UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report filed under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2006
or [ ] Transitional report filed under Section 13 or 15(d) of
the Exchange Act.
Commission File No. 0-32863
EESTech, Inc (Formerly Aqua Dyne, Inc).
---------------------------------------
(Name of Small Business Issuer in its Charter)
Delaware 33-0922627
-------- ----------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
23011 Moulton Parkway A-10, Laguna Hills, Ca. 92653
-----------------------------------------------------------
(Address of principal executive office)
Issuer's telephone number: (949) 380 4033
--------------
----------------------------------------------------------
Former address and telephone number
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
been subject to such filing requirements for the past ninety (90) days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date:
As of July 10, 2006, there were 17,619,358 shares of Common Stock, par
value $.001 per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets 3
(b) Consolidated Statements of Operations 4
(c) Consolidated Statements of Stockholders' Equity 5
(d) Consolidated Statements of Cash Flows 6
(e) Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 9
Item 3. Controls and Procedures 11
PART II. OTHER INFORMATION 11
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults On Senior Securities 11
Item 4. Submission of Items to a Vote 11
Item 5. Other Information 12
Item 6.
(a) Exhibits (b) Reports on Form 8K 12
SIGNATURES 13
2
EESTECH, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------------------------------
ASSETS
June 30, 2006 DECEMBER 31,
UN-AUDITED 2005
------------ ------------
Current assets:
Cash $ 16,551 $ 1,828
Prepaid expenses 17,220 26,424
------------ ------------
Total current assets 33,771 28,252
------------ ------------
Property and equipment, net of depreciation 27,357 34,089
Intellectual property, net of amortization 2,787 2,887
------------ ------------
Total assets $ 63,915 $ 65,228
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 274 $ 164,930
Payroll and payroll taxes payable 4,326 11,381
Shareholder loans 245,641 245,429
------------ ------------
Total current liabilities 250,241 421,740
------------ ------------
Stockholders' equity:
Common Stock, $0.001 par value, 20,000,000 shares
authorized; 15,348,224 and 14,416,410 shares issued
and outstanding at June 30, 2006 and December 31, 2005,
respectively 15,347 14,415
Additional paid in capital 10,357,951 9,892,369
Common stock subscribed, 507,610 and 62,500 shares at
June 30, 2006 and December 31, 2005, respectively 203,044 50,000
Deficit accumulated during development stage (10,905,088) (10,324,295)
Accumulated other comprehensive income 142,420 10,999
------------ ------------
Total stockholders' equity (deficit) (186,326) (356,512)
------------ ------------
Total liabilities and stockholders' equity $ 63,915 $ 65,228
============ ============
The accompanying notes are an integral part of these financial statements
3
EESTECH, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
FOR THE FOR THE AMOUNTS FROM
FOR THE SIX FOR THE SIX THREE MONTHS THREE MONTHS APRIL 26,
MONTHS ENDED MONTHS ENDED ENDED ENDED 2000 TO
JUNE 30, 2006 JUNE 30, 2005 JUNE 30, 2006 JUNE 30, 2005 JUNE 30, 2006
------------ ------------ ------------ ------------ ------------
Operating expenses:
General and administrative $ 596,089 $ 1,080,928 $ 274,044 $ 394,680 $ 5,434,092
Research and development -- 50,000 -- 25,000 1,200,466
Impairment loss on intellectual property -- -- -- -- 4,300,000
------------ ------------ ------------ ------------ ------------
Total operating expenses 596,089 1,130,928 274,044 419,680 10,934,558
Loss from operations (596,089) (1,130,928) (274,044) (419,680) (10,934,558)
Other income (expense)
Interest income 380 3,278 256 1,168 34,773
