UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2009
OR
[ ] 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 333-87696
EXOUSIA ADVANCED MATERIALS, INC.
Texas | 90-0347581 |
(State or Other Jurisdiction of | |
incorporation or Organization) | (I.R.S. Employer Identification No.) |
1200 Soldier’s Field Drive, Suite 200
Sugar Land, Texas 77479
(Address of Principal Executive Offices)
(281) 313-2333
(Issuer's Telephone Number, Including Area Code)
Indicate by check 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition 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)
SEC 1296 (02-08) | Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
Number of shares outstanding as of the close of business on May 14, 2009:
TITLE OF CLASS | NUMBER OF SHARES OUTSTANDING | |||
Common Stock, $0.001 par value. | 55,190,556 |
1
EXOUSIA ADVANCED MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
REPORT ON FORM 10-Q
For the Quarterly Period Ended March 31, 2009
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | ||
Item 1. | Unaudited Consolidated Financial Statements | 3 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 9 |
Item 3. | Quantitative and Qualitative Analysis of Market Risks | 10 |
Item 4. | Controls and Procedures | 10 |
PART II - OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 11 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
Item 3. | Default Upon Senior Securities | 12 |
Item 4. | Submission of Matters to a Vote of Security Holders | 12 |
Item 5. | Other Information | 12 |
Item 6. | Exhibits | 12 |
SIGNATURES | 13 |
2
PART I – FINANCIAL STATEMENTS
EXOUSIA ADVANCED MATERIALS, INC. AND SUBSIDIARIES
BALANCE SHEETS
As of March 31, 2009 and December 31, 2008
March 31, 2009 | December 31, 2008 | |||||||
ASSETS | (unaudited) | |||||||
Cash and cash equivalents | $ | 208,495 | $ | 139,967 | ||||
Accounts receivable trade, net | 33,164 | 79,863 | ||||||
Inventory | 661,234 | 657,700 | ||||||
Prepaid expenses | 25,601 | 121,833 | ||||||
TOTAL CURRENT ASSETS | 928,494 | 999,363 | ||||||
NON-CURRENT ASSETS Fixed assets, net of accumulated depreciation of $34,098 and $23,567 as of March 31, 2009 and December 31, 2008, respectively | 213,582 | 224,113 | ||||||
Patent, net of amortization of $213,833 and $176,531 as of March 31, 2009 and December 31, 2008, respectively | 1,536,166 | 1,579,830 | ||||||
Other assets | 30,417 | 14,417 | ||||||
TOTAL NON-CURRENT ASSETS | 1,780,165 | 1,818,360 | ||||||
TOTAL ASSETS | $ | 2,708,659 | $ | 2,817,723 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 764,064 | $ | 736,859 | ||||
Reserve for legal costs | 232,829 | 232,829 | ||||||
Notes payable | 715,263 | 109,855 | ||||||
Debenture principal and interest payable | 51,841 | 50,362 | ||||||
TOTAL CURRENT LIABILITIES | 1,763,997 | 1,129,905 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Common stock $0.001 par value, 100 million shares authorized; 55,190,556 and 50,917,866 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively | 55,190 | 50,917 | ||||||
Additional paid-in capital | 15,499,748 | 14,312,710 | ||||||
Accumulated deficit | (14,610,276 | ) | (12,675,809 | ) | ||||
Total shareholders' equity | 944,662 | 1,687,818 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,708,659 | $ | 2,817,723 |
The accompanying notes are an integral part of these financial statements.
