Delaware
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26-1856569
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Common Stock
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None
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(Title of Class)
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(Name of each exchange on which registered)
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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Page
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PART I.
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Item 1. | Business | 3 |
Item 1A.
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Risk Factors
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8
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Item 1B.
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Unresolved Staff Comments
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9
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Item 2.
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Properties
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9
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Item 3.
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Legal Proceedings
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9
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Item 4.
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Mine Safety Disclosures
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9
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PART II.
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Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 9 |
Item 6.
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Selected Financial Data
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13
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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13
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Item 8.
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Financial Statements and Supplementary Data
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18 |
Item 9.
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Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
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18
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Item 9A.
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Controls and Procedures
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18
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Item 9B.
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Other Information
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19
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Item 10.
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Directors, Executive Officers and Corporate Governance
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19 |
PART III.
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Item 11.
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Executive Compensation
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22
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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24
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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27
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Item 14.
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Principal Accounting Fees and Services
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28
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PART IV.
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Item 15.
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Exhibits, Financial Statement Schedules
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28
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Signatures
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31
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High
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Low
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|||||||
Fiscal Year 2012
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||||||||
First Quarter
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$ | 2.250 | $ | .70 | ||||
Second Quarter
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.825 | .15 | ||||||
Third Quarter
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1.25 | .10 | ||||||
Fourth Quarter
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.71 | .36 | ||||||
Fiscal Year 2011
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||||||||
First Quarter
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0.32 | 0.19 | ||||||
Second Quarter
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0.19 | 0.11 | ||||||
Third Quarter
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0.18 | 0.08 | ||||||
Fourth Quarter
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0.13 | 0.05 |
Plan category
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Number of securities
Issued under equity
compensation plan
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Weighted-average
Exercise price of
outstanding options
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Number of securities
Remaining available for
Future issuance under
Equity compensatio plans
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||||||||||
Equity compensation plans approved by security holders
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0 | ||||||||||||
Equity compensation plans not approved by security holders
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93,816 | $ | 10.00 | ||||||||||
Total
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93,816 | $ | 10.00 | 6,184 |
Fiscal Year ended December 31, | ||||||||||||||||||||||||
% of
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% of
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Change from 2011
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||||||||||||||||||||||
2012
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Revenue
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2011
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Revenue
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Variance
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%
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|||||||||||||||||||
Net revenues
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$ | 59,915 | $ | 204,796 | $ | (144,881 | ) | -242 | % | |||||||||||||||
Product cost
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46,916 | 78 | % | 138,874 | 68 | % | (91,958 | ) | -196 | % | ||||||||||||||
Gross profit
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12,999 | 22 | % | 65,922 | 32 | % | (52,923 | ) | -407 | % | ||||||||||||||
Operating expenses
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546,735 | 913 | % | 1,217,938 | 719 | % | (671,203 | ) | -123 | % | ||||||||||||||
Operating loss
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533,736 | -891 | % | (1,152,016 | ) | 687 | % | 1,685,752 | 316 | % | ||||||||||||||
Interest and other income, net
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255,519 | 426 | % | (222,031 | ) | 17 | % | 477,550 | 187 | % | ||||||||||||||
Loss from continuing operations
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(278,217 | ) | 464 | % | (1,374,047 | ) | 677 | % | 1,095,830 | -394 | % | |||||||||||||
Loss from discontinued operations
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$ | - | 0 | % | - | 0 | % | - | 0 | % | ||||||||||||||
Net loss
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$ | (278,217 | ) | 464 | % | $ | (1,374,047 | ) | 677 | % | $ | 1,095,830 | -394 | % |
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·
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
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·
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
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·
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.
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N
a
me
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A
ge
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P
o
sition
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John W. Huemoeller II (1)
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57
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Chief Executive Officer/President/Director
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John Zotos (2)
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58
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Secretary, Director
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Edward L. Bernstein (3)
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61
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Chairman of the Board
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Mark Kalow (4)
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58
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Director
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James Fuller
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70
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Director
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(1)
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On March 6, 2013, Mr. Huemoeller was appointed as our Chief Executive Officer and President and a director.
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(2)
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On March 6, 2013, Mr. Zotos was appointed as our Secretary and a director.
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(3)
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On March 6, 2013, Mr. Bernstein resigned as our Chief Executive Officer and President
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(4)
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On January 19, 2012, we received written notice of the resignation of James Wallace as Vice President and Secretary, effective as of January 19, 2012. Mr. Kalow temporarily assumed the role of Assistant Secretary to fill the vacant position until March 6, 2013 when Mr. Zotos assumed the position of Secretary.
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(1)
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Includes value of stock paid in lieu of severance.
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(2)
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On March 6, 2013, Mr. Bernstein resigned as our Chief Executive Officer and President.
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(3)
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At December 31, 2012, Mr. Bernstein is due $78,125 in deferred salaries and bonuses of which $63,542 accrued during 2012.
