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EX-31.1 - EXHIBIT 31.1 - REJUVEL BIO-SCIENCES, INC.ex31_1apg.htm
EX-31.2 - EXHIBIT 31.2 - REJUVEL BIO-SCIENCES, INC.ex31_2apg.htm
EX-32.1 - EXHIBIT 32.1 - REJUVEL BIO-SCIENCES, INC.ex32_1apg.htm
EXCEL - IDEA: XBRL DOCUMENT - REJUVEL BIO-SCIENCES, INC.Financial_Report.xls


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________


FORM 10-Q

____________


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2013


[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934


For the transition period from ______ to _______


Commission File Number 0-53698


TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

(Name of small business issuer in its charter)


Florida

 

27-1116025

(State of incorporation)

 

(I.R.S. Employer Identification No.)


18851 N.E. 29th Avenue, Suite 700, Adventura, Florida 33180

(Address of principal executive offices)


(786) 787-0402

(Registrant’s telephone number)


Copy of all Communications to:

Law Office of Andrew Coldicutt

1220 Rosecrans Street, PMB 258

San Diego, CA 92106

Phone: 619-228-4970


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]  No [   ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [   ]  No [X]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer

[   ]

Accelerated filer

[   ]

Non-accelerated filer

[   ]. (Do not check if a smaller reporting company)

Smaller reporting company

[X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [   ]  No [X]


As of August 19, 2013, there were 117,248,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.





TECHONOLOGY APPLICATIONS INTERNATIONAL CORPORATION*


TABLE OF CONTENTS

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

3

 

 

 

ITEM 2.

  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

4

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

7

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES    

7

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

8

 

 

 

ITEM 1A.

RISK FACTORS

8

 

 

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

8

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

8

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

9

 

 

 

ITEM 5.

OTHER INFORMATION

9

 

 

 

ITEM 6.

EXHIBITS

10



Special Note Regarding Forward-Looking Statements


Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Technology Applications International Corporation (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we,"”TAIC,” "our," "us," the "Company," refers to Technology Applications International Corporation.



2



PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS






 

TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

 

(A Development Stage Company)


Condensed Consolidated Financial Statements


(Expressed in US dollars)


June 30, 2013 (unaudited)



 


Financial Statement Index




Condensed Consolidated Balance Sheets (unaudited)

F-1

 

 

Condensed Consolidated Statements of Operations (unaudited)

F-2

 

 

Condensed Consolidated Statements of Cash Flows (unaudited)

F-3

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

F-4





3





TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

ASSETS

 

 

 (Unaudited)

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

 $

1,298 

  $

120,697 

Inventories

 

 

120,270 

 

125,408 

Deposits

 

 

60,000 

 

50,000 

Other current assets

 

1,909 

 

3,814 

Total current assets

 

183,477 

 

299,919 

Trademarks, net

 

1,995 

 

2,049 

Machinery and equipment, net

 

 

11,476 

 

13,462 

Total assets

 $

196,948 

  $

315,430 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' DEFICIT

 

 

 

 

 

Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

322,290 

 $

193,894 

Advances from affiliate

 

 

144,405 

 

157,843 

Loan from affiliate

 

 

77,401 

 

88,880 

Convertible debentures (net of debt discount of $126,231 and $134,292, respectively)

118,769 

 

65,708 

Derivative liability

 

 

321,540 

 

276,000 

Other current liabilities

 

 

2,000 

 

Short-term advances

 

 

5,000 

 

Total current liabilities

 

 

991,405 

 

782,325 

Total liabilities

 

 

991,405 

 

782,325 

 

 

 

 

 

 

Shareholders' deficit

 

 

 

 

 

Preferred stock, par value, $0.001 per share, 50,000,000 shares

 

 

 

 

 

authorized, none issued or outstanding

 

 

 

Common stock, par value $0.001 par value, 300,000,000 shares authorized,

 

 

 

 

 

117,248,000 and 117,248,000 shares issued and outstanding at

 

 

 

 

 

June 30, 2013 and December 31, 2012, respectively.