3
EXOUSIA ADVANCED MATERIALS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2009 and 2008
Three Months Ended March 31, 2009 | Three Months Ended March 31, 2008 | |||||||
REVENUES: | ||||||||
Sales | $ | 82,861 | $ | 162,953 | ||||
EXPENSES: | ||||||||
Cost of Sales | 50,030 | 116,429 | ||||||
Compensation - officers and directors | 514,602 | 186,500 | ||||||
General and administrative expenses | 1,340,328 | 321,449 | ||||||
Professional fees | 48,084 | 89,880 | ||||||
Research and development expenses | 3,408 | 21,773 | ||||||
Depreciation and amortization | 54,194 | 57,902 | ||||||
TOTAL OPERATING EXPENSES | 2,010,646 | 793,933 | ||||||
OPERATING LOSS | (1,927,785 | ) | (630,980 | ) | ||||
OTHER INCOME (EXPENSE): | ||||||||
Interest expense | (6,660 | ) | (3,209 | ) | ||||
Abandoned acquisition expense | - | (19,999 | ) | |||||
Interest income | 16 | 2,565 | ||||||
Other expense | (38 | ) | - | |||||
Total Other Income & Expenses | (6,682 | ) | (20,643 | ) | ||||
Net loss before extraordinary items | (1,934,467 | ) | (651,623 | ) | ||||
Extraordinary gain- bargain purchase | - | 234,583 | ||||||
NET LOSS | $ | (1,934,467 | ) | $ | (417,039 | ) | ||
Basic and diluted net loss per share | $ | (0.04 | ) | $ | (0.01 | ) | ||
Weighted average number of shares outstanding | 53,929,090 | 31,575,197 |
The accompanying notes are an integral part of these financial statements.
4
EXOUSIA ADVANCED MATERIALS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
For the Three Months Ended March 31, 2009
No. of Shares | Capital Stock | Additional Paid In Capital | Accumulated Deficit | Total | ||||||||||||||||
Balance, December 31, 2008 | 50,917,866 | $ | 50,917 | $ | 14,312,710 | $ | (12,675,809 | ) | $ | 1,687,818 | ||||||||||
Shares issued for services | 3,829,833 | 3,830 | 1,072,481 | - | 1,076,311 | |||||||||||||||
Shares issued for cash | 442,857 | 443 | 114,557 | - | 115,000 | |||||||||||||||
Net loss | - | - | - | (1,934,467 | ) | (1,934,467 | ) | |||||||||||||
Balance, March 31, 2009 | 55,190,556 | $ | 55,190 | $ | 15,499,748 | $ | (14,610,276 | ) | $ | 944,662 | ||||||||||
The accompanying notes are an integral part of these financial statements.
5
EXOUSIA ADVANCED MATERIALS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 2009 AND 2008
Three Months Ended March 31, | ||||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (1,934,467 | ) | $ | (417,039 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Extraordinary items | - | (234,583 | ) | |||||
Capital stock issued for services | 1,076,311 | 6,400 | ||||||
Depreciation and amortization | 54,193 | 57,902 | ||||||
Abandoned acquisition expense | - | 19,999 | ||||||
Change in operating assets and liabilities: | ||||||||
--Accounts receivable | 46,699 | (174,250 | ) | |||||
--Inventory | (3,534 | ) | (457,213 | ) | ||||
---Prepaid expenses | 96,232 | (89,970 | ) | |||||
---Other assets | (15,998 | ) | - | |||||
---Interest payable to related parties | 6,113 | 927 | ||||||
---Accounts payable and accrued liabilities | 27,205 | 251,704 | ||||||
Net cash used in operating activities | (647,246 | ) | (1,036,123 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash used for asset purchase | - | (12,588 | ) | |||||
Net cash used in investing activities | - | (12,588 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Payments of insurance payable | (7,832 | ) | - | |||||
Payments on debt | (1,394 | ) | - | |||||
Common stock issued for cash | 115,000 | 1,463,250 | ||||||
Notes payable | 610,000 | - | ||||||
Net cash provided by financing activities | 715,774 | 1,463,250 | ||||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 68,528 | 414,539 | ||||||
Cash and cash equivalents, beginning of period | 139,967 | 267,212 | ||||||
Cash and cash equivalents, end of period | $ | 208,495 | $ | 681,751 |
SUPPLEMENTAL INFORMATION
Interest Paid | $ | - | $ | - | ||||
Taxes Paid | $ | - | $ | - |
The accompanying notes are an integral part of these financial statements.
