PINX:EXNT Enxnet Inc Quarterly Report 10-Q/A Filing - 6/30/2012

Effective Date 6/30/2012

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exnt10qa1-6302012.htm





UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q/A-1

[X]
QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012
OR
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-30675

EnXnet, Inc.
(Name of issuer in its charter)

Oklahoma
73-1561191
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

11333 E. Pine Street, Suite 92 - Tulsa, Ok 74116
(Address of principal executive offices & zip code)

(918) 592 - 0015
Registrant’s telephone number, including area code:

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 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 (SS 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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
Large Accelerated Filer
[   ]
 
Accelerated Filer
[   ]
 
Non-accelerated Filer
[   ]
 
Smaller Reporting Company
[X]
 
(Do not check if smaller reporting company)
     

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 14, 2012, there were outstanding 46,639,018 shares of the registrant’s common stock, $0.0005 par value.








REASON FOR AMENDMENT

The sole purpose of this Amendment to the Quarterly Report on Form 10-Q of EnXnet, Inc. for the period ended June 30, 2012, filed with the Securities and Exchange Commission (“SEC”) on August 14, 2012, is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405(a)(2) of Regulation S-T. Exhibit 101 consists of the interactive data files that were not included with the Form 10-Q, as allowed by the 30-day grace period for the first quarterly period in which detailed footnote tagging is required. This amendment does not otherwise change or update the disclosures set forth in the Form 10-Q as originally filed and does not otherwise reflect events occurring after the original filing of the Form 10-Q.
 
 

 

Table of Contents

 
Page
 
 
 
   
Financial Statements
3
 
3
 
4
 
5
 
6
     
Management’s Discussion and Analysis of Financial Condition and Results of Operations
8
Quantitative and Qualitative Disclosures About Market Risk
12
Controls and Procedures
12
     
 
   
 
 
     
Legal Proceedings
12
Risk Factors
12
Exhibits and Reports on Form 8-K
13
     
14
   
15

 

 
-2-


PART I.  FINANCIAL INFORMATION

ITEM 1.             FINANCIAL STATEMENTS.

ENXNET, INC
BALANCE SHEET
(Unaudited)


ASSETS
June 30, 2012
 
March 31, 2012
 
CURRENT ASSETS
       
Cash
$
32,462
 
$
11,966
 
Prepaid expenses
 
155
   
1,828
 
TOTAL CURRENT ASSETS
 
32,617
   
13,794
 
             
OTHER ASSETS
           
Patent technology, net
 
39,332
   
39,850
 
Deposits
 
1,137
   
1,137
 
TOTAL OTHER ASSETS
 
40,469
   
40,987
 
TOTAL ASSETS
$
73,086
 
$
54,781
 
             
LIABILITIES AND STOCKHOLDERS’ DEFICIT
           
CURRENT LIABILITIES
           
Accounts payable and accrued expenses
$
509,715
 
$
510,244
 
Advances from officer - related party
 
10,500
   
39,500
 
Advances from stockholder
 
32,400
   
32,400
 
Convertible notes payable - stockholders
 
186,413
   
186,413
 
Convertible notes payable - related parties
 
802,705
   
765,805
 
TOTAL CURRENT LIABILITIES
 
1,541,733
   
1,534,362
 
             
STOCKHOLDERS’ DEFICIT
           
Common stock, $0.00005 par value; 200,000,000 shares authorized,
46,639,018 and 45,139,018  shares issued and outstanding
 
2,332
   
2,257
 
Additional paid-in capital
 
5,281,471
   
5,219,593
 
Accumulated deficit
 
(6,652,450
)
 
(6,601,431
)
Other comprehensive income
 
(100,000
)
 
(100,000
)
TOTAL STOCKHOLDERS’ DEFICIT
 
(1,468,647
)
 
(1,479,581
)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
$
73,086
 
$
54,781
 


The accompanying notes are an integral part of these unaudited financial statements.


 
-3-


ENXNET, INC
STATEMENTS OF OPERATIONS
(Unaudited)


 
Three months Ended
 
 
June 30,
 
   
2012
   
2011
 
REVENUES
$
-
 
$
-
 
COST OF SALES
 
-
   
-
 
Gross Profit
 
-
   
-
 
EXPENSES
           
Consulting fees
 
11,273
   
15,181
 
Depreciation & amortization
 
518
   
1,452
 
Advertising
 
-
   
-
 
Payroll
 
15,039
   
14,508
 
Professional services
 
11,855
   
2,591
 
Occupancy
 
3,160
   
3,231
 
Office
 
1,710
   
2,569
 
Travel
 
770
   
300
 
Other
 
671
   
1,151
 
Total Expenses
 
44,996
   
40,983
 
LOSS FROM OPERATIONS
 
(44,996
)
 
(40,983
)
OTHER INCOME (EXPENSE)
           
Interest expense
 
(6,023
)
 
(5,601
)
NET LOSS
$
(51,019
)
$
(46,584
)
BASIC AND DILUTED NET LOSS PER SHARE
$
(0.00
)
$
(0.00
)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING, BASIC AND DILUTED
 
45,253,089
   
43,040,073
 


The accompanying notes are an integral part of these unaudited financial statements.


