Nevada
|
IRS#
33-6159915
|
(State
or other jurisdiction
|
(IRS
Employer File Number)
|
Of
incorporation)
|
|
33012
Calle Perfecto
|
|
San
Juan Capistrano, California
|
92675
|
(Address
of principal executive offices)
|
(zip
code)
|
Item
|
Description
|
Page
|
Part
I
|
||
Item
1.
|
Description
of Business
|
1
|
Risk
Factors
|
7
|
|
Item
2.
|
Description
of Property
|
8
|
Item
3.
|
Legal
Proceedings
|
8
|
Item
4
|
Submission
of Matters of a Vote of Security Holders
|
9
|
Part
II
|
||
Item
5.
|
Market
for Common Equity and Related Stockholder Matters
|
9
|
Item
6.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
14
|
Item
7.
|
Financial
Statements and Supplementary Data
|
20
|
Item
8.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
68
|
Item
8A
|
Controls
and Procedures
|
68
|
Part
III
|
||
Item
9.
|
Directors
and Executive Officers, Promoters & Control Persons; Compliance with
Section 16(a) of the Exchange Act
|
70
|
Item
10.
|
Executive
Compensation
|
72
|
Item
11.
|
Security
Ownership of Certain Beneficial Owners and Management And Related
Stockholder Matters
|
75
|
Item
12.
|
Certain
Relationships and Related Transactions
|
76
|
Part
IV
|
||
Item
13.
|
Exhibits
|
78
|
Item
14.
|
Principal
Accountant Fees and Services
|
79
|
Signatures
|
80
|
- |
operating
as a public entity, incurring non-cost of sales expenses such as
accounting, auditing, legal activities, and maintaining full compliance
of
a regulated reporting status including continuing Sarbanes-Oxley
requirements.
|
- |
under-capitalization
to challenge the lack of market acceptance of our new products and
technologies.
|
- |
significant
legal and professional fees associated with regulated business activities
and SEC
|
- |
reporting
requirements including continuing Sarbanes-Oxley
requirements.
|
Fiscal
Year 2006
|
High
Bid
|
Low
Bid
|
Month
Ending:
|
||
First
Quarter May 2005
|
$.36
|
$.28
|
Common
Shares
|
||
Second
Quarter Aug 2005
|
$.36
|
$.17
|
Common
Shares
|
||
Third
Quarter Nov 2005
|
$.35
|
$.11
|
Common
Shares
|
||
Fourth
Quarter Feb 2006
|
$.99
|
$.27
|
Common
Shares
|
Fiscal
Year 2005
|
High
Bid
|
Low
Bid
|
Month
Ending:
|
||
First
Quarter May 2004
|
$.28
|
$.11
|
Common
Shares
|
||
Second
Quarter Aug 2004
|
$.16
|
$.09
|
Common
Shares
|
||
Third
Quarter Nov 2004
|
$.13
|
$.04
|
Common
Shares
|
||
Fourth
Quarter Feb 2005
|
$.65
|
$.05
|
Common
Shares
|
Date
Issued
|
Issue
to
|
Service
Performed
|
Common
Shares
|
Stock
Estimated
value
|
February10
2004
|
M.
Rae
|
Compensation
|
100,000
|
$13,000
|
February10
2004
|
J.
Sierra
|
Compensation
|
20,000
|
$
2,600
|
Date
Issued
|
Issue
to
|
Service
Performed
|
Common
Shares
|
Stock
Estimated
value
|
February
28, 2002
|
D.
Wagner
|
Legal
services
|
100,000
|
$
5,000
|
January
17, 2005
|
H.
Mathews
|
Consultant
|
15,000
|
$
2,775
|
January
17, 2005
|
Li
Yang
|
Consultant
|
10,000
|
$
1,850
|
Date
Issued
|
Issue
to
|
Common
Shares
|
Stock
Estimated
value
|
March
3, 2004
|
N.
Carreon
|
12,500
|
$
1,000
|
March
19, 2004
|
R.
Chadderdon
|
100,000
|
$
10,000
|
January
17, 2005
|
J.
Place
|
55,000
|
$
11,000
|
January
17, 2005
|
D.
Parsons
|
55,000
|
$
11,000
|
January
17, 2005
|
V.
Parsons
|
20,000
|
$
4,000
|
January
17, 2005
|
R.
Sierra
|
50,000
|
$
11,000
|
January
17, 2005
|
S.
Weston
|
15,000
|
$
3,000
|
January
17, 2005
|
M.
Ward
|
15,000
|
$
6,000
|
February
16, 2005
|
R.
Haugh
|
1,666
|
$
500
|
February
16, 2005
|
HC
Consulting
|
50,000
|
$
7,500
|
February
16, 2005
|
S.
Croner
|
50,000
|
$
7,500
|
February
22, 2006
|
J.
McGonigle
|
100,000
|
$15,000
|
February
21, 2005
|
C.
Fiege
|
5,000
|
$
1,500
|
February
16, 2005
|
H.
Bassett
|
7,000
|
$
2,100
|
Date
Issued
|
Issue
to
|
Service
Performed
|
Common
Shares
|
Stock
Estimated
value
|
January
17, 2005
|
Wong
Johnson & Associates, APC.
|
Debt
settlement
|
50,000
|
$
40,500
|
March
26, 2004
|
M.
Bennett
|
Debt
settlement
|
5,000
|
$
2,100
|
Date
Issued
|
Issue
to
|
Common
Shares
|
Stock
Estimated
value
|
April
13, 2005
|
S.
Sparks
|
5,000
|
$
1,500
|
April
13, 2005
|
F.
Duesler
|
20,000
|
$
6,000
|
April
13, 2005
|
S.
Lampman
|
2,000,000
|
$450,000
|
April
19, 2005
|
R.
Kelly
|
7,500
|
$
1,500
|
April
13, 2005
|
C.
Blevins
|
200,000
|
$
50,000
|
April
19, 2005
|
J.
Rodriguez
|
5,000
|
$
1,000
|
May
11, 2005
|
G.
Bailard Trust
|
20,000
|
$
5,000
|
May
11, 2005
|
K.Kahoolyzadeh
|
6,000
|
$
1,800
|
May
11, 2005
|
Hakimipour
|
1,333
|
$
400
|
May
11, 2005
|
K.Kahoolyzadeh
|
4,000
|
$
1,200
|
May
11, 2005
|
M.