6
EXOUSIA ADVANCED MATERIALS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Basis of Presentation and Accounting Policies
Presentation of Interim Information
The accompanying consolidated financial statements of Exousia Advanced Materials, Inc. and Consolidated Subsidiaries (“Exousia” or the “Company”) have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted or condensed pursuant to such rules and regulations. These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2008. In management’s opinion, these interim consolidated financial statements reflect all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of the consolidated financial position and results of operations for each of the periods presented. The accompanying unaudited interim financial statements as of and for the three months ended March 31, 2009 are not necessarily indicative of the results which can be expected for the entire year.
Principles of Consolidation
The accounts of our wholly-owned subsidiary, Aegeon, are included in the consolidation of these financial statements from the date of acquisition. All significant intercompany accounts and transactions have been eliminated in consolidation.
Note 2 - Notes Payable
On February 19, 2009, the Company acquired two short term loans in the amount of $610,000 for use of operations. This loan is to be paid back on or before June 15, 2009 bearing interest of 7.5% per annum. In addition, as consideration for the loan, the Company issued 383,333 shares valued at the closing share price of $0.30 for a total value of $115,000. For the period ended March 31, 2009, the Company recorded the $115,000 in expense and accrued interest expense of $4,635, which is included in the note payable balance of $715,263.
Note 3- Reserve for Legal Costs
On or about July 21, 2008, a suit was filed by Baker & Daniels, LLP against the Company in St. Joseph circuit Court, in the State of Indiana, bearing Cause No. 71C01-0807-CC-01617, for unpaid legal fees in the amount of $7,051, with late fees accruing at $63 monthly. The Company disputes the claim, and intends to vigorously defend the claim. At March 31, 2009, the Company accrued $7,051 in legal costs.
On or about November 6, 2008, a Judgment was entered in Cause No. 20D02-0709-PL-79 in the Elkhart Superior Court No. 2, Elkhart, Indiana, in favor of Group Impact, LLC, Tektrellis, Inc., Marc Lacounte and Mary Wetzel, Plaintiffs, against J. Wayne Rodrigue, Exousia Advanced Materials, Inc., Re-Engineered Composite Systems, LLC and Engineered Particle Systems, LLC, Defendants, jointly and severally, in the amount of One Hundred Thousand Dollars ($100,000), plus prejudgment interest at the rate of 12% A.P.R. from May 1, 2007 through April 1, 2008 totaling Eleven Thousand Dollars ($11,000), plus post judgment interest accruing on the outstanding judgment amount at the statutory rate of Eight Percent (8%) from the date of summary judgment of April 1, 2008. In addition, Judgment was entered against the Defendants, jointly and severally, in the amount of Seven Thousand Three Hundred Thirty-Eight Dollars ($7,338) in attorney’s fees and costs, plus post judgment interest accruing on the outstanding judgment amount at the statutory rate of Eight Percent (8%) from the date of award of attorneys fees and costs of May 21, 2008. On or about November 12, 2008, Plaintiffs filed a Notice of Filing Foreign Judgment in the 240th Judicial District Court of Fort Bend County, Texas bearing Cause Number 08-DCV-167838.
7
On or about February 6, 2009, Defendants J. Wayne Rodrigue and Exousia Advanced Materials, Inc. filed a Motion to Vacate Judgment alleging certain defects in the Judgment and the attempt to file the Judgment as a Foreign Judgment. The Company is continuing to investigate the matter, including investigating the possibility of an out-of-court settlement of the claim. At March 31, 2009, the Company accrued $125,778 in legal costs.
