
or services instead of paying with or using the equity instrument.
FORWARD STOCK SPLIT
All references to the Company's outstanding shares, and options, have been
adjusted to give effect to the 2 for 1 forward stock split effective August 17,
2007.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY
The Financial Accounting Standards Board's ("FASB") Accounting Standards
Codification (ASC) became effective on July 1, 2009. At that date, the ASC
became FASB's officially recognized source of authoritative U.S. generally
accepted accounting principles ("GAAP") applicable to all public and non-public
non-governmental entities, superseding existing FASB, American Institute of
Certified Public Accountants ("AICPA"), Emerging Issues Task Force ("EITF") and
related literature. Rules and interpretive releases of the SEC under the
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. All other accounting literature is considered
non-authoritative. The switch to the ASC affects the way companies refer to U.S.
GAAP in financial statements and accounting policies. Citing particular content
in the ASC involves specifying the unique numeric path to the content through
the Topic, Subtopic, Section and Paragraph structure.
In February 2010, the FASB issued Accounting Standards Update (ASU) No.
2010-08--Technical Corrections to Various Topics. This update's purpose is to
eliminate GAAP inconsistencies, update outdated provisions, and provide needed
clarifications. The adoption of ASU No. 2010- 08 will not have a material impact
on the Company's financial statements.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, could have a material
effect on the accompanying financial statements.
NOTE 3 - FAIR VALUE MEASUREMENTS
The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, for
assets and liabilities measured at fair value on a recurring basis. ASC 820
establishes a common definition for fair value to be applied to existing
generally accepted accounting principles that require the use of fair value
measurements establishes a framework for measuring fair value and expands
disclosure about such fair value measurements. The adoption of ASC 820 did not
have an impact on the Company's financial position or operating results, but did
expand certain disclosures.
ASC 820 defines fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Additionally, ASC 820 requires the use of
valuation techniques that maximize the use of observable inputs and minimize the
use of unobservable inputs.
11
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for
identical assets or liabilities Level 2: Observable market-based inputs or
unobservable inputs that are corroborated by market data Level 3: Unobservable
inputs for which there is little or no market data, which require the use of the
reporting entity's own assumptions. The Company did not have any Level 1, Level
2 or Level 3 assets or liabilities as of March 31, 2011 and December 31, 2010.
The Company discloses the estimated fair values for all financial instruments
for which it is practicable to estimate fair value. As of December 31, 2010 and
March 31, 2011, the fair value short-term financial instruments including
subscriptions receivable, loans payable, accounts payable and accrued expenses,
approximates book value due to their short-term duration.
In addition, the Financial Accounting Standards Board ("FASB") issued, "The Fair
Value Option for Financial Assets and Financial Liabilities," effective for
January 1, 2008. This guidance expands opportunities to use fair value
measurements in financial reporting and permits entities to choose to measure
many financial instruments and certain other items at fair value. The Company
did not elect the fair value option for any of its qualifying financial
instruments.
NOTE 4 - OTHER ASSETS
Other assets is comprised of the following:
Deposits for Inventory $50,000
Prepaid Rent 12,620
Other deposits 23,121
-------
$85,741
=======
NOTE 5 -STOCKHOLDER LOANS
On December 14th 2006, the Company entered into an Advisory Agreement with
Ludvik Nominees Pty Ltd (a Company 100% owned by Frank Kristan) for services to
be rendered which were payable based on 3% assets under management and 20% of
net profits of Ludvik Capital. The term of the agreement was approximately 11
years, maturing on December 31, 2017.
Frank Kristan served as President and Chief Executive Officer of the Company
from inception, October 20, 2006 through March 31, 2010 and is also the
President of Ludvik Nominees Pty Ltd. On March 31, 2010, Frank Kristan resigned
as President and Director of the Company.
On March 31, 2010 the original 2006 agreement was terminated and a settlement
agreement was created to resolve any outstanding obligations with respect to the
2006 agreement. In accordance with the settlement agreement both parties agreed
that since advisory fees under the December 14th 2006 Agreement were based on
the assets under management that had no value, the Advisor had the option to get
paid a fee of $30,000 per month starting October 2006 including interest.
Furthermore, the remaining principal balance plus accrued interest as of March
31, 2010 was rolled over into a Secured Convertible Note amounting to
$1,503,167.
12
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
From the period from inception, October 20, 2006 through the termination of the
original agreement, March 31, 2010, the Company issued its advisors 32,394,269
shares of common stock as payment for services amounting to $484,250.