Kohan
|
1,000
|
$
300
|
May
11, 2006
|
C.
Kackert
|
23,333
|
$
7,000
|
May
1, 2005
|
B.
Kackert
|
3,333
|
$
1,000
|
May
11, 2005
|
J.
Kackert
|
3,333
|
$
1,000
|
May
11, 2005
|
Ch.
Kackert
|
3,333
|
$
1,000
|
May
11, 2005
|
A.
Gomez
|
10,000
|
$
3,000
|
May
11, 2005
|
S.
White
|
3,333
|
$
1,000
|
May
11, 2005
|
L.
Inque
|
3,333
|
$
1,000
|
May
11, 2005
|
J.
Kearny
|
20,000
|
$
20
|
May
16, 2005
|
W.
Wright
|
10,000
|
$
10
|
May
24, 2005
|
B.
McDonagh
|
6,060
|
$
2,000
|
Date
Issued
|
Issue
to
|
Service
Performed
|
Common
Shares
|
Stock
Estimated
value
|
July
29, 2005
|
V.
Parsons
|
Compensation
|
15,000
|
$
4,500
|
July
29, 2005
|
C.
Garcia
|
Compensation
|
15,000
|
$
4,500
|
Selected
Financial Data
|
2004
|
2005
|
Year
Over Year
Change
|
%
|
Sales
|
$468,420
|
$341,106
|
($127,314)
|
(27)
|
Cost
of sales
|
$307,175
|
$155,113
|
($152,062)
|
(50)
|
Gross
profit
|
$161,245
|
$185,993
|
$
24,748
|
15
|
General
& administrative expenses
|
$239,897
|
$272,762
|
$
30,865
|
14
|
Consulting
fees to related parties
|
$
-0-
|
$
35,292
|
$
35,292
|
-
|
Interest
expense to related parties
|
$117,584
|
$124,629
|
$
7,045
|
6
|
Net
cash used in operating activities
|
($36,643)
|
($64,262)
|
$
27,619
|
74
|
Net
cash used in investing activities
|
($15,956)
|
($12,434)
|
($
3,522)
|
(22)
|
Net
cash provided financing activities
|
$115,670
|
$
31,710
|
($
83,960)
|
(73)
|
|
|
Payments
Due by Period
|
|
|
||||||||||
Convertible
|
||||||||||||||
Less
than
|
More
than
|
to
common
|
||||||||||||
Total
|
1
year
|
2
years
|
3
years
|
3
years
|
stock
|
|||||||||
Accrued
liabilities
|
$
262,106
|
$
70,556
|
$
191,550
|
|||||||||||
Line
of credit
|
50,000
|
50,000
|
|
2006
|
2005
|
|
ASSETS
|
||
CURRENT
ASSETS
|
||
Cash
|
$
635,569
|
$
23,782
|
Trade
receivables, net of allowance for doubtful accounts of $-0- and
$2,047
|
||
as
of February 28, 2006 and 2005, respectively
|
33,602
|
20,047
|
Inventories,
net
|
391,641
|
313,754
|
Prepaid
expenses
|
45,261
|
-
|
Total
current assets
|
1,106,073
|
357,583
|
PROPERTY
AND EQUIPMENT, NET
|
157,671
|
99,826
|
INTANGIBLE
ASSETS, NET
|
17,664
|
121,567
|
OTHER
ASSETS
|
6,742
|
14,670
|
Total
non-current assets
|
182,077
|
236,063
|
|
||
TOTAL
ASSETS
|
$
1,288,150
|
$
593,646
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
2006
|
2005
|
CURRENT
LIABILITIES
|
||
Accounts
payable
|
$
61,010
|
$
24,747
|
Accrued
expenses
|
262,106
|
188,900
|
Line
of credit
|
50,000
|
-
|
Accrued
interest due to related parties
|
169,315
|
362,518
|
Current
portion of notes payable to related parties
|
-
|
100,000
|
Customer
deposits
|
29,048
|
25,911
|
Income
taxes payable
|
6,400
|
8,397
|
|
|
|
Total
current liabilities
|
577,879
|
710,473
|
NOTES
PAYABLE TO RELATED PARTIES, less current portion
|
363,150
|
348,150
|
COMMITMENTS
AND CONTINGENCIES
|
||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||
Preferred
stock, none authorized, issued or outstanding as
|
|
|
of
February 28, 2006 and 2005, respectively
|
-
|
-
|
Common
stock $.001 par value - 50,000,000 shares
|
22,458
|
16,665
|
authorized;
22,458,384 and 16,665,646 shares issued and
|
||
outstanding
as of February 28, 2006 and 2005, respectively
|
||
Additional
paid-in capital
|
5,392,553
|
4,340,086
|
Estimated
value of warrants
|
448,000
|
-
|
Accumulated
deficit
|
(4,957,934)
|
(4,025,478)
|
Unearned
interest
|
(353,523)
|
(462,443)
|
Unearned
compensation
|
(204,413)
|
(333,807)
|
Total
stockholders' equity (deficit)
|
347,121
|
(464,977)
|
TOTAL
LIABILITIES AND
|
||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
$
1,288,150
|
$
593,646
|
2006
|
2005
|
|
SALES
|
$
751,844
|
$
341,106
|
COST
OF SALES
|
430,134
|
155,113
|
Gross
profit
|
321,710
|
185,993
|
OPERATING
EXPENSES
|
||
Selling
|
59,459
|
27,425
|
General
and administrative
|
591,557
|
272,762
|
Consulting
fees to related parties
|
201,293
|
35,292
|
Impairment
of intellectual property
|
104,000
|
-
|
Total
expenses
|
956,309
|
335,479
|
LOSS
FROM OPERATIONS
|
(634,599)
|
(149,486)
|
OTHER
INCOME (EXPENSES)
|
||
Interest
expense due to related parties
|
(272,653)
|
(124,629)
|
Claim
settlement
|
-
|
(31,360)
|
Write-off
of accrual for product return liability
|
-
|
61,630
|
Gain
(loss) on sale of vehicle / equipment
|
(30,000)
|
5,100
|
Miscellaneous
income (expense)
|
6,396
|
(10,078)
|
Total
other income (expense)
|
(296,257)
|
(99,337)
|
LOSS
BEFORE PROVISION
|
||
FOR
INCOME TAXES
|
(930,856)
|
(248,823)
|
PROVISION
FOR INCOME TAXES
|
1,600
|
1,600
|
Net
loss
|
$
(932,456)
|
$
(250,423
)
|
BASIC
AND DILUTED (LOSS) PER SHARE
|
$
(0.05)
|
$
(0.02)
|
WEIGHTED
AVERAGE NUMBER OF
|
||
SHARES:
BASIC AND DILUTED
|
17,969,317
|
11,936,767
|
|
Preferred
|
Preferred
|
Common
|
Common
|
Additional
|
Estimated
|
Unissued
|
|
|
Total
|
||
|
Stock
|
Stock
|
Stock
|
Stock
|
Paid-in
|
Value
of
|
stock
|
Accumulated
|
Unearned
|
Unearned
