PINX:AQNM Aquentium Inc Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

From transition period from ____ to ____

Commission File No.: 000-23402
 
AQUENTIUM, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
11-2863244
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
     
5188 Western Way, Perris, California
 
92571
(Address of principal executive offices)
 
(Zip Code)
 
(951) 657-8832
(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 o

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 o   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 o Accelerated filer o
Non-accelerated filer o 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).  o Yes   x No

As of August 20, 2012, the registrant had 57,457,403 shares of common stock outstanding.
 


 
 

 
TABLE OF CONTENTS
 
 
PART I – FINANCIAL INFORMATION
     
         
Item 1:
Financial Statements
    3  
           
 
Consolidated Balance Sheets as of June 30, 2012 (Unaudited) and September 30, 2011 (Audited)
    4  
           
 
Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2012 and 2011 (Unaudited) and from inception (April 30, 2001) to June 30, 2012
    5  
           
 
Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2012 and 2011 (Unaudited) and from inception (April 30, 2001) to June 30, 2012
    6  
           
 
Notes to Consolidated Financial Statements (Unaudited)
    8  
           
Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    12  
           
Item 3:
Quantitative and Qualitative Disclosures about Market Risk
    14  
           
Item 4T:
Controls and Procedures
    14  
           
 
PART II – OTHER INFORMATION
       
           
Item 1. Legal Proceedings        
           
Item 1A. Risk Factors     15  
           
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds     15  
           
Item 3. Default on Senior Securities     15  
           
Item 4. Remove and Reserve     15  
           
Item 5. Other Information     15  
           
Item 6:
Exhibits
    16  
           
 
Signatures
    17  
 
 
2

 
 
PART I – FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

The financial information set forth below with respect to our statements of operations for the three and nine months periods ended June 30, 2012 and 2011 is unaudited.  This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data.  The results of operations for the nine month period ended June 30, 2012, are not necessarily indicative of results to be expected for any subsequent period.  Our year end is September 30.
 
 
 
 
 
3

 

AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

   
June 30
   
September 30,
 
   
2012
   
2011
 
   
(Unaudited)
   
(Audited)
 
ASSETS
             
Current assets
           
      Cash
  $ 2,382     $ --  
     Total current assets
    2,382       --  
                 
              Total assets
  $ 2,382     $ --  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                 
Current liabilities
               
     Bank overdraft
  $ --     $ 16  
     Accounts payable
    38,878       34,830  
     Accrued interest
    57,558       48,528  
     Accrued expense- litigation
    177,247       177,247  
     Advances-related party
    188,334       188,774  
     Accrued rent-related party
    158,400       115,200  
     Salaries payable- related party
    1,595,357       1,475,357  
     Total current liabilities
    2,215,774       2,039,952  
                 
               Total liabilities
    2,215,774       2,039,952  
                 
Stockholders’ deficit
               
     Preferred shares, par value $0.00001
               
        10,000,000 authorized; none issued and outstanding
    --       --  
     Common stock, par value $0.005
               
         authorized 100,000,000 shares,
               
         issued and outstanding 57,457,403
               
         as June 30, 2012 and 46,457,403 as of
               
         September 30, 2011
    282,787       232,287  
     Additional paid-in capital
    972,471       952,471  
     Accumulated deficit during development stage
    (3,470,650 )     (3,224,710 )
     Total stockholders’ deficit
    (2,213,392 )     (2,039,952 )
                 
            Total liabilities and stockholders’ deficit
  $ 2,382     $ --  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
4

 

AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                           
From
 
                           
Inception
 
                           
(April 30,
 
   
Three Months
    Nine Months    
2001) to
 
   
Ended June 30,
    Ended June 30,    
June 30,
 
   
2012
   
2011
   
2012
   
2011
   
2012
 
                               
Income
  $ 5,750     $ --       10,775     $ 5,000     $ 15,775  
Cost of goods sold
    2650       --       (4,034 )     --       (4,034 )
Gross margin
    3,100       --       6,741       5,000       11,741  
                                         
Selling, general and administrative expenses
    80,770       77,920       245,203       241.790       5,062,537  
Impairment loss
    --       --       --               15,000  
Depreciation
    -       -       --       ----       3,973  
                                         
