Attached files
file | filename |
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EX-31.1 - CERTIFICATION - SONNEN Corp | exhibit311.htm |
EX-32.1 - CERTIFICATION - SONNEN Corp | exhibit321.htm |
EXCEL - IDEA: XBRL DOCUMENT - SONNEN Corp | Financial_Report.xls |
EX-31.2 - CERTIFICATION - SONNEN Corp | exhibit312.htm |
EX-32.2 - CERTIFICATION - SONNEN Corp | exhibit322.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2011.
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
.
Commission file number: 000-52803
SONNEN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada
98-0514037
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133
(Address of principal executive offices) (Zip Code)
(305) 529-4888
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 o
No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes o No þ
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 o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes þ No o
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuers common stock, $0.0001 par value (the only class
of voting stock), at April 8, 2013, was 67,893,000.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
3
Consolidated Balance Sheets as of December 31, 2011 (Unaudited) and June 30,
4
2011
Unaudited Consolidated Statements of Operations for the three and six months
5
ended December 31, 2011 and 2010, and cumulative amounts from development
stage activities (November 16, 2006 through December 31, 2011)
Unaudited Consolidated Statements of Cash Flows for the three and six months
6
ended December 31, 2011 and 2010, and cumulative amounts from development
stage activities (November 16, 2006 through December 31, 2011)
Notes to Unaudited Consolidated Financial Statements
7
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
18
Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
22
Item 4.
23
PART II-OTHER INFORMATION
Item 1.
24
Item 1A.
24
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
24
Item 3.
Defaults Upon Senior Securities
24
Item 4.
24
Item 5.
24
Item 6.
24
25
Index to
26
Exhibits
2
PART I FINANCIAL INFORMATION
ITEM 1.
As used herein, the terms Company, we, our, and us, refer to Sonnen Corporation, a Nevada
corporation, unless otherwise indicated. In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of operations for the periods presented.
The results of operations for the periods presented are not necessarily indicative of the results to be
expected for the full year.
3
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
December 31,
June 30,
2011
2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
87 $
159
Prepaid expenses (Note 4)
856
1,099
Total Current Assets
943
1,258
Total Other Assets
-
-
Total Assets
$
943 $
1,258
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable
$
136,192 $
131,505
Accounts payable - related parties
427,048
319,379
Accrued payroll
13,283
13,283
Notes payable - related parties (including accrued
interest of $238 - December 31, 2011 and $93 - June 30, 2011)
11,983
11,693
Notes payable (including accrued interest of $19,572
- December 31, 2011 and $16,655 - June 30, 2011)
173,949
167,763
Loans from shareholder (including accrued interest of $18,684
- December 31, 2011 and $15,604 - June 30, 2011)
172,424
166,264
Total Current Liabilities
934,879
809,887
COMMITMENTS AND CONTINGENCIES (Note 11)
-
-
STOCKHOLDERS' DEFICIT (Note 8)
Preferred stock, $0.0001 par value, 50,000,000 shares
authorized, none issued and outstanding
-
-
Common stock, par value $0.0001, 250,000,000 shares
authorized, 67,893,000 issued and outstanding
6,789
6,789
Paid-in capital
3,043,094
2,841,575
Accumulated deficit during the development stage
(3,983,819)
(3,656,993)
Total Stockholders' Deficit
(933,936)
(808,629)
Total Liabilities and Stockholders' Deficit
$
943 $
1,258
The accompanying notes are an integral part of these consolidated financial statements.
4
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
Cumulative
amounts
from
development
stage
activities
(November
For the three months ended
For the six months ended
16, 2006
December 31,
December 31,
through
December
2011
2010
2011
2010
31, 2011)
REVENUES
$
-
$
- $
- $
- $ -
GENERAL & ADMINISTRATIVE
EXPENSES
General and administrative
44
816
197
2,015
96,250
Professional fees
7,620
46,476
19,360
57,119
371,836
Consulting fees
-
-
-
-
179,727
Consulting and professional fees -
related parties
38,000
54,000
92,000
100,000
590,250
Stock based compensation
-
-
-
-
101,000
Compensation and related taxes and
benefits
100,769
150,031
201,519
300,061
1,797,310
Transfer fees
300
305
650
605
9,954
Depreciation
-
155
-
309
1,044
Research & development
-
72
-
107
167,666
Total General & Administrative Expenses
146,733
251,854
313,726
460,215
3,315,037
Loss before other income (expense)
(146,733)
(251,854)
(313,726)
(460,215)
(3,315,037)
Interest income/ (expense)
(6,322)
(6,173)
(13,100)
(11,881)
(44,422)
Loss on foreign currency exchange
-
-
-
-
(1,551)
Loss on disposal of assets
-
-
-
-
(809)
Impairment loss on asset
-
-
-
-
(672,000)
Other income
-
-
-
-
50,000
Loss before provision for income taxes
(153,055)
(258,028)
(326,826)
(472,097)
(3,983,819)
Provision for income taxes
-
-
-
-
-
NET LOSS
$
(153,055) $
(258,028) $
(326,826) $
(472,097) $
(3,983,819)
NET LOSS PER SHARE - BASIC AND
DILUTED
$
(0.00) $
(0.00) $
(0.00) $
(0.01)
WEIGHTED AVERAGE NUMBER OF
COMMON
SHARES OUTSTANDING - BASIC
AND DILUTED
67,893,000
67,893,000
67,893,000
67,893,000
The accompanying notes are an integral part of these consolidated financial statements
5
SONNEN CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cumulative
amounts from
development
stage activities
(November 16,
For the six months ended
2006 through
December 31,
December 31,
2011
2010