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Number of Shares | ||||||||
Acquired on
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Value Realized
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|||||||
Name
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Exercise (number)
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on Exercise ($)
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||||||
Edward Bernstein
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- | - |
Name
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Fees Earned
or Paid in Cash
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Stock
Awards
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Stock
Awards
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Non-equity
Incentive Plan
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Nonqualified
Deferred
Compensation
Earnings
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All Other
Compensation
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Total
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|||||||||||||||||||||
($)
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($)
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(1) |
($)
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($)
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($)
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($)
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||||||||||||||||||||||
Mark Kalow
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- | - | - | - | - | - | - | |||||||||||||||||||||
James Fuller (2)
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- | - | - | - | - | - | - |
(1)
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The amounts in this column represent the aggregate grant date fair values of the stock option awards granted to the executive in fiscal year ended December 31, 2012 and 2011, respectively in accordance with stock compensation accounting. See Note 9 of the Notes to our Consolidated Financial Statements contained herein, for a discussion of all assumptions made by us in determining the valuation of equity awards.
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(2)
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On October 14, 2011, Mr. Fuller was appointed to the Board of Directors.
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Name
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Amount and
Nature of
Beneficial
Ownership of
Common Stock
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Percent of
Common Stock
Beneficially
Owned (1)
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Amount and
Nature of
Beneficial of
Series A-
Convertible
Preferred
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Percent of
Series A-1
Convertible
Preferred Stock
Beneficially
Owned (2)
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||||||||||||
John Huemoeller
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3,125,011 | (3) | 2.30 | % | ||||||||||||
Edward L. Bernstein
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3,564,951 | (4) | 2.67 | % | 250,000 | 5.80 | % | |||||||||
Mark Kalow
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30,412 | (5) | * | |||||||||||||
James Fuller
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23,862 | (6) | * | |||||||||||||
John Zotos
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312,511 | (7) | * | |||||||||||||
5% Shareholders
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||||||||||||||||
Joseph W. and Patricia G. Abrams Family Trust (8)
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6,898,919 | (8) | 4.90 | % | 375,000 | 8.70 | % | |||||||||
Joseph Abrams (9)
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7,098,919 | (9) | 5.00 | % | ||||||||||||
Anuta Limited (Seycheles) (10)
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12,500,000 | 9.30 | % | |||||||||||||
Base-Marketing Ltd. (Seycheles) (11)
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12,500,000 | 9.30 | % | |||||||||||||
Demesne Hold Limited (Nevis) (12)
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12,500,000 | 9.30 | % | |||||||||||||
Greencloud Ltd (Nevis) (13)
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12,500,000 | 9.30 | % | |||||||||||||
Oxnard Universal SA (14)
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10,920,000 | 8.13 | % | |||||||||||||
Realcom Ltd (Anguilla) (15)
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12,500,000 | 9.50 | % | |||||||||||||
Resourse Ingeneering Ltd (BVI) (16)
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7,500,000 | 5.60 | % | |||||||||||||
Store & Navigation (BVI) (17)
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12,500,000 | 9.30 | % | |||||||||||||
Mathew Abrams (18)
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3,750,000 | 2.80 | % | 375,000 | 8.70 | % | ||||||||||
Dart Union (19)
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5,000,000 | 3.40 | % | 500,000 | 11.59 | % | ||||||||||
Paramount Capital Inc (20)
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3,125,000 | 2.27 | % | 312,500 | 7.30 | % | ||||||||||
Sufforg Limited Company (21)
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12,500,000 | 9.30 | % | 1,250,000 | 28.99 | % | ||||||||||
Yuzhik Ltd Co (22)
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9,500,000 | 6.7 | % | |||||||||||||
Saint Paulia Ltd (23)
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12,500,000 | 8.7 | % | |||||||||||||
Prind Consulting Limited (24)
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11,000,000 | 7.7 | % | |||||||||||||
DelInvest Limited Commonwealth Trust Limited (25)
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12,500,000 | 8.7 | % | |||||||||||||
AVK-Com Limited (26)
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12,500,000 | 8.7 | % | |||||||||||||
Hekydrive Limited (27)
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12,500,000 | 8.70 | % | |||||||||||||
All officers and directors as a group (5 persons)
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7,056,747 | 5.00 | % |
*
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Less than 1%
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(1)
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Based on 134,432,871 shares of Common Stock issued and outstanding as of April 3, 2013.
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(2)
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Based on 4,312,500 shares of Series A-1 Convertible Preferred Stock issued and outstanding as of April 3, 2013. Each holder of the Series A-1 Convertible Preferred Stock is convertible, at the option of the holder, into ten (10) shares of our common stock and each holder is entitled to vote with the common stock on an as converted basis.
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(3)
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Mr Huemoeller received an option exercisable for 10,000,000 shares of our Common Stock, of which 2,500,012 vested immediately, 208,333 vested on April 6, 2012, 416,666 will vest within the next 60 days and the remainder vest 208,333 on each monthly anniversary of the Effective Date for thirty-six (36) successive months while Consultant is employed by the Company.
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(4)
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Includes 1,014,489 shares of Common Stock owned by Mr. Bernstein. Also includes 250,000 shares of Series A-1 Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. and options exercisable for 50,462 shares of Common Stock
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(5)
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Includes 2,550 shares of Common Stock owned by Mr. Kalow. Mr. Kalow also has 27,862 options exercisable within 60 days.
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(6)
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Mr Fuller has 23,862 options exercisable within 60 days.
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(7)
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Mr. Zotos received an option exercisable for 1,000,000 shares of our Common Stock , of which 250,012 vested immediately, 20,833 options vested on March 6, 2013, an additional 41,666 will vest within 60 days and the remainder vest 20,833 on each monthly anniversary of the Effective Date for thirty-six (36) successive months while Mr Zotos remains a consultant.