Other income 15,210 -- -- -- 15,210
Interest expense -- -- -- -- (644)
Loss on disposition of assets -- -- -- -- (18,700)
Provision for taxes (294) -- -- -- (1,169)
------------ ------------ ------------ ------------ ------------
Net loss $ (580,793) $ (1,127,650) $ (273,788) $ (418,512) $(10,905,088)
============ ============ ============ ============ ============
Loss per share $ (0.04) $ (0.09) $ (0.02) $ (0.03)
============ ============ ============ ============
Weighted average number of common shares outstanding 15,007,735 12,736,908 15,303,550 14,072,515
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements
4
EESTECH, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock Deficit
----------------------------------------------------- accumulated
Par Additional during Total
Shares value paid-in Shares development Comprehensive stockholders'
issued $0.001 capital subscribed stage income equity
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance at inception-
April 26, 2000 -- $ -- $ -- $ -- $ -- $ -- $ --
Issuance of stock for
intellectual property 4,000,000 4,000 -- -- -- -- 4,000
Issuance of stock to directors 650,000 650 -- -- -- -- 650
Net loss -- -- -- -- (18,973) -- (18,973)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2000 4,650,000 4,650 -- -- (18,973) -- (14,323)
Issuance of stock for cash 997,000 997 996,003 -- -- -- 997,000
Issuance of stock for
intellectual property 1,000,000 1,000 999,000 -- -- -- 1,000,000
Net loss -- -- -- -- (1,638,743) -- (1,638,743)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2001 6,647,000 6,647 1,995,003 -- (1,657,716) -- 343,934
Issuance of stock for cash 585,000 585 584,415 -- -- -- 585,000
Net loss -- -- -- -- (662,710) -- (662,710)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2002 7,232,000 7,232 2,579,418 -- (2,320,426) -- 266,224
Issuance of stock for cash 583,985 584 875,470 -- -- -- 876,054
Issuance of stock for services 50,000 50 189,950 -- -- -- 190,000
Common stock subscribed -- -- -- 44,097 -- -- 44,097
Net loss -- -- -- -- (1,106,906) -- (1,106,906)
Adjust for foreign
currency translation -- -- -- -- -- 23,637 23,637
------------
Comprehensive loss -- -- -- -- -- -- (1,083,269)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2003 7,865,985 7,866 3,644,838 44,097 (3,427,332) 23,637 293,106
Issuance of stock for
intellectual property 1,000,000 1,000 3,299,000 -- -- -- 3,300,000
Stock subscribed issued 29,398 29 44,068 (44,097) -- -- --
Issuance of stock for cash 978,370 978 616,149 -- -- -- 617,127
Issuance of stock for services 30,000 30 37,470 -- -- -- 37,500
Common stock subscribed -- -- -- 890,230 -- -- 890,230
Net loss -- -- -- -- (5,159,117) -- (5,159,117)
Adjustment for foreign
currency translation -- -- -- -- -- 135,903 135,903
------------
Comprehensive loss -- -- -- -- -- -- (5,023,214)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2004 9,903,753 9,903 7,641,525 890,230 (8,586,449) 159,540 114,749
Issuance of stock for cash 3,845,638 3,845 1,853,673 (890,230) -- -- 967,288
Issuance of stock for note 588,235 588 299,412 -- -- -- 300,000
Issuance of stock for services 78,784 79 97,759 -- -- -- 97,838
Common stock subscribed
(62,500 shares) -- -- -- 50,000 -- -- 50,000
Net loss -- -- -- -- (1,737,846) -- (1,737,846)
Adjustment for foreign
currency translation -- -- -- -- -- (148,541) (148,541)
------------
Comprehensive loss -- -- -- -- -- -- (1,886,387)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance December 31, 2005 14,416,410 $ 14,415 $ 9,892,369 $ 50,000 $(10,324,295) $ 10,999 $ (356,512)
Issuance of stock for cash 784,741 785 280,179 (50,000) -- -- 230,964
Issuance of stock for services 147,073 147 185,403 -- -- -- 185,550
Stock subscribed (507,610)shares -- -- -- 203,044 -- -- 203,044
Net loss -- -- -- -- (580,793) -- (580,793)
Adjustment for foreign currency
