x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
|
|
For the quarterly period ended: DECEMBER 31,
2008
|
|
or
|
|
r
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
|
|
For the transition period from: _____________
to
_____________
|
DELAWARE
|
333-123365
|
20-1602779
|
(State
or Other Jurisdiction of
Incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer Identification
No.)
|
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. x Yes r
No
|
|||||||
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
|
|||||||
Large
accelerated filer r
|
Accelerated
filer
r
|
||||||
Non-accelerated
filer r
|
Smaller
reporting company x
|
|
|||||
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). r Yes
x No
|
|
|
|
||||
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
|
Class
|
Outstanding at February 23,
2009
|
|
Common
Stock, $.0001 par value
|
15,338,525
|
|
PAGE
|
|||
PART I
|
FINANCIAL
INFORMATION
|
||
Item
1
|
3
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
|
|||
Item
2.
|
18
|
||
Item
3.
|
26
|
||
Item
4T.
|
27
|
||
|
|||
PART II.
|
OTHER
INFORMATION
|
|
|
|
|||
Item
1A.
|
27
|
||
Item
6.
|
27
|
||
|
|||
28
|
Nine
Months Ended
|
Year
Ended
|
|||||||
December
31, 2008
|
March
31, 2008
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 3,656 | $ | 351,627 | ||||
Accounts
receivable, net
|
21,513 | 16,880 | ||||||
Prepaid
expenses
|
16,295 | 96,061 | ||||||
Inventory
|
26,402 | 49,399 | ||||||
TOTAL
CURRENT ASSETS
|
67,866 | 513,967 | ||||||
PROPERTY
AND EQUIPMENT
|
||||||||
Furniture
& fixtures
|
205,694 | 205,694 | ||||||
Machinery
& equipment
|
195,137 | 195,137 | ||||||
Capitalized
software
|
3,210 | 3,210 | ||||||
Less
accumulated depreciation
|
(188,953 | ) | (138,712 | ) | ||||
TOTAL
FIXED ASSETS
|
215,088 | 265,329 | ||||||
OTHER
ASSETS
|
||||||||
Trade
secrets
|
1,026,000 | 1,026,000 | ||||||
Deposits
|
261,703 | 244,338 | ||||||
TOTAL
OTHER ASSETS
|
1,287,703 | 1,270,338 | ||||||
TOTAL
ASSETS
|
$ | 1,570,657 | $ | 2,049,634 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable and accrued expenses
|
$ | 378,228 | $ | 121,727 | ||||
Accrued
interest payable
|
106,017 | 23,877 | ||||||
Wages
payable
|
122,588 | - | ||||||
TOTAL
CURRENT LIABILITIES
|
606,833 | 145,604 | ||||||
LONG
TERM LIABILITIES
|
||||||||
Notes
payable, net of discount
|
1,071,202 | 250,000 | ||||||
Notes
payable - related parties, net of discount
|
92,950 | - | ||||||
TOTAL
LONG TERM LIABILITIES
|
1,164,152 | 250,000 | ||||||
TOTAL
LIABILITIES
|
1,770,985 | 395,604 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
- | - | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Preferred
stock, $0.0001 par value; 5,000,000 shares authorized,
|
||||||||
no
shares issued and outstanding
|
- | - | ||||||
Common
stock, $0.0001 par value; 100,000,000 shares authorized,
|
||||||||
15,338,525
and 14,249,889 shares issued and outstanding
|
1,534 | 1,425 | ||||||
Additional
paid-in capital
|
28,724,772 | 27,226,561 | ||||||
Accumulated
deficit
|
(28,926,634 | ) | (25,573,956 | ) | ||||
TOTAL
STOCKHOLDERS' EQUITY
|
(200,328 | ) | 1,654,030 | |||||
TOTAL
LIABILITIES AND
|
||||||||
STOCKHOLDERS'
EQUITY
|
$ | 1,570,657 | $ | 2,049,634 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
December
31,
|
December
31,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
REVENUES
|
$ | 28,176 | $ | 48,120 | $ | 73,680 | $ | 102,082 | ||||||||
COST