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(8)
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Includes 542,669 shares of Common Stock owned by the Trust. Joseph W. and Patricia G. Abrams Family Trust have offices at 131 Laurel Grove, Kentfield, CA 94904. Includes 2,606,250 shares of common stock to be issued upon conversion of a note in the principal amount of $52,125 issued to the Trust. Also includes 375,000 shares of Series A-1 Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock.
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(9)
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Includes 542,669 shares of Common Stock owned by the Joseph W. and Patricia G. Abrams Family Trust and 200,000 shares of Common Stock owned by Joseph Abrams. Joseph Abrams has offices at 131 Laurel Grove, Kentfield, CA 94904. Includes 3,475,000 shares of common stock to be issued upon conversion of a note in the principal amount of $69,500 issued to the Trust. Also includes 375,000 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. Does not include shares of stock issuable upon two notes issued to the Trust, which are convertible into shares of common stock at a conversion price equal to the higher of $.05per share or a 50% discount to the average closing price of our common stock on the three days prior to conversion.
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(10)
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Ioulia Daliandou is the beneficial owner and director of Anuta Limited. The address of the holder is is Glolxal Gateway 8, Rue DW La Perle, Providence, Mahe Seychelles.
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(11)
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Elena Zanti is the beneficial owner and director of Base-Marketing, Ltd. The address of the holder is 306 Victoria House, Victoria, Mahe, Seyshelles.
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(12)
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Christos Anastasiou is the beneficial owner and director Demesne Holdings Limited. The address of the holder is Heritage Plaza, Main Street, Charlestown, Nevis.
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(13)
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Phee Sim Boon is the beneficial owner and director of Greencloud Ltd. The address of the holder is Nishbets Chambers, Chapel Street, Charlestown, Nevis.
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(14)
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Jigme Ribi is the beneficial owner and director of Oxnard Universal. The address of the holder is 53
rd
Street Marbella MMG Tower Floor 16, Panama City, Panama.
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(15)
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Marinos Anatasion is the beneficial owner and director of Realcom Ltd. The address of the holder is Rogers Office Building Edwin Wallis Red Drive Anguilla, British Virgin Islands.
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(16)
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Seet Mei Siah is the beneficial owner and director of Resourse Ingeneering Ltd. The addressof the holder is Wickhams Cay, P.O. Box 3483, Road Town, Tortola, British Virgin Islands.
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(17)
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Lidija Matuseuka is the beneficial owner and director of Store & Navigation Ltd. The address of the holder is Geneva Place, Ocean Front Drive, Tortola, British Virgin Islands.
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(18)
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Includes 120 shares of Common Stock and 375,000 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. The address of the holder is 131 Laurel Grove Avenue, Kentfield, California 94904.
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(19)
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Includes 500,000 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. Ivan Yatsenko is the beneficial owner of Dart Union. Does not include shares of stock issuable upon two notes in the principal amount of $45,000, which are convertible into shares of common stock at a conversion price equal to the higher of $.05per share or a 50% discount to the average closing price of our common stock on the three days prior to conversion. The address of the holder s P.O. Box 3321, Drake Chambers, Road Town, Tortola, British Virgin Islands
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(20)
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Includes 312,500 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. Abraham Morales is the beneficial owner of Paramount Capital Inc. The address of the holder is 15 Forsyth Place, Hamilton, ON L8S 4E5.
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(21)
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Includes 1,250,000 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. Evgenii Bobovskii is the beneficial owner of Sufforg Limited Company. The address of Sufforg Limited Company is The Mason Complex, Suites 19 and 20, The Valley, Antigua.
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(22)
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Includes 250,000 shares of Common Stock, 750,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $15,000 and 650,000 shares of Series A Preferred Stock that have the right to ten votes per share and convert to ten shares of common stock. Abraham Morales is the beneficial owner of Paramount. The address of the holder is PO Box 517, Charlestown, Nevis.
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(23)
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Includes 2,375,000 shares of Common Stock, and 7,125,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $142,500. Anatoli Luzhik is the beneficial owner of Yuzhik Ltd Co. The address of the holder is 1 ½ Miles Northern Highway, Belize City, Belize.
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(24)
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Includes 3,125,000 shares of Common Stock, and 9,375,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $187,500. Evgeny Andreev is the beneficial owner of Saint Paulia. The address of the holder is 3
rd
Floor Geneva Place, Road Town, Tortola, British Virgin Islands
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(25)
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Includes 2,750,000 shares of Common Stock, and 8,250,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $165,000. Samvel Karakhanian is the beneficial owner of PRIND Consulting. The address of the holder is PO Box 3540, Road Town, Tortola, British Virgin Islands
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(26)
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Includes 3,125,000 shares of Common Stock, and 9,375,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $187,500. Alexander Motorin is the beneficial owner of DelInvest Limited. The address of the holder is PO Box 3321 Road Town, Tortola, British Virgin Islands
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(27)
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Includes 3,125,000 shares of Common Stock, and 9,375,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $187,500. Victor Amirov is the beneficial owner of AVK-Com Limited. The address of the holder is PO Box 4342 Road Town, Tortola, British Virgin Islands
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(28)
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Includes 3,125,000 shares of Common Stock, and 9,375,000 shares of Common Stock to be issued upon conversion of a note in the principal amount of $187,500. Sergei Kastiuk is the beneficial owner of Helydrive. The address of the holder is 177 Main Street Road Town, Tortola, British Virgin Islands
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Service
|
Fiscal 2012
|
Fiscal 2011
|
||||||
Audit Fees
|
$ | 27,500 | $ | 25,725 | ||||
Audit-related Fees
|
0 | 0 | ||||||
Tax Fees
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0 | 0 | ||||||
All Other Fees
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3,500 | 0 | ||||||
$ | 31,000 | $ | 25,725 |
No.