translation -- -- -- -- -- 131,421 131,421
------------
Comprehensive loss -- -- -- -- -- -- (449,372)
------------ ------------ ------------ ----------- ------------ ------------ ------------
Balance June 30, 2006
(unaudited) 15,348,224 $ 15,347 $ 10,357,951 $ 203,044 $(10,905,088) $ 142,420 $ (186,326)
============ ============ ============ =========== ============ ============ ============
The accompanying notes are an integral part of these financial statements
5
EESTECH, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
CUMULATIVE AMOUNTS
FROM INCEPTION
FOR THE SIX FOR THE SIX (APRIL 26, 2000)
MONTHS ENDED MONTHS ENDED THROUGH
JUNE 30, 2006 JUNE 30, 2005 JUNE 30 2006
UN-AUDITED UN-AUDITED UN-AUDITED
------------ ------------ ------------
Cash flows from operating activities:
Net loss $ (580,793) $ (1,127,650) $(10,905,088)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation 6,832 7,734 39,802
Impairment of intellectual property -- -- 4,300,000
Shares issued for services 236,994 97,838 562,982
Disposition of property -- -- 18,700
Changes in assets and liabilities:
Decrease (increase) in prepaid expenses 9,204 (13,377) (17,220)
Increase (decrease) in accounts payable (164,656) (74,771) 274
Increase (decrease) in accrued payroll taxes (7,055) 3,799 4,326
Increase in bank overdraft -- 43,874 --
------------ ------------ ------------
Net cash used in operations (499,474) (1,062,553) (5,996,224)
------------ ------------ ------------
Cash flows used by investing activities:
Disposition (acquisition) of fixed assets -- (4,339) (84,646)
------------ ------------ ------------
Net cash used by investing activities -- (4,339) (84,646)
------------ ------------ ------------
Cash flows from financing activities:
Issuance of common stock 230,964 774,553 5,557,760
Loan from shareholder 212 1,600 245,641
Stock subscribed 151,600 -- 151,600
------------ ------------ ------------
Net cash from financing activities 382,776 776,153 5,955,001
------------ ------------ ------------
Comprehensive gain (loss) on translation 131,421 (110,463) 142,420
Net increase (decrease) in cash 14,723 (401,202) 16,551
Cash, beginning of period 1,828 401,202 --
------------ ------------ ------------
Cash, end of period $ 16,551 $ -- $ 16,551
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Issuance of stock for intellectual property $ -- $ -- $ 4,304,000
============ ============ ============
Issuance of stock for services $ 236,994 $ 97,838 $ 562,982
============ ============ ============
Issuance of stock subscribed $ 50,000 $ 890,230 $ --
============ ============ ============
Issuance of stock for loan payable $ -- $ 300,000 $ --
============ ============ ============
The accompanying notes are an integral part of these financial statements
6
ESSTECH, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
AND CUMMULATIVE FROM INCEPTION APRIL 26, 2000 TO JUNE 30, 2006
(UN-AUDITED)
- --------------------------------------------------------------------------------
1. INTERIM FINANCIAL INFORMATION
-----------------------------
The consolidated financial statements of ESSTech, Inc. (the Company),
formerly Aqua Dyne, Inc, and its wholly-owned subsidiary Aqua Dyne
Australia Pty Ltd as of June 30, 2006 and related footnote information
are un-audited. All adjustments (consisting only of normal recurring
adjustments) have been made which, in the opinion of management, are
necessary for a fair presentation. Results of operations for the six
months ended June 30, 2006 and 2005 are not necessarily indicative of
the results that may be expected for any future period. The balance
sheet at December 31, 2005 was derived from audited financial
statements.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America, have been omitted.
These financial statements should be read in conjunction with the
financial statements and notes for the year ended December 31, 2005.