|
Finders
|
Stockholders
|
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Warrants
|
liability
|
Deficit
|
Interest
|
Compensation
|
Fees
|
Deficit
|
Balance,
February 29, 2004
|
8,000
|
$80
|
10,513,480
|
$10,513
|
$3,213,469
|
-
|
$20,000
|
$(3,775,055)
|
-
|
-
|
-
|
$(530,993)
|
|
||||||||||||
Issuance
of common stock
|
-
|
-
|
200,000
|
200
|
19,800
|
-
|
(20,000)
|
-
|
-
|
-
|
-
|
-
|
|
||||||||||||
Contributed
executive services
|
-
|
-
|
-
|
-
|
10,000
|
-
|
-
|
-
|
-
|
-
|
-
|
10,000
|
|
||||||||||||
Issuance
of common stock for
|
||||||||||||
compensation
and services
|
-
|
-
|
125,000
|
125
|
9,500
|
-
|
-
|
-
|
-
|
-
|
-
|
9,625
|
|
||||||||||||
Issuance
of common stock
|
||||||||||||
to
employees
|
-
|
-
|
70,000
|
70
|
21,280
|
-
|
-
|
-
|
-
|
-
|
-
|
21,350
|
|
||||||||||||
Issuance
of common stock for
|
||||||||||||
Cash
|
-
|
-
|
541,166
|
541
|
90,561
|
-
|
-
|
-
|
-
|
-
|
-
|
91,102
|
|
Issuance
of common stock in
|
||||||||||||||
exchange
for debt
|
-
|
-
|
55,000
|
55
|
42,307
|
-
|
-
|
-
|
-
|
-
|
-
|
42,362
|
||
|
||||||||||||||
Issuance
of common stock
|
||||||||||||||
for
technology
|
-
|
-
|
32,000
|
32
|
5,868
|
-
|
-
|
-
|
-
|
-
|
-
|
5,900
|
||
|
||||||||||||||
Issuance
of common stock
|
||||||||||||||
for
claim settlement
|
-
|
-
|
84,000
|
84
|
29,316
|
-
|
-
|
-
|
-
|
-
|
-
|
29,400
|
||
|
||||||||||||||
Conversion
of preferred to
|
||||||||||||||
common
stock
|
(8,000)
|
(80)
|
4,500,000
|
4,500
|
(4,420)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Preferred
|
Preferred
|
Common
|
Common
|
Additional
|
Estimated
|
Unissued
|
|
|
|
Total
|
|
|
Stock
|
Stock
|
Stock
|
Stock
|
Paid-in
|
Value
of
|
Stock
|
Accumulated
|
Unearned
|
Unearned
|
Finders
|
Stockholders
|
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Warrants
|
Liability
|
Deficit
|
Interest
|
Compensation
|
Fees
|
Deficit
|
Discount
factor on common
|
||||||||||||
stock
issued to consultants
|
||||||||||||
at
below fair value
|
-
|
-
|
65,000
|
65
|
22,685
|
-
|
-
|
-
|
-
|
(7,583)
|
-
|
15,167
|
|
||||||||||||
Discount
factor on common
|
||||||||||||
stock
issued to officers
|
||||||||||||
at
below fair value
|
-
|
-
|
480,000
|
480
|
225,120
|
-
|
-
|
-
|
-
|
(206,800)
|
-
|
18,800
|
Beneficial
conversion feature
|
||||||||||||
on
warrants issued to
|
||||||||||||
officers
at below fair value
|
-
|
-
|
-
|
-
|
55,275
|
-
|
-
|
-
|
-
|
(49,133)
|
-
|
6,142
|
Beneficial
conversion feature
|
||||||||||||
on
warrants issued to note
|
||||||||||||
holder
at below fair value
|
-
|
-
|
-
|
-
|
27,225
|
-
|
-
|
-
|
(24,200)
|
-
|
-
|
3,025
|
Discount
factor on common
|
||||||||||||
stock
issued to officers
|
||||||||||||
at
below fair value
|
-
|
-
|
-
|
-
|
79,100
|
-
|
-
|
-
|
-
|
(70,291)
|
-
|
8,809
|
|
||||||||||||
Discount
factor on common
|
||||||||||||
stock
issued to note
|
||||||||||||
holder
at below fair value
|
-
|
-
|
-
|
-
|
493,000
|
-
|
-
|
-
|
(438,243)
|
-
|
-
|
54,757
|
|
||||||||||||
Net
loss from fiscal year ending February 28, 2005
|
-
|
-
|
-
|
-
|
-
|
-
|
(250,423)
|
-
|
-
|
(250,423)
|
||
Balance,
February 28, 2005
|
-
|
-
|
16,665,646
|
16,665
|
4,340,086
|
-
|
-
|
(4,025,478)
|
(462,443)
|
(333,807)
|
-
|
(464,977)
|
Preferred
|
Preferred
|
Common
|
Common
|
Additional
|
Estimated
|
Unissued
|
Total
|
|||||
Stock
|
Stock
|
Stock
|
Stock
|
Paid-in
|
Value
of
|
Stock
|
Accumulated
|
Unearned
|
Unearned
|
Finders
|
Stockholders
|
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Warrants
|
Liability
|
Deficit
|
Interest
|
Compensation
|
Fees
|
Deficit
|
|
Contributed
executive services
|
-
|
-
|
-
|
-
|
10,000
|
-
|
-
|
-
|
-
|
-
|
-
|
10,000
|
Issuance
of shares for services rendered
|
-
|
-
|
64,300
|
64
|
20,085
|
-
|
-
|
-
|
-
|
-
|
-
|
20,149
|
Issuance
of shares for compensation or services
|
-
|
-
|
30,000
|
30
|
7,170
|
-
|
-
|
-
|
-
|
-
|
-
|
7,200
|
Issuance
of common stock for cash
|
-
|
-
|
2,474,225
|
2,474
|
564,282
|
-
|
-
|
-
|
-
|
-
|
-
|
566,756
|
Issuance
of common shares with detachable stock warrants with conversion at
below
market value
|
-
|
-
|
2,000,000
|
2,000
|
-
|
448,000
|
-
|
-
|
-
|
-
|
-
|
450,000
|
Issuance
of shares to settle accrued interest to primary
shareholder
|
-
|
-
|
1,266,667
|
1,267
|
226,733
|
-
|
-
|
-
|
-
|
-
|
-
|
228,000
|
Issuance
of shares to primary lender for continued financial
support
|
-
|
-
|
37,500
|
38
|
8,400
|
-
|
-
|
-
|
-
|
-
|
-
|
8,438
|
Issuance
of shares for settlement of debt
|
-
|
-
|
312,784
|
312
|
125,093
|
-
|
-
|
-
|
-
|
-
|
-
|
125,405
|
Issuance
of shares to consultant for services performed
|
-
|
-
|
37,500
|
38
|
8,400
|
-
|
-
|
-
|
-
|
-
|
-
|
8,438
|
Payment
of finders fees
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,800)
|
(11,800)
|
Reclassification
of
finders
fees to
additional
paid in
capital
|
-
|
-
|
-
|
-
|
(11,800)
|
-
|
-
|
-
|
-