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Description
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2.1
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Agreement and Plan of Reorganization between the Registrant, Crystal Magic, Inc. and Crystal Acquisition Corporation (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on October 8, 2008)
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2.2
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Agreement and Plan of Reorganization between the Registrant, Mountain Capital, LLC, Auleron 2005, LLC, Arrow Acquisition Corporation and Auleron 2005 Acquisition Corporation (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on October 8, 2008)
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2.3
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Agreement and Plan of Reorganization dated June 14, 2010 between the Registrant, Designbyhumans.com (“DBH”) the DBH shareholders and DBH Acquisition Corporation (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2010)
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3.1
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Certificate of Incorporation (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
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3.2
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Certificate of Amendment to Certificate of Incorporation (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
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3.3
|
By-Laws (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
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3.4
|
Certificate of Designations of Series A-1 Convertible Preferred Stock (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2012)
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3.5
|
Certificate of Amendment to the Certificate of Incorporation (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on September 5, 2012)
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4.1
|
2008 Stock Option Plan (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
4.2
|
Form of 3% Convertible Promissory Note (Incorporated herein by reference to the Company’s registration statement on Form S-1/A, as amended filed with the Securities and Exchange Commission on October 8, 2008)
|
|
4.3**
|
Option Agreement between Steven M. Rhodes, Crystal Magic, Inc. and the Registrant (Incorporated herein by reference to the Company’s registration statement on Form S-1/A, as amended filed with the Securities and Exchange Commission on October 8, 2008)*
|
4.4
|
Amendment to Promissory Note between Registrant and Lanai Investments, LLC (Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2008, as amended filed with the Securities and Exchange Commission on April 14, 2009)
|
|
4.5
|
Amendment to Promissory Note between Registrant and Loco Lobo, LLC (Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2008, as amended filed with the Securities and Exchange Commission on March 31, 2009)
|
|
4.6
|
Secured Promissory Note dated September 3, 2009 and Amendments(Incorporated herein by reference to the Company’s annual report on Form 10-K/A for the year ended December 31, 2009, as amended Filed with the Securities and Exchange Commission on January 14, 2011)
|
|
4.7
|
Security Agreement dated September 3, 2009 between Registrant and Remington Partners, Inc. (Incorporated herein by reference to the Company’s annual report on Form 10-K/A for the year ended December 31, 2009, as amended Filed with the Securities and Exchange Commission on January 14, 2011 March 31, 2010)
|
|
4.8
|
Promissory Note dated June 23, 2010 between Registrant and Joseph W. Abrams. (Incorporated by reference to the Company’s annual report on Form 10-K/A for the Year Ended December 31, 2010, as amended filed with the Securities and Exchange Commission on June 29, 2011)
|
|
4.9
|
Promissory Note dated December 15, 2010 between Registrant and Joseph W. Abrams. (Incorporated by reference to the Company’s annual report on Form 10-K/A for the Year Ended December 31, 2010, as amended filed with the Securities and Exchange Commission on June 29, 2011)
|
|
4.10
|
Promissory Note dated February 15, 2011 between Registrant and Joseph W. Abrams. (Incorporated by reference to the Company’s annual report on Form 10-K/A for the Year Ended December 31, 2010, as amended filed with the Securities and Exchange Commission on June 29, 2011)
|
|
4.11
|
6% Convertible Redeemable Note Due June 7, 2012 (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
4.12
|
6% Convertible Redeemable Note Due June 23, 2012 (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
4.13
|
Convertible Promissory Note, Issue Date August 3, 2011 (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
4.14
|
6% Convertible Redeemable Note Due October 2013 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2011)
|
|
4.15
|
6% Convertible Redeemable Note Due October 2012 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2011 )
|
|
4.16
|
Tripod Note Due October 2012 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2011)
|
|
4.17
|
6% Convertible Redeemable Note Due September 5, 2012 (Incorporated by reference to the Company’s annual report on Form 10-K/A for the Year Ended December 31, 2010, as amended filed with the Securities and Exchange Commission on June 29, 2011)
|
|
4.18
|
8% Convertible Redeemable Note Due December 5, 2012(Incorporated by reference to the Company’s annual report on Form 10-K for the Year Ended December 31, 2011 filed with the Securities and Exchange Commission on April 16, 2012)
|
|
4.19
|
8% Convertible Redeemable Note Due September 5, 2012(Incorporated by reference to the Company’s annual report on Form 10-K for the Year Ended December 31, 2011 filed with the Securities and Exchange Commission on April 16, 2012)
|
|
10.1
|
Patent License Agreement between Crystal Magic, Inc. and Laser Design International, LLC dated May 6, 2007 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.2
|
Crystal Magic, Inc. SBA Disaster Loan Control No. 9TFL-00512 dated December 19, 2001 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.3