OF SALES
|
22,534 | 51,072 | 68,173 | 111,449 | ||||||||||||
Gross
Profit
|
5,642 | (2,952 | ) | 5,507 | (9,367 | ) | ||||||||||
EXPENSES
|
||||||||||||||||
Sales
|
78,889 | 87,311 | 266,425 | 225,770 | ||||||||||||
Product
development
|
91,858 | 89,005 | 301,982 | 358,675 | ||||||||||||
Corporate
|
1,370,854 | 1,044,391 | 2,390,495 | 2,040,429 | ||||||||||||
Finance
and administrative
|
82,886 | 98,246 | 317,148 | 345,181 | ||||||||||||
Total
Expenses
|
1,624,487 | 1,318,953 | 3,276,050 | 2,970,055 | ||||||||||||
LOSS
FROM OPERATIONS
|
(1,618,845 | ) | (1,321,905 | ) | (3,270,543 | ) | (2,979,422 | ) | ||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Interest
expense
|
(27,423 | ) | - | (82,141 | ) | - | ||||||||||
Other
income
|
- | - | - | - | ||||||||||||
Interest
income
|
- | 1,329 | 6 | 17,731 | ||||||||||||
Impairment
of long lived assets
|
- | - | - | (374,000 | ) | |||||||||||
Total
Other Income and Expense
|
(27,423 | ) | 1,329 | (82,135 | ) | (356,269 | ) | |||||||||
LOSS
BEFORE TAXES
|
(1,646,268 | ) | (1,320,576 | ) | (3,352,678 | ) | (3,335,691 | ) | ||||||||
INCOME
TAX EXPENSE
|
- | - | - | - | ||||||||||||
NET
LOSS
|
$ | (1,646,268 | ) | $ | (1,320,576 | ) | $ | (3,352,678 | ) | $ | (3,335,691 | ) | ||||
BASIC
AND DILUTED NET LOSS PER SHARE
|
$ | (0.11 | ) | $ | (0.09 | ) | $ | (0.23 | ) | $ | (0.22 | ) | ||||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING,
|
||||||||||||||||
BASIC
AND DILUTED
|
14,558,905 | 14,210,759 | 14,392,525 | 14,965,525 |
Nine
Months Ended
|
||||||||
December 31, | ||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
loss
|
$ | (3,352,678 | ) | $ | (3,336,032 | ) | ||
Depreciation
and amortization
|
50,241 | 37,343 | ||||||
Stock
issued for services
|
143,000 | 650,000 | ||||||
Stock
options granted and warrants issued
|
408,211 | 136,590 | ||||||
Stock
options re-priced for services
|
623,549 | 701,192 | ||||||
Discount
on note payable
|
729,452 | - | ||||||
Adjustments
to reconcile net loss to net cash used by operations:
|
||||||||
Decrease
(increase) in accounts receivable
|
(4,633 | ) | (21,063 | ) | ||||
Decrease
(increase) in prepaid expenses
|
79,766 | 10,047 | ||||||
Decrease
(increase) in inventory
|
22,997 | 46,954 | ||||||
Decrease
in trade secrets
|
- | 374,000 | ||||||
Decrease
(increase) in deposits
|
(17,365 | ) | (36,949 | ) | ||||
Increase
(decrease) in accounts payable & accrued
expenses
|
461,229 | 28,244 | ||||||
Increase
(decrease) in product recall reserve
|
- | (26,999 | ) | |||||
Net
cash used by operating activities
|
(856,231 | ) | (1,436,673 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase
of equipment
|
- | (21,812 | ) | |||||
Net
cash provided (used) in investing activities
|
- | (21,812 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds
from notes payable
|
319,700 | - | ||||||
Payment
of notes payable
|
(135,000 | ) | - | |||||
Proceeds
from the sale of common stock and warrants
|
235,000 | 250,000 | ||||||
Proceeds
from the re-pricing of warrants
|
88,560 | - | ||||||
Net
cash provided by financing activities
|
508,260 | 250,000 | ||||||
NET
INCREASE (DECREASE) IN CASH
|
(347,971 | ) | (1,208,485 | ) | ||||
CASH
- Beginning of period
|
351,627 | 1,216,495 | ||||||
CASH
- End of period
|
$ | 3,656 | $ | 8,010 | ||||
SUPPLEMENTAL
CASH FLOW DISCLOSURES:
|
||||||||
Interest
expense
|
$ | - | $ | - | ||||
Income
taxes
|
$ | - | $ | 341 |