In January, 2007, the Company entered into an Asset Purchase and Sale Agreement under which the Company would acquire certain assets of The Little Trailer company, Inc., and Indiana Corporation. The Company has received notice from The Little Trailer Company, Inc. that it claims to be owed a ‘break-up fee’ of approximately One Hundred Thousand Dollars ($100,000) in connection with the alleged failure of Exousia to close the transaction. The Company disputes the claim of The Little Trailer Company, Inc., and intends to vigorously defend the claim and any lawsuit that may be initiated with respect thereto. At March 31, 2009, the Company accrued $100,000 in legal costs.
Note 4 - Common Stock Transactions
As of March 31, 2009, the Company had 55,190,556 common shares issued and outstanding of which 23,107,483 or 42% are owned directly or indirectly by officers and directors of the Company.
The following common stock transaction occurred during the three month period ended March 31, 2009:
· | 442,857 shares issued for cash totaling $115,000 to accredited investors as part of a private placement with warrants of 442,857 at an exercise price of $.50 and a term of 30 months. |
· | 3,829,833 shares issued for services valued at $1,076,311 based upon the closing price of the Company’s common stock on the date of issue. |
Note 5 – Going Concern
The Company is subject to the risks associated with companies that lack working capital, operating resources and contracts, cash and ready access to the credit and equity markets. Without additional funding, the Company may be unable to continue as a going concern. The Company expects to obtain additional debt and equity financing from various sources in order to finance its operations and to grow through merger and acquisition opportunities. However, the Company is currently dependent upon external debt and cash flows have historically been insufficient for the Company’s cash needs. New debt or equity capital may contain provisions that could suppress future stock prices further, or cause significant dilution to current shareholders and increase the cost of doing business. In the event the Company is unable to obtain additional debt and equity financing, the Company may not be able to continue its operations.
Note 6 – Business Combination
On March 5, 2008 the Company acquired the assets of Aegeon, LLC (“Aegeon”) for a purchase price of $193,000 which was paid in cash at the close of this transaction. Aegeon primarily has focused on the manufacturing and distribution of industrial grade coatings. Certain notes and other liabilities due from Aegeon were not part of this transaction. This purchase has been accounted for as a business purchase pursuant to an evaluation by management of EITF 98-3. The transaction was evaluated and the Company believes that the historical cost of the assets acquired approximated fair market value given the current nature of the assets acquired. The fair value of the net assets acquired was $427,583 resulting in a bargain purchase of $234,583. Pursuant to business combination accounting and specifically FASB statement 141 in a bargain purchase any shortfall of consideration is first netted against the long term assets acquired. Given that the fair value of any long term assets acquired was zero the in accordance with purchase accounting the next step would be to consider any contingent consideration. Since there was no contingent consideration in this transaction pursuant to purchase accounting the excess purchase price of $234,583 is treated as an extraordinary gain.
8
A breakdown of the purchase price is as follows:
Cash | $ | 37,787 | ||
Accounts Receivable | 140,066 | |||
Inventory | 435,651 | |||
Prepaid Expenses | 18,220 | |||
LESS: Liabilities assumed | (204,141 | ) | ||
Net Assets Acquired | 427,583 | |||
Less: Excess purchase price | (234,583 | ) | ||
Total Consideration | $ | 193,000 |
The following unaudited pro-forma assumes the transaction occurred as of the beginning of the periods presented as if it would have been reported during the three month periods below.
(Unaudited) | ||||
Pro forma | ||||
three month period | ||||
ended 3/31/08 | ||||
Sales | $ | 486,931 | ||
Cost of Sales | 387,879 | |||
Gross Margin | 99,052 | |||
Operating Expenses | 766,663 | |||
Other Expenses Income | 20,643 | |||
Net Loss | $ | (688,254 | ) |
Item 2 – Management’s Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources
As of March 31, 2009, total assets were $2,708,659 and $1,763,999 in current liabilities. As of December 31, 2008, total assets were $2,817,723 and $1,129,905 in current liabilities. Our revenues for the three months ended March 31, 2009 and 2008 were $82, 861 and $162,953, respectively. The Company sustained losses of $1,934,467 and $417,039 for the three months ended March 31, 2009 and 2008, respectively. Cash used in operating activities was $647,246 and $1,036,123 for the three months ended March 31, 2009 and 2008, respectively.
