Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K / A
Amendment No. 1
(Mark One)
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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
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For the Fiscal Year Ended December 31, 2010
or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period from ____________ to ____________
Commission File Number 033-03275-D
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ENSURGE, INC.
(Name of registrant as specified in its charter)
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Nevada
(State or other jurisdiction of
incorporation or organization)
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87-0431533
(I.R.S. Employer
Identification No.)
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1001 Brickel Bay Drive, 27th Floor
Miami, Florida
(Address of Principal Executive Offices)
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33131
(Zip Code)
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Issuer's Telephone Number (888) 978-9994
Securities Registered Pursuant to Section 12(b) of the Exchange Act: None
Securities Registered Pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange. [ ] Yes [X] No
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Note – Checking the box above will not relieve any registrant to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. [X] Yes [ ] 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 (§ 229.405 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 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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Accelerated filer
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Non-accelerated filer (Do not check if a smaller reporting company)
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Smaller reporting company R
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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 [X] No
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2010 was approximately $14,349,023. The registrant had issued and outstanding 32,348,726 shares of its common stock on February 13, 2012.
EXPLANATORY NOTE
Due to staff comments from the United States Securities and Exchange Commission, the Company is amending its December 31, 2010 10-K/A Part III. This amended Part III of the 10-K/A should be referred to and not the proxy statement for December 31, 2010. The only section of Part III that has been changed is: Item 11 Executive Compensation. This Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K/A of RT Technologies, Inc. for the fiscal year ended December 31, 2010, originally filed with the Securities and Exchange Commission (“SEC”) on April 7, 2011 (the “Original Filing”) and amended again
on February 6, 2012. This Form 10-K/A does not attempt to modify or update any other disclosures set forth in the Original Filing. There are no changes to the body of the Form 10-K/A other than the discussion under “Executive Compensation.” Additionally, this amended Form 10-K/A, except for the amended information, speaks as of the filing date of the Original Filing and does not update or discuss any other developments affecting us subsequent to the date of the Original Filing.
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ENSURGE, INC.
FORM 10-K/A
FOR THE YEAR ENDED DECEMBER 31, 2010
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PART III
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ITEM 10.
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DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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ITEM 11.
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EXECUTIVE COMPENSATION
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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10
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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11
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ITEM 15.
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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12
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SIGNATURES
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Forward-Looking Statements and Associated Risks
This Report, including all documents incorporated herein by reference, includes certain “forward-looking statements” within the meaning of that term in Section 13 or 15(d) of the Securities Act of 1934, and Section 21E of the Exchange Act, including, among others, those statements preceded by, followed by or including the words “believes,” “expects,” “anticipates” or similar expressions.
These forward-looking statements are based largely on the Company’s current expectations and are subject to a number of risks and uncertainties. The Company’s actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include:
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·
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changes in the Company’s business strategy or an inability to execute its strategy due to unanticipated changes in the market,
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the Company’s ability to raise sufficient capital to meet operating requirements,
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various competitive factors that may prevent the Company from competing successfully in the marketplace, and
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·
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changes in external competitive market factors or in the Company’s internal budgeting process which might impact trends in the Company’s results of operations.
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In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Report will, in fact, occur.
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PART III
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
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The following sets forth certain information regarding the Company’s executive officers and directors as of March 31, 2011:
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Name
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Age
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Director
Since
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Position
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Jordan M. Estra
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64
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2010
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Chief Executive Officer, President, Director
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Jeff A. Hanks
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45
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2002
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Chief Financial Officer, Secretary, Director
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The biographies of each of the directors and executive officers below contains information regarding the person’s service, business experience, positions held currently or at any time during the last five years, and for each director or any nominee for director the particular experiences, qualifications, attributes or skills that caused the Board of Directors to determine that such person should serve as a director for the Company in 2011, and the names of other any other publicly-held companies of which such person served as a director in the past five years.
Jordan M. Estra, Chief Executive Officer, President, and Director:
Mr. Estra has had the following employment opportunities; Managing Director in the Private Equity group at Sutter Securities Incorporated, since May 2009, Managing Director at Jesup & Lamont Securities, Inc., from April 2007 to April 2009, Senior Vice President for Dawson James Securities, Inc., from September 2006 to March 2007 and Managing Director at Stanford Financial Group, from June 2003 to September 2006. He has focused on raising capital for emerging natural resource companies. Mr. Estra has been a leading research analyst and global metals/mining team leader for a number of major investment banks, including SG Warburg (now UBS), Merrill Lynch and BT Alex Brown
(now Deutsche Bank) He began his career in the resources industry, at AMAX Inc., a global natural resources leader with interests in precious metals, copper, lead, zinc, coal, oil & gas, molybdenum, tungsten and iron ore. Mr. Estra held a number of positions in finance, marketing and strategic business development.