 

 

117,248 

 

117,248 

Additional paid in capital

 

 

505,220 

 

505,220 

Deficit accumulated during the development stage

 

 

(1,416,925)

 

(1,089,363)

 

 

 

 

 

 

Total shareholders' deficit

 

 

(794,457)

 

(466,895)

 

 

 

 

 

 

Total liabilities and shareholders' deficit

 

 $

196,948 

  $

315,430 


The accompanying notes are an integral part of these condensed consolidated financial statements



F-1




TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months  and Six Months Ended June 30, 2013 and 2012 and Period from October 14, 2009

(Inception of Development Stage) through June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

Period from

October 14,

2009 (inception

of development

stage) through 

 

 

2013

 

2012

 

2013

 

2012

 

June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

21,481 

 

$

1,450 

 

$

31,528 

 

$

1,450 

 

$

41,007 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

1,809 

 

321 

 

7,258 

 

321 

 

11,752 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

19,672 

 

1,129 

 

24,270 

 

1,129 

 

29,255 

Expenses

 

 

 

 

 

 

 

 

 

 

General and administrative

 

149,043 

 

190,922 

 

287,701 

 

398,249 

 

1,225,735 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

Gain (loss) on derivative valuation

 

118,400 

 

 

93,400 

 

 

170,600 

Interest expense

 

(128,157)

 

 

(157,531)

 

 

(391,045)

Total other income (expense)

 

(9,757)

 

 

 

 

(220,445)

Net loss

 $

(139,128)

$

(189,793)

$

(327,562)

 $

(397,120)

 $

(1,416,925)

Loss per share

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

($0.00)

 

($0.00)

 

($0.00)

 

($0.00)

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

117,248,000 

 

117,248,000 

 

117,248,000 

 

117,182,791 

 

 


The accompanying notes are an integral part of these condensed consolidated financial statements



F-2




TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2013 and 2012 and Period from October 14, 2009

(Inception of Development Stage) through June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

Six month

Period ended

June30, 2013

 

For the

Six month

Period ended

June 30, 2012

 

Period from October 14, 2009 (inception of development stage) through

June 30, 2013

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

 

 

(327,562)

 

(397,120)

 

(1,416,925)

Adjustments to reconcile net loss to

 

 

 

 

 

 

 

 

net cash used in operating activities:

 

 

 

 

 

 

 

 

Loss (Gain) on derivative valuation

 

 

 

(93,400)

 

 

(170,600)

Amortization of discount on convertible debentures

 

 

147,001 

 

19,591 

 

365,909 

Depreciation and amortization

 

 

 

2,040 

 

2,086 

 

10,352 

Shares issued for services rendered

 

 

 

 

 

 

11,318 

Change in current assets and current liabilities:

 

 

 

 

 

 

 

(Increase) decrease in inventory

 

 

 

5,138 

 

(191,151)

 

(120,270)

(Increase) decrease in deposits

 

 

 

(10,000)

 

 

(60,000)

(Increase) decrease in other current assets

 

 

1,905 

 

(2,255)

 

(1,909)

Increase in accounts payable and accrued expenses

 

 

128,396 

 

75,605 

 

322,290 

Increase (decrease) in other current liabilities

 

 

2,000 

 

(258)

 

2,000 

Net cash used in operating activities

 

 

 

(144,482)

 

(493,502)

 

(1,057,835)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of equipment

 

 

 

 

 

(21,553)

Increase in trademarks

 

 

 

 

(275)

 

(2,170)

Net cash used in investing activities

 

 

 

 

(275)

 

(23,723)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Advances from (to) affiliate, net

 

 

 

(13,438)

 

(79,367)

 

246,205 

Proceeds from loan from affiliate

 

 

 

 

125,000 

 

125,000 

Repayment of loan from affiliate

 

 

 