Our financial statements are prepared using principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, we do not have significant cash or other material liquid assets, nor do we have an established source of revenue sufficient to cover our operating costs and to allow us to continue as a going concern. We may, in the future, experience significant fluctuations in our results of operations. If we are required to obtain additional debt and equity financing or our illiquidity could suppress the value and price of our shares if and when trading in those shares develops. However, our future offerings of securities may not be undertaken, and if undertaken, may not be successful or the proceeds derived from these offerings may be less than anticipated and/or may be insufficient to fund operations and meet the needs of our business plan. Our current working capital is not sufficient to cover expected cash requirements for 2008 or to bring us to a positive cash flow position. It is possible that we will never become profitable and will not be able to continue as a going concern.
9
On March 5, 2008 the Company acquired Aegeon, LLC which is a coatings manufacturer with over 30 years of continuous operations in the Houston, Texas area.
Since the acquisition, the Company has been actively involved in increasing the production capacity of the plant facility. As of the date of this filing, the plant has gone from averaging 1 batch per day of coatings production to over 4 batches per day. Additionally there have been changes in the overall plant design to allow for more staging areas and raw materials prep areas to facilitate a more timely production approach.
The Company’s management is also working with our raw materials suppliers to negotiate better pricing through increased purchases and through detailed forecasting. The Company has had very good reception from our suppliers. Management believes that through better buying practices that a cost savings of 5 to 10 percent can be realized.
The Company has secured a favorable location near Tianjin for its manufacturing facility. The facility will be a distribution point for coatings manufactured at our Houston facility and shipped to China as we continue to complete the design and implementation phase for our China facility which should be operational by the end of this year.
Finally, the Company continues to grow its domestic business opportunities in the transportation industry and the RV industry. The Company’s strategic relationship with American Cargo continues to grow with American Cargo continuing its production pace for full implementation of its objective of producing 50 truck bodies per month utilizing the TRUSSCORE brand laminated panels.
In summary, the Company’s management sees the beginning of traction in the implementation of its strategic plan to reach its stated goals and the first quarter is evidence of this movement. While much hard work is required and anticipated the Company’s management team is up to the challenge.
Item 3 – Quantitative and Qualitative Analysis of Market Risks
There are no material changes in the market risks faced by us from those reported in our Annual Report on Form 10-K for the year ended December 31, 2008.
Item 4 – Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of March 31, 2009, the Company's management carried out an evaluation, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company's system of disclosure controls and procedures pursuant to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective, as of the date of their evaluation, for the purposes of recording, processing, summarizing and timely reporting material information required to be disclosed in reports filed by the Company under the Securities Exchange Act of 1934.
As of March 31, 2009, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
Changes in Internal Control over Financial Reporting
No change in the Company’s internal control over financial reporting occurred during the quarter ended March 31, 2009, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
10
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings
On or about December 10, 2007 a lawsuit was filed by CorrBan Technologies, Inc and Thin Film Technology, Inc. against Exousia Advanced Materials, Inc, Shield Industries, Inc, Global Development Enterprise, Inc, Vickers Industrial Coatings, Inc and other individuals. In the Lawsuit Plaintiffs allege misappropriation of proprietary information, breach of fiduciary duty and fraud. The allegations stem from the certain individuals previous association with CorrBan Technologies and CorrBan’s belief that these individuals used technology obtained from CorrBan. The defendants have agreed to a temporary restriction regarding the use of the disputed technology. Exousia does not believe this temporary agreement will affect their day to day business operations. A settlement was reached during the nine month period ending September 30, 2008 and the Company paid $25,000 on July 28, 2008 to CorrBan Technologies.