|
-
|
11,800
|
-
|
Surrender
of shares due to failure to perform services
|
-
|
-
|
(250,000)
|
(250)
|
(32,250)
|
-
|
-
|
-
|
-
|
-
|
-
|
(32,500)
|
Repurchase
of shares from investor
|
-
|
-
|
(210,238)
|
(210)
|
(32,636)
|
-
|
-
|
-
|
-
|
-
|
-
|
(32,846)
|
Beneficial
conversion feature
|
||||||||||||
on
warrants issued to note holder
|
||||||||||||
at
below fair value
|
-
|
-
|
-
|
-
|
120,000
|
-
|
-
|
-
|
(120,000)
|
-
|
-
|
-
|
Discount
factor on common stock / warrants issued to primary lender at below
fair
value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
228,920
|
-
|
-
|
228,920
|
Beneficial
conversion feature on warrants
|
||||||||||||
issued
to consultants
|
||||||||||||
at
below fair value
|
-
|
-
|
30,000
|
30
|
8,970
|
-
|
-
|
-
|
-
|
(9,000)
|
-
|
-
|
Discount
factor on common stock / warrants issued to officers at below fair
value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
164,877
|
-
|
164,877
|
Discount
factor on common stock issued to consultants at below fair
value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,517
|
-
|
3,517
|
Discount
factor on warrants
|
||||||||||||
issued
to consultant
|
||||||||||||
at
below fair value
|
-
|
-
|
-
|
-
|
15,000
|
-
|
-
|
-
|
-
|
(15,000)
|
-
|
-
|
Discount
factor on warrants issued to employee at below fair value
|
-
|
-
|
-
|
-
|
15,000
|
-
|
-
|
-
|
-
|
(15,000)
|
-
|
-
|
Net
loss from fiscal year ending February 28, 2006
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(932,456)
|
-
|
-
|
(932,456)
|
|
Balance,
February 28, 2006
|
-
|
-
|
22,458,384
|
$22,458
|
$5,392,533
|
$448,000
|
-
|
($4,957,934)
|
($353,523)
|
($204,413)
|
-
|
$
347,121
|
2006
|
2005
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||
Net
loss
|
$
(932,456)
|
$
(250,423)
|
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||
Depreciation
and amortization
|
26,407
|
33,868
|
|
||
Compensation
and interest expense on stock and warrants
|
422,519
|
106,700
|
Contributed
executive services
|
10,000
|
10,000
|
Stock
issued for services
|
25,350
|
30,975
|
Stock
issued for claim settlement
|
-
|
29,400
|
Allowance
for doubtful accounts
|
2,047
|
9,018
|
Impairment
of intellectual property
|
104,000
|
-
|
(Reversal)
Provision for slow moving inventory
|
79,789
|
-
|
Write
off of product return liability
|
-
|
(61,630)
|
Gain
(loss) on disposal of vehicle / equipment
|
30,000
|
(5,100)
|
Return
of shares due to failure to perform services
|
(32,500)
|
-
|
Changes
in operating assets and liabilities:
|
||
Trade
receivables
|
(15,602)
|
7,624
|
Inventories
|
(157,676)
|
(118,333)
|
Prepaid
expenses and other assets
|
(37,329)
|
-
|
Accounts
payable
|
35,831
|
(8,171)
|
Accrued
expenses
|
198,611
|
(349)
|
Accrued
interest due to related parties
|
34,797
|
124,559
|
Income
tax payable
|
(1,997)
|
1,600
|
Customer
deposits
|
3,137
|
26,000
|
Net
cash used by operating activities
|
(205,072)
|
(64,262)
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||
Proceeds
from sale of vehicle / equipment
|
20,000
|
5,800
|
Purchase
of equipment
|
(135,811)
|
(18,234)
|
Increase
in patents
|
(1,440)
|
-
|
Net
cash used by investing activities
|
(117,251)
|
(12,434)
|
2006
|
2005
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||
Proceeds
from sale of common stock
|
$
1,013,756
|
$
91,102
|
Purchase
of common stock
|
(32,846)
|
-
|
Payment
of finders fees
|
(11,800)
|
-
|
Proceeds
from line of credit
|
50,000
|
-
|
Proceeds
from related party advances
|
-
|
1,000
|
Repayments
on related party notes payable
|
(85,000)
|
(60,392)
|
Net
cash provided by financing activities
|
934,110
|
31,7100
|
NET
INCREASE (DECREASE) IN CASH
|
611,787
|
(44,987)
|
Cash,
beginning of year
|
23,782
|
68,768
|
Cash,
end of year
|
$
635,569
|
$
23,782
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||
Cash
paid during the year for:
|
||
Interest
|
$
-
|
$
-
|
Income
taxes
|
$
1,997
|
$
-
|
NON-CASH
INVESTING AND FINANCING ACTIVITIES
|
||
Stock
issued for services
|
$
25,350
|
$
30,975
|
Stock
issued for settlement of debt
|
$
125,405
|
$
-
|
Stock
issued for accrued interest
|
$
228,000
|
$
-
|
Stock
issued for settlement of claim
|
$
-
|
$
29,400
|
Return
of shares due to non-performance of services
|
$
32,500
|
$
-
|
Stock
issued for purchase of technology
|
$
-
|
$
5,900
|
The
Company’s consolidated financial statements are prepared using accounting
principles generally accepted in the United States of America applicable
to a going concern, which contemplates the realization of assets
and
liquidation of liabilities in the normal course of business. The
Company
has experienced recurring losses from operations and has an accumulated
deficit of $4,957,934 as of February 28, 2006. These factors, among
others, raise substantial doubt as to its ability to have the necessary
resources to market the Company’s new
products.