The parties agreed that following components made up the balance of the Secured
Convertible Note as of March 31, 2010:
Advisory Fees $ 1,260,000
Accrued Interest 727,417
Value of shares issued for payment (484,250)
-----------
$ 1,503,167
===========
This note was payable on June 30, 2010 and bears an interest rate of 12% per
annum payable at the end of the term. Upon default, the unpaid principal balance
of this note and any accrued and unpaid interest bear interest at the rate of
18%. The outstanding balance and accrued interest, all or in part, is
convertible at the option of the holder into the Company's common stock at a
conversion price of 50% of the stock price, with a minimum of $.01 per share. As
of December 31, 2010 and as of the date of this filing, this note was in
default. In April 2011, the Company received a waiver of the default and
extended the due date of the note to December 31, 2011, at an interest rate of
18%.
In the 3rd and 4th quarter of 2010 this stockholder assigned $373,469 of the
loan payable to investors (as discussed in Note 9)
In the 1st quarter 2011, the stockholder assigned $580,000 of the loan payable
to investors and converted $46,927 into 4,692,700 shares of common stock.
As of March 31, 2011, the stockholder loan balance and related accrued interest
amounted to $502,771 and $220,552, respectively.
NOTE 7 - RELATED PARTY TRANSACTIONS
On March 31, 2010, Isaac H. Sutton was elected to the Board of Directors and
currently serves as the Company's new President and sole director.
As of December 31, 2010, the Company recorded $30,000 expense related to
consulting fees earned by the Company's President for 6 months.
During the Period of April 1, 2010 - December 31, 2010, the Company received
short term funding from Sutton Global Associates, Inc., which is a related party
since this company is controlled by Isaac H. Sutton the Company's President and
Sole Director. As of December 31, 2010, the Company owes $479,600 to Sutton
Global Associates, Inc.
During 2010, the Company advanced certain monies to GoIP Global, a related party
controlled by Isaac H. Sutton the Company's President and Sole Director, to fund
its operations. In addition, the Company entered into a one year agreement with
GoIP where as GoIP provided messaging services to the Company. As of December
31, 2010, the Company's payable related to these services amounted to $25,000.
As of March 31, 2011, there is no balance owing to or from GoIP Global.
13
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
In December 2010, the Company wrote off $218,636 due from another affiliated
company SavWatt Industries, LLC, a company later controlled by Isaac H. Sutton.
The original owners are now employees of the Company. The Company determined
that this amount would not be collectible and therefore recorded this amount as
bad debt expense.
In the three months ending March 31, 2011, the Company received short term
funding from Sutton Global Associates, Inc. of approximately $430,000. In
January 2011, Sutton Global converted $250,000 of debt into 5,000,000 shares of
Preferred Series A stock. As of March 31, 2011 the balance due to Sutton Global
amounted to $666,253.
NOTE 8 - NONCONTROLLING INTEREST
In November 2010 the Company formed a joint venture in the form of a limited
liability company Pro Eco Solutions LLC ("LLC"), whose purpose is specializing
in comprehensive support services for all energy services companies and
performance contractors. The Company is a 50.1% member/owner and the Company's
President, Ike Sutton is also the chief executive officer of the LLC. Pursuant
to the agreement, the members' initial contribution to the company capital is
$10,000 of which 50.1% or $5,050 relates to the Company's portion. The initial
contribution is payable in cash or in the form of a note payable on December 31,
2011. The Company and the non controlling LLC has yet to make this initial
contribution. The Company has committed to fund the LLC an additional $250,000
over the next 12 months.
As of March 31, 2011 the Company has funded approximately $49,892. This amount
has been eliminated upon consolidation. The net loss attributable to the
non-controlling interest amounted to $41,408 as of March 31, 2011. The
non-controlling carrying value as of March 31, 2011 amounted to $58,353 as shown
in the accompanying balance sheet.
NOTE 9 - DEBT
Short term Convertible Debt
In August 2010 through December 2010 a stockholder assigned $373,469 of his loan
payable to investors transferring all the rights and interests of the original
note (as disclosed in Note 6). As of December 31, 2010 the assignee debt holders
have converted $173,469 of their outstanding debt into 18,374,278 shares of the
Company's common stock resulting in the loan payable balance of $200,000.
During the quarter ending March 31, 2011, the Company entered into several
short-term convertible notes as a resulting from the assignment of a stockholder
loan payable with a total face amount of $580,000. These notes bear interest
rates ranging from 5% to 18% payable in full in twelve months or less and which
were convertible into shares of Company's common stock at prices ranging from
$0.01 to $0.00275 per share.
