PINX:NENE New Energy Technologies Inc Quarterly Report 10-Q Filing - 5/31/2012

Effective Date 5/31/2012

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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 quarterly period ended May 31, 2012

 

¨      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 333-127953

 

NEW ENERGY TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 59-3509694
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
9192 Red Branch Road, Suite 110  
Columbia, Maryland 21045
(Address of principal executive offices) (Zip Code)

 

(800) 213-0689

(Registrant’s telephone number, including area code)

 

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 12b-2 of the Exchange Act.) Yes ¨ No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 20,638,360 shares of common stock, par value $0.001, were outstanding on July 11, 2012.

 

 

 

 
 

 

NEW ENERGY TECHNOLOGIES, INC.

FORM 10-Q

 

For the Quarterly Period May 31, 2012

 

Table of Contents

 

PART I FINANCIAL INFORMATION  
   
Item 1. Consolidated Financial Statements (Unaudited)  
   
Consolidated Balance Sheets 1
   
Consolidated Statements of Operations 2
   
Consolidated Statements of Stockholders’ Equity (Deficit) 3
   
Consolidated Statement s of Cash Flows 4
   
Notes to Consolidated Financial Statements 5
   
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20
   
Item 4. Controls and Procedures 27
   
PART II OTHER INFORMATION  
   
Item 1. Legal Proceedings 28
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28
   
Item 3. Defaults Upon Senior Securities 28
   
Item 4. Mine Safety Disclosures 28
   
Item 5. Other Information 28
   
Item 6. Exhibits 28
   
Signatures 29
   
Certifications  

 

 
 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements (Unaudited)

 

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

MAY 31, 2012 AND AUGUST 31, 2011

 

   May 31,   August 31, 
   2012   2011 
   (Unaudited)     
ASSETS          
Current assets          
Cash and cash equivalents  $1,516,829   $2,320,185 
Deferred research and development costs   86,262    156,279 
Deferred offering costs   -    20,000 
Prepaid expenses and other current assets   15,500    49,382 
Total current assets   1,618,591    2,545,846 
           
Equipment, net of accumulated depreciation of $4,346 and $463 at May 31, 2012 and August 31, 2011   21,502    927 
Total assets  $1,640,093   $2,546,773 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Current liabilities          
Accounts payable  $148,476   $119,868 
Accrued liabilities   8,438    161,009 
Convertible promissory note, net of $999,985 discount   15    - 
Total current liabilities   156,929    280,877 
           
Total liabilities   156,929    280,877 
           
Commitments and contingencies          
           
Stockholders' equity          
Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding at May 31, 2012 or August 31, 2011.   -    - 
Common stock: $0.001 par value; 300,000,000 shares authorized, 20,638,360 shares issued and outstanding at May 31, 2012 and August 31, 2011.   20,638    20,638 
Additional paid-in capital   13,778,126    12,593,184 
Deficit accumulated during the development stage   (12,315,600)   (10,347,926)
Total stockholders' equity   1,483,164    2,265,896 
Total liabilities and stockholders' equity  $1,640,093   $2,546,773 

 

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

 

1
 

 

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2012 AND 2011 AND FOR THE

PERIOD FROM INCEPTION (MAY 5, 1998) TO MAY 31, 2012

 

 

                   Cumulative 
   Three Months Ended   Nine Months Ended   May 5, 1998 
   May 31,   May 31,   (Inception) to 
   2012   2011   2012   2011   May 31, 2012 
                     
Revenue  $-   $-   $-   $-   $- 
                          
Operating expense                         
Selling, general and administrative   386,653    1,542,502    1,315,655    3,768,809    11,053,561 
Research and development   241,652    138,148    557,400    233,248    2,475,096 
Total operating expense   628,305    1,680,650    1,873,055    4,002,057    13,528,657 
                          
Loss from operations   (628,305)   (1,680,650)   (1,873,055)   (4,002,057)   (13,528,657)
                          
Other income (expense)                         
Interest income   -    -    -    -    98,582 
Interest expense - other   (8,438)   (382)   (8,438)   (1,238)   (20,831)
Interest expense - accretion of debt discount   (15)   -    (15)   -    (15)
Loss on disposal of fixed assets   -    -    -    -    (5,307)
Gain on dissolution of foreign subsidiary   -    -    -    -    59,704 
Foreign exchange loss   -    -    (65)   (497)   (86,438)
Change in fair value of warrant liability   -    -    -    8,059    2,128,331 
Change in contingent liability   -    -    156,109    -    186,109 
Total other income (expense)   (8,453)   (382)   147,591    6,324    2,360,135 
                          
Loss from continuing operations   (636,758)   (1,681,032)   (1,725,464)   (3,995,733)   (11,168,522)
                          
Loss from discontinued operations   (3,000)   -    (242,210)   -    (404,307)
                          
Net loss  $(639,758)  $(1,681,032)  $(1,967,674)  $(3,995,733)  $(11,572,829)
                          