2. ISSUE OF COMMON STOCK FOR INTELLECTUAL PROPERTY
-----------------------------------------------
The Company acquired the JETWATER System in its final stages of
prototype development from Global Power & Water, Inc. ("Global") in
fiscal year 2000 in exchange for issuance to Global of 6,000,000 shares
of common stock, 4,000,000 of our shares of common stock initially,
1,000,000 shares following the successful testing of the system and
another 1,000,000 shares to be issued upon the successful demonstration
that the JETWATER System is ready for large scale production and
deployment in commercial operations.
During the nine months ended September 30, 2004 the Company issued
1,000,000 shares of common stock at a par value of $0.001 per share in
payment of intellectual property acquired in 2000. Since the fair
market value of the stock on the date issued was $3.30 the Company was
required to value the intellectual property acquired at $3,300,000 and
the Company was not able to substantiate that it would be able to
realize revenues to recover the investment. Therefore, the Company was
required to recognize an impairment of long-lived asset of $3,300,000.
3. STOCK BASED COMPENSATION
------------------------
Prior to January 1, 2006, the Company accounted for employee
stock-based compensation using the intrinsic value method supplemented
by pro forma disclosures in accordance with APB 25 and SFAS 123
"Accounting for Stock-Based Compensation" ("SFAS 123") Under the
intrinsic value based method, compensation cost is the excess, if any,
of the quoted market price of the stock at grant date or other
measurement date over the amount an employee must pay to acquire the
stock. Under the intrinsic value method, the Company has recognized
stock-based compensation common stock on the date of grant.
Effective January 1, 2006 the Company adopted SFAS 123R using the
modified prospective approach and accordingly prior periods have not
been restated to reflect the impact of SFAS 123R. Under SFAS 123R,
stock-based awards granted prior to its adoption will be expensed over
the remaining portion of their vesting period. These awards will be
expensed under the straight line amortization method using the same
fair value measurements which were used in calculating pro forma
stock-based compensation expense under SFAS 123. For stock-based awards
granted on or after January 1, 2006, the Company will amortize
stock-based compensation expense on a straight-line basis over the
requisite service period, which is generally a five-year vesting
period.
7
SFAS 123R requires forfeitures to be estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures
differ from initial estimates. Had there been stock-based compensation
in 2006, stock-based compensation expense would have been recorded net
of estimated forfeitures for the period ended June 30, 2006 such that
expense would be recorded only for those stock-based awards that are
expected to vest. Previously under APB 25 to the extent awards were
forfeited prior to vesting, the corresponding previously recognized
expense was reversed in the period of forfeiture.
If the fair value based method under FAS 123 had been applied in
measuring stock-based compensation expense for the period ended June
30, 2005, the pro forma on net loss and net loss per share would have
been as follows:
Three-month Six-month
period ended period ended
June 30, 2005 June 30, 2005
------------ ------------
Net loss, as reported $ (418,512) $(1,127,650)
Add: Stock based employee compensation
expense included in reported net loss,
net of related tax effects -- --
Deduct: Total Stock-based employee
compensation expense determined under
fair-value based method for all awards not
included in net loss -- (1,557)
----------- -----------
Pro-forma net loss $ (418,512) $(1,129,207)
=========== ===========
Loss per share:
Basic and diluted - as reported $ (0.03) $ (0.09)
----------- -----------
Basic and diluted - pro-forma $ (0.03) $ (0.09)
----------- -----------
4. SEGMENT INFORMATION
-------------------
The Company has adopted FAS Statement No. 131, "Disclosures about
Segments of a Business Enterprise and Related Information". The
Company's marketing and research and development activity is
administered in two operating segments: United States and Australia.
United States Australia
------------- ---------
Net Loss- June 30, 2006 $ 265,363 $ 315,430
June 30, 2005 $ 188,076 $ 939,574
------------ ------------
Long lived assets (net)
June 30, 2006 $ 0 $ 27,357
June 30, 2005 $ 0 $ 43,705
5. SUBSEQUENT EVENTS
------------------
In July the Company issued the subscribed shares of common stock
(379,000 shares for cash $151,600 and 128,610 shares for services
$51,444).