December
31,
|
March
31,
|
|||||||
2008
|
2008
|
|||||||
Estimated
net operating loss carry forward
|
$ | 28,927,000 | $ | 25,574,000 | ||||
Deferred
tax asset
|
$ | 13,235,000 | $ | 8,695,000 | ||||
Deferred
tax asset valuation allowance
|
(13,235,000 | ) | (8,695,000 | ) | ||||
Net
deferred tax asset
|
$ | - | $ | - |
December
31,
|
March
31,
|
|||||||
2008
|
2008
|
|||||||
Office
Equipment
|
$ | 51,347 | $ | 51,347 | ||||
Furniture
& Fixtures
|
11,825 | 11,825 | ||||||
Marketing/Trade
Show Equipment
|
2,659 | 2,659 | ||||||
Manufacturing
Equipment
|
195,138 | 195,138 | ||||||
Laboratory
Equipment
|
139,862 | 139,138 | ||||||
Capitalized
Software
|
3,210 | 3,210 | ||||||
404,041 | 382,230 | |||||||
Allowance
for Depreciation and amortization
|
(188,953 | ) | (138,712 | ) | ||||
Fixed
Assets, net
|
$ | 215,088 | $ | 265,329 |
December
31,
|
March
31,
|
|||||||
2008
|
2008
|
|||||||
Raw
material
|
$ | 26,402 | $ | 36,540 | ||||
Finished
goods
|
- | 12,859 | ||||||
Allowance
for obsolescence
|
- | - | ||||||
Inventory,
net
|
$ | 26,402 | $ | 43,399 |
December
31,
|
March
31,
|
|||||||
2008
|
2008
|
|||||||
7%
note due May 8, 2009 payable to ANPG Lending,
Inc
|
$ | 1,500,000 | $ | 1,500,000 | ||||
6%
notes due November 26, 2008 payable to Arthur Douglas &
Associates
|
25,000 | - | ||||||
6%
notes due January 30, 2009 payable to Arthur Douglas &
Associates
|
25,000 | - | ||||||
6%
notes due February 14, 2009 payable to Arthur Douglas &
Associates
|
25,000 | - | ||||||
6%
notes due February 24, 2009 payable to Arthur Douglas &
Associates
|
10,000 | - | ||||||
Discount
on notes payable
|
(513,798 | ) | (1,250,000 | ) | ||||
$ | 1,071,202 | $ | 250,000 |
December
31,
|
March
31,
|
|||||||
2008
|
2008
|
|||||||
6%
notes due November 25, 2008 payable to our CEO
|
25,000 | - | ||||||
6%
notes due December 11, 2008 payable to our CEO
|
25,000 | - | ||||||
6%
notes due December 28, 2008 payable to our CEO
|
12,000 | - | ||||||
6%
notes due December 29, 2008 payable to our CFO
|
6,000 | - | ||||||
6%
notes due January 15, 2009 payable to our CEO
|
9,000 | - | ||||||
6%
notes due February 4, 2009 payable to our CEO
|
6,000 | - | ||||||
6%
notes due March 15, 2009 payable to our CEO
|
16,700 | - | ||||||
Discount
on notes payable
|
(6,750 | ) | - | |||||
$ | 92,950 | $ | - |
Payments
Due by Period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than 1 year
|
1-3
years
|
4-5
years
|
After
5 years
|
|||||||||||||||
Office
Lease
|
$ | 353,029 | $ | 71,685 | $ | 149,882 | $ | 131,462 | $ | - | ||||||||||
Total
Contractual Cash Obligations
|
$ | 353,029 | $ | 71,685 | $ | 149,882 | $ | 131,462 | $ | - |
Number
of
Shares
Under Warrants
|
Exercise
Price
Per Share
|
Weighted
Average
Exercise
Price
|
||||||||||
Warrants
issued and exercisable at: March
31, 2007
|
4,713,533 | $ | 2.50-5.00 | $ | 1.97 | |||||||
Warrants
issued
|
4,250,000 | - | - | |||||||||
Warrants
expired
|
(823,191 | ) | 5.00 | 5.00 | ||||||||
Warrants
exercised
|
(200,000 | ) | 1.25 | 1.25 | ||||||||
Warrants
issued and exercisable at: March
31, 2008
|
7,940,342 | $ | .87-5.00 | $ | 2.25 | |||||||
Warrants
issued
|
476,930 | 0.20-0.88 | 0.88 | |||||||||
Warrants
expired
|
(178,007 | ) | 5.00 | 5.00 | ||||||||
Warrants
exercised
|
(675,000 | ) | 0.20 | 0.20 | ||||||||
Warrants
issued and exercisable at: December
31, 2008
|
7,564,265 | $ | 0.20-5.00 | $ | 2.76 |
Outstanding
and Exercisable
|