Loss from operations
    (77,670 )     (77,920 )     (238,462 )     (236,790 )     (5,069,769 )
                                         
Other income (expense)
                                       
    Other Income
    --       --       --       --       1,877  
Gain on debt settlement
    --       --       1,533               3,430  
    Gain on sale of investment  /business
    --        --       --       --        370,000  
    Rental income
    --       --       --       --       1,471,279  
    Expense- litigation settlement
    --       --       --       --       (177,247 )
    Interest expense
    (3,010 )     (3,010 )     (9,030 )     (9,030 )     (68,342 )
                                         
  Total other income (expense)
    (3,010 )     (3,010 )     (7,477 )     (9,030 )     1,599,120  
                                         
Net loss
  $ (80,680 )   $ (80,930 )     (245,939 )     (245,820 )   $ (3,470,650 )
                                         
Loss per common share Basic
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
 
                                       
Basic weighted average number of common shares outstanding
    51,743,117       46,457,403       48,109,417       46,457,403          

The accompanying notes are an integral part of the consolidated financial statements.
 
 
5

 
 
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
Nine Months
   
From inception
 
   
Ended June 30,
   
(April 30, 2001) to
 
   
2012
   
2011
   
June 30, 2012
 
Cash Flows From Operating Activities:
                 
Net loss
  $ (245,939 )   $ (245,820 )   $ (3,470,650 )
Adjustments to reconcile net loss to
                       
net cash used in operating activities:
                       
Depreciation
    --       --       3,973  
Stock for services
    --       --       715,755  
Stock for joint venture
    --       --       6,000  
Gain on exchange of stock
    --       --       (370,000 )
Disposition of subsidiary
    --       --       18,465  
Stock option compensation
    --       --       100,000  
Impairment expenses
    --       --       18,638  
Changes in operating assets and liabilities:
                       
Bank overdraft
    (16 )     --       (16 )
Accrued rent
    43,200       43,200       158,400  
Accrued expense-litigation payable
    --       --       177,247  
Accounts payable
    4,047       6,870       39,678  
Accrued interest
    9,030       9,030       69,483  
Salaries payable-related party
    180,000       180,000       2,072,253  
                         
Net cash used in operating activities
    (9,678 )     (6,720 )     (460,770 )
                         
Cash Flows From Investing Activities:
                       
Investment in joint venture
    --       --       (15,000 )
Purchase of fixed assets
    --       --       (3,973 )
                         
Net cash used in investing activities
    --       --       (18,973 )
                         
Cash Flows From Financing Activities:
                       
Bank overdraft
    --       --       16  
Note payable-related party
    --       --       134,960  
Stock issued for cash
    12,500               12,500  
Advances – related party
    (440 )     9,200       325,149  
Capital contribution – founder
    --       --       500  
Capital contribution – office space
    --       --       9,000  
                         
Net cash provided by financing activities
    12,060       9,200       482,125  
                         
Net increase in cash
    2,382       2,480       2,382  
Cash at beginning of period
    --       --       --  
Cash at end of period
  $ 2,382     $ 2,480     $ -  

The accompanying notes an integral part of the consolidated financial statements.

 
6

 
 
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
 
   
Nine Months
   
From inception
 
   
Ended June 30,
   
(April 30, 2001) to
 
   
2012
   
2011
   
June 30, 2012
 
Non-Monetary Transactions
                 
                   
Stock issued for cash
  $ 12,500           $ 12,500  
                       
Stock for debt settlement 5,292,549 shares issued at $0.0255 and $0.02 per share respectively
  $ --     $ --     $ 135,000  
                         
Stock for interest 467,631 shares issued at $0.0255 per share
  $ --     $ --     $ 11,925  
                         
Stock for officer salaries payable 10,000,00, 7,039,820 and 3,000,000 shares respectively
                       
     shares issued $0.006; $0.0255 and $0.02 per share respectively
  $ 60,000     $ --     $ 299,515  
                         
Stock for licensing agreement 100,000 shares issued at $0.06 per share
  $ --     $ --     $ 6,000  
                         
Stock for acquisitions 1,150,000 shares issued at $0.02 per share
  $ --     $ --     $ 23,000  
                         
Stock issue for salary 3,000,000 shares issued at $0.02 per share
  $ --     $ --     $ 60,000  
                         
Stock for patent pending 4,000 shares issued at 1.00 per share
  $ --     $ --     $ 4,000  
                         
Reduction of liability to a related party by an exchange in investment
  $ --     $ --     $ 375,000  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
7

 
 
AQUENTIUM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1- BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of the Company's management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation of these financial statements have been included.