2011)
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES
Net (loss) from development stage activities
$
(326,826) $
(472,097) $
(3,983,819)
Adjustments to reconcile net loss to net
cash provided (used) by development stage activities:
Depreciation
-
309
1,044
Stock options vested
201,519
300,061
1,707,344
Stock issued for services
-
-
101,000
Loss on disposal of assets
-
-
809
Impairment loss on asset
-
-
672,000
Changes in operating assets and liabilities:
Increase in prepaid expenses
243
7,233
(856)
Increase in accounts payable
4,688
20,899
173,554
Increase in accounts payable - related parties
107,668
96,038
427,047
Increase in accrued liabilities
-
-
13,283
Increase in accrued interest
12,636
11,869
44,813
Total adjustments
326,754
438,410
3,140,038
NET CASH PROVIDED BY DEVELOPMENT STAGE ACTIVITIES
(72)
(33,686)
(843,781)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
-
-
(1,853)
NET CASH USED BY INVESTING ACTIVITIES
-
-
(1,853)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable, net
-
37,000
280,660
Proceeds from notes payable - related parties
-
-
45,600
Repayments from notes payable - related party
-
(4,000)
(50,079)
Proceeds from sale of common stock, net of offering costs
-
-
569,540
NET CASH PROVIDED BY FINANCING ACTIVITIES
-
33,000
845,721
NET INCREASE/ (DECREASE) IN CASH AND CASH
EQUIVALENTS
(72)
(686)
87
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
159
840
-
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
87 $
154 $
87
Supplemental Disclosures:
Cash paid for income taxes
$
- $
- $
-
Cash paid for interest
$
- $
- $
-
Non-cash Disclosures:
Payments made by related party on behalf of the Company:
Increase in notes payable - related parties
$
- $
- $
21,079
Decrease in accounts payable - related parties
$
- $
- $
(11,079)
Increase in prepaid expenses
$
- $
- $
(10,000)
To apply balance owed to a related party to accounts receivable:
Decrease in accounts receivable - related party
$
- $
- $
40,000
Repayments of note payable - related party
$
- $
- $
(40,000)
Stock issued for licensing agreement rights
$
- $
- $
672,000
The accompanying notes are an integral part of these consolidated financial statements
6
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 1 BUSINESS
Sonnen Corporation was incorporated in the state of Nevada on November 16, 2006 as Simple Tech,
Inc. Sonnen Corporation and its wholly-owned subsidiary, Sonnen One, Inc., are referred to herein as the
Company. By June 2009, the Company had been unable to realize its original business objective. In July
2009, the Company entered into a licensing agreement to research, develop and market products that rely
upon a novel process for energy generation consisting of specific materials and proprietary material
combinations.
On November 3, 2009, the Company amended its articles of incorporation to change its name from Simple
Tech, Inc. to Sonnen Corporation and to decrease the number of its authorized common stock from one
billion five hundred million (1,500,000,000) shares (par value $0.0001) to two hundred fifty million
(250,000,000) shares (par value $0.0001) without affecting the number of issued and outstanding shares.
The Companys subsidiary changed its name from Sonnen Corporation to Sonnen One, Inc.
On November 9, 2009, the Company formed a Scientific Advisory Board to support the Company with its
research, development, and commercialization efforts through advice, counsel, and direct participation
utilizing the industry expertise and professional and academic backgrounds of its Scientific Advisory Board
members pursuant to its current business plan.
On February 6, 2010, the licensor of the licensing agreement notified the Company of a purported breach of
contract terms, including a breach of confidentiality, insufficient funding for research and development
activities and failure to provide direct access to our patent attorneys. The license agreement allowed for a
ninety day period in which to cure purported breaches. The Company subsequently learned that the licensor
was not the rightful owner of the license and had no rights to grant the license to the Company.
Since the licensor failed to remedy the breach of the licensing agreement, the Company filed a legal
complaint on March 8, 2010 and impaired the entire $672,000 book value of the licensing agreement.
The Company has since been seeking to litigate an outcome of the dispute.
7
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles (GAAP) for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information
and footnotes required by GAAP for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the
Companys financial position as of December 31, 2011, and the results of its operations and cash flows for
the six months ended December 31, 2011, have been made. Operating results for the six months ended
December 31, 2011 are not necessarily indicative of the results that may be expected for the year ended
June 30, 2012.
These consolidated financial statements should be read in conjunction with the financial statements and
notes for the year ended June 30, 2011, thereto contained in the Companys Form 10-K.
Development Stage Enterprise
At December 31, 2011, the Companys business operations had not fully developed and the Company is
highly dependent upon funding and therefore is considered a development stage enterprise.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Sonnen Corporation and
Sonnen One, Inc., its wholly-owned subsidiary. All material intercompany accounts and transactions
between the Companies for the periods presented have been eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets, the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ
from those estimates and assumptions.