On or about July 21, 2008, a suit was filed by Baker & Daniels, LLP against the Company in St. Joseph circuit Court, in the State of Indiana, bearing Cause No. 71C01-0807-CC-01617, for unpaid legal fees in the amount of $7,051, with late fees accruing at $63 monthly. The Company disputes the claim, and intends to vigorously defend the claim. At March 31, 2009, the Company accrued $7,051 in legal costs.
On or about November 6, 2008, a Judgment was entered in Cause No. 20D02-0709-PL-79 in the Elkhart Superior Court No. 2, Elkhart, Indiana, in favor of Group Impact, LLC, Tektrellis, Inc., Marc Lacounte and Mary Wetzel, Plaintiffs, against J. Wayne Rodrigue, Exousia Advanced Materials, Inc., Re-Engineered Composite Systems, LLC and Engineered Particle Systems, LLC, Defendants, jointly and severally, in the amount of One Hundred Thousand Dollars ($100,000), plus prejudgment interest at the rate of 12% A.P.R. from May 1, 2007 through April 1, 2008 totaling Eleven Thousand Dollars ($11,000), plus post judgment interest accruing on the outstanding judgment amount at the statutory rate of Eight Percent (8%) from the date of summary judgment of April 1, 2008. In addition, Judgment was entered against the Defendants, jointly and severally, in the amount of Seven Thousand Three Hundred Thirty-Eight Dollars ($7,338) in attorney’s fees and costs, plus post judgment interest accruing on the outstanding judgment amount at the statutory rate of Eight Percent (8%) from the date of award of attorneys fees and costs of May 21, 2008. On or about November 12, 2008, Plaintiffs filed a Notice of Filing Foreign Judgment in the 240th Judicial District Court of Fort Bend County, Texas bearing Cause Number 08-DCV-167838.
On or about February 6, 2009, Defendants J. Wayne Rodrigue and Exousia Advanced Materials, Inc. filed a Motion to Vacate Judgment alleging certain defects in the Judgment and the attempt to file the Judgment as a Foreign Judgment. The Company is continuing to investigate the matter, including investigating the possibility of an out-of-court settlement of the claim. At March 31, 2009, the Company accrued $125,778 in legal costs.
In January, 2007, the Company entered into an Asset Purchase and Sale Agreement under which the Company would acquire certain assets of The Little Trailer company, Inc., and Indiana Corporation. The Company has received notice from The Little Trailer Company, Inc. that it claims to be owed a ‘break-up fee’ of approximately One Hundred Thousand Dollars ($100,000) in connection with the alleged failure of Exousia to close the transaction. The Company disputes the claim of The Little Trailer Company, Inc., and intends to vigorously defend the claim and any lawsuit that may be initiated with respect thereto. At March 31, 2009, the Company accrued $100,000 in legal costs.
11
Item 2 - Changes in Securities
None
Item 3 – Defaults Upon Senior Securities
None
Item 4 – Submission of Matters to a Vote of Security Holders
None
Item 5 – Other Information
None
Item 6 – Exhibitions and Reports on Form 8-K
Exhibit No. | Description of Exhibit |
3.1 | Articles of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s SB-2 Registration Statement declared effective August 6, 2002 is incorporated here by reference) |
3.2 | By-laws of the Company (filed as Exhibit 3.2 to the Company’s SB-2 Registration Statement declared effective August 6, 2002 is incorporated here by reference) |
31.1 | Certification Pursuant to 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification Pursuant to 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
12
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.
Exousia Advanced Materials, Inc. (Registrant) |
By //s// Wayne Rodrigue, CEO/President/Chairman |
Date: May 14, 2009 |
In accordance with the Securities Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By //s// Robert Roddie, CFO/COO/Sr. VP |
Date: May 14, 2009 |
By //s// Wayne Rodrigue, CEO/President/ Chairman |
Date: May 14, 2009 |
By //s// Robert Lane Brindley, Director |
Date: May 14, 2009 |
By //s// Terry Stevens, Director |
Date: May 14, 2009 |
By //s// George Stapleton, Director |
Date: May 14, 2009 |
13