The results for the periods presented are not necessarily indicative of the results for the full year and should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2011 included in our Annual Report on Form 10-K, filed on December 28, 2011.

NOTE 2- GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $3,470,650 and has limited revenues to cover its operating costs.  This uncertainty raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company's plan. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

NOTE 3 - BUSINESS DESCRIPTION

A.  Business

Aquentium, Inc. (a Delaware corporation) is a diversified holding company in the development stage.  (See Note 4B "Development Stage Company").  Its holdings include a solar energy company for solar farms, residential and commercial buildings (Aquentium Solar, Inc.), a company for research and development of algae energy projects, (New American Energy, Inc.), a Waste-To-Energy company for the development of waste-to-energy projects and recycling systems (Environmental Waste Management, Inc.), a housing company for the development of emergency and re-deployable housing structures (H.E.R.E. International, Inc.), an early-stage entertainment company that for the development of motion pictures, music, print publications, and consumer products (Canby Group, Inc.), and (Aquentium De Mexico) for any housing, energy, and water treatment business done in the Country of Mexico.  The subsidiaries were not active during the period ending June 30, 2012.

On May 14, 2012 the Company formed Aquentium Puerto Rico, Inc. as a wholly owned subsidiary.
 
 
8

 

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.   Principles of Consolidation
 
The consolidated financial statements include the accounts of the Company and its subsidiaries.  There was no activity in any of the subsidiaries.

B.   Development-Stage Company

The accompanying consolidated financial statements have been prepared in accordance with Financial Accounting Standards Board’s Accounting Standard Codification (FASB ASC) 915-205 “Development-Stage Enterprises".  A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenue there from.  Development-stage companies report cumulative costs from the enterprise’s inception.

C.   Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

D.  Loss per Share

Basic earnings (loss) per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares  outstanding for the period.  Dilutive earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.  Dilutive earnings (loss) per share are equal to that of basic earnings (loss) per share as the effects of stock options and warrants have been excluded as they are anti-dilutive.

E.   Revenue Recognition

The Company recognizes revenue upon shipment of a product to the customer or upon completion of the service the Company is providing.

NOTE 5 – SUMMARY OF ACCOUNTING POLICIES
 
Recently issued accounting pronouncements
 
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

NOTE 6:  STOCK ISSUED

On May 14, 2012 the Company issued 10,000,000 shares of common stock with a value of $60,000 ($0.006 per share to the CEO for a reduction of accrued compensation.

On June 18, 2012 the Company issued 500,000 shares of common stock for cash to one individual with a value of $12,500 ($0.025 per share). (See Note 7- Related Party Transactions)
 
 
9

 
 
NOTE 7- RELATED PARTY TRANSACTIONS

Mark T. Taggatz, President, CEO and Chairman of the Board had the following transactions with the Company:

a)  
Mr. Taggatz is the majority shareholder and an officer and director of Ozone Safe Food (OSF). Through OSF, Mr. Taggatz has advanced funds to pay for expenses on behalf of the Company.  Mr. Taggatz and affiliates have a total outstanding balance of $188,334 as of June 30, 2012.

b)  
The Company recorded compensation of $180,000 as salary payable for the nine month periods ending June 30, 2012 and 2011 which are accrued but not paid.  Total salaries payable as of June 30, 2012 and September 30, 2011 was $1,595,357 and $1,475,357 respectively.

c)  
The Company entered into a lease agreement with Sani Dri and has accrued rent payable of $158,400 as of June 30, 2012. (See Note 12 “Lease Agreement”).  Sani Dri is a Company Mr. Taggatz controls.

d)  
The Company  issued 10,000,000 shares of common stock reducing the recorded compensation by $60,000 ( See Note 6- Stock Issued)