8
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 3 GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will
continue as a going concern. The Company has a cumulative net loss for the period from inception
(November 16, 2006) through December 31, 2011 of $3,983,819, a working capital deficit of $933,939 and
negative cash flows from development stage activities of $72. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The Company's continuation as a going concern
is dependent on its ability to meet its obligations, to obtain additional debt and/or equity financing as may
be required and ultimately to attain profitability. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
NOTE 4 PREPAID EXPENSES
Prepaid expenses comprise of the following at:
December 31,
2011
Haynes and Boone, LLP Prepayment retainer for legal fees
$
856
Total
$
856
June 30, 2011
Haynes and Boone, LLP Prepayment retainer for legal fees
$
1,099
Total
$
1,099
NOTE 5 LICENSING AGREEMENT
The Company entered into a licensing agreement (the Agreement) with PT Group, Limited (PT Group),
an unrelated entity, on July 27, 2009, that grants the Company an exclusive, non-transferable license to use
PT Groups intellectual property of a certain technology and licensed products to be used in achieving the
Companys business objectives. The terms of the agreement would have continued until the expiry of
protections afforded for the intellectual property, provided that the Company was not in breach or default of
any of the terms or conditions contained in the Agreement. During the term of the licensing agreement, the
PT Group retained sole and beneficial propriety of the intellectual property including any improvements
made to any licensed products or future products, regardless of the source.
9
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 5 LICENSING AGREEMENT - CONTINUED
In exchange for use of the license, the PT Group was issued common shares equal to 5% of the issued and
outstanding common shares, 3,360,000 shares of the Company at a value of $0.20 per share on the
execution date, which was estimated to be $672,000. Additionally, upon the Company cumulatively raising
$50 million in equity financing, the Company guaranteed that PT Group would own no less than 2.5% of
the issued and outstanding shares of its common shares.
Breach of Contract Claim
On February 6, 2010, PT Group notified the Company of a purported breach of contract terms, including a
breach of confidentiality, insufficient funding for research and development activities and failure to provide
direct access to our patent attorneys. The license agreement allowed for a ninety day period in which to cure
purported breaches. During the quarter ended March 31, 2010, the Company learned that PT Group was not
the rightful owner of the license and had no rights to grant the license to the Company. Since PT Group has
not remedied the breach in accordance with the Agreement, the Company filed a legal complaint. (Note 11)
As a result of this discovery, the Company impaired the entire $672,000 book value of the license
agreement.
NOTE 6 NOTES PAYABLE
On January 5, 2010, the Company received an advance on an interest bearing promissory note of $100,000
from an unrelated entity. The note is due and payable on January 11, 2011, and bears an interest rate of 8%
per annum. Interest of $4,088 for both periods ended December 31, 2011 and 2010 has been accrued and is
outstanding as of December 31, 2011. Subsequent to December 31, 2011, this note was extended to
December 12, 2014.
On August 29, 2009, the Company received an advance on an interest bearing promissory note of $10,000
from an unrelated third party. The note was due and payable on February 28, 2010, and bears an interest rate
of 1% per month. On November 17, 2009, we made a principal payment of $5,000. On March 1, 2010, the
Company executed a new note for $5,000 to the same unrelated third party. The new note is due and
payable on March 1, 2011, and bears an interest rate of 8% per annum. Interest of $204 for both periods
ended December 31, 2011 and 2010, respectively, has been accrued and is outstanding as of December 31,
2011. Subsequent to December 31, 2011, this note was extended to January 3, 2015.
10
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 6 NOTES PAYABLE - CONTINUED
On June 10, 2010, the Company received an advance on an interest bearing promissory note of $5,983 for a
payment made on behalf of the Company from an unrelated entity. The note is due and payable on June 10,
2011, and bears an interest rate of 8% per annum. Interest of $245 for both periods ended December 31,
2011 and 2010, respectively, has been accrued and is outstanding as of December 31, 2011. On June 18,
2010, the Company received another advance on an interest bearing promissory note of $10,000 in cash
from the same unrelated entity. The note is due and payable on June 18, 2011, and bears an interest rate of
8% per annum. Interest of $409 for both periods ended December 31, 2011 and 2010, respectively, has been
accrued and is outstanding as of December 31, 2011. On June 30, 2010, the Company received an advance
on an interest bearing promissory note of $5,300 for a payment made on behalf of the Company from the
same unrelated entity. The note is due and payable on June 30, 2011, and bears an interest rate of 8% per
annum. Interest of $217 for both periods ended December 31, 2011 and 2010, respectively, has been
accrued and is outstanding as of December 31, 2011. Subsequent to December 31, 2011, each of these notes
were extended to January 3, 2015.
On September 20, 2010, the Company received an advance on an interest bearing promissory note of
$25,000 from an unrelated entity. The note is due and payable on September 20, 2011, and bears an interest
rate of 8% per annum. Interest of $1,022 and $567 for the periods ended December 31, 2011 and 2010,
respectively, has been accrued and is outstanding, as of December 31, 2011. Subsequent to December 31,
2011, this note was extended to January 3, 2015.