|
2006
|
2005
|
|
Raw
materials
|
$161,066
|
$
169,427
|
Work
in progress
|
105,760
|
34,513
|
Finished
goods
|
204,604
|
109,814
|
471,430
|
313,754
|
|
Reserve
for obsolete or
slow
moving inventory
|
(79,789)
|
-
|
Net
inventories
|
$391,641
|
$
313,754
|
2006
|
2006
|
2005
|
2005
|
|
Sales
|
Accounts
|
Sales
|
Accounts
|
|
Percentage
|
Receivable
|
Percentage
|
Receivable
|
|
Customer
1
|
25%
|
$6,100
|
10%
|
$
-
|
Customer
2
|
4%
|
673
|
16%
|
2,041
|
Customer
3
|
12%
|
-
|
-%
|
-
|
Customer
4
|
12%
|
-
|
-%
|
10
|
NOTE
2:
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES,
continued
|
2006
|
2006
|
2005
|
2005
|
|
Purchase
|
Accounts
|
Purchase
|
Accounts
|
|
Percentage
|
Payable
|
Percentage
|
Payable
|
|
Vendor
1
|
24%
|
$
7,407
|
-
|
$
-
|
Vendor
2
|
15%
|
-
|
18%
|
-
|
Vendor
3
|
-
|
-
|
11%
|
-
|
2006
|
2005
|
|
Tooling
|
$271,510
|
$231,216
|
Equipment
|
36,602
|
21,392
|
Vehicles
|
10,000
|
33,433
|
Furniture
and fixtures
|
15,465
|
15,465
|
Computer
equipment
|
16,956
|
15,726
|
Leasehold
equipment
|
1,000
|
1,000
|
351,533
|
316,262
|
|
Less:
Accumulated depreciation
|
206,810
|
288,941
|
Book
Value
|
144,723
|
27,341
|
Tooling
not in service
|
12,948
|
72,485
|
$
157,671
|
$99,826
|
2006
|
2005
|
|
Enviro
Care technologies
|
$
-
|
$
104,000
|
Hand
pump
|
8,000
|
8,000
|
Patents
|
17,623
|
16,182
|
25,623
|
128,182
|
|
Less:
Accumulated amortization
|
7,959
|
6,615
|
$
17,664
|
$
121,567
|
2006
|
2005
|
|
Accrued
legal expenses
|
$124,296
|
$114,985
|
Accrued
accounting expenses
|
95,346
|
6,076
|
Accrued
rent
|
-
|
14,889
|
Accrued
claim settlement
|
12,750
|
12,750
|
Accrued
credit card purchases
|
11,926
|
19,134
|
Accrued
wages and benefits
|
2,647
|
1,932
|
Other
accrued expenses
|
15,141
|
19,134
|
$262,106
|
$188,900
|
Outstanding
warrants
|
Warrants
Outstanding
|
Exercise
Price
|
Balance,
February 29 ,2004
|
0
|
0
|
Granted
|
1,500,000
|
$
0.225
|
Exercised
|
0
|
0
|
Canceled
|
0
|
0
|
Balance,
February 28, 2005
|
1,500,000
|
$
0.225
|
Granted
|
2,500,000
|
$
0.225
|
Exercised
|
0
|
|
Canceled
|
0
|
|
Balance,
February 28, 2006
|
4,000,000
|
$
0.225
|
Outstanding
options
|
Stock
Options Outstanding
|
Exercise
Price
|
Balance,
February 29, 2004
|
248,861
|
Market
|
Granted
|
0
|
|
Exercised
|
0
|
|
Canceled
|
248,861
|
|
Balance,
February 28, 2005
|
0
|
|
Granted
|
0
|
|
Exercised
|
0
|
|
Canceled
|
0
|
|
Balance,
February 28, 2006
|
0
|
2006
|
2005
|
|
Current:
|
||
State
|
$1,600
|
$1,600
|
Federal
|
-
|
-
|
Deferred:
|
||
State
|
97,503
|
(16,797)
|
Federal
|
308,761
|
(70,591)
|
Valuation
allowance
|
(406,264)
|
87,388
|
Provision
for income taxes
|
$1,600
|
$1,600
|
2006
|
2005
|
|
Tax
(benefit) of statutory rate
|
(34%)
|
(34%)
|
Deferred
tax effect of goodwill
|
||
relating
to Aqua Vision Acquisition
|
(6%)
|
(12%)
|
Contributed
executive services
|
1%
|
3%
|
Interest
due to related parties
|
29%
|
49%
|
Consulting
fees due to related parties
|
21%
|
35%
|
Impairment
and inventory reserves
|
19%
|
(64%)
|
Effect
of state tax benefit
|
(3%)
|
(3%)
|
Other
|
13%
|
4%
|
Change
in valuation allowance
|
(40)%
|
22%
|
Effective
tax Rate
|
0%
|
0%
|
2006
|
2005
|
|
Net
operating loss carry forward
|
$
1,111,651
|
$
922,372
|
Interest
to related parties
|
144,610
|
45,365
|
Consulting
fees to related parties
|
105,486
|
32,216
|
Impairment
charge
|
37,856
|
-
|
Inventory
& bad debt reserves
|
29,043
|
14,275
|
Other
|
6,003
|
14,157
|
Less:
Valuation allowance
|
(1,434,649)
|
(1,028,385)
|
Net
deferred tax asset
|
$
0
|
$
0
|
2007
|
$
71,712
|
2008
|
74,304
|
$146,016
|
2006
|
2005
|
|
United
States
|
$
751,844
|
$
341,106
|
China
|
-
|
-
|
$
751,844
|
$
341,106
|
|
Segment
assets:
|
||
2006
|
2005
|
|
United
States
|
$
1,184,065
|
$
543,646
|
China
|
104,085
|
50,000
|
$1,288,150
|
$
593,646
|
February
28, 2006