NOTE 8 - ACCRUED INTEREST

As a result of arbitration during the fiscal year 2007, a former landlord was awarded a judgment against the Company totaling $177,247.  The Company is accruing interest on the judgment at an annual rate of seven percent on the outstanding balance. During the nine month period ended June 30, 2012 the Company accrued interest of $9,030 for the outstanding judgment resulting in total interest accrued as of June 30, 2012 of $57,558. (See Note 9: Commitments and Contingencies)

NOTE 9- COMMITMENTS AND CONTINGENCIES

Effective September 1, 2004, the Company exercised an option to lease 84,772 square feet of building space on an average monthly basis of $31,897 per month.  The Company was assigned the lease rights of the other tenants in the building and collected rents from those tenants.  For the years ending September 30, 2009 and 2008, the Company recorded no lease expenses in connection with these leases.  The Company had an option to purchase the building for $5.1 million.  The largest tenant in the building was eFoodsafety.com.

During the year ended September 30, 2007, the Company was party to an arbitration hearing with the landlord pertaining to the lease of the building and the sub-lease of portions of the building to its sub-tenants.  On April 11, 2007, the arbitrator granted legal fees to the landlord in the amount of $47,000. On April 19, 2007 and June 29, 2007, amended notices of ruling were heard by the Superior Court of California, County of Riverside resulting in a judgment awarded on September 21, 2007 to the landlord of $146,917 including fees and interest. Additionally, on August 17, 2007, the landlord received a judgment against the Company of $29,692 pertaining to termination of the Company’s occupancy of the building.

The Company is a plaintiff in suits against the individual sub-tenants pertaining to rent withheld by the sub-tenants. No determination of these cases has been concluded. As of June 30, 2012, $177,247 for the judgment plus accrued interest of $57,558 has been accrued by the Company for a total liability of $234,805.
 
 
10

 

On February 2, 2010 the Company entered into agreements with two municipalities in China to convert waste material into energy.  Under the terms of the agreement the municipalities would provide the waste material to the Company, land for the Company to build the conversion plant and buy the resulting energy produced from the Company.  These projects will require substantial funding which must be arranged and provided by the Company along with the conversion plant construction and operations. As of this date no activity beyond the signing of the agreements has been completed.

On March 1, 2010, the Company signed a consulting agreement with an individual giving the individual 100,000 shares of common stock with a value of $5,000. Under the terms of the agreement the individual can earn additional shares of the Company stock plus commissions based on the sales initiated by the individual.

NOTE 10 – JOINT VENTURES

In March 2004, Aquentium entered into 50/50 joint venture.  Aquentium Hong Kong, Ltd., a Chinese limited liability company, was formed to manufacture market and sell Aquentium's products and/or services, if any, in Asia for a period of 10 years.  As of June 30, 2012, the joint venture had no further activity.

On August 18, 2008, the Company signed a business development agreement with Megaros, Inc. Under the terms of the agreement Megaros will receive commissions starting at five (5) percent of the first $1,000,000 of sales and decreasing one (1) percent for each $1,000,000 of additional sales of the Company’s products.

On July 28, 2009, the Company signed a joint venture agreement with an individual for the production and harvesting of algae on property owned by the individual.  Under the terms of the agreement the Company is required to raise substantial capital within twenty four months of the date of the agreement plus manage the joint venture on behalf of both parties.  The Company was obligated to a one-time fee of $15,000, which has been paid, plus an annual fee of $250,000 payable to the individual, once production commences. As there has been no activity and the obligation of the Company has not been met, the Company impaired the investment of $15,000 at September 30, 2010.

NOTE 11 - LEASE AGREEMENT

On October 1, 2009, the Company entered into a lease agreement with Sani-Dri, Sani-Dri is controlled by the wife of Mr. Taggatz.  The Company has exclusive distribution territories for the Sani-Dri ozone hand dryer. Under the terms of the agreement the Company is subleasing 8,000 square feet of commercial office and warehouse space for three years. They will pay the affiliate rent of $4,000 per month through the year ending September 30, 2010; $4,800 per month for year two ending September 30, 2011 and $6,000 per month for year ending September 30, 2012.