Mr. Estra graduated with high distinction from Babson College with a degree in International Economics and with honors from Columbia University’s Graduate School of Business. Mr. Estra served in the United States Army and has been a member of the American Institute of Mining, Metallurgical and Petroleum Engineers, the Foreign Policy Association, the New York Society of Security Analysts and the Stock & Bond Club of South Florida.
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The Company believes Mr. Estra’s qualifications to sit on its Board of Directors include his experience in the natural resource industry, his background as a research analyst and his advanced education in management.
Other Directorships: Mr. Estra is a Director of Searchlight Minerals, Inc., and is Director and Non-Executive Chairman of Starcore International Mines, LTD, and is a member of the Advisory Board of RX Exploration, all publicly owned gold mining companies.
Jeff A. Hanks, CPA, Chief Financial Officer and Director:
Mr. Hanks has served as a member of the Board of Directors of the Company and as the Chief Financial Officer of the Company, since 2002. During this time the Company focused on several Mergers and Acquisitions. From 2002, until December, 2009, Mr. Hanks also served as the President of the Company. Prior to joining the Company in 2000, Mr. Hanks worked as a Controller and Chief Financial Officer for several mid-size growing companies. Mr. Hanks has also worked as a consultant and auditor for Deloitte & Touche, one the Big Four international accounting firms where he obtained his CPA license. He graduated from the University of Utah with a
degree in Accounting. He is currently a member of the AICPA.
The Company believes Mr. Hanks’ qualifications to sit on its Board of Directors include his extensive audit and SEC experience, CPA license and his over 20 years of experience in finance and accounting and his senior executive experience with several companies, including eleven years with the Company.
Other Directorships: From March 2010 to Sept 2010, Mr. Hanks served as the Chief Financial Officer and a director for SMSA El Paso II Acquisition Corp., a development stage company in the oil, gas and mineral industry. He also serves as a Director and Treasurer for NAMI of Utah.
Term of Office
All directors serve until the next annual stockholders meeting or until their successors are duly elected and qualified. All officers serve at the discretion of the Board of Directors.
There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors during the period covered by this report.
Family Relationships
There are no family relationships between or among any of the Company's directors or executive officers.
Code of Ethics
The Company has not yet adopted a code of ethics. The Company intends to adopt a code of ethics in the near future.
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Involvement in Certain Legal Proceedings
To the best of its knowledge, the Company’s directors and executive officers were not involved in any legal proceedings during the last 10 years as described in Item 401(f) of Regulation S-K.
Compliance with Section 16(a) Beneficial Ownership Reporting.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers and persons who own more than five percent of a registered class of the Company’s equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of its common stock. Officers, directors and ten-percent or more beneficial owners of the Company’s common stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file and provide written representation that no Form 5 is required.
Jordan Estra and Jeff Hanks, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, both of whom are also directors of the Company, have represented to the Company that all filings of their Initial Statements of Beneficial Ownership on Form 3 have been filed. The Form 3 for each executive has been filed as of the date of this annual report on Form 10-K.
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ITEM 11.
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EXECUTIVE COMPENSATION
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Michael B. Campbell was appointed President and Chief Executive Officer during the month of December 2009 and served through June 1, 2010, when he resigned. He received compensation of $75,000 during this time period.
Jordan M. Estra was appointed President and Chief Executive Officer on July 1, 2010. He received compensation of $93,750, common stock and options valued at $487,463 for the year ended December 31, 2010.
Jeff A. Hanks served as President of the Company until December 2009 and is currently the Chief Financial Officer. During 2010 he received compensation of $87,000, common stock and options valued at $417,463 for that time period. He did receive 400,000 shares of common stock in June 2009 in exchange for accrued compensation.
No other officer of the company was compensated in excess of $100,000.
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning the compensation paid or accrued for each of the Company’s last two completed fiscal years to the Company’s Chief Executive Officer and each of its other executive officers that received compensation in excess of $100,000 during such period (as determined at December 31, 2010 and 2009):
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| Summary Compensation Table | ||||||||||||||||||||||||||||||
| Annual Compensation | Awards | Payouts | ||||||||||||||||||||||||||||
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Name and Principal Position
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Year
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Salary
($)
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Bonus
($)
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Stock
Awards
($) (3)
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Option
Awards
($) (3)
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Non-Equity
Incentive Plan
Compensation
($)
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Nonqualified
Deferred
Compensation
Earnings ($)
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All Other
Compensation
($)
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Total
($)
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Jordan
Estra,
CEO/
President(1)
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2010
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93,750 | -0- | 140,000 | 347,463 | -0- | -0- | -0- | 581,213 | |||||||||||||||||||||
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Michael
Campbell,
CEO/
President(2)
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2010
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75,000 | -0- | -0- | -0- | -0- | -0- | -0- | 75,00 | |||||||||||||||||||||
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Jeff Hanks,
CFO
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2010 | 87,000 | -0- | 70,000 | 347,463 | -0- | -0- | -0- | 504,463 | |||||||||||||||||||||
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Jeff Hanks,
President
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2009
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-0- | -0- | 1,000 | -0- | -0- | -0- | -0- | 1,000 | |||||||||||||||||||||
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(1) Mr. Estra was appointed as President and Chief Executive Officer in July 2010.