(11,479)

 

 

(47,599)

Proceeds from issuance of convertible debentures

 

 

45,000 

 

 

245,000 

Proceeds from issuance of common stock

 

 

 

 

397,000 

 

509,250 

Proceeds from short-term advances

 

 

 

5,000 

 

 

5,000 

Net cash provided by financing activities

 

 

 

25,083 

 

442,633 

 

1,082,856 

Net change in cash and cash equivalents

 

 

 

(119,399)

 

(51,144)

 

1,298 

Cash and cash equivalents, beginning balance

 

 

 

120,697 

 

174,363 

 

Cash and cash equivalents, ending balance

 

 

 

1,298 

 

123,219 

 

1,298 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

Income taxes paid

 

 

 

$

 

$

 

$

Interest paid

 

 

 

$

 

$

 

$

Non-cash transactions affecting Operating,

 

 

 

 

 

 

 

     Investing and Financing activities

 

 

 

 

 

 

 

Deposit converted to convertible debenture

 

 

$

 

100,000 

 

100,000 

Issuance of common stock - shareholder note payable

 

 

$

 

$

 

101,800 

Issuance of common stock for services

 

 

$

 

$

 

11,318 


The accompanying notes are an integral part of these condensed consolidated financial statements



F-3




TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

 

 

 

 

 

(Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



1.

Nature of Operations and Basis of Presentation


Nature of Operations


Technology Applications International Corporation (formerly Raj Ventures, Inc.) (“Technology”) was incorporated on October 14, 2009 under the laws of Florida.  Renuell Int’l, Inc. and NueEarth, Inc., Technology’s wholly owned subsidiaries and Technology, collectively, are referred to here-in as the “Company”, a development stage company.  The Company is engaged in developing market entry technology products and services into early and mainstream technology products and services.  Through our subsidiaries, we are focused on developing and manufacturing a line of technologically advanced skin care products and providing environmental management solutions that use electron particle accelerator technology.


Principles of Consolidation


The consolidated financial statements include the accounts of Technology Applications International Corporation and its wholly owned subsidiaries, Renuell Int’l, Inc. and NueEarth, Inc.  All significant inter-company accounts and transactions have been eliminated in consolidation.


Basis of Presentation and Going Concern Considerations


The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013.


For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.


The accompanying financial statements have been presented on the basis that it is a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs.  The Company’s ability to continue as a going concern is highly dependent upon management’s ability to increase near-term operating cash flows and obtain additional working capital through the issuance of debt and or equity.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.


These consolidated financial statements present the financial condition, and results of operations and cash flows of the operating companies.


Development Stage Risk


Since its inception, the Company has been dependent upon the receipt of capital investment to fund its operating activities.  In addition to the normal risks associated with a new business venture, there can be no assurance that the



F-4



Company’s business plans will be successfully executed.  The Company’s ability to execute its business plans is dependent on its ability to obtain additional debt and equity financing and achieving a profitable level of operations.  There can be no assurance that sufficient financing will be obtained or that we will achieve a profitable level of operations.


The Company has minimal revenues generated from operations due to the sale of sample products.  Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise” as set forth in Accounting Standards Codification (“ASC”) 915 “Development Stage Entities”.  Among the disclosures required are that the Company’s financial statements be identified as those of a development stage company and that the statements of operations, shareholders’ equity / (deficit) and cash flows disclose activity since the date of the Company’s inception.


2.

Inventories


Inventories are stated at the lower of cost or market value.  The Company reduces the value of its inventories to market value when the value is believed to be less than the cost of the item.


 

June

30, 2013

 

December

31, 2012

 

 

 

 

Raw materials

$

-

 

$

-

Work-in-process

-

 

-

Finished goods

120,270

 

125,408

 

 

 

 

     Total Inventories

$

120,270

 

$

125,408



No reserves for inventory have been deemed necessary at June 30, 2013.


3.