In accordance with ASC 470, the Company recorded a discount for the Beneficial
Conversion Feature ("BCF") on the convertible debt amounting to $450,000 and is
amortized over the life of the debentures. The Company recorded a discount
amortization expense for the BCF of approximately $359,000 with a remaining
unamortized balance of the discount of approximately $91,000.
As of March 31, 2011 $321,727 of these short term notes were converted into
124,309,340 shares of the Company's common stock. Some of these notes were
converted at a cost less than the stated conversion price and as a result the
Company recorded an expense related to the modification of the conversion price
amounting to approximately $395,000.
As of March 31, 2011 the balance of the Company's short term convertible notes
amounted to $367,273, net of the remaining debt discount of $91,000.
14
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
The interest on these debentures is accrued and due at the end of the term. The
accrued interest amounted to approximately $30,000 and is included in accounts
payable and accrued expenses.
LONG TERM CONVERTIBLE DEBT
On March 31, 2011, the Company received proceeds and entered into a long-term
convertible note with a total face amount of $25,000 bearing an interest rate of
5% payable in full in eighteen months and convertible into shares of Company's
common stock at $0.001 per share.
In accordance with ASC 470, the Company recorded a discount for the Beneficial
Conversion Feature ("BCF") on the convertible debt amounting to $25,000 and is
amortized over the life of the debentures. The Company recorded a discount
amortization expense for the BCF of approximately $0 with a remaining
unamortized balance of the discount of approximately $25,000.
As of March 31, 2011 the balance of the Company's long term convertible note
amounted to $0, net of the remaining debt discount of $25,000.
The interest on this debenture is accrued and due at the end of the term.
LOANS PAYABLE
In October 2010, the Company entered into a secured promissory note for $50,000.
The note is payable within 90 days and bears an interest rate of 5%, due at
maturity. In addition to the 5% interest rate the Company issued 500,000 shares
of its common stock as additional consideration. The shares issued are valued at
$21,249 and recorded as interest expense.
In February 2011, the Company received proceeds and entered into a promissory
note for $50,000. The terms of this note have yet to be determined.
As of March 31, 2011 the balance of the Company's loans payable amounted to
$100,000.
The interest on this debt is accrued and due at the end of the term. The accrued
interest amounted to approximately $2,000 and is included in accounts payable
and accrued expenses.
NOTE 10 - EQUITY TRANSACTIONS FROM INCEPTION
On October 20, 2006, Ludvik Capital, Inc. was formed to be the successor
corporation by merger of Patriot Advisors, Inc. and Templar Corporation.
Pursuant to a court order in the US bankruptcy court and December 12th Stock
Purchase Agreement between the Company and Ludvik Nominees Pty Ltd, Patriot
Advisors, Inc. and Templar Corporation merged with the Ludvik Capital, Inc,
whereby the surviving corporation became the registrant, Ludvik Capital, Inc.
Ludvik Nominees Pty Ltd was issued 40,000,000 shares (post forward stock split),
of which approximately 18 million shares of Ludvik common stock were issued to
old creditors of Patriot Advisors and Templar Corp as payment for past
outstanding services and approximately 22 million shares of Ludvik common stock
were held by Ludvik Nominees Pty Ltd. for the initial capital of $20,000.
On February 7, 2007 the United States Bankruptcy Court for the District of Maine
entered an order confirming the December 12, 2006 agreement with the Debtor
whereby, there were 40,000,000 (post forward stock split) unrestricted shares of
the Company's Common Stock issued to creditors and plan participants .
15
SavWatt USA, Inc.
f/k/a Ludvik Capital, Inc.
(Development Stage Company)
Notes to Consolidated Financial Statements
From Inception, October 20, 2006 through March 31, 2011
(Unaudited)
--------------------------------------------------------------------------------
In April 2010, the Company amended its Articles of Incorporation changing the
name of the Company to SavWatt Usa, Inc. and increasing the authorized capital
stock from 100,000,000 to 2,000,000,000 and 200,000,000 shares of preferred
stock.
In January 2011, Sutton Global converted $250,000 of debt into 5,000,000 shares
of Preferred Series A stock.