|
Crystal Magic, Inc. SBA Loan No. PLP 399-356-4007 dated October 5, 2000 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.4
|
Crystal Magic, Inc. SBA Loan No. PLP 399-236-4004 dated October 4, 2000 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.5
|
Crystal Magic, Inc. SBA Loan No. PLP 309-109-4009 dated July 29, 1999 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.6
|
Operating Agreement between Crystal Magic, Inc. and Cashman Enterprises, Inc dated September 7, 2001 (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.7
|
Employment agreement between the Registrant and John Wolf (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.8
|
Employment agreement between the Registrant and Jim Wallace (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.9
|
Employment agreement between the Registrant and Paul Scapatici (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.10
|
Employment agreement between the Registrant and Lane Folliott (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.11
|
Employment agreement between the Registrant and Edward L. Bernstein (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008)
|
|
10.12
|
Employment agreement between the Registrant and Steven M. Rhodes (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on October 8, 2008)
|
10.13
|
Form of Lock-up Agreement (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on October 8, 2008)
|
|
10.14
|
Indemnification Agreement between the Registrant and Steven M. Rhodes and Vicki L. Rhodes (Incorporated herein by reference to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on October 8, 2008)
|
|
10.15
|
Amendment to Employment Agreement between the Registrant and John Wolf (Incorporated herein by reference to the Company’s filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.16
|
Amendment to Employment Agreement between the Registrant and Jim Wallace (Incorporated herein by reference to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.17
|
Amendment to Employment Agreement between the Registrant and Paul Scapatici (Incorporated herein by reference to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.18
|
Amendment to Employment Agreement between the Registrant and Lane Folliott (Incorporated herein by reference to the Company’s annual report on Form 10-K as amended filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.19
|
Amendment to Employment Agreement between the Registrant and Edward L. Bernstein (Incorporated herein by reference to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.20
|
Amendment to Employment Agreement between the Registrant and Steven M. Rhodes (Incorporated herein by reference to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.21
|
Release, Termination and Restructuring Agreement between Registrant and Steven M. Rhodes dated April 8, 2009 (Incorporated herein by reference to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009)
|
|
10.22**
|
Employment Agreement between Propell and Edward L. Bernstein dated June 30, 2011 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on July 5, 2011)
|
|
10.23
|
Consulting Agreement dated July 25, 2011 (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
10.24
|
Agreement to Exchange Note for Stock (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
10.25
|
Consulting Agreement dated May 1, 2011 (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the Quarter ended June 30, 2011, as amended filed with the Securities and Exchange Commission on August 15, 2011)
|
|
10.26
|
Share Issuance Agreement dated October 23, 2011 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2011)
|
|
10.27
|
Share Exchange Agreement dated February 4, 2013 (Incorporated herein by reference to the Company’s annual report on form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on March 31, 2012)
|
|
10.28**
|
Employment Agreement between Propell and John Huemoeller II dated March 6, 2013 (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2013)
|
|
10.29
|
License Agreement between Novas Energy (USA), Inc. and Novas Energy Group Limited *
|
|
10.30
|
Consulting Agreement between Propell and John Zotos dated March 6, 2013 *
|
|
14.1
|
Code of Ethics (Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2008, as amended filed with the Securities and Exchange Commission on March 31, 2009)
|
|
21.1
|
List of Subsidiaries of the Registrant*
|
|
31.1
|
Certification of our Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
31.2
|
Certification of our Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
Certification of our Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
32.2
|
Certification of our Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
**+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
|
* Filed Herewith | ||
** Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report | ||
**+ As provided in Rule 406T of Regulation S-T, this information is deemed furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended. |
By:
|
/s/ John W. Huemoeller II
|
|
John W. Huemoeller II
|
||
President, Chief Executive Officer
|
||
and Chief Financial Officer
|
||
(Principal Executive Officer and
|
||
Principal Financial Officer)
|
Date: April 15, 2013
|
By:
|
/s/ John W. Huemoeller II
|
|
John W. Huemoeller II
President, Chief Executive Officer
and Chief Financial Officer and
Director (Principal Executive Officer and
Principal Accounting Officer)
|
|||
Date: April 15, 2013
|
By:
|
/s/ Edward Bernstein
|
|
Edward Bernstein
Director
|
|||
Date: April 15, 2013
|
By:
|
/s/ Mark Kalow
|
|
Mark Kalow
Director
|
|||
Date: April 15, 2013
|
By:
|
/s/ James Fuller
|
|
James Fuller
Director
|
|||
Date: April 15, 2013
|
By:
|
/s/ John Zotos
|
|
John Zotos
Director
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2012 and 2011
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2012 and 2011
|
F-4
|
Consolidated Statements of Changes in Stockholders’ Deficit as of December 31, 2012 and 2011
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011
|
F-6
|
Notes to the Consolidated Financial Statements
|
F-7
|
/s/ Liggett, Vogt & Webb, P.A.
|
|
Liggett, Vogt & Webb, P.A.