Machinery and Equipment


Machinery and equipment are recorded at cost.  Expenditures for maintenance and repairs are charged to earnings as incurred whereas additions, renewals and betterments are capitalized.  When machinery and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations.  Depreciation of machinery and equipment is provided using the straight-line method over the assets estimated useful lives of approximately 5 to 7 years.  Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.


Machinery and equipment, as of June 30, 2013 and December 31, 2012, consisted of the following:


 

Estimated Useful Lives

June

30, 2013

 

December

31, 2012

 

 

 

 

 

Computer Equipment

3 Years

$

4,162 

 

$

4,162 

Machinery and equipment

5 Years

3,418 

 

3,418 

Furniture and fixtures

7 Years

14,073 

 

14,073 

Accumulated depreciation

 

(10,177)

 

(8,191)

 

 

 

 

 

 

 

$

11,476 

 

$

13,462 



Depreciation expense for the six month periods ended June 30, 2013 and 2012 were $1,986 and $2,041, respectively. Depreciation expense for the three month periods ended June 30, 2013 and 2012 were $993 and $1,020, respectively.



F-5



4.

Convertible Debenture


During December 2011, the Company received $100,000 as a deposit for entering into a distribution agreement.  On March 22, 2012, the Company converted the $100,000 deposit into a convertible debenture.  The convertible debenture bears interest at a rate of five-percent (5%) per annum and is payable March 21, 2014.  At the Holder’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share.  In addition to the common stock, the Holder shall receive warrants to purchase an equal number of shares of common stock exercisable at $1.00 per share.  These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


On September 25, 2012, the Company issued a $100,000 convertible debenture.  The convertible debenture bears interest at a rate of five-percent (5%) per annum and is payable September 20, 2013.  At the Holder’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share.  In addition to the common stock, the Holder shall receive warrants to purchase an equal number of shares of common stock exercisable at $1.00 per share.  These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


On May 23, May 31, and June 10, 2013, the Company issued a $10,000, $10,000 and $25,000 convertible debentures, respectively.  The convertible debentures bear interest at a rate of ten-percent (10%) per annum and is payable May 18, May 26, and June 5, 2014, respectively.  At the Holder’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share.  In addition to the common stock, the Holder shall receive warrants to purchase an equal number of shares of common stock exercisable at $1.00 per share.  These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


The Compound derivative comprises certain derivative features embedded in the host convertible debenture contracts including the conversion feature and warrants both of which contain anti-dilution protections.  These instruments were combined into one compound derivative and bifurcated from the host instrument at fair value.  The Company applied the Black-Scholes Merton valuation technique to fair value these derivatives because this technique embodies all of the assumptions necessary to fair value these compound derivative instruments.


Since the derivative financial instruments are required to be recorded, both initially, and subsequently, at fair value, there were insufficient proceeds to allocate any amount to the convertible debentures and, accordingly, it has no carrying value on the date of inception.  Additionally, proceeds were insufficient to record the fair values of the derivative financial instruments, resulting in initial interest expense of $247,140.  It should be noted that the derivative instruments will be adjusted to fair value at each reporting date.  As the Company does not have historical volatility data for its own stock, the expected volatility was based upon the Company’s peer group in the industry in which it does business.  Fair values are highly influenced by the trading stock price and volatility of the peer group, changes in our credit risk and market interest rates.


The company amortizes the discount on the convertible debentures resulting from the initial allocation over the term of the convertible debt instruments using the effective method.  Amortization expense arising from this method for the six months ended June 30, 2013 and 2012 was approximately $52,868 and $0, respectively.  These amounts have been included as a component of interest expense.


5.

Capital Stock


Common Stock


On August 26, 2010, the Company issued 100,000 shares of its common stock to purchase equipment.


On October 20, 2011, the Company issued 101,800,000 shares of its common stock as payment for cancellation of debt for part of the amount due to its related party.


On October 28, 2011, the Company issued 5,727,000 shares of its common stock to a consultant as payment for services rendered.