In July the Company issued 763,700 shares of common stock to acquire
Methgen, Inc. that holds the license for marketing and exploitation of
the Hybrid Coal Gas Turbine Technology in the United States.
In July the Company executed an agreement to issue 999,820 shares of
common stock to acquire a 58% interest in Liquatech Pty Ltd. that holds
the exclusive International marketing and production rights to the
Hybrid Coal Gas Turbine intellectual property. The settlement date for
the issue of the stock has been deferred to a future date to be agreed
by both parties.
8
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS PRELIMINARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
based upon current conditions and the most recent results of operations.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "project," "expect," "believe," "estimate,"
"anticipate," "intends," "continue", "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other
variations of those terms or comparable words or expressions. (See the Company's
Form 10-KSB for a description of certain of the known risks and uncertainties of
the Company.)
Overview of the Company's Business
- ----------------------------------
EESTech, Inc. ("Company", "us" or "we") was incorporated and commenced
operations on April 26, 2000. The Company was formed to seek out and acquire
promising technologies with the intent of bringing them to commercialization.
The first such technology we acquired was the JETWATER System for water
purification. This technology was acquired from Global Power & Water, Inc., a
Nevada corporation ("Global"). As a result of the acquisition Global became our
controlling shareholder. Following the acquisition of the patent rights and
complete ownership of this technology, we have been working to complete
development and testing of the JETWATER System process. The Company acquired the
JETWATER System in its final stages of prototype development from Global Power &
Water, Inc. ("Global") in fiscal year 2000 in exchange for issuance to Global of
6,000,000 shares of common stock, 4,000,000 of our shares of common stock
initially, 1,000,000 shares following the successful testing of the system and
another 1,000,000 shares to be issued upon the successful demonstration that the
JETWATER System is ready for large scale production and deployment in commercial
operations.
To date a total of 6,000,000 of our shares of common stock have been issued to
Global, following the successful independent testing of the JETWATER System. The
acquisition of JETWATER System from Global was accounted for as a purchase of an
asset for stock.
In December 2002, Aqua Dyne Australia Pty Ltd., a wholly-owned subsidiary of the
Company was formed under the laws of Australia. The subsidiary had been formed
to conduct the Company's operations in Australia.
During the period to 30 June 2006, most of the operations were conducted in
Australia.
9
Plan of Operations
- ------------------
Management's goal is to keep costs to a minimum, but to do sufficient marketing
to successfully sell the JETWATER System for commercial use. Now that the
completion of the testing is over, the JETWATER System planned activities are as
follows:
1) initial production of the first commercial version of the
JETWATER System is ready to start if the Company can sell or
lease the system to a commercial buyer.
2) continue to do demonstrations to parties that have a need for
the JETWATER System;
3) work with Global to continue to improve and modify the
JETWATER System; and
4) seek out potential joint venture partners to market the
JETWATER System to selective industries and territories.
There are still no assurances that we will be successful in our marketing
efforts, concluding any contracts or joint venture arrangements.
Results of operations
- ---------------------
The Company has been in the developmental stage since its inception.
Our net loss from inception (April 26, 2000) until June 30, 2006 was
$10,905,000. Our net loss for the six months ended June 30 2006 was $581,000 as
compared to $1,128,000 for the six months ended June 30, 2005.
Our general and administrative expenses from inception (April 26, 2000) until
June 30, 2006 were $5,434,000. Our general and administrative expenses for the
six months ended June 30, 2006 were $596,000 as compared to $1,081,000 for the
six months ended June 30, 2005. The reduction in expenses of $485,000 was due
primarily to the reduction of expenses in Australia of contract labor $332,000,
wages $69,000 and consulting fees $75,000.
Our research and development expenses from inception (April 26, 2000) until June
30 2006 were $1,200,000. All costs through December 31, 2002 were related to the
process of establishing the technological feasibility of the water purification
system. There have been no research and development expenses in 2006 as the
contract with Global for research and development came to an end in June 2005.