 
11

 
 
Reference in this report to “Aquentium’” “we,” “us,” and “our” refer to Aquentium, Inc. and its subsidiaries.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions.  This report contains these types of statements.  Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

ITEM 2:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

Aquentium, Inc. is a holding company of nine wholly-owned subsidiaries and we have interests in joint ventures, as well as business opportunities related to ozone equipment and structural insulated panels.  During the past year, we have actively expanded our focus into providing green technologies and solutions to businesses throughout the world.  We are expanding our business in the area of alternative energy and are currently pursuing Waste-to-Energy projects throughout the world as well as the production of algae bio-fuels.   We have been focused on bringing Waste-to-Energy solutions to the countries in Europe, South America, Asia and the country of Mexico.  Management is very optimistic about the worldwide demand for such technology.

On a daily basis Aquentium plans to sell and market our complete line of ozone sanitation equipment.  This technology is designed for use in food processing, beverage processing, hotels, schools, hospitals, and veterinarian clinics. In addition to our distributors, the company also markets directly to these industries. 
 
As of the date of this filing we have minimal operations and have recorded minimal revenues for the past two years.  Our focus for the next twelve months will be to obtain additional funding to develop and expand our operations and new projects.  Our success will depend on our ability to obtain funding through equity and/or debt transactions.  However, with the downturn of the United States and world economies, we will encounter substantial competition for the limited financing that will be available in the market place.  If we are unable to obtain financing, then we will likely delay further business development of any of our products, marketing and other projects and joint ventures.  Potential investors must recognize that we have limited capital available for the development of our business plan and all risks inherent in a new and inexperienced enterprise are inherent in our plan to launch operations.
 
In summary, management continues to position the company in a way to best benefit from worldwide economic conditions, trends, events, and demand for new technologies.
 
 
12

 

Liquidity and Capital Resources

From inception (April 30, 2001) to June 30, 2012, we had an accumulated deficit of $3,470,650. We recorded a net loss of $ 80,680 and $245,939 for the three and nine months ending June 30, 2012 and $80,930 and $245,820 for the same period in 2011.  The loss was minimal in 2012 over 2011. Based on these numbers there is substantial doubt that we can continue as a going concern unless we obtain external funding.  Management plans to continue limited operations until we obtain additional funding to expand our operations.

Working capital is a negative $2,231,092 as of June 30, 2012 compared to a negative $ 2,039,952 as of September 30, 2011. Cash used in operations totaled $9,678 during the period ending June 30, 2012 compared to $6,720 during the same period in 2011. Funds provided from financing activities were $12,060 in 2012 compared to $9,200 during the same period in 2011.

During the past two fiscal years we have relied primarily on related party advances and loans and the issuance of our common stock to satisfy our cash requirements.  During the nine month period ended June 30, 2012 we have received advances from our President, Mark T. Taggatz, who has a total outstanding balance of $171,697 plus an outstanding balance of $16,637 from Ozone Safe Food, Inc., a related party.  The advances are used for operational expenses in the normal course of business.  We anticipate that Mr. Taggatz or our affiliates may provide advances in the future; however, we have not entered into written agreements with any person and, therefore, no one is obligated to provide advances to us.

Management expects to continue to issue common stock to pay for acquisitions, services and agreements.  Any issuance of common stock will likely be pursuant to exemptions to the registration requirements provided by federal and state securities laws.  The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions.  We do not currently intend to make a public offering of our stock.  We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock.

We intend to rely on debt and equity financing, capital contributions from management and sales of our common stock to pay for costs, services, operating leases, litigation expense and future development of our business opportunities.  Accordingly, our focus for the next twelve months will be to obtain additional funding through debt or equity financing, but as of the date of this filing we have not finalized agreements for additional funding.  Our success in obtaining funding will depend upon our ability to sell our common stock or borrow on terms that are financially advantageous to us.  If we are unable to obtain financing, then expansion of our operations will be delayed and our subsidiaries may remain inactive.

Results of Operations

We recorded revenue of $5,750 and $10,775 in the three and nine months ending June 30, 2012 compared to zero and $5,000 during the same periods in 2011.  Cost of goods during the period ending June 30, 2012 was $4,034 compared to zero for the same period in 2011. The general and administrative expense during the three and nine months ended June 30, 2012 were $80,770 and $245,203 compared to $77,920 and $241,790 for the same periods in 2011.  Management anticipates our general and administrative expenses will increase when we launch full operations related to the business opportunities we are currently investigating.  Interest expense totaled $3,010 for the three months and $9,030 for the nine months ended June 30, 2012 compared to $3,010 and $9,030 in 2011. Management anticipates net losses will continue over the next two to three years as we develop our operations.
 