NOTE 7 LOANS FROM SHAREHOLDERS
On February 17, 2010, the Company received an advance on an interest bearing promissory note of $93,660
in cash and a payment made on behalf of the Company of $5,000 for a total of $98,660 from an
unrelated shareholder. The note is due and payable on February 17, 2011, and bears an interest rate of 8%
per annum. Interest of $4,034 for both periods ended December 31, 2011 and 2010, respectively, has been
accrued and is outstanding as of December 31, 2011. On May 6, 2010, the Company received another
advance on an interest bearing promissory note of $35,000 in cash and a payment made on behalf of the
Company of $5,000 for a total of $40,000 from the same shareholder. The note is due and payable on May
6, 2011, and bears an interest rate of 8% per annum. Interest of $1,636 for both periods ended December 31,
2011 and 2010, respectively, has been accrued and is outstanding as of December 31, 2011. On July 8,
2010, the Company received another advance on an interest bearing promissory note of $12,000 from the
same shareholder. The note is due and payable on July 8, 2011, and bears an interest rate of 8% per annum.
Interest of $491 and $469 for the periods ended December 31, 2011 has been accrued and is outstanding.
Subsequent to December 31, 2011, each of these notes was extended to January 3, 2015.
11
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 8 STOCKHOLDERS' EQUITY
Common Shares Authorized
The Company has 250,000,000 common shares authorized at a par value of $0.0001 per share and
50,000,000 shares of preferred stock, par value $0.0001 per share. All common stock shares have equal
voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and,
therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all the
directors of the Company. As of December 31, 2011, there are no classes of preferred stock designated and
none are outstanding. As of December 31, 2011 and 2010, there are 67,893,000 shares issued and
outstanding, respectively.
Common Stock Issuances and Warrants Granted
For the six months ended December 31, 2011 there were no share issuances.
NOTE 9 STOCK BASED COMPENSATION
On August 31, 2009, the Company adopted the Companys 2009, Stock Option Plan (the Plan) in an
effort to promote the interests of the Company by providing eligible persons and companies with the
opportunity to acquire or increase a proprietary interest in the Company through the grant of up to five
million (5,000,000) non-statutory stock options (the Options) as an incentive for the eligible persons to
continue their employment or service.
On August 31, 2009, the Company authorized the grant of an aggregate of one million eight hundred
thousand (1,800,000) Options with an exercise price of $1.00 per share pursuant to the Plan. This block of
Options vest over a three year period through August 31, 2013, in equal increments of one-third of
potentially exercisable Options each year or in full if involuntarily terminated. During the six months ended
December 31, 2011 and 2010, the Company recognized option expense of $201,519 and $311,254,
respectively, in connection with the above options.
During the six months ended December 31, 2011, there have been no additional grants of stock options
under the plan.
12
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 9 STOCK BASED COMPENSATION - CONTINUED
A summary of the Options granted to employees and others under the Plan and changes since inception of
the Plan is presented below:
Weighted
Average
Number of
Exercise
Aggregate
Options
Price
Intrinsic Value
Balance at July 1, 2010
2,000,000 $
1.03 $
2,038,908
Options Granted
-
-
-
Options Exercised
-
-
-
Options Forfeited or Expired
(50,000) $
1.25
(62,844)
Balance at June 30, 2011
1,950,000 $
1.01 $
1,976,064
Exercisable at June 30, 2011
1,149,960 $
1.01 $
1,170,027
Weighted average fair value of Options
granted through June 30, 2011
$
1.01
Weighted
Average
Number of
Exercise
Aggregate
Options
Price
Intrinsic Value
Balance at July 1, 2011
1,950,000 $
1.01 $
1,976,064
Options Granted
-
-
-
Options Exercised
-
-
-
Options Forfeited or Expired
-
-
-
Balance at December 31, 2011
1,950,000 $
1.01 $
1,976,064
Exercisable at December 31, 2011
1,549,920 $
1.01 $
1,572,985
Weighted average fair value of Options
granted through December 31, 2011
$
1.01
13
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 9 STOCK BASED COMPENSATION - CONTINUED
The following table summarizes information about stock Options under the Plan that were outstanding at
December 31, 2011:
Outstanding Options
Weighted
Number
Average
Outstanding
Remaining
Weighted
at
Contractual
Average
Exercise
December
Life in
Exercise
Intrinsic
Price
31, 2011
Years
Price
Value
$
1.00
1,800,000
7.75 $
1.00 $ 1,813,493
$
1.25
150,000
7.95 $
1.25 $
162,572
1,950,000
7.85 $
1.01 $ 1,976,064
Options Exercisable
Number
Weighted
Exercisable
Average
Aggregate
Exercise
at December
Exercise
Intrinsic
Price
31, 2011
Price
Value
$
1.00
1,399,920 $
1.00 $ 1,410,413
$
1.25
150,000 $
1.25 $
162,572
1,549,920 $
1.01 $ 1,572,985
During the six months ended December 31, 2011 and 2010, the Company recorded $201,519 and $300,061,
respectively, in stock-based compensation which is included in salaries, payroll taxes, and expenses on the
statements of operations.