|||||||||||
Range
of Exercise Price
|
Number
of
Shares
Under
Warrants
|
Weighted
Average
Remaining
Contract
Life in
Years
|
Weighted
Average
Exercise
Price
|
||||||||
$ | 5.00 |
324,835
|
0.81
|
$
|
2.39
|
||||||
$ | 0.20 - 2.50 |
2,762,500
|
1.22
|
1.40
|
|||||||
$ | 2.70 |
2,500,000
|
3.52
|
2.70
|
|||||||
$ | 0.20 - .88 |
1,976,930
|
4.17
|
.87
|
|||||||
Total
|
7,564,265
|
2.73
|
1.72
|
Shares
Under
Options
Outstanding
|
Weighted
Average
Exercise
Price
|
|||||||
Options
outstanding at March 31, 2007
|
2,578,255 | $ | 2.73 | |||||
Options
granted
|
98,200 | 1.75 | ||||||
Options
expired
|
- | - | ||||||
Options
exercised
|
- | - | ||||||
Options
outstanding at March 31, 2008
|
2,676,455 | 2.75 | ||||||
Options
granted
|
42,000 | 0.63 | ||||||
Options
expired
|
(373,265 | ) | 2.88 | |||||
Options
exercised
|
- | - | ||||||
Options
outstanding at December 31, 2008
|
2,345,190 | $ | 2.69 |
Options
Exercisable
|
Weighted
Average
Exercise
Price
per
Share
|
|||||||
Options
exercisable at March 31, 2008
|
2,298,955 | $ | 2.75 | |||||
Options
exercisable at December 31, 2008
|
2,068,965 | $ | 2.78 |
Range
of
Exercise
Price
|
Number
Outstanding
at
March
31,
2008
|
Weighted
Average
Remaining
Contractual
Life
Years
|
Weighted
Average
Exercise
Price
(Total
Shares)
|
Number
Exercisable
At
December
31,
2008
|
Weighted
Average
Exercise
Price
(Exercisable
Shares)
|
|||||||||||||||||
$ | 3.40 | 702,392 | 5.84 | $ | 3.40 | 702,392 | $ | 3.40 | ||||||||||||||
$ | 5.00 | 72,333 | 2.13 | $ | 5.00 | 72,333 | $ | 5.00 | ||||||||||||||
$ | 1.61 - 2.95 | 22,365 | 7.71 | $ | 2.06 | 22,365 | $ | 2.06 | ||||||||||||||
$ | 1.00 - 2.85 | 1,506,100 | 4.83 | $ | 2.31 | 1,265,475 | $ | 2.33 | ||||||||||||||
$ | 0.63 | 42,000 | 9.83 | $ | 0.63 | 6,400 | $ | 0.63 | ||||||||||||||
$ | 0.63 - 5.00 | 2,345,190 | 5.15 | $ | 2.69 | 2,068,965 | $ | 2.78 |
|
·
|
They
kill a wide range of infectious microorganism, including
MRSA;
|
|
·
|
They
minimize harmful effects to people and do not cause skin, eye, pulmonary,
oral or dermal irritation;
|
|
·
|
They
are non-corrosive (EnviroTru®/EnviroTru®
1453 are included in the Boeing Qualified Products List (QPL) and conform
with AMS-1452A, 1453 & D6-7127 Aircraft Corrosion Specifications);
and
|
·
|
Surface
care products - disinfectants, sanitizers and cleaners (including
wipes);
|
·
|
Animal
care products - skin and hoof care treatment and animal
shampoo;
|
·
|
Personal
care products – antimicrobial hand soaps, hand sanitizers and facial
scrubs (including wipes); and
|
·
|
Geo-Biocides
– biocides for use in the oil and gas
industry.
|
·
|
EnviroTru®
Disinfectant
& Cleaner Deodorizer, which is a
multi-purpose, ready-to-use disinfectant, sanitizer and deodorizing
cleaner for use on hard surfaces. EnviroTru® is
effective against numerous organisms without causing any adverse effects
to surfaces, humans or the environment. EnviroTru® is
registered by the Environmental Protection Agency (EPA) and meets EPA
requirements for Toxicity Category IV (minimal effects noted, no
precautionary or first aid statements required; no harmful dermal, ocular,
inhalation or ingestion effects). EnviroTru®
also conforms to AMS 1452A, AMS 1453 and Boeing D6-7127 specifications for
non-corrosion and materials compatibility. EnviroTru®
has no special handling requirements, does not require protective
clothing, gloves or special ventilation and is
non-flammable.