Off-Balance Sheet Arrangements

None
 
 
13

 

Commitments and Contingent Liabilities

Prior to the 2007 year, we leased the Tennant Desert property in North Palm Springs, California.  We subleased portions of this building and received rental income from the subleases.  Due to a dispute with the landlord of the Tennant Desert property in August 2007, we moved to a new office.  As a result of the legal action brought by the landlord, a judgment was filed against Aquentium and we have recognized an accrued a liability of $177,247, plus interest of $57,558 for a total of $234,805, related to the judgment awarded to the landlord of the Tennant Desert property.

On July 28, 2009, Aquentium entered into a joint venture agreement with Clinton Jim, an individual, to produce and harvest algae on 475.450 acres of land located near Standing Rock, New Mexico.  Mr. Jim agreed to provide the land and Aquentium agreed to secure funding for the proposed budget of $44 million (US) for the development of this project.  Under the agreement Aquentium provided an initial capital contribution of $15,000 to secure the use of the land and Aquentium agreed to manage the business operations.  Also, Mr. Jim will receive an annual payment of $250,000 once production begins.   If Aquentium fails to raise the necessary funding within 24 months of the effective date of the agreement, the joint venture agreement will become void.   The joint venture agreement may be terminated by an agreed buyout, or expiration of its term, through July 27, 2108.  As of the date of this filing, we have contributed $15,000 to secure the use of the land, but have not raised the necessary funds to move forward with this project. The $15,000 was impaired in the fiscal ended December 31, 2010.

On February 2, 2010 the Company entered into agreements with two municipalities in China to convert waste material into energy.  Under the terms of the agreement the municipalities would provide the waste material to the Company, land for the Company to build the conversion plant and buy the resulting energy produced from the Company.  These projects will require substantial funding which must be arranged and provided by the Company along with the conversion plant construction and operations. As of this date no activity beyond the signing of the agreements has been completed.

On July 21, 2010, the Company entered into a joint venture with a company for construction waste to energy plants in Canada. Under the terms of the agreement the Company is responsible for the design and construction of the plants along with financing 50% of the joint venture. These projects may require substantial funding by the Company before any benefits are derived from the joint venture.

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T:  CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures
 
Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise.  Our CEO and CFO do not possess accounting expertise and our company does not have an audit committee.  This weakness is due to the company’s lack of working capital to hire additional staff.  To remedy this material weakness, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.
 
 
14

 
 
Changes in Internal Control over Financial Reporting
 
Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

PART II – OTHER INFORMATION
 
ITEM 1.   LEGAL PROCEEDINGS

None

ITEM 1A.  RISK FACTORS

There have been no material changes to Aquentium’s risk factors as previously disclosed in our most recent 10-K filing for the year ending December 31, 2011.

ITEM 2.   UNREGISTERED SLAES OF EQUITY SECVURITIES AND USE OF PROCEEDS

On May 14, 2012 the Company issued 10,000,000 shares of common stock with a value of $60,000 ($0.006 per share to the CEO for a reduction of accrued compensation.

On June 18, 2012 the Company issued 500,000 shares of common stock for cash to one individual with a value of $12,500 ($0.025 per share).

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  REMOVE AND RESERVE


ITEM 5.  OTHER INFORMATION

None
 
 
15

 
 
ITEM 6.  EXHIBITS
 
No.   Description
     
31   Chief Executive Officer Certification
     
32   Section 1350 Certification
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
16

 
          
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
  AQUENTIUM, INC.  
       
Date: August 20, 2012
By:
 /s/ Mark T. Taggatz  
    Mark T. Taggatz  
    President  
   
Chief Executive Officer
Principal Financial and Accounting Officer
 

 
17
 

PINX:AQNM Aquentium Inc Quarterly Report 10-Q Filling

Aquentium Inc PINX:AQNM Stock - Get Quarterly Report SEC Filing of Aquentium Inc PINX:AQNM stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

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PINX:AQNM Aquentium Inc Quarterly Report 10-Q Filing - 6/30/2012
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