At December 31, 2011 there was $268,719 of total unrecognized compensation cost related to stock options
granted under the Plan. That cost is expected to be recognized pro-rata according to the vesting schedules
through August 1, 2012.
14
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 10 RELATED PARTY TRANSACTIONS
Notes payable related parties
On April 29, 2010, the Company received an advance on a non-interest bearing promissory note of $8,500
from a related entity. The note is due and payable on demand. On July 15, 2010, the Company repaid
$4,000 of the balance of this note. The remaining balance of $4,500 is outstanding as of December 31, 2011
for which the Company has not yet received a demand.
On May 2, 2011, the Company received an advance on an interest bearing promissory note of $7,100 from a
related entity. The note is due and payable on June 2, 2012, and bears an interest rate of 8% per annum.
Interest of $290 for the six months ended December 31, 2011 has been accrued and is outstanding.
Subsequent to December 31, 2011, this note was extended to January 3, 2015.
Consulting Agreements
On October 1, 2009, the Company entered into a consulting agreement with Prosper Financial, Inc., a
company owned by the spouse of the Companys President and Chief Executive Officer and 37% owner of
the Company. The agreement calls for monthly payments of $2,500 for consulting services rendered and
$1,200 per month in rental payments for the use of Prosper Financial, Inc.s office space. The agreement
extends through October 31, 2010, and was extended after that on a month to month basis for the consulting
services. As of December 31, 2011 and June 30, 2011, this related party had a balance due of $41,064 and
$26,064, respectively, and is reflected in accounts payable related parties.
On August 1, 2009, the Company entered into a consulting agreement with a director and officer that calls
for monthly compensation of $7,500 and extended through December 31, 2009, after which became a
month to month basis. As of December 31, 2011 and June 30, 2011, this related party had a balance due of
$147,375 and $101,706, respectively, which is reflected in accounts payable related parties.
On July 1, 2009, the Company entered into a consulting agreement with a shareholder, director and officer
of the Company that calls for an annual base fee of $96,000 and extends through June 30, 2010, after which
was continued on a month to month basis. As of December 31, 2011, this related party had a total balance
due of $182,969, comprised of $169,350 due for consulting fees, and $13,619 for business expenses, all of
which is reflected in accounts payable related parties. As of June 30, 2011, this related party had a total
balance due of $150,969, comprised of $137,350 due for consulting fees, and $13,619 for business
expenses, all of which is reflected in accounts payable related parties.
On October 1, 2009, the Company entered into a consulting agreement with the former Head of Research
that calls for monthly compensation of $6,000 and extends through December 31, 2009, this contract was
not renewed or extended. As of December 31, 2011 and June 30, 2011, this related party had a balance due
of $1,840, which is reflected in accounts payable related parties.
15
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 10 RELATED PARTY TRANSACTIONS - CONTINUED
On October 1, 2009, the Company entered into an agreement with a consultant to provide bookkeeping
services, the monthly compensation is $5,000 and extended through October 1, 2010, in addition, the
consultant shall be entitled to 100,000 incentive stock options upon signing, and extended through October
1, 2010. On April 1, 2010, we entered into a new agreement with the same consultant, the monthly
compensation was amended to be $2,500 per month, all other terms remained the same, and extended
through April 1, 2011, this contract was not renewed or extended. As of December 31, 2011 and June 30,
2011, this related party had a balance due of $40,000 and $25,000, respectively, which is reflected in
accounts payable related parties.
On December 1, 2009, the Company entered into a consulting agreement with the son of our President to
provide business consulting services that calls for monthly compensation of $2,000 and extends through
November 30, 2010, this contract was not renewed or extended. As of December 31, 2011 and June 30,
2011, this related party had a balance due of $9,000, which is reflected in accounts payable related parties.
NOTE 11 COMMITMENTS AND CONTINGENCIES
Contingencies
On February 6, 2010, PT Group notified the Company of a purported breach of contract terms including a
breach of confidentiality, insufficient funding for research and development activities and failure to provide
direct access to our patent attorneys. The licensing agreement allows for a ninety day period in which to
cure purported breaches. The Companys management and board of directors have reason to believe that PT
Group may not be the rightful owner of the intellectual property licensed under the licensing agreement.
(Note 5)
On March 8, 2010, the Company filed a complaint in the Circuit Court of the 11th Judicial Court In and For
Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of the
licensing agreement dated July 27, 2009. The complaint seeks: (i) damages for fraud that stem from
reliance on PT Group's claim of ownership over certain proprietary information, (ii) the return of Company
shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief sought to prohibit
Mr. Leonards use of confidential information to which he is not entitled, and (iv) reasonable attorneys
fees. Mr. Leonard responded to the complaint in an answer dated November 19, 2012 asserting that had no
knowledge of the subject matter of the suit. The Company has been unable to serve PT Group to date.
Should the relief sought be adjudicated, the Company expects to succeed on the merits of its claims.