 
-4-


ENXNET, INC
STATEMENTS OF CASH FLOWS
(Unaudited)


 
For the Three months Ended
 
 
June 30,
 
 
2012
 
2011
 
CASH FLOWS FROM OPERATING ACTIVITIES
       
Net loss
$
(51,019
)
$
(46,584
)
Adjustments to reconcile net loss to net cash used by operations:
           
Depreciation and amortization
 
518
   
1,452
 
Common stock issued for services
 
7,500
   
750
 
Stock options issued
 
4,453
   
-
 
Changes in operating assets and liabilities:
           
Decrease (increase) in accounts receivable
 
-
   
-
 
Decrease (increase) in prepaid expenses
 
1,673
   
14,232
 
Increase (decrease) in accounts payable & accrued expenses
 
(529
)
 
(19,992
)
Net cash provided (used) by operating activities
 
(37,404
)
 
(50,142
)
             
CASH FLOWS FROM FINANCING ACTIVITIES
           
Proceeds from stock sales
 
50,000
   
-
 
Proceeds from note payable
 
-
   
-
 
Proceeds from advances from officer and stockholders
 
18,900
   
52,500
 
Repayment of advances from officer and stockholders
 
(11,000
)
     
Net cash provided (used) by financing activities
 
57,900
   
52,500
 
             
NET INCREASE (DECREASE) IN CASH
 
20,496
   
2,358
 
CASH - Beginning of period
 
11,966
   
8,443
 
CASH - End of period
$
32,462
 
$
10,801
 
             
SUPPLEMENTAL CASH FLOW DISCLOSURES:
           
Interest expense
$
-
 
$
-
 
Income taxes
$
-
 
$
-
 
             
NON-CASH FINANCING AND INVESTING TRANSACTIONS:
           
Conversion of account payable – related parties to note payable – related parties
$
36,900
 
$
-
 


The accompanying notes are an integral part of these unaudited financial statements.


 
-5-


ENXNET, INC
NOTES TO FINANCIAL STATEMENTS
(Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements of EnXnet, Inc. (“EnXnet” or “the Company”) for the three months ended June 30, 2012 have been prepared in accordance with generally accepted accounting principles in the United States of America, pursuant to the rules and regulations of the U.S. Securities and Exchange Comission (the “SEC”) for interim financia1 information. Accordingly, the financial statements do not include all information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2012 Annual Report on Form 10-K.

NOTE 2 – GOING CONCERN

The Company has a working capital deficit and has incurred losses since inception.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Management of the Company has undertaken certain actions to address these conditions.  Management is currently in negotiations with potential customers and with marketing representatives to establish a more developed product channel.  Funds required to carry out management’s plans are expected to be derived from future stock sales and borrowings from outside parties.  There can be no assurances that the Company will be successful in executing its plans.

NOTE 3 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable-related parties consists of the following:
 
   
June 30,
2012
   
March 31,
2012
3% convertible note payable to Ryan Corley, President of the Company, due on demand
 
21,705
   
21,705
2% convertible notes payable to Ryan Corley, due on demand
 
620,750
   
583,850
2% convertible note payable to an entity controlled by Ryan Corley,  due on demand
 
48,900
   
48,900
3% convertible notes payable to an entity controlled by Ryan Corley, due on demand
 
111,350
   
111,350
Total notes payable-related party
$
802,705
 
$
765,805

Convertible notes payable consist of the following:
 
 
June 30,
2012
 
March 31,
2012
4% convertible notes payable to a stockholder, due on demand, convertible into a maximum of 350,000 common shares
 
175,000
   
175,000
2% convertible notes payable to 2 stockholders, due on demand, convertible into a maximum of 294,934 common shares
 
11,413
   
11,413
Total notes payable
$
186,413
 
$
186,413

NOTE 4 – ADVANCES FROM AND NOTES PAYABLE TO OFFICER

Advances from a stockholder at both June 30, 2012 and March 31, 2012 were $32,400.

Our CEO, Ryan Corley, has made advances to the Company in prior years. During the three months ended June 30, 2012, the CEO made additional unsecured advances totaling $18,900. During the three months ended June 30, 2012 the Company made payments on these advances of $11,000. On May 17, 2012, advances in the amount of $36,900 were converted into a note payable bearing interest at 2% and convertible into common stock of the Company at $0.08 per share.

 
-6-


ENXNET, INC
NOTES TO FINANCIAL STATEMENTS
(Unaudited)


The Company has notes payable to the CEO totaling $642,455 and $605,555 as of June 30, 2012 and March 31, 2012. Accrued interest owed on these notes is $125,814 and $122,670. These notes and accrued interest are convertible into 13,899,258 and 13,372,992 shares, respectively.

An entity controlled by the CEO has made unsecured advances and notes payables to the Company. At both June 30, 2012 and March 31, 2012, advances from the entity controlled by the CEO were $10,500 with notes payable totaled $160,250. Accrued interest owed on these notes was $13,213 and $12,136, respectively. These notes and accrued interest are convertible into 2,797,773 and 2,780,783 shares, respectively.

NOTE 5 - COMMON STOCK TRANSACTIONS

The Company issued 250,000 shares in exchange for services valued at $7,500 for the three months ended June 30, 2012. The Company also issued 1,250,000 shares for $50,000 in cash during the three months ended June 30, 2012.

NOTE 6 – STOCK OPTIONS

On July 24, 2001, the Company filed with the SEC Form S-8, for its 2002 Stock Option Plan, (the Plan). An aggregate amount of common stock that may be awarded and purchased under the Plan is 3,000,000 shares of the Company’s common stock. Under the Plan during the years ended March 31, 2012, the Company granted stock options to employees and members of the Board of Directors in the amount of 2,190,000. The Company recognized option expense of $4,453 due to the vesting of these options.

There were no stock options issued during the 3 months ended June 30, 2012.  A summary of the status of the Company’s stock options as of June 30, 2012 is presented below:

 
June 30, 2012
Options outstanding at beginning of year
 
3,090,000
Options granted
 
-
Options exercised
 
-
Options canceled
 
(300,000)
Options outstanding at end of year
 
2,790,000

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