|
|
New York, New York
|
|
April 9, 2013
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 2,774 | $ | 5,242 | ||||
Accounts receivable (net of allowances)
|
32 | 718 | ||||||
Prepaid expenses
|
1,946 | 27,266 | ||||||
Due from others
|
- | 591 | ||||||
Deposits - current
|
- | 1,849 | ||||||
Total Current Assets
|
4,752 | 35,666 | ||||||
Property and Equipment, net
|
1,541 | 3,582 | ||||||
Other Assets
|
||||||||
Website, net
|
800 | 2,400 | ||||||
Total Assets
|
$ | 7,093 | $ | 41,648 | ||||
Liabilities and Stockholders' Deficit
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 38,076 | $ | 290,678 | ||||
Accrued liabilities
|
85,176 | 80,191 | ||||||
Accrued interest
|
13,824 | 340,760 | ||||||
Notes payable and advances - related parties
|
3,000 | 415,188 | ||||||
Convertible notes payable, net of discount of $0 and 48,277 respectively
|
- | 1,384,948 | ||||||
Convertible notes payable related parties
|
45,000 | - | ||||||
Derivative liability
|
- | 57,925 | ||||||
Liabilities from discontinued operations
|
1,221,008 | 1,221,008 | ||||||
Total Current Liabilities
|
1,406,084 | 3,790,698 | ||||||
Long Term Liabilities
|
||||||||
Convertible notes payable related parties, net of discount of $1,960,093 and $0 respectively
|
39,907 | - | ||||||
Total Long Term Liabilities
|
39,907 | - | ||||||
Total Liabilities
|
1,445,991 | 3,790,698 | ||||||
Stockholders' Deficit
|
||||||||
Prefered stock, $0.001 par value; 5,000,000 shares authorized, 5,000,000 and 0 shares | ||||||||
issued and outstanding, respectively. (liquidation preference $400,000 and $0, respectively)
|
5,000 | |||||||
Common stock, $0.001 par value; 100,000,000 shares authorized, 1,957,871 and 518,231 shares issued and outstanding, respectively
|
1,958 | 518 | ||||||
Additional paid-in capital
|
4,766,059 | 2,184,130 | ||||||
Accumulated deficit
|
(6,211,915 | ) | (5,933,698 | ) | ||||
Total Stockholders' Deficit
|
(1,438,898 | ) | (3,749,050 | ) | ||||
Total Liabilities and Stockholders' Deficit
|
$ | 7,093 | $ | 41,648 |
Years Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Net Revenues
|
$ | 59,915 | $ | 204,796 | ||||
Cost of Goods Sold
|
46,916 | 138,874 | ||||||
Gross Profit
|
12,999 | 65,922 | ||||||
Compensation
|
108,458 | 486,557 | ||||||
Sales and Marketing
|
63,666 | 102,555 | ||||||
Professional Fees
|
166,044 | 182,707 | ||||||
General and administrative
|
208,567 | 446,119 | ||||||
Total Expense
|
546,735 | 1,217,938 | ||||||
Loss from Operations
|
(533,736 | ) | (1,152,016 | ) | ||||
Other Income
|
235,727 | 34,070 | ||||||
Debt forgivness
|
493,609 | - | ||||||
Interest Expense
|
(470,866 | ) | (256,101 | ) | ||||
Other Expenses
|
(2,951 | ) | - | |||||
Loss before Provision for Income Taxes
|
(278,217 | ) | (1,374,047 | ) | ||||
Provision for Income Taxes
|
- | - | ||||||
Net Loss
|
(278,217 | ) | (1,374,047 | ) | ||||
Preferred dividends
|
409,060 | - | ||||||
Net loss to common stockholders
|
$ | (687,277 | ) | $ | (1,374,047 | ) | ||
Net Loss Per Share - Basic and Diluted
|
$ | (1.02 | ) | $ | (2.85 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted
|
674,111 | 481,715 |
Additional
|
Total
|
|||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Paid-in
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||||||||
Balance, December 31, 2010
|
- | $ | - | 455,152 | $ | 455 | $ | 1,784,361 | $ | (4,559,651 | ) | $ | (2,774,835 | ) | ||||||||||||||
Services rendered
|
- | - | 34,300 | 34 | 206,466 | - | 206,500 | |||||||||||||||||||||
Conversion from debt to equity
|
- | - | 28,779 | 29 | 100,525 | - | 100,554 | |||||||||||||||||||||
Stock option grants
|
- | - | - | - | 92,778 | - | 92,778 | |||||||||||||||||||||
Net loss for year ended December 31, 2011
|
(1,374,047 | ) | (1,374,047 | ) | ||||||||||||||||||||||||
Balance, December 31, 2011
|
- | - | 518,231 | 518 | 2,184,130 | (5,933,698 | ) | (3,749,050 | ) | |||||||||||||||||||
Preferred shares sold
|
2,875,000 | 2,875 | - | - | 227,125 | - | 230,000 | |||||||||||||||||||||
Preferred shares issued in connection with
conversion from debt and interest to equity
|
2,125,000 | 2,125 | - | - | 176,935 | - | 179,060 | |||||||||||||||||||||
Recognition of stock based compensation in
connection with common stock option grants
|
- | - | - | - | 41,209 | - | 41,209 | |||||||||||||||||||||
Common shares issued in connection with the
conversion of debt and accrued interest to equity
|
- | - | 223,199 | 223 | 56,043 | - | 56,266 | |||||||||||||||||||||
Debt forgiveness by shareholders
|
- | - | - | 51,557 | - | 51,557 | ||||||||||||||||||||||
Common shares issued for compensation