Basic and Diluted Loss per Common Share:                         
Continuing operations  $(0.03)  $(0.08)  $(0.08)  $(0.20)     
Discontinued operations  $-   $-   $(0.01)  $-      
Total  $(0.03)  $(0.08)  $(0.10)  $(0.20)     
                          
Weighted average number of common shares outstanding - basic and diluted   20,638,360    20,638,360    20,638,360    20,314,810      

 

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

 

2
 

 

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FROM MAY 5, 1998 (INCEPTION) TO MAY 31, 2012

 

                   Deficit         
               Accumulated   Accumulated         
               Other   During the         
   Common Stock   Additional   Comprehensive   Development   Comprehensive   Total Stockholders' 
   Shares   Amount   Paid-in Capital   Income (Loss)   Stage   Income (Loss)   Equity (Deficit) 
Restricted common stock issued to related parties for management services at $0.001 per share   3,000,000   $3,000   $-   $-   $-   $-   $3,000 
Unrestricted common stock sales to third parties at $0.40 per share   375,000    375    149,625    -    -    -    150,000 
Net loss for the year ended August 31, 1998                       (12,326)   (12,326)   (12,326)
Balance, August 31, 1998   3,375,000    3,375    149,625    -    (12,326)   (12,326)   140,674 
                                    
Net loss for the year ended August 31, 1999                       (77,946)   (77,946)   (77,946)
Balance, August 31, 1999   3,375,000    3,375    149,625    -    (90,272)   (77,946)   62,728 
                                    
Net loss for the year ended August 31, 2000                       (12,446)   (12,446)   (12,446)
Balance, August 31, 2000   3,375,000    3,375    149,625    -    (102,718)   (12,446)   50,282 
                                    
Net loss for year ended August 31, 2001                       (12,904)   (12,904)   (12,904)
Balance, August 31, 2001   3,375,000    3,375    149,625    -    (115,622)   (12,904)   37,378 
                                    
Net loss for the year ended August 31, 2002                       (54,935)   (54,935)   (54,935)
Balance, August 31, 2002   3,375,000    3,375    149,625    -    (170,557)   (54,935)   (17,557)
                                    
Restricted common stock issued at $.001 per share to two related parties to satisfy outstanding management fees.   10,333,200    10,333    92,999    -    -    -    103,332 
Net loss for the year ended August 31, 2003                       (97,662)   (97,662)   (97,662)
Balance, August 31, 2003   13,708,200    13,708    242,624    -    (268,219)   (97,662)   (11,887)
                                    
Net loss for the year ended August 31, 2004                       (19,787)   (19,787)   (19,787)
Balance, August 31, 2004   13,708,200    13,708    242,624    -    (288,006)   (19,787)   (31,674)
                                    
Net loss for the year ended August 31, 2005                       (103,142)   (103,142)   (103,142)
Balance, August 31, 2005   13,708,200    13,708    242,624    -    (391,148)   (103,142)   (134,816)
                                    
Issuance of common stock and warrants at $0.50 per share   1,000,000    1,000    499,000    -    -    -    500,000 
Net loss for the year ended August 31, 2006                       (157,982)   (157,982)   (157,982)
Balance, August 31, 2006   14,708,200    14,708    741,624    -    (549,130)   (157,982)   207,202 
                                    
Exercise of Class A Warrants at $0.50 per share   1,000,000    1,000    499,000    -    -    -    500,000 
Exercise of Class B Warrants at $0.55 per share   1,000,000    1,000    549,000    -    -    -    550,000 
Exercise of Class C Warrants at $1.50 per share   326,667    327    489,673    -    -    -    490,000 
Exercise of Class D Warrants at $1.65 per share   293,333    293    483,707    -    -    -    484,000 
Exercise of Class E Warrants at $1.80 per share   293,333    293    527,707    -    -    -    528,000 
Issuance of common stock and warrants at $1.50 per share   333,333    333    499,667    -    -    -    500,000 
Dividend paid - spin off of MircoChannel Technologies Corporation   -    -    -    -    (400,000)   -    (400,000)
Comprehensive income (loss)                                   
Foreign currency translation adjustments                  (1,811)   -    (1,811)   (1,811)
Net loss for the year ended August 31, 2007                       (1,442,769)   (1,442,769)   (1,442,769)
Balance, August 31, 2007   17,954,866    17,954    3,790,378    (1,811)   (2,391,899)   (1,444,580)   1,414,622 
                                    
Common stock and warrants issued for cash and services at $3.00 per Unit   1,225,000    1,225    3,394,730    -    -    -    3,395,955 
Exercise of Class C Warrants at $1.50 per share   6,667    7    9,993    -    -    -    10,000 
Exercise of Class D Warrants at $1.65 per share   6,667    7    10,993    -    -    -    11,000 
Exercise of Class F Warrants at $3.75 per share   58,333    58    218,692    -    -    -    218,750 
Stock based compensation   -    -    3,600,303    -    -    -    3,600,303 
Comprehensive income (loss)                                   
Foreign currency translation adjustments                  12,504    -    12,504    12,504 
Net loss for the year ended August 31, 2008                       (5,721,545)   (5,721,545)   (5,721,545)
Balance, August 31, 2008   19,251,533    19,250    11,025,090    10,693    (8,113,444)   (5,709,041)   2,941,589 
                                    