(2) Mr. Campbell was appointed as a member of the Board of Directors of the Company and as its President and Chief Executive Officer in December 2009; he resigned June 30, 2010. Mr. Hanks resigned as President of the Company in December 2009 but continued as its Chief Financial Officer.
(3) This column represents the aggregate grant date fair value of the awards granted in 2010 and 2009, respectively. Therefore, the values shown here are not representative of the amounts that may eventually be realized by an executive. Pursuant to the rules of the Securities and Exchange Commission, we have provided a grant date fair value for option awards in accordance with the provisions of FASB ASC 718 Share-based Payments. For option awards, the fair value is estimated as of the date of grant using the Black-Scholes option pricing model, which requires the use of certain assumptions, including the risk-free interest rate, dividend yield, volatility,
forfeitures and expected term. Expected term is determined using an average of the contractual term and vesting period of the award. Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of similar industry indices, which are publicly traded, over the expected term of the award. Risk-free interest rate is equivalent to the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards and forfeitures are based on the history of cancellations of awards granted by the Company and management's analysis of potential forfeitures.
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Salaries for Mr. Hanks for 2007 and 2008 were earned and accrued and paid with common stock in 2009.
In July 2010 the Company obtained financing at $0.14, which we determined to be the current market value of the Company’s common stock. During July of 2010 the Company issued 1,000,000 shares of common stock to Jordan Estra and 500,000 shares of common stock to Jeff Hanks at the current market price of $0.14, for a total of $140,000 and $70,000 respectively and a total of $210,000. During August and November the Company issued 1,600,000 options to both Jordan Estra and Jeff Hanks at the current market price of $0.14, which equals $224,000 respectively. We used this value of $224,000
as the current market value of the options and used this for our Black Sholes model, which determined an accounting expense of $347,463, respectively, to be charged on the financials as an expense. Thus, this higher amount was used in the table so as to tie to the financial statements.
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Michael B. Campbell’s Consulting Agreement
On February 1, 2010, the Company entered into a one-year non-exclusive consulting agreement (the “Campbell Consulting Agreement”) with Michael Campbell, Chairman of the Board of Directors of the Company. Pursuant to the Campbell Consulting Agreement, Mr. Campbell will serve as the President and Chief Executive Officer of the Company and Mr. Campbell will receive a monthly consulting fee of $15,000, in addition to reimbursement of his reasonable and necessary business expenses. This consulting agreement was terminated when Michael Campbell resigned on June 30, 2010.
Jeff A. Hanks’s Consulting Agreement
On February 1, 2010, the Company also entered into a one-year non-exclusive consulting agreement (the “Hanks Consulting Agreement” and collectively with the Campbell Consulting Agreement, the “Consulting Agreements”) with Jeff A. Hanks, a member of the Board of Directors of the Company. Pursuant to the Hanks Consulting Agreement, Mr. Hanks will serve as the Chief Financial Officer of the Company and Mr. Hanks will receive a monthly base consulting fee of $2,000, plus a $1,000 preparation fee for each Annual Report on Form 10-K or Quarterly Report on Form 10-Q he prepares for the Company. This agreement was terminated when Mr. Hanks accepted a full time position
with the Company.
Employment Contracts and Termination of Employment and Change in Control Arrangement
We have entered into two contracts with our management. The employment agreements are for a term of three years but automatically renew on the anniversary date for an additional one year period until terminated on thirty days written notice form Ensurge or the employee. Our CEO will receive an annual salary of $225,000 and our CFO will receive an annual salary of $150,000 both subject to yearly adjustment by the board or compensation committee. The contracts also allow for yearly bonuses and stock options at the discretion of the board or compensation committee. If there is a change of control and the CEO or CFO is terminated within the twelve months
following such change of control, the CEO or CFO, as the case may be, will receive twenty four months of his salary from the date of such termination. Unless terminated for cause, the CEO or CFO will receive twenty four months of his annualized salary. Cause is defined as gross negligence, felony conviction fraud, embezzlement or willful and material violations of Ensurge policy which is not corrected.