|
- | - | 1,208,320 | 1,208 | 26,120 | - | 27,328 | |||||||||||||||||||||
Common shares issued as an inducement to
assign convertible debt
|
- | - | 8,059 | 81 | 2,868 | - | 2,949 | |||||||||||||||||||||
Par value adjustment and shares issued due to
rounding in reverse stock split
|
- | - | 62 | (72 | ) | 72 | - | - | ||||||||||||||||||||
Debt discount for conv Notes issued
November 30, 2012
|
- | - | 2,000,000 | - | 2,000,000 | |||||||||||||||||||||||
Net loss for year ended December 31, 2012
|
(278,217 | ) | (278,217 | ) | ||||||||||||||||||||||||
Balance, December 31, 2012
|
5,000,000 | $ | 5,000 | 1,957,871 | $ | 1,958 | $ | 4,766,059 | $ | (6,211,915 | ) | $ | (1,438,898 | ) |
Years Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss for the year
|
$ | (278,217 | ) | $ | (1,374,047 | ) | ||
Adjustments to reconcile net loss to net cash used in
operating activities:
|
||||||||
Depreciation expense
|
2,041 | 2,028 | ||||||
Amortization expense
|
1,600 | 1,600 | ||||||
Amortization of debt discount
|
39,907 | 43,718 | ||||||
Change in fair value of derivative liability
|
(57,925 | ) | (34,070 | ) | ||||
Bad debt expense
|
- | 4,485 | ||||||
Stock options issued for services
|
41,209 | 92,778 | ||||||
Stock issued as inducement to convert debt
|
2,949 | 180,861 | ||||||
Debt forgivness
|
493,609 | - | ||||||
Changes in Assets and Liabilities
|
||||||||
Accounts receivable
|
686 | (613 | ) | |||||
Due from others
|
1,849 | 769 | ||||||
Inventory
|
- | 521 | ||||||
Unbilled receivables
|
591 | - | ||||||
Prepaid expenses
|
25,320 | 3,426 | ||||||
Accounts payable
|
(331,317 | ) | 104,920 | |||||
Accrued expenses
|
4,666 | 46,067 | ||||||
Accrued interest
|
(326,936 | ) | 210,160 | |||||
CASH USED IN OPERATING ACTIVITIES
|
(379,968 | ) | (717,397 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Security deposits
|
- | (350 | ) | |||||
Purchase of property and equipment
|
- | (3,838 | ) | |||||
NET CASH USED IN INVESTING ACTIVITIES
|
- | (4,188 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Cost of issuance of redeemable preferred
|
230,000 | |||||||
Proceeds from convertible note
|
- | 308,000 | ||||||
Proceeds from notes payable and advances
|
147,500 | 362,188 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
377,500 | 670,188 | ||||||
NET DECREASE IN CASH
|
(2,468 | ) | (51,397 | ) | ||||
CASH AT BEGINNING OF YEAR
|
5,242 | 56,639 | ||||||
CASH AT YEAR END
|
$ | 2,774 | $ | 5,242 | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
||||||||
Convertible notes and interest converted into common
stock
|
$ | 203,627 | $ | 100,554 | ||||
Common stock issued for services and classified as
|
||||||||
prepaid expense at December 31, 2011
|
$ | - | $ | 25,639 |
Description
|
Estimated Useful Life
|
|
Office equipment and furniture
|
2 to 5 years
|
|
Leasehold improvements and fixtures
|
Lesser of estimated useful life or life of lease
|
2012
|
2011
|
|||||||
Furniture and fixtures
|
$ | 500 | $ | 500 | ||||
Computer and equipment
|
7,744 | 7,744 | ||||||
Total cost
|
8,824 | 8,824 | ||||||
Less: accumulated depreciation
|
(7,283 | ) | (5 , 242 | ) | ||||
Property and equipment, net
|
$ | 1 , 541 | $ | 3,582 |
2012
|
2011
|
|||||||
Payroll
|
$ | 78,125 | $ | 70,782 | ||||
Taxes
|
212 | 165 | ||||||
Other
|
6,839 | 9,244 | ||||||
Total accrued expenses
|
$ | 85 , 176 | $ | 80 , 191 |
Convertible Notes Payable
|
Principal Amount
|
|||
6% convertible notes payable, due November 19, 2017
|
$ | 2,000,000.00 | ||
6% convertible notes payable, due October 31, 2013
|
45,000.00 | |||
less debt discount
|
(1,960,093.00 | ) | ||
Total convertible notes payable, net of discount
|
$ | 84,907.00 |
Convertible Notes Payable
|
Principal Amount
|
|||
15% convertible notes payable to Remington Partners, due August 31, 2012
|
$ | 1,167,500 | ||
6% convertible note to Tripod Group, LLC, due June 23, 2012
|
7,725 | |||
6% convertible note to Prolific Group LLC, due June 7, 2012
|
40,000 | |||
8% convertible note to Asher Enterprises, Inc., due May 7, 2012
|
53,000 | |||
8% convertible note to Asher Enterprises, Inc., due June 12, 2012
|
32,500 | |||
6% convertible note to Tripod Group, LLC, due August 24, 2012
|
50,000 | |||
6% convertible note to Tripod Group, LLC, due October 23, 2012
|
50,000 | |||
8% convertible note to Asher Enterprises, Inc., due September 5, 2012
|
32,500 | |||
Total convertible notes payable
|
1 , 4 33,225 | |||
Debt Discount | (48,277 | ) | ||
$ | 1,384,948 |
Notes Payable
|
Principal Amount
|
|||
10% note to Joseph Abrams due December 15, 2011
|
50,000 | |||
12 % note to Joseph Abrams due February 10, 2012