16
SONNEN CORPORATION AND SUBSIDIARY
(Formerly known as Simple Tech Inc and Subsidiary)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2011
NOTE 12 SUBSEQUENT EVENTS
In accordance with Accounting Standards Codification (ASC) topic 855-10 Subsequent Events, the
Company has evaluated subsequent events through the date which the financial statements were available to
be issued. The Company has determined that there were no such events that warrant disclosure or
recognition in the financial statements, other than these below:
Note payables extensions
Subsequent to December 31, 2011, all of the Companys notes payables due dates were extended as
discussed above in Notes 6 + 7.
Stock options
On December 31, 2012, all outstanding vested options had expired in accordance with the terms of their
respective stock option agreements or rescinded by mutual agreement between the Company and the
respective holders.
17
ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
This Managements Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this quarterly report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as anticipates, expects, believes,
plans, predicts, and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include, but are not limited to, those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
consolidated financial statements and related notes included in this report. Information presented herein is
based on the three and six month periods ended December 31, 2011. Our fiscal year-end is June 30.
Discussion and Analysis of the Companys Plan of Operation
Our plan of operation over the next twelve months is to prosecute the Companys civil complaint against
PT Group and certain of the principals thereof and to consider alternative technologies for merger or
acquisition that might create value for its shareholders. Meanwhile, we have suspended our development
plan for the technology licensed from PT Group. While awaiting resolution of the uncertainties
surrounding the licensing agreement, the Company intends to identify, acquire and develop alternative
innovative technologies that it might advance to commercial applications. Management understands that
new technologies must meet several critical milestones in advance of commercialization. Milestones
include cost effectiveness, energy efficiencies, convenience of use and practicability. Any products that
we should develop will have to be able to effectively compete with todays accepted technologies by
optimizing low-cost manufacturing processes, ensuring enhanced energy efficiencies, and providing a
reliable product with the flexibility to rely on alternative fuel sources.
The Companys business development strategy is prone to significant risks and uncertainties which could
have an immediate impact on its efforts to generate a positive net cash flow and could deter the
development of advanced energy enhanced technology. Historically, the Company has not generated
sufficient cash flow to sustain operations and has had to rely on debt or equity financing to remain in
business. Therefore, we cannot offer that future expectations that any technology the Company might
develop will be commercially developed or that it will be sufficient to generate the revenue required for
its operations. Should we be unable to generate cash flow, the Company may be forced to seek additional
debt or equity financing as alternatives to the cessation of operations. The success of such measures can in
no way be assured.
We have not generated any revenue since inception.
Results of Operations
During the six months ended December 31, 2011, our operations were focused on maintaining our civil
complaint against Paul R. Leonard and PT Group in connection with breaches of a licensing agreement
and considering alternative technologies for merger or acquisition that might create value for the
Companys shareholders.
Net Losses
For the period from inception (November 16, 2006) until December 31, 2011, the Company incurred net
losses of $3,983,819.
18
Net losses for the three months ended December 31, 2011 were $153,055 as compared to net losses of
$258,028 for the three months ended December 31, 2010. Net losses for the six months ended December
31, 2011 were $326,826 as compared to net losses of $472,097 for the six months ended December 31,
2010. The decrease in net losses over the comparative three and six month periods can be attributed to a
decrease in general and administrative expenses.
We expect to continue to realize net losses as operating costs accrue and management considers
alternative technologies to succeed that technology subject to litigation.
General and Administrative Expenses
For the period from inception until December 31, 2011, the Company incurred general and administrative
expenses of $3,315,037. General and administrative expenses for the three months ended December 31,
2011 were $146,733 as compared to $251,854 for the three months ended December 31, 2010. The
decrease in general and administrative expenses over the comparative three periods can be primarily
attributed to a decrease in professional fees to $7,620 from $46,476, a decrease in consulting fees for
related parties to $38,000 from $54,000, and a decrease in compensation benefits to $100,769 from
$150,031.
General and administrative expenses for the six months ended December 31, 2011 were $313,726 as
compared to $460,215 for the six months ended December 31, 2010. The decrease in general and
administrative expenses over the comparative six month periods can be primarily attributed to a decrease
in administrative costs to a decrease in professional fees to $19,360 from $57,119, a decrease in
consulting fees for related parties to $92,000 from $100,000, a decrease in compensation benefits to
$201,519 from $300,061.
We expect that our general and administrative expenses will continue to decrease as the Companys
operations slow in response to ongoing litigation with PT Group and the suspension of our research and
development operations.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward and
start up costs that will offset any future operating profit.
Capital Expenditures
The Company has not spent significant amounts of capital for the period from November 16, 2006
(inception) to December 31, 2011.
Liquidity and Capital Resources
The Company has been in the development stage since inception, and has experienced significant changes
in liquidity, capital resources, and stockholders equity.
The Company had current assets of $943 consisting of cash and prepaid expenses, and total assets of $943
as of December 31, 2011.
19
The Company had current and total liabilities of $934,879, consisting of accounts payable, accounts
payable to related parties, accrued payroll, notes payable to related parties, notes payable and loans from a
shareholder as of December 31, 2011.
The Company had a stockholders deficit of $933,936 and a working capital deficit of $933,936 at
December 31, 2011.