On November 8, 2011, the Company issued 5,591,000 shares of its common stock to a consultant as payment for



F-6



services rendered.


During November and December 2011, the Company issued 236,000 shares of its common stock through a private placement to several investors for total cash consideration of $118,000.


During January and February 2012, the Company issued 794,000 shares of its common stock through a private placement for total cash consideration of $397,000.


Stock Purchase Warrants


In conjunction with the Private Placement Memorandum dated October 28, 2011, the Company is offering up to 10,000 Units.  Each Unit consists of 1,000 shares of common stock priced at $0.50 per share and one Class A Warrant to purchase 1,000 shares of common stock with an exercise price of $1.00 per share.  These warrants expire on the earlier of (i) 180 days after the common stock commences quotation on the OTC Bulletin Board or (ii) one year after the date of issuance.


Warrants to purchase up to 1,030,000 shares of common stock were issued in accordance with the Private Placement Memorandum stated above.  As these warrants were issued as part of a unit sold, there has been no value assigned to them.  As of June 30, 2013, each of these warrants have expired.


In conjunction with the Private Placement Memorandum dated February 13, 2013, the Company is offering up to 3,000,000 units.  Each unit consists of 1 share of common stock priced at $1.00 and one Class A Warrant to purchase 1 share of common stock with an exercise price of $1.50 per share.  These warrants expire on the earlier of (i) 180 days after the common stock commences quotation on the OTC Bulletin Board or (ii) one year after the date of issuance.  No issuances have been sold from this offering as of June 30, 2013.


6.

Fair Value Measurements


On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy.  The following table presents information about the Company’s liabilities measured at fair value as of June 30, 2013 and December 31, 2012:


 

 

Level 1

 

Level 2

 

Level 3

 

Fair Value at June 30, 2013

Liabilities

 

 

 

 

 

 

 

 

Derivative Liability

 

-

 

-

 

$     321,540

 

$          321,540



 

 

Level 1

 

Level 2

 

Level 3

 

Fair Value at December 31, 2012

Liabilities

 

 

 

 

 

 

 

 

Derivative Liability

 

-

 

-

 

$     276,000

 

$          276,000



The fair value changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3), relate solely to the derivative liability as follows:


Balance as of December 31, 2011

 

$

Derivative liability recorded

 

353,200 

Fair value adjustment

 

77,200 

Balance at December 31, 2012

 

276,000 

Derivative liability recorded

 

138,940 

Fair value adjustment

 

(93,400)

Balance at June 30, 2013

 

$

321,540 







F-7



7.

Related Parties


An affiliate of the Company, an entity owned by the Company’s president, has been funding operations of the Company by making payments directly to third parties or advancing monies to the Company.  These amounts bear no interest and are payable on demand.  Amounts due to the affiliate at June 30, 2013 and 2012 are approximately 144,000 and $158,000, respectively.


During June 2012, the Company borrowed $125,000 from an affiliate. The loan bears interest at 10% per annum and is unsecured and payable upon demand.  The Company has paid $47,600 towards the loan amount.  The outstanding balance at June 30, 2013 and December 31, 2012 is $77,401 and $88,880, respectively.


8.

Subsequent Events


Pursuant to Accounting Standards Codification 855-10, the Company has evaluated all events or transactions that have occurred from July 1, 2013 through the filing with the SEC.  The Company did not have any material recognizable subsequent events during this period.





F-8



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


FORWARD-LOOKING STATEMENTS


This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.



RESULTS OF OPERATIONS


Working Capital


 

June 30,

2013

$

December 31,

2012

$

Current Assets

183,477

299,919

Current Liabilities

991,405

782,325

Working Capital Deficit

(807,928)

(482,406)


Cash Flows


 

June 30,

2013

$

June 30,

2012

$

Cash Flows used in Operating Activities

(144,482)

(493,502)

Cash Flows provided by Financing Activities

25,083

442,633

Cash Flows used in Investing Activities

-

(275)

Net decrease in Cash During Period

(119,399)

(51,144)



Results for the Quarter ended June 30, 2013, Compared to the Quarter ended June 30, 2012


Operating Revenues


During the period ended June 30, 2013, the Company earned revenues of $21,481 compared with revenues of $1,450 for the period ended June 30, 2012.