|
100,000 | |||
10% note to Joseph Abrams due May 20, 2012
|
25,000 | |||
10% note to Joseph Abrams due June 13, 2012
|
40,000 | |||
10% note to Joseph Abrams due July 7, 2012
|
35,000 | |||
10% note to Joseph Abrams due July 27, 2012
|
20,000 | |||
10% note to Joseph Abrams due August 31, 2012
|
30,000 | |||
Advances from Mr. Abrams – non-interest bearing
|
112,188 | |||
Loan from shareholder – non-interest bearing
|
3,000 | |||
Total notes payable and accrued interest
|
$ | 415,188 |
2012
|
2011
|
|||||||
Exercise price
|
$ | 5.00 - $25.00 | $ | 7.50 - $13.50 | ||||
Expected dividends
|
0 | % | 0 | % | ||||
Expected volatility
|
376 | % | 123 | % | ||||
Risk free interest rate
|
0.16% to 2.315%
|
1.14% to 1.77%
|
||||||
Expected life of option
|
5-7 years
|
5-7 years
|
||||||
Expected forfeitures
|
0 | % | 0 | % |
·
|
Annually, over one, two or three years
|
·
|
Monthly, over six months to one year
|
·
|
Annually, with monthly vesting after the first year, over a total of three or four years
|
·
|
Immediately, upon gran
|
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Options
|
Exercise Price
|
Contractual Life
|
Intrinsic Value
|
|||||||||||||
Balance, December 31, 2010
|
39,480 | $ | 18.50 | |||||||||||||
Granted
|
92,800 | 6.00 | 6.46 | |||||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
(35,400 | ) | 16.50 | |||||||||||||
Balance, December 31, 2011
|
96,880 | 7.50 | 8.12 | $ | 0 | |||||||||||
Granted
|
0 | |||||||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
(41,600 | ) | 5.00 | |||||||||||||
Balance, December 31, 2012 - Outstanding
|
55,280 | 7.50 | 7.63 | $ | 0 | |||||||||||
Balance, December 31, 2012 - Exercisable
|
38,430 | 10.00 | 7.20 | $ | 0 |
O
p
t
io
n
s
O
u
t
s
t
a
nd
i
n
g
|
O
p
t
io
n
s
E
x
e
r
c
isa
b
le
|
|||||||||||||||||||
Exercise
Price
|
Number
Otstanding
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average
Exercise Price
|
Number
Exercisable
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining
Contractual Life
|
||||||||||||||
$ | 25.00 | 2,500 |
6.46 years
|
$ | 25.00 | 2,500 | $ | 25.00 |
7.46 years
|
|||||||||||
$ | 13.50 | 4,480 |
5.35 years
|
$ | 13.50 | 14,480 | $ | 13,50 |
6.35 years
|
|||||||||||
$ | 12.50 | 2,000 |
7.79 years
|
$ | 12.50 | 2,000 | $ | 12.50 |
8.79 years
|
|||||||||||
$ | 8.50 | 30,500 |
8.24 years
|
$ | 8.50 | 20,250 | $ | 8.50 |
9.43 years
|
|||||||||||
$ | 5.00 | 14,800 |
8.49 years
|
$ | 5.00 | 8,200 | $ | 5.00 |
9.49 years
|
|||||||||||
55 , 280 |
7.06 years
|
$ | 8.95 | 38,430 | $ | 9.75 |
8.06 years
|
Non-vested
Stock options
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Non-vested - December 31, 2011
|
51,867 | $ | 16.50 | |||||
Granted
|
0 | $ | 6.00 | |||||
Vested/Exercised
|
(11,267 | ) | $ | 4.50 | ||||
Forfeited/Cancelled
|
(23,750 | ) | $ | 8.50 | ||||
Non-vested - December 31, 2012
|
16,850 | $ | 6.00 | |||||
Weighted average remaining period for vesting
|
1.61 years
|
Year Ended
|
Year Ended
|
|||||||
December 31, 2012
|
December 31, 2011
|
|||||||
Tax expense at the federal statutory rate
|
34 | % | 34 | % | ||||
State tax expense, net of federal tax effect
|
5 | % | 5 | % | ||||
Permanent timing differences
|
22 | % | (8 | %.) | ||||
Deferred income tax asset valuation allowance
|
(61 | %.) | (31 | %.) | ||||
Effective income tax rate
|
0 | % | 0 | % |
December 31, 2012
|
December 31, 2011
|
|||||||
Deferred income tax assets - net operating losses
|
$ | 2,000,000 | $ | 1,830,000 | ||||
Less deferred income tax assets valuation allowance
|
(2,000,000 | ) | (1,830,000 | ) | ||||
Net deferred income tax assets
|
$ | 0 | $ | 0 |
NOVAS ENERGY GROUP LIMITED
|
||
By: /s/Samvel Karakhanian
|
||
Name: Samvel Karakhanian
|
||
Title: Director
|
||
By: /s/Ageev Nikita
|
||
Name: Ageev Nikita
|
||
Title: CEO
|
||
NOVAS ENERGY (USA) INC.
|
||
By: /s/John Huemoeller
|
||
Name: John W. Huemoeller II
|
||
Title: President & CEO
|
CONSULTANT: COMPANY
|
Propell Technologies Group Inc., | |||
a Delaware Corporation | |||
/s/ John A. Zotos
|
By:
/s/ Edward Bernstein
|
||
JOHN A. ZOTOS
|
Name: Edward Bernstein
|
||
Title: Chairman
|
1.
|
I have reviewed this Annual Report on Form 10-K of Propell Technologies Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John W. Huemoeller II
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Propell Technologies Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John W. Huemoeller II
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John W. Huemoeller II
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John W. Huemoeller II
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|