For the period from inception until December 31, 2011, the Companys net cash used in development
stage activities was $843,781. Net cash used in development stage activities for the six month period
ending December 31, 2011 was $72 as compared to $33,686 used in development stage activities for the
six months ended December 31, 2010. Net cash used in development stage activities in the current six
month period was primarily offset by vested stock options that are recognized as a book expense item
which does not affect the total amount relative to actual cash used. Actual cash items used in the current
six month period, that are not income statement related items, include pre-paid expenses, accounts
payable, accounts payable to related parties, and accrued interest. We expect to continue to generate
negative cash flow in development stage activities.
For the period from inception until December 31, 2011, the Companys net cash used in investing
activities was $1,853. Net cash used in investing activities for the six months ended December 31, 2011
for each of the six months ended December 31, 2011 and December 31, 2010 was zero. We expect to
generate negative cash flow in investing activities on resuming operations in technology development.
For the period from inception until December 31, 2011, the Companys net cash provided by financing
activities was $845,721. Net cash provided by financing activities for the six months ended December 31,
2011 was zero as compared to $33,000 for the six months ended December 31, 2010. Net cash flow
provided by financing activities in the prior period is attributable to proceeds from notes payable, offset
by repayments on notes payable to a related party. We expect to generate positive cash flow from
financing activities as the Company seeks new rounds of financing to finance litigation costs, regulatory
compliance and daily operations.
Our current assets are insufficient to meet our current obligations or to satisfy our cash needs over the
next twelve months and as such the Company will require additional debt or equity financing. We had no
commitments or arrangements for financing at December 31, 2011 though we are pursuing a number of
prospective sources that include shareholder loans, the sale of equity, the procurement of long term debt
or the settlement of additional debt for equity. We face certain financial obstacles to attracting new
financing due to our historical and current record of net losses and working capital deficits. Therefore,
despite our efforts we can provide no assurance that we will be able to obtain the financing required to
meet our stated objectives or even to continue as a going concern.
The Company does not expect to pay cash dividends in the foreseeable future.
The Company has a defined stock option plan and contractual commitments with all of its officers and
directors.
The Company has no current plans for any significant purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
20
Off Balance Sheet Arrangements
As of December 31, 2011, the Company had no 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 stockholders.
Going Concern
The Companys auditors have expressed an opinion as to its ability to continue as a going concern as a
result of continuing net operating losses. Our ability to continue as a going concern is dependent on
realizing funding from inside or outside sources. Managements plan to address the Companys ability to
continue as a going concern includes: (i) obtaining funding from the private placement of debt or equity;
and (ii) converting debt to equity. Management believes that it will be able to obtain funding to enable the
Company to remain a going concern through the methods discussed above, though there can be no
assurances that such methods will prove successful.
Forward- Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Results of Operations and Description of Business,
with the exception of historical facts, are forward looking statements. A safe-harbor provision may not be
applicable to the forward looking statements made in this current report. Forward looking statements
reflect our current expectations and beliefs regarding our future results of operations, performance, and
achievements. These statements are subject to risks and uncertainties and are based upon assumptions and
beliefs that may or may not materialize. These statements include, but are not limited to, statements
concerning:
our anticipated financial performance;
uncertainties related to the research and development of technology;
our ability to generate revenues through sales to fund future operations;
our ability to raise additional capital to fund cash requirements for future operations;
the volatility of the stock market; and
general economic conditions.
We caution readers that our operating results are subject to various risks and uncertainties that could cause
our actual results to differ materially from those discussed or anticipated. We advise readers not to place
any undue reliance on the forward-looking statements contained in this report, which reflect our beliefs
and expectations only as of the date of this report. We assume no obligation to update or revise these
forward-looking statements to reflect new events or circumstances or any changes in our beliefs or
expectations, other than as required by law.
Stock-Based Compensation
We have adopted Accounting Standards Codification, ASC 718, formerly SFAS No. 123R, Share-Based
Payments, which addresses the accounting for stock-based payment transactions in which an enterprise
receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprises equity instruments or that may be settled by the issuance of
such equity instruments.
21
We account for equity instruments issued in exchange for the receipt of goods or services from other than
employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable based on the Black-Scholes model. The value of equity instruments issued for
consideration other than employee services is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services.
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04 which relates to fair value measurement (FASB ASC
Topic 820), which amends current guidance to achieve common fair value measurement and disclosure
requirements in U.S. GAAP and International Financial Reporting Standards. The amendments generally
represent clarification of FASB ASC Topic 820, but also include instances where a particular principle or
requirement for measuring fair value or disclosing information about fair value measurements has
changed. The guidance also expands the disclosures for fair value measurements that are estimated using
significant unobservable (Level 3) inputs. This guidance is effective during interim and annual periods
beginning after December 15, 2011 and is to be applied prospectively. The adoption of this standard will
not materially impact the Company's financial statement statements.
In June 2011, the FASB issued Accounting Standards Update No. 2011-5, Presentation of Comprehensive
Income. This standard requires presentation of the items of net income and other comprehensive income
in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but
consecutive, statements of net income and other comprehensive income. The new requirements are
effective for fiscal years beginning after December 15, 2011. Early adoption is permitted and full
retrospective application is required. The Company does not expect a significant impact on the
Company's financial positions as a result of adoption of these new requirements.