|
February
28, 2005
|
|
Numerator:
|
||
Net
loss
|
$
(932,456)
|
$
(250,423)
|
Loss
available to common stockholders
|
$
(932,456)
|
$
(250,423)
|
Denominator:
|
||
Weighted
average shares outstanding (includes both restricted and free trading
shares)
|
17,969,317
|
11,936,767
|
Basic
and diluted loss per share
|
$
(0.05)
|
$
(0.02)
|
NAME
|
AGE
|
POSITION
HELD
|
Carl
Palmer
|
72
|
President,
Chief Executive Officer and Director
|
Richard
Parsons
|
71
|
Executive
Vice President, Secretary and Director
|
James
Place
|
67
|
Chief
Operating Officer, Treasurer and
Director
|
Annual
Compensation
|
Long
Term Compensation
|
|||||||
----------------------------------
|
---------------------------------------
|
|||||||
Awards
|
Payouts
|
|||||||
----------------------------------
|
---------------------------------------
|
|||||||
Restricted
|
All
|
|||||||
Name
and
|
Salary
|
Annual
|
Other
Stock
|
LTIP
|
Other
|
|||
Principal/
Positions
|
Fiscal
Year
Ending
|
Compensation
($)
(2)
|
Bonus
($)
|
Compensation
($)(1)(3)
|
Award(s)
|
Securities
|
||
Carl
Palmer
|
2006
|
$10,000
(2)
|
||||||
President
& CEO
|
2005
|
$10,000
(2)
|
||||||
Director
|
2004
|
$10,000
(2)
|
||||||
Richard
Parsons
|
2006
|
$44,203(3)(5)(7)
|
$77,595(4)(6)
|
|||||
Executive
VP*
|
2005
|
$9,400(3)
|
$11,908(4)
|
|||||
Director
(1)
|
2004
|
|||||||
James
Place
|
2006
|
$9,400(3)
|
$70,0944,584(4)(6)
|
|||||
COO*
|
2005
|
$9,400(3)
|
$4,584(4)
|
|||||
Director
(1)
|
2004
|
--
|
(1) |
Elected
to Board of Directors during November
2004
|
NAME
AND ADDRESS
|
AMOUNT
AND NATURE OF
|
PERCENT
OF
|
|||
OF
BENEFICIAL OWNER
|
BENEFICIAL
OWNERSHIP (1)(2)(4)
|
CLASS
|
|||
The
TAM Irrevocable Trust
|
10,216,030
(3)
|
41.3%
|
|||
4012
S. Rainbow #K111
|
|||||
Las
Vegas, NV 80103-2012
|
|||||
Shawn
Lampman
|
4,000,000
|
16.2%
|
|||
2345
Calico Creek
|
|||||
Las
Vegas, NV 89135
|
|||||
FTS
Worldwide Corp.
|
1,320,009
|
5.3%
|
|||
24
Route De Malagnou
|
|||||
1208
Geneva Switzerland
|
|||||
Carl
Palmer
|
-0-
|
-0-
|
|||
251
Jeanell Dr., Ste 3
|
|||||
Carson
City, NV 89703
|
|||||
Richard
Parsons
|
687,263
|
2.8%
|
|||
251
Jeanell Dr., Ste 3
|
|||||
Carson
City, NV 89703
|
|||||
James
Place
|
205,000
|
0.8%
|
|||
251
Jeanell Dr., Ste 3
|
|||||
Carson
City, NV 89703
|
|||||
All
officers and directors
|
892,263
|
3.6%
|
|||
As
a Group (three persons)
|
(4) |
There
are no other financial instruments, including stock warrants, etc.
that
are issuable within sixty days from the filing of this document.
|
Exhibit
No.
|
Description
|
2A*
|
Plan
of Exchange between Seychelle Environmental Technologies, Inc. and
Seychelle Water Technologies, Inc. dated January 30, 1998 as filed
with
Form 10-SB 12 G on February 8, 2000.
|
3A*
|
Articles
of Incorporation dated January 23, 1998 as filed with Form 10-SB
12 G on
February 8, 2000.
|
3B*
|
Articles
of Merger of Royal Net, Inc. into Seychelle Environmental Technologies,
Inc as filed with Form 10-SB 12 G on February 8, 2000.
|
3C*
|
Amendment
to Articles of Incorporation re: Series "A" Preferred Stock as of
January
31, 1998 as filed with Form 10-SB 12 G on February 8,
2000.
|
3D*
|
Amendment
to Articles of Incorporation re: Series "AA" Preferred Stock as of
June 5,
1998 as filed with Form 10-SB 12 G on February 8, 2000.
|
3E*
|
Amendment
to Articles of Incorporation re: Series "AAA" Preferred Stock as
of
February 18, 1999 as filed with Form 10-SB 12 G on February 8,
2000.
|
3F*
|
Bylaws
as filed with Form 10-SB 12 G on February 8, 2000.
|
10A*
|
Purchase
Agreement with Aqua Vision as filed with Form 10-SB 12 G on February
8,
2000.
|
10B*
|
Amended
Purchase Agreement with Aqua Vision as filed with Form 10-SB 12 G
on
February 8, 2000.
|
10C*
|
2000
Stock Compensation Plan I, dated July 1, 2000 as filed with Registration
Statement on Form S-8 on August 31, 2000.