|
·
|
EnviroTru®
1453 Disinfectant
& Cleaner Deodorizer, which is a
multi-purpose, ready-to-use disinfectant, sanitizer and deodorizing
cleaner for use on aircraft hard surfaces, including exterior and interior
surfaces such as cabins, toilets, sinks, faucets, counter tops and luggage
compartments. EnviroTru®1453
conforms to AMS 1452A, AMS 1453 and Boeing D6-7127 specifications for
non-corrosion and materials compatibility. EnviroTru®1453
is registered by the Environmental Protection Agency (EPA) and meets EPA
requirements for Toxicity Category IV (minimal effects noted, no
precautionary or first aid statements required; no harmful dermal, ocular,
inhalation or ingestion effects). EnviroTru®1453
has no special handling requirements, does not require protective
clothing, gloves or special ventilation and is
non-flammable.
|
·
|
SurfaceTru™ Deodorizing
Cleaner, which is a powerful, multi-purpose cleaner and deodorizer
that’s safe for use on a variety of surfaces. SurfaceTru™ is
effective for removing dirt and grime and is gentle to application
surfaces, safe for the user and friendly to the environment. It has no
special handling requirements, does not require protective clothing,
gloves or special ventilation and is
non-flammable.
|
·
|
SurfaceTru™
Cleaning & Deodorizing Wipes, which are powerful cleaning and
deodorizing wipes that are packaged in their own individual foil wrappers
for easy portability. Each wipe opens to a large, 9” x 8” durable cloth
with a smooth finish that can be conveniently used on a variety of
surfaces. SurfaceTru™ Wipes can be carried with you for use when an
immediate need for an effective, yet gentle cleaner
arises.
|
·
|
Electrostatic
Sprayers. In addition to the foregoing products,
we also market electrostatic sprayers produced by Electrostatic Spraying
Systems, Inc. (“ESS”)
which may be used to apply our liquid surface care products to the target
surfaces. Electrostatic sprayers provide superior spray coverage by more
effectively dispensing solutions compared to conventional sprayers; tests
have demonstrated 4-10 times better coverage. Electrostatic sprayers
operate by producing highly charged spray droplets using a unique embedded
induction electrode design. This induction charging results in spray
droplets that have a force of attraction that is 75 times that of gravity.
This means droplets will reverse direction and move upwards, against
gravity, to coat hidden surfaces, and wrap around objects resulting in
complete, even coverage of the target. When using an electrostatic sprayer
it is possible to deliver ESI’s liquid disinfectants and cleaners to
difficult to reach locations that may harbor disease-causing
microorganisms.
|
Three
Months Ended December 31,
|
||||||||
Products
|
2008
|
2007
|
||||||
Electro-Static
Sprayer
|
42.59 | % | - | |||||
SurfaceTru®
Cleaning & Deodorizing Wipes
|
19.12 | % | 40.42 | % | ||||
EnviroTru®
and EnviroTru 1453®
|
35.68 | % | 59.58 | % | ||||
EquineTru®
|
2.61 | % | - |
Nine
Months Ended December 31,
|
||||||||
Products
|
2008
|
2007
|
||||||
SurfaceTru®
|
0.92 | % | - | |||||
SurfaceTru®
Cleaning & Deodorizing Wipes
|
33.79 | % | 41.70 | % | ||||
EnviroTru®
and EnviroTru 1453®
|
39.31 | % | 58.30 | % | ||||
EquineTru®
|
3.18 | % | - | |||||
Electro-Satic
Sprayer
|
22.80 | % | - |
|
Payments
Due by Period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than 1 year
|
1-3
years
|
4-5
years
|
After
5 years
|
|||||||||||||||
Office
Lease
|
$ | 353,029 | $ | 71,685 | $ | 149,882 | $ | 131,462 | $ | - | ||||||||||
Total
Contractual Cash Obligations
|
$ | 353,029 | $ | 71,685 | $ | 149,882 | $ | 131,462 | $ | - |
Exhibit 31.1 | ||
Exhibit 31.2 | ||
Exhibit 32.1 |
Anpath
Group, Inc.
|
|
February
23, 2009
|
By: /s/ J. Lloyd
Breedlove
|
J.
Lloyd Breedlove
President,
Chief Executive Officer (Principal Executive
Officer)
|
Exhibit 31.1 | ||
Exhibit 31.2 | ||
Exhibit 32.1 |