Critical Accounting Policies
In the notes to the audited consolidated financial statements the Company for the years ended June 30,
2011 and 2010, included in the Companys Form 10-K filed with the Securities and Exchange
Commission, the Company discussed those accounting policies that are considered to be significant in
determining the results of operations and financial position. The Companys management believes that
their accounting principles conform to accounting principles generally accepted in the United States of
America.
The preparation of financial statements requires management to make significant estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these
judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate our
estimates, including those related to bad debts, inventories, intangible assets, warranty obligations,
product liability, revenue, and income taxes. We base our estimates on historical experience and other
facts and circumstances that are believed to be reasonable, and the results form the basis for making
judgments about the carrying value of assets and liabilities. The actual results may differ from these
estimates under different assumptions or conditions.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required.
22
ITEM 4.
CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by
management, with the participation of the chief executive officer and the chief financial officer, of the
effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or submitted
under the Exchange Act is recorded, processed, summarized, and reported within the time periods
specified in the Commissions rules and forms and that such information is accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered by
this report, that the Companys disclosure controls and procedures were not effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and that such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) during the three months ended December 31, 2011, that materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.
23
PART II OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS.
On March 8, 2010, the Company filed a complaint in the Circuit Court of the 11th Judicial Court In and
For Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of
the licensing agreement dated July 27, 2009. The complaint seeks: (i) money damages for fraud that stem
from reliance on PT Group's claim of ownership over certain proprietary information, PT Groups
misrepresentation of efforts credited to prior research and development and PT Groups failure to provide
sufficient technical information on which to prepare patents to secure the technology, (ii) the return of the
Companys shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief
sought to prohibit Mr. Leonards use of confidential information to which he is not entitled, and (iv)
reasonable attorneys fees. Mr. Leonard responded to the complaint in an answer dated November 19,
2012 asserting that had no knowledge of the subject matter of the suit. The Company has been unable to
serve PT Group to date. Should the relief sought be adjudicated, the Company expects to succeed on the
merits of its claims.
ITEM 1A.
RISK FACTORS.
Not required of smaller reporting companies.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3.
DEFAULTS ON SENIOR SECURITIES.
None.
ITEM 4.
(REMOVED AND RESERVED)
Removed and reserved.
ITEM 5.
OTHER INFORMATION.
None.
ITEM 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page
26 of this Form 10-Q, and are incorporated herein by this reference.
24
Pursuant to the requirements 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.
Sonnen Corporation
Registrant
April 8, 2013
/s/ Robert Miller
Date
Robert Miller
Chief Executive Officer and Director
April 8, 2013
/s/ Costas Takkas
Date
Costas Takkas
Chief Financial Officer, Principal Accounting Officer and Director
25
INDEX TO EXHIBITS
Exhibit
Description
3.1.1*
Articles of Incorporation, incorporated by reference to the Companys Form SB-2 filed with the
Commission on August 6, 2007.
3.1.2*
Amendment to the Articles of Incorporation, incorporated by reference to the Companys
Definitive 14C filed with the Commission on October 14, 2009.
3.2*
Bylaws, incorporated by reference to the Companys Form SB-2 filed with the Commission on
August 6, 2007.
10.1*
Licensing Agreement between the Company, the Companys wholly owned subsidiary, and P.T.
Group, Ltd., dated July 27, 2009, incorporated by reference to the Companys Form 10-K filed
with the Commission on August 3, 2009.
10.2*
Consulting Agreement between the Company and Costas Takkas, dated July 27, 2009,
incorporated by reference to the Companys Form 10-K filed with the Commission on August 3,
2009.
10.3*
Employment Agreement between the Company and Paul Leonard dated July 27, 2009,
incorporated by reference to the Companys Form 10-K filed with the Commission on August 3,
2009.
10.4*
Employment Agreement between the Company and David Greenbaum dated August 1, 2009,
incorporated by reference to the Companys Form 10-Q filed with the Commission on November
23, 2009.
10.5*
Consulting Agreement between the Company and Carol Laws dated August 1, 2009, incorporated
by reference to the Companys Form 10-Q filed with the Commission on November 23, 2009.
10.6*
Consulting Agreement between the Company and Backend Technologies, LLC dated August 5,
2009, incorporated by reference to the Companys Form 10-Q filed with the Commission on
November 23, 2009.
10.7*
Employment Agreement between the Company and Robert H. Miller dated January 1, 2010,
incorporated by reference to the Company Form 10-Q filed with the Commission on November
23, 2010.
21*
Subsidiaries of the Company, incorporated by reference to the Companys Form 10-K filed with
the Commission on August 3, 2009.
Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).
101. INS
XBRL Instance Document
101. PRE
XBRL Taxonomy Extension Presentation Linkbase
101. LAB
XBRL Taxonomy Extension Label Linkbase
101. DEF
XBRL Taxonomy Extension Label Linkbase
101. CAL
XBRL Taxonomy Extension Label Linkbase
101. SCH
XBRL Taxonomy Extension Schema
*
Incorporated by reference to previous filings of Allied.
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed furnished and
not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the
Securities Act of 1933, or deemed furnished and not filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, and otherwise is not subject to liability under these
sections.
26