The issuance of common stock from inception, October 20, 2006 through the year
ended December 31, 2010 is summarized in the table below:
Number of Per Share
of shares Fair Value at Value at
common stock Issuance Issuance
------------ -------- --------
Stock issued upon merger in accordance with Court Order 40,000,000 $ 20,000 $ 0.0005
Stock issued in connection with acquisition 24,196 -- --
Stock issued for services 38,905,710 13,061,326 .0395-5.52
Stock issued to retire debt - Shareholder loans 32,394,269 23,494,294 .040-1.01
Common stock issued for cash 37,333,333 315,000 .003-.01
Fair value of common stock issued for interest 500,000 21,249 0.0425
Common stock issued pursuant to note holder debt
conversion 18,374,278 173,469 .009-.01
----------- -----------
167,531,786 $37,085,338
The issuance of common stock during the three month period ended March 31, 2011
is summarized in the table below:
Number of Per Share
of shares Fair Value at Value at
common stock Issuance Issuance
------------ -------- --------
Common stock cancelled (5,000,000) $ -- $ --
Fair value of common stock issued for services 12,100,000 62,250 .0033-.0140
Fair value of common stock issued for interest 1,000,000 14,000 0.014
Fair value of common stock issued for related party debt
settlement 2,500,000 35,000 0.014
Common stock issued pursuant to note holder debt conversion 124,309,340 321,727 .005-.01
Stock issued to retire debt - Shareholder loans 4,692,700 46,927 .01
----------- ---------
139,602,040 $ 479,904
16
NOTE 11 - COMMITMENTS AND CONTINGENCIES
On July 1, 2010, the Company entered into an employment agreement with Michael
Haug, as the Company's CEO, which responsibilities include running the daily
operations of SavWatt USA, Inc. The term of the agreement is for one year at a
salary of $84,000, and may be renewed upon mutual agreement by the Company and
the employee.
On February 11, 2011, the Company entered into a lease for approximately 24,561
square feet at 1100 Wicomico Street, Suite 700, Baltimore, Maryland, under a
written lease for a term of ten years. This new facility will be the Company's
new principal executive offices, as well as a manufacturing and assembly
facility. We will not have to pay rent on this facility until February 1, 2012.
Thereaftter, we will pay rent as follows:
February 1, 2012 - January 31, 2013 $ 9,926.74 per month
February 1, 2013 - January 31, 2016 $11,564.14 per month
February 1, 2016 - January 31, 2019 $12,526.11 per month
February 1, 2019 - January 31, 2021 $13,549.49 per month
NOTE 12 - SUBSEQUENT EVENTS
During April and May 2011 the Company recorded the following transactions:
* Issued 231,447,000 shares of common stock pursuant to the conversi0n of
$295,567 of debt.
* Issued 42,300,000 shares as collateral for debt.
* Received proceeds amounting to $150,000 related to the issuance of short
term loans.
* A shareholder assigned approximately $349,000 of debt to investors.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS CAUTIONARY FORWARD - LOOKING STATEMENT
This Form 10-Q contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Some of the statements
contained in this Form 10-Q for SavWatt USA, Inc., formerly known as Ludvik
Capital, Inc. ("Company"), discuss future expectations, contain projections of
results of operation or financial condition or state other "forward-looking"
information. These statements are subject to known and unknown risks,
uncertainties, and other factors that could cause the actual results to differ
materially from those contemplated by the statements. The forward-looking
information is based on various factors and is derived using numerous
assumptions.
Management expresses its expectations, beliefs and projections in good faith and
believes the expectations reflected in these forward-looking statements are
based on reasonable assumptions; however, Management cannot assure current
stockholders or prospective stockholders that these expectations, beliefs and
projections will prove to be correct. Such forward-looking statements reflect
the current views of Management with respect to the Company and anticipated
future events.
Management cautions current stockholders and prospective stockholders that such
forward-looking statements, including, without limitation, those relating to the
Company's future business prospects, demand for its products, revenues, capital
needs, expenses, development and operation costs, wherever they occur in this
Form 10-Q, as well as in the documents incorporated by reference herein, are not
guarantees of future performance or results, but are simply estimates reflecting
the best judgment of Management and involve a number of risks and uncertainties
that could cause actual results to differ materially from those suggested by
such forward-looking statements.
Important factors that may cause actual results to differ from projections
include, for example:
* the success or failure of management's efforts to implement their business
strategy;
* the ability of the Company to raise sufficient capital to meet operating
requirements;
* the uncertainty of consumer demand for our products, services and
technologies;
* the ability of the Company to protect its intellectual property rights;
* the ability of the Company to compete with major established companies;
* the effect of changing economic conditions;
* the ability of the Company to attract and retain quality employees;
* the current global recession and financial uncertainty; and
* other risks which may be described in future filings with the SEC.
Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," and variations of such words and similar expressions are intended
to identify such forward-looking statements. These statements are not guarantees
of future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual results and
outcomes may differ materially from what is expressed or forecasted in any such
forward-looking statements. Unless required by law, the Company undertakes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
GENERAL
The Company was incorporated on October 20, 2006, under the name of Ludvik
Capital, Inc. We changed our name to SavWatt USA, Inc. on April 5, 2010. On
January 12, 2007, we filed a Form 10 registration statement under section 12(g)
of the Securities Exchange Act of 1934, as amended ("Exchange Act"). As a
consequence of filing our Form 10, we became subject to the periodic reporting
requirements of the Exchange Act and were required to file Annual Reports of
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy
Statements pursuant to Regulation 14A and Schedule 14C Information Statements
pursuant to the Exchange Act.
18
The financial statements included in this Form 10-Q have been prepared in
accordance with generally accepted accounting principles for financial
information and have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for smaller reporting companies. In the
opinion of management, all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of operations for the period
from October 20, 2006 (Inception) to March 31, 2011 have been reflected herein.
The results of operations for the period from October 20, 2006 (Inception) to
March 31, 2011 are not necessarily indicative of the results to be expected in
the future. These statements should be read in conjunction with the audited
financial statements for the year ended December 31, 2010 included in our
previously filed Form 10-K.
RESULTS OF OPERATIONS
The Company has generated minimal revenues since its inception, October 20,2006.
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
The Company's operations for the three months ended March 31, 2011 and 2010
consist of general and administrative expenses incurred in the amount of
$292,143 and $90,000 respectively and professional fees amounting to $170,965
and $0, respectively.
FOR THE PERIOD FROM OCTOBER 20, 2006 (INCEPTION) TO MARCH 31, 2011.
Expenses from inception consist of professional fees of $1,888,171 and general
and administrative expenses consisting of organization and related expenses of
$586,421 and $36,073,619 related to stock based compensation.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations from inception to date through the sale of
common stock, amounting to $335,000, and through the issuance of a $125,000 loan
payable.
We had minimal cash on hand as of March 31, 2011 and a working capital
deficiency of $1,871,036. We will continue to need additional cash during the
following twelve months and these needs will coincide with the cash demands
resulting from implementing our business plan and remaining current with our
Securities and Exchange Commission filings. There is no assurance that we will
be able to obtain additional capital as required, or obtain the capital on
acceptable terms and conditions.
GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. The Company has not begun generating significant
revenues, and is still considered a development stage company, has experienced
recurring net operating losses and had a net loss of $1,323,297 for the three
months ended March 31, 2011. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from this uncertainty. We will
need to raise funds or implement our business plan to continue operations.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
19
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Since the Company has securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 ("Exchange Act"), the Company is responsible for
maintaining, and management is responsible for evaluating, the effectiveness of,
disclosure controls and procedures as provided in Rule 13a-15(e) of the Exchange
Act. Item 307 of the SEC's Regulation S-K requires that our principal executive
and principal financial officer evaluate the effectiveness of the design and
operation of our disclosure controls and procedures. The term "disclosure
controls and procedures," as defined in Rules 13a-15(e) under the Securities and
Exchange Act of 1934, as amended ("Exchange Act"), means controls and other
procedures of a company that are designed to ensure that information required to
be disclosed by the company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures also include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a
company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the company's management, including its
principal executive and principal financial officers, or persons performing
similar functions, as appropriate, to allow timely decisions regarding required
disclosure. We conducted an evaluation under the supervision and with the
participation of our management, including Isaac H. Sutton, our chief and
principle executive and financial officer, of the effectiveness of our
disclosure controls and procedures. Based on this evaluation, our principal
executive and financial officer concluded as of March 31, 2011, that our
disclosure controls and procedures have been improved and were effective as of
March 31, 2011.
(b) Changes in Internal Control over Financial Reporting During the quarter
ended March 31, 2011, we did not make any changes in our internal controls over
financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not aware of any threatened or pending litigation against the
Company.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. (REMOVED AND RESERVED)
None.
ITEM 5. OTHER INFORMATION
None.
20
ITEM 6. EXHIBITS
See Exhibit Index below for exhibits required by Item 601 of regulation S-K.
EXHIBIT INDEX
Exhibit Description
------- -----------
31.1 Certification under Section 302 of Sarbanes-Oxley Act of 2002.
32.1 Certification under Section 906 of Sarbanes-Oxley Act of 2002.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this amended report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SavWatt USA, Inc.
Dated: May 20, 2011 /s/ Michael Haug
------------------------------------------
By: Michael Haug
Its: Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this amended report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Dated: May 20, 2011 /s/ Michael Haug
------------------------------------------
By: Michael Haug
Its: Chief Executive Officer
21