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Outstanding Equity Awards At Fiscal Year-End
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Name
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Option awards
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Stock awards
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Number of securities underlying unexercised options
(#)
exercisable
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Number of
securities
underlying
unexercised
options
(#)
unexercisable
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Equity
incentive
plan awards:
Number of
securities
underlying
unexercised
unearned
options
(#)
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Option
exercise
price
($)
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Option
expiration
date
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Number of
shares or units
of stock that
have not
vested
(#)
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Market value
of shares of
units of stock
that have not
vested
($)
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Equity
incentive
plan awards:
Number of
unearned
shares, units or
other rights that
have not vested
(#)
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Equity
incentive
plan awards: Market or
payout value of
unearned
shares, units or other
rights that have not
vested
($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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Jordan Estra
Jeff Hanks
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1,600,000
1,600,000
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900,000
900,000
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None
None.
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$0.14
$0.14
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Nov 2020
Nov 2020
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None
None.
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None
None.
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None
None.
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None
None.
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Benefit Plans
On April 21, 2010, the Company adopted an Equity Incentive Plan. The Company has not adopted any retirement, pension, or profit sharing for the benefit of its employees.
Director Compensation
The Company does not currently provide compensation to its directors for serving on its Board of Directors.
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The following table sets forth certain information regarding the beneficial ownership of the Company's outstanding Common Stock as of March 31, 2011, by (i) each director of the Company, (ii) each named executive officer in the Summary Compensation Table, (iii) each person known or believed by the Company to own beneficially five percent or more of the Common Stock and (iv) all directors and executive officers as a group. Unless indicated otherwise, each person has sole voting and dispositive power with respect to such shares.
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Name and Address
Of Beneficial Owner
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Beneficial
Ownership (1)
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Percent of
Class
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Officers and Directors
As a Group (two)
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2,600,200
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8.8%
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Jordan M. Estra
2825 East Cottonwood Parkway,
Suite 500
Salt Lake City, UT 84121
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1,700,000
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5.8%
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Jeff A. Hanks
2825 East Cottonwood Parkway,
Suite 500
Salt Lake City, UT 84121
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900,200
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3.0%
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Beneficial Owners
Owning greater than 5%
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Beneficial
Ownership
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Percent
Of Class
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Steve Heard
4003 West Tacon Street
Tampa, FL 33629
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3,850,000
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13.0%
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Puremax, Inc.
4003 West Tacon Street
Tampa, FL 33629
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5,000,000
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16.9%
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Barrington Capital Partners, Inc.
830 West RT 22, Suite 153
Lake Zurich, IL 60047
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3,367,251
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11.4%
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Wasatch Property Development, Inc.
35 W. Broadway, Suite #104
Salt Lake City, UT 84101
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3,032,155
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10.2%
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Seaside 88,LP
750 Ocean Royale Way, Suite 805
Juno Beach, FL 33408
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2,813,555
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9.5%
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(1)
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Unless otherwise indicated, the Company has been advised that all individuals or entities listed have the sole power to vote and dispose of the number of shares set forth opposite their names. For purposes of computing the number and percentage of shares beneficially owned by a security holder, any shares which such person has the right to acquire within 60 days of March 31, 2011 are deemed to be outstanding, but those shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other security holder.
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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None.
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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Audit Fees: the aggregate audit and review fees billed for fiscal years ending 2010 and 2009 were respectively, $14,800 and $13,300. These fees were for professional services rendered by Child, Van Wagoner & Bradshaw, PLLC CPA firm for the audit of the Company’s annual financial statements and review of financial statements.
Audit-Related Fees: None.
Tax Fees: the aggregate tax fees billed for fiscal years ending 2010 and 2009 were respectively, $700 and $700. These fees were for professional services rendered by Child, Van Wagoner & Bradshaw, PLLC, which were for the completion of the Company’s year end tax return.
All Other Fees: None.
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ITEM 15.
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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(a)(1)(2) Financial Statements.
The financial statements listed in the Index to Financial Statements are filed as part of this Annual Report on Form 10-K.
(a)(3) Exhibits.
The exhibits required by this item are set forth on the Exhibit Index attached hereto.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
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ENSURGE, INC.
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February 14, 2012
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By:
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/s/ JORDAN M. ESTRA
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Jordan M. Estra, Chief Executive Officer
(Principal Executive Officer)
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By:
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/s/ JEFF A. HANKS
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Jeff A. Hanks, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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/s/ JORDAN M. ESTRA
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February 14, 2012
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Jordan M. Estra
President, Chief Executive Officer
and Director
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/s/ JEFF A. HANKS
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February 14, 2012
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Jeff A. Hanks
Chief Financial Officer
and Director
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