|
10D*
|
2002
Stock Compensation Plan I, dated February 12, 2002 as filed with
Registration Statement on Form S-8 on February 27,
2002.
|
10E*
|
Purchase
Agreement with Aqua Gear as filed with Annual Report on Form 10-KSB
on
June 14, 2002.
|
10F*
|
Employment
Contract with Carl Palmer as filed with Annual Report on Form 10-KSB
on
June 14, 2002.
|
10G*
|
Management
Consulting Contract with Richard Parsons
|
10H*
|
Management
Consulting Contract with James Place
|
10I**
|
Joint
Venture Agreement with Huanghua Plastic Co. Ltd. dated September
1,
2005
|
10J**
|
ABMS
Health Care Pvt. Ltd. Distribution Rights Agreement dated April 1,
2006
|
10K**
|
Confident,
Inc. Exclusive Distribution Rights Agreement dated January 1,
2006
|
10L**
|
Continental
Technologies. Inc., Purchase Agreement dated April 26,
2006
|
23.1**
|
Auditor’s
Consent
|
23.2**
|
Auditor’s
Consent
|
31.1**
|
Certification
of the Chief Executive Officer pursuant to Rule 13a-14(a)
(Section
302 of the Sarbanes-Oxley Act of 2002)
|
31.1**
|
Certification
of the Chief Financial Officer pursuant to Rule 13a-14(a)
(Section
302 of the Sarbanes-Oxley Act of 2002)
|
32.1**
|
Certification
of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350
(Section
906 of the Sarbanes-Oxley Act of 2002)
|
32.2**
|
Certification
of the Chief Financial Officer pursuant to 18 U.S.C.ss.1350
(Section
906 of the Sarbanes-Oxley Act of 2002)
|
99**
|
C
ode
of Ethics for Chief Executive Officer and Senior Financial
Officers
|
1. |
Objective
|
2. |
Details
|
A. |
Modification:
No
modification, waiver or amendment of any term or condition of this
Agreement shall be effective unless and until it shall be reduced to
writing and signed by both of the parties hereto or their legal
representatives
.
|
B. |
Complete
Agreement:
This
Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and supersedes in all respects
all
prior proposals, negotiations, conversations, discussions and agreements
between the parties concerning the subject matter
hereof.
|
C. |
Assignment:
This
Agreement may not be assigned, in whole or in part, by either party
hereto
without prior written.
|
D. |
Governing
Law:
This
Agreement shall be construed according to the laws of the State of
California and shall not be subject to any choice of law provisions
of
such laws. This Agreement shall be binding upon HUANGHUA and
SEYCHELLE
,
and their respective successors and assigns.
|
E. |
Binding
on Successors:
The terms and provisions of the Agreement that by their sense and context
to survive the performance hereof by either party or by other parties
hereto shall so survive the completion of performance and termination
of
this Agreement, including without limitation the making of any and
all
payments due hereunder unless otherwise
noted.
|
A. |
SEYCHELLE
hereby grants to ABMS the right to distribute and sell each of the
PRODUCTS within India on an on-going basis, and for a minimum of ten
(10)
years.
|
B. |
ABMS
shall have the right of first refusal to handle sales of any third
party
orders provided that they can meet the terms and conditions of such
a
transaction within thirty (30) days of receipt of
order.
|
C. |
ABMS
shall have the right to represent itself as a distributor for each
of the
PRODUCTS within India in printed communications, public marketing and
promotional materials and in any discussions with private parties or
governmental agencies within India.
|
A. |
In
consideration of the grant of Distribution Rights made to ABMS in Section
1., above, ABMS hereby agrees that it will undertake, at its own
reasonable expense and using reasonable best efforts, to obtain all
necessary governmental licenses, permits and approvals required to
allow
the sale of the PRODUCTS within India prior in each case to its
commencement of distribution and sale activities of that PRODUCT in
India.
|
B. |
In
addition, ABMS agrees that it will use reasonable best efforts, at
its own
expense, to open distribution channels for each of the PRODUCTS within
the
private, governmental, education and military sectors within
India.
|
C. |
ABMS
shall
be exclusively responsible for all sales, promotion and marketing expenses
relating to its distribution and sale of PRODUCTS in India.
|
D. |
ABMS
covenants and agrees that it will not distribute or resell any PRODUCTS
purchased directly from SEYCHELLE, or manufactured by ABMS in India,
other
than in India, without first advising SEYCHELLE of its intention, and
receiving SEYCHELLE’S prior written approval to do
so.
|
B. |
SEYCHELLE
further covenants and agrees that, at ABMS’s request, upon reasonable
advance notice, SEYCHELLE shall make available a representative of
its
senior management who will travel to India, for a period of up to one
(1)
week, to promote the PRODUCTS and support ABMS’s sales and distribution
efforts at the start of our business relationship. ABMS will be solely
responsible for all expenses of such travel (including, but not limited
to, airfare (business class), hotel accommodations, local transportation
and meals), but will not be required otherwise to compensate SEYCHELLE
for
the time or participation of its representative in such
visits.
|
C. |
ABMS
covenants and agrees that it shall bear its own expenses in the
performance of its duties hereunder.
|
5. |
Understanding
the Business Relationship.
ABMS
and SEYCHELLE agree to enter into this Agreement for the purpose of
manufacturing and distributing the PRODUCTS in India and its sub-continent
and in other such regions where there may be non-conflicting business
opportunities.
|
1.
|
Failure
to perform any obligations under this
Agreement.
|
2.
|
Is
declared insolvent or bankrupt or makes a bankruptcy filing or an
assignment or similar arrangement for the benefit of its creditors
or
ceases active business operations.
|
3.
|
Attempting
to copy any or all SEYCHELLE technologies with the idea of competing
directly against SEYCHELLE, or avoiding any payments due
SEYCHELLE.
|
1. |
Willfully
refuses or is unable to supply filters or technology as set forth in
this
Agreement.
|
2. |
Failure
to perform any other obligations or covenants set forth in this
Agreement.
|
9.