Gross Profit


For the three months ended June 30, 2013, the Company’s gross profit increased to $19,672 compared with the gross profit of $1,129 for the same period in 2012.


Operating Expenses


During the three months ended June 30, 2013, the Company recorded operating expenses of $149,043 compared with operating expenses of $190,922 for the three months ended June 30, 2012. The decrease in operating expenses was attributed to the fact that the Company reduced its purchases of inventory and packaging materials for the sale of its skin care products.



4




Net Loss


Net loss for the three months ended June 30, 2013 was $139,128 compared with a net loss of $189,793 for the three months ended June 30, 2012.


Results for the Six month period ended June 30, 2013 Compared to the Six month period ended June 30, 2012


Operating Revenues


The Company’s revenues were $31,528 for the six months ended June 30, 2013 compared to $1,450 for the same period in 2012.  This represents an increase of $30,078 or 2,074% which is directly attributable to the Company’s marketing efforts.


Cost of Revenues


The Company’s cost of revenues was $7,258 for the six months ended June 30, 2013 compared to $321 for the same period in 2012.  This represents an increase of $6,937 or 2,161%, which is directly attributable to the increase in sales.


Gross Profit


For the six months ended June 30, 2013, the Company’s gross profit increased by $23,141 or 2,050% from $1,129 for the same period in 2012.  As a percentage of sales, gross profit was 77%.


General and Administrative Expenses


General and administrative expenses consisted primarily of consulting fees, professional fees, travel and meals and entertainment relating to being a public company.  For the six months ended June 30, 2013 and June 30, 2012, general and administrative expenses decreased to $287,701 from $398,249 for the same period in 2012 representing a decrease of $110,548 or 28%.  The change is primarily attributable to decreases in consulting, website design and travel costs of approximately $92,000, $13,000 and $12,000, respectively.


Other Income (Expense)


Other income (expense) consisted of a gain on derivative valuation and interest expense.  The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from December 31, 2012 through June 30, 2013.  Interest expense is primarily attributable to the accretion of the convertible debentures for the six months ended June 30, 2013.  There was no gain (loss) on derivative valuation or interest expense for the same period in 2012.


Net Loss


Our net loss for the six months ended June 30, 2013 was $(327,562) compared with a net loss of $(397,120) for the six months ended June 30, 2012, a decrease of $69,558 or 18%.  The net loss is influenced by the matters discussed in the other sections of the MD&A.


Results for the Period from October 14, 2009 (inception of development stage) Through June 30, 2013.


Operating Revenues


The Company’s revenues were $31,528 for the six months ended June 30, 2013 compared to $41,007 for the period from October 14, 2009 (inception of development stage) through June 30, 2013.


Cost of Revenues


The Company’s cost of revenue was $7,258 for the six months ended June 30, 2013 compared to $11,752 for the period from October 14, 2009 (inception of development stage) through June 30, 2013.




5



Gross Profit


For the six months ended June 30, 2013, the Company’s gross profit was $24,270 compared to $29,255 for the period from October 14, 2009 (inception of development stage) through June 30, 2013.


General and Administrative Expenses


General and administrative expenses consisted primarily of consulting fees, professional fees, travel and meals and entertainment.  For the six months ended June 30, 2013, general and administrative expenses were $287,701 compared to $1,225,735 for the period from October 14, 2009 (inception of development stage) through June 30, 2013.


Other Income (Expense)


Other income (expense) for the period October 14, 2009 (inception) through June 30, 2013 was $(220,445).  Other income (expense) consisted of gain on derivative valuation and interest expense.  The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from date of issuance during 2012 through June 30, 2013.  Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms.  Interest associated with the derivative instruments amounted to approximately $391,045.