For the six months ended June 30, 2005 the Company incurred $50,000 in
accordance with the Global contract that expired as of June 30, 2005.
The Company had an impairment loss on intellectual property of $4,300,000 since
inception due to the issuance of 2,000,000 shares of stock that was agreed upon
when the Company acquired the intellectual property in 2000. The 2,000,000
shares issued were valued at the current market price of the stock when issued.
10
Liquidity and Capital Resources
- -------------------------------
The Company had a cash balance of $16,551 at June 30 2006, as compared to cash
of $1,828 at December 31, 2005.
To date the Company continues to fund its operations from private placements of
common shares. For the six months ended June 30, 2006 the Company issued shares
for $230,964 and subscribed shares for $151,600.
ITEM 3. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive Officer
and Chief Financial Officer, after evaluating the effectiveness of the Company's
disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e))
and 15d-15(e) as of the end of the period June 30 2006, have concluded that its
disclosure controls and procedures are effective to reasonably ensure that
material information required to be disclosed by the company in the reports that
are filed or submitted under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified by Securities and Exchange
Commissions' Rules and Forms and that such information is accumulated and
communicated to our Management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
There were no changes made during our most recently completed fiscal quarter in
our internal control over financial reporting that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
The Chief Executive Officer and Chief Financial Officer confirm that the review
of the Controls and Procedures was conducted at 30 June 2006.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS- NONE
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS-NONE
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES- NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS-
On 15 June 2006, at a Special Meeting of Stockholders, a resolution was passed
unanimously to permit an amendment to the Company's Amended and Restated
Certificate of Incorporation to change the name of the company to "EESTech, Inc"
The State of Delaware was advised and a new certificate was issued on June 26
2006
The NASDAQ was subsequently informed and it approved the name change on July 7
2006, confirming that the new Trading symbol would be EESH.OB
The significance of this is to broaden the Company's activities into
Economically and Environmentally Sustainable Technologies
11
ITEM 5 - OTHER INFORMATION-
Events Subsequent to 30 June 2006
On 3 July 2006 the Board approved the following:
(a) The issuance of 763,700 Restricted Stock to 8 Stockholders in Methgen
Inc. In exchange EESTech Inc received all the issued stock in Methgen
Inc. This company holds a License to exploit HCGT (Hybrid Coal Gas
Turbine) technology in the United States.
(b) To issue 999,268 Restricted Stock to Mr Gregory Paxton and 552
Restricted stock to Global Power and Water. In exchange EESTech, Inc is
to receive 1,392 shares in Liquatech Pty Ltd, This represents 58% of
that company's issued stock. Liquatech Pty Ltd holds a 50% interest in
Comenergy Pty Ltd, a company that holds a world-wide License to exploit
the HCGT technology.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
- -------------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
4.1 Form of the Stock Certificate*
4.2 Form of Subscription Agreement executed by investors
in the Private Placement*
10.1 Deed of Agreement for Assignment of Intellectual Property*
10.2 Agreement for Performance of Services by Independent
Contractor*
10.3 Employment Agreement with James Wilson**
10.4 Promissory Note to Global Power & Water, Inc.**
31 Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
32 Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
* Previously filed with the Securities and Exchange Commission on Form 10-QSB.
** Previously filed with the Securities and Exchange Commission on Form 10-KSB
(b) Reports on Form 8-K.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: August 9, 2006 EESTECH, INC.
By: /s/ Murray Bailey
-------------------------------------
Murray Bailey
Chief Executive Officer and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Murray Bailey Chief Executive Officer and August 9, 2006
- --------------------- Director (PRINCIPAL EXECUTIVE
Murray Bailey OFFICER)
/s/ Murray Bailey Chief Financial Officer (PRINCIPAL August 9, 2006
- --------------------- FINANCIAL OFFICER AND PRINCIPAL
Murray Bailey ACCOUNTING OFFICER)
13