Confidentiality.
|
- |
Portable
filter bottles (Flip Top and Bottoms Up)
|
- |
Portable
canteens
|
- |
In-line
hydration filters and packs
|
- |
Pure
water bags and pumps
|
- |
Shower
filters
|
- |
Countertop
filter systems
|
- |
Pitchers
|
- |
Straws
|
1. |
Portable
Bottles
|
2. |
Advanced
Filters
|
3. |
Terms
and Conditions
|
- |
FOB
our plant in San Juan Capistrano, CA.
|
- |
Payment
in US dollars.
|
- |
Prices
subject to change with sixty (60) days written
notice.
|
- |
Irrevocable
Letters of Credit written as follows: release of 50% of the funds to
SEYCHELLE upon the placement of the order; 50% released by the Bank
upon
presentation of Bill of Lading and all other documents when shipment
is
released by SEYCHELLE to the freight
forwarder.
|
1. |
Payment
|
2. |
Payment
Schedule
|
- |
$150,000
when molds are ordered.
|
- |
$100,000
when SEYCHELLE personnel deliver the molds and work with ABMS to set
up
assembly (approximately 45 to 60 days
later).
|
- |
Both
payments are to be wire transfers.
|
3. |
Products
|
4. |
Plan
detail
.
|
A. |
SEYCHELLE
will order (and pay its suppliers cash up front) molds
for:
|
- |
Flip
Top Bottle
:
which consists of a bottle and cap (cap, mouthpiece, gasket, stem for
filter and O-ring). This consists of 5 molds.
|
- |
Bottoms
Up Bottle
:
which consists of a bottle and cap (same as Flip Top) as well as filter
stem extender and bottom cap (tether, tether insert, cap, gasket, and
plastic Chlorine tablet housing). This consists of a total of 11 molds
- 6
for the top assembly, and 5 for the bottom cap.
|
- |
Military
Canteen
:
which consists of a bottle, cap (pull top and screw-in filter for
replacement) poppett top and male adapter. This will be a total of
3
molds.
|
- |
Check
Valve:
if
we supply these out of China, they are at $.12
each.
|
B. |
India
manufacturing capability.
|
C. |
Timetable
|
D. |
Getting
started.
|
· |
Additional
products may be added by separate Exhibit
|
· |
Prices
subject to change with 60 days written
notice.
|
1. |
Purchase
Price
|
A. |
Modification:
No
modification, waiver or amendment of any term or condition of this
Agreement shall be effective unless and until it shall be reduced to
writing and signed by both of the parties hereto or their legal
representatives
.
|
B. |
Complete
Agreement:
This
Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and supersedes in all respects
all
prior proposals, negotiations, conversations, discussions and agreements
between the parties concerning the subject matter
hereof.
|
C. |
Assignment:
This
Agreement may not be assigned, in whole or in part, by either party
hereto
without prior written.
|
D. |
Governing
Law:
This
Agreement shall be construed according to the laws of the State of
California and shall not be subject to any choice of law provisions
of
such laws. This Agreement shall be binding upon CONTINENTAL and
SEYCHELLE
,
and their respective successors and assigns.
|
E. |
Binding
on Successors:
The terms and provisions of the Agreement that by their sense and context
to survive the performance hereof by either party or by other parties
hereto shall so survive the completion of performance and termination
of
this Agreement, including without limitation the making of any and
all
payments due hereunder unless otherwise
noted.
|
F. |
Best
Efforts:
Seychelle warrants that it put forth its “best efforts” to increase the
sales of the business, and will not circumvent any independent efforts
of
CONTINENTAL.
|
G. |
Closing
Date:
The date of closing will be April 26,
2006.
|
H. |
Confidentiality:
CONTINENTAL
agrees
to the terms and conditions set forth in the Confidentiality Agreement
set
forth in EXHIBIT “B.
|
I. |
Term
of Agreement
:
This Agreement will be in force for the life of the company, and binding
on acquirers should the company be sold.
|
J. |
Non-Circumvent:
SEYCHELLE
agrees not to circumvent any of CONTINENTALS present or future customers
as identified in SEYCHELLE’S Contract Exclusivity
Form.
|
K. |
Other
Stipulation
:
In the event that CONTINENTAL is dissolved or otherwise becomes inactive,
the residual commissions and royalty payments revert to the three
principals as follows: Loretta M. Teeters - 20%, Donald L. Teeters
- 40%,
and Leland M. Young - 40%.
|
A. |
Use
of EPA Registration Number 55304-4-71426.
|
B. |
Name
of Chlorine supplier and contract, if
any.
|
C. |
Use
of Redi Chlor Brand name and Trademark.
|
1. |
Upon
the execution if this Agreement, Discloser agrees to disclose to Purchaser
certain of the Confidential Information.
|
2. |
Purchaser
agrees to hold said Confidential Information, and any Confidential
Information previously disclosed to Purchaser, in confidence, and not
to
use the Confidential Information for anyone accept Purchaser. Purchaser
agrees to limit dissemination of, and access to, the Confidential
Information to within Purchaser’s organization, and then only to those
personnel or associates who have a need for access to the information
for
the above-described purpose, and who have entered into a restrictive
agreement prohibiting such personnel from doing anything with respect
to
the Confidential Information that Purchaser would itself be prohibited
from doing under this Agreement.
|
3. |
It
is agreed that the obligations of confidentiality and non-use imposed
hereunder will not in any way apply with respect to any of the following
information:
|
a. |
Information
which Purchaser reasonably demonstrates is a part of the public domain
at
the time the information is received by Purchaser and is not otherwise
a
protect able trade secret; and;
|
b. |
Information
that Purchaser reasonably demonstrates was already known to Purchaser
at
the time of disclosure of the Confidential Information to Purchaser
by
Discloser, as evidenced by presently existing written
documentation.
|
4. |
With
regard to the interpretation of paragraph 3, Purchaser agrees that
the
fact that Purchaser had prior knowledge of a particular item of
Confidential Information, or that such particular item is generally
known
to the public, at the time of it’s receipt, shall not permit Purchaser’s
disclosure to others of such item of Confidential Information, or use
of
the same, in connection with one or other known items disclosed to
Purchaser by Discloser, unless the particular combination itself, as
well
as it’s advantages and operability, were previously known to and not
abandoned by the Purchaser, or the public generally, for the same specific
purposes and uses disclosed to Purchaser by
Discloser.
|
5. |
Nothing
in this Agreement may be deemed a commitment of any kind, by either
Purchaser or Discloser, to enter into any further agreement with the
other.
|