Net Loss


Net loss for the period from October 14, 2009 (inception of development stage) through June 30, 2013 was $(1,416,925).  The net loss for this period was primarily related to general and administrative expenses exceeding the amount of revenues for the period indicated.


Impact of Inflation


We believe that the rate of inflation has had a negligible effect on our operations.


Liquidity and Capital Resources


The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  Since its inception, the Company has been funded by related parties through capital investment and borrowing of funds.


At June 30, 2013, the Company had total current assets of $183,477 compared to $299,919 at December 31, 2012.  Current assets consisted primarily of inventories and deposits and decreased due to cash being utilized to pay general and administrative expenses for operations.


At June 30, 2013, the Company had total current liabilities of $991,405 compared to $782,325 at December 31, 2012.  Current liabilities consisted primarily of accounts payable and accrued expenses, a loan and advances from a related party and convertible debentures.


We had negative working capital of $(807,928) as of June 30, 2013 compared to $(482,406) as of December 31, 2012, an decrease of $(325,522) or 67.5%.


Cashflow from Operating Activities


During the six months ended June 30, 2013, cash used in operating activities was $(144,482) compared to $(493,502) for the six months ended June 30, 2012. The decrease in the amounts of cash used for operating activities was primarily due to the lower amounts of skin care products being purchased for inventory and a related decrease in accounts payable and accrued expenses.


Cashflow from Investing Activities


During the six months ended June 30, 2013 cash used in investing activities was $0 compared to $(275) for the six months ended June 30, 2012.



6




Cashflow from Financing Activities


During the six months ended June 30, 2013, cash used in financing activity was $25,083 compared to $442,633 being provided during the six months ended June 30, 2012.  The decrease in cash provided by financing activities is due to the Company repaying advances from affiliates and not incurring any additional debt or completing any stock sales during the period ended June 30, 2013.

 

Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that there is substantial doubt about our ability to continue as a going concern without further financing.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.


Off-Balance Sheet Arrangements


We have no significant 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 are material to stockholders.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 4. CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures




7



Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act").  Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2013, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements.  Please refer to our Annual Report on Form 10-K as filed with the SEC on April 16, 2013 and the Amendment to the Form 10-K filed with the SEC on April 22, 2013, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control over Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.



PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 1A.  RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


1.Quarterly Issuances:


During the quarter, we did not issue any unregistered securities other than as previously disclosed.


2. Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


None.





8



ITEM 4. MINE SAFETY DISCLOSURES


Not applicable.


ITEM 5. OTHER INFORMATION


On May 23, 2013, the Company issued a ten percent (10%) convertible debenture note (the “Sosa Note”) to Phillip Sosa, Jr.  (“Mr. Sosa”), in the amount of Ten Thousand US dollars ($10,000). The Sosa Note bears simple interest accruing at a rate of ten-percent (10%) per annum and is payable at Mr. Sosa’s option. At Mr. Sosa’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share of restricted common stock. In addition to the common stock, Mr. Sosa, shall receive warrants to purchase an equal number of shares of common stock at $1.00 per share. These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


On May 31, 2013, the Company issued a ten percent (10%) convertible debenture note (the “Tobias Note”) to Michael Tobias (“Mr. Tobias”), in the amount of Ten Thousand US dollars ($10,000). The Tobias Note bears simple interest accruing at a rate of ten-percent (10%) per annum and is payable at Mr. Tobias’s option. At Mr. Tobias’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share of restricted common stock. In addition to the common stock, Mr. Tobias shall receive warrants to purchase an equal number of shares of common stock at $1.00 per share. These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


On June 10, 2013, the Company issued a ten percent (10%) convertible debenture note (the “Moulton Note”) to Jonathan Moulton (“Mr. Moulton”), in the amount of Twenty Five Thousand US dollars ($25,000). The Moulton Note bears simple interest accruing at a rate of ten-percent (10%) per annum and is payable at Mr. Moulton’s option. At Mr. Moulton’s option, principle and unpaid accrued interest shall be convertible into common stock at a rate of $0.50 per share of restricted common stock. In addition to the common stock, Mr. Moulton shall receive warrants to purchase an equal number of shares of common stock at $1.00 per share. These warrants expire at the earlier of 180 days after the common stock commences quotation on the OTC Bulletin Board or one-year from exercise.