Exercise of Class E Warrants at $1.80 per share   6,667    7    11,993    -    -    -    12,000 
Exercise of Class F Warrants at $3.75 per share   275,333    275    1,032,225    -    -    -    1,032,500 
Stock based compensation   -    -    183,312    -    -    -    183,312 
Reversal of stock based compensation due to forfeiture of stock options   -    -    (3,591,093)   -    -    -    (3,591,093)
Comprehensive income                                   
Foreign currency translation adjustments                  (10,693)   -    (10,693)   (10,693)
Net loss for the year ended August 31, 2009                       1,961,175    1,961,175    1,961,175 
Balance, August 31, 2009   19,533,533    19,532    8,661,527    -    (6,152,269)   1,950,482    2,528,790 
                                    
Stock based compensation   -    -    661,040    -    -    -    661,040 
Reversal of stock based compensation due to forfeiture of stock options   -    -    (478,971)   -    -    -    (478,971)
Cumulative adjustment upon adoption of ASC 815-40   -    -    (1,785,560)   -    (342,771)   -    (2,128,331)
Net loss for the year ended August 31, 2010                       (233,136)   (233,136)   (233,136)
Balance, August 31, 2010   19,533,533    19,532    7,058,036    -    (6,728,176)   (233,136)   349,392 
                                    
Rounding due to reverse one for three stock split effective March 16, 2011   (3)   -    -    -    -    -    - 
Exercise of Class F Warrants at $3.75 per share   1,054,512    1,055    3,953,320    -    -    -    3,954,375 
Exercise of stock options   50,318    50    30,750    -    -    -    30,800 
Stock based compensation   -    -    2,855,630    -    -    -    2,855,630 
Reversal of stock based compensation due to forfeiture of stock options   -    -    (1,304,551)   -    -    -    (1,304,551)
Net loss for the year ended August 31, 2011                       (3,619,750)   (3,619,750)   (3,619,750)
Balance, August 31, 2011   20,638,360    20,637    12,593,185    -    (10,347,926)   (3,619,750)   2,265,896 
                                    
Stock based compensation   -    -    193,185    -    -    -    193,185 
Reversal of stock based compensation due to forfeiture of stock options   -    -    (8,243)   -    -    -    (8,243)
Discount on convertible promissory note due to detachable warrants   -    -    547,050    -    -    -    547,050 
Discount on convertible promissory note due to beneficial conversion feature   -    -    452,950    -    -    -    452,950 
Net loss for the nine months ended May 31, 2012                       (1,967,674)   (1,967,674)   (1,967,674)
Balance, May 31, 2012   20,638,360   $20,638   $13,778,126   $-   $(12,315,600)  $(1,967,674)  $1,483,164 

 

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

 

3
 

 

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

FOR THE NINE MONTHS ENDED MAY 31, 2012 AND 2011 AND FOR THE

PERIOD FROM INCEPTION (MAY 5, 1998) TO MAY 31, 2012

 

           Cumulative 
   Nine Months Ended   May 5, 1998 
   May 31,   (Inception) to 
   2012   2011   May 31, 2012 
Cash flows from operating activities               
Loss from continuing operations  $(1,725,464)  $(3,995,733)  $(11,168,522)
Add: loss from discontinued operations   (242,210)   -    (404,307)
Adjustments to reconcile net loss to net cash used in operating activities               
Depreciation   3,883    348    8,828 
Stock based compensation expense   193,185    2,669,468    7,493,470 
Reversal of stock based compensation expense due to forfeiture of stock options   (8,243)   -    (5,382,858)
Change in fair value of warrant liability   -    (8,059)   (2,128,331)
Loss on disposal of fixed assets   -    -    5,307 
Payable written off   -    -    (30,000)
Common stock issued for services   -    -    3,000 
Common stock issued for debt settlement   -    -    103,332 
Accretion of debt discount   15    -    15 
Changes in operating assets and liabilities:               
Decrease (increase) in deferred research and development costs   70,017    (98,437)   (86,262)
Decrease (increase) in prepaid expenses and other current assets   53,882    (40,021)   (15,500)
Increase in accounts payable   28,608    9,145    178,476 
Increase (decrease) in accrued liabilities   (152,571)   9,750    8,438 
Net cash used in operating activities   (1,778,898)   (1,453,539)   (11,414,914)
                
Cash flows from investing activity               
Purchase of equipment   (24,458)   (1,390)   (35,637)
Net cash used in investing activity   (24,458)   (1,390)   (35,637)
                
Cash flows from financing activities               
Proceeds from the issuance of common stock, exercise of warrants and stock options, net   -    3,985,175    12,367,380 
Repayment of promissory note   -    -    (155,000)
Proceeds from promissory notes   1,000,000    -    1,155,000 
Dividend paid   -    

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