ITEM 6. EXHIBITS


Exhibit Number

Description of Exhibit

Filing

3.1

Articles of Incorporation

Filed with the SEC on January 19, 2010 as part of the Company’s Registration of Securities on Form 10-12G.

3.1(a)

Restated Articles of Incorporation

Filed with the SEC on April 18, 2011 as part of the Company’s Current Report on Form 8-K.

3.2

Bylaws

Filed with the SEC on January 19, 2010 as part of the Company’s Registration of Securities on Form 10-12G.

3.2(a)

Amended Bylaws

Filed with the SEC on April 18, 2011 as part of the Company’s Current Report on Form 8-K.

10.1

Lease between Brickell Bay Tower Ltd., Inc. and Raj Ventures, Inc. dated October 18, 2010

Filed with the SEC on March 28, 2010 as part of the Company’s Annual Report on Form 10-K.

10.2

Share Purchase Agreement by and among Raj Ventures, Inc., Willowhuasca Wellness, Inc., and Raj Ventures Funding, Inc., dated April 12, 2010

Filed with the SEC on April 12, 2010 as part of the Company’s Current Report on Form 8-K.

10.3

Bill of Sale and Assignment between Raj Ventures, Inc., and High Voltage Environmental Applications, Inc., dated as of August 26, 2010

Filed with the SEC on September 1, 2010 as part of the Company’s Current Report on Form 8-K.



9






10.4

Promissory Note between the Company and Joe-Val, Inc., dated March 27, 2012

Filed with the SEC on March 27, 2012 as part of the Company’s Current Report on Form 8-K.

10.5

Promissory Note between the Company and Coast To Coast Equity Group, Inc., dated June 25, 2012

Filed with the SEC on August 20, 2012 as part of the Company’s Quarterly Report on Form 10-Q

10.6

Convertible debenture between the Company and Shane Case, dated September 26, 2012

Filed with the SEC on November 19, 2012 as part of the Company’s Quarterly Report on Form 10-Q

10.7

Distribution Agreement between Regenetech, Inc. and Renuéll Int’l, Inc., dated December 29, 2011 and Amended on December 13, 2012.

Filed with the SEC on January 17, 2013 as part of the Company’s S-1/A.

10.8

Form of Subscription Agreement

Filed with the SEC on November 29, 2012 as part of the Company’s S-1/A.

10.9

Consulting Agreement between the Company and John Stickler

Filed with the SEC on December, 27, 2012 as part of the Company’s S-1/A.

16.1

Letter from Lake and Associates CPA’s LLC, dated March 12, 2013

Filed with the SEC on March 14, 2013 as part of the Company’s Current Report on Form 8-K.

21.1

List of Subsidiaries

Filed with the SEC on April 16, 2012 as part of the Company’s Annual Report on Form 10-K.

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.

101.INS*

XBRL Instance Document

Filed herewith.

101.SCH*

XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

101.PR0045*

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.


*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.




10



SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


TECHNOLOGY APPLICATIONS INTERNATIONAL CORPORATION


Dated: August 19, 2013

/s/ Charles J. Scimeca

By: Charles J. Scimeca

Its: President, Principal Executive Officer & Principal Financial Officer (Principal Accounting Officer)


Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:


Dated: August 19, 2013

/s/ Charles J. Scimeca

Charles J. Scimeca – Director


Dated: August 19, 2013

/s/ John Stickler

John Stickler – Director



11