PROSPECTUS
SUMMARY
|
2
|
THE
OFFERING
|
3
|
RISK
FACTORS
|
4
|
FORWARD-LOOKING
STATEMENTS
|
10
|
SELLING
STOCKHOLDER
|
11
|
USE
OF PROCEEDS
|
14
|
PLAN
OF DISTRIBUTION
|
15
|
DESCRIPTION
OF CAPITAL STOCK
|
16
|
DESCRIPTION
|
17
|
MANAGEMENT
|
24
|
PRINCIPAL
STOCKHOLDERS
|
32
|
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS
|
33
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
37
|
LEGAL
MATTERS
|
42
|
EXPERTS
|
43
|
AVAILABLE
INFORMATION
|
43
|
FINANCIAL
STATEMENTS OF XSUNX, INC.
|
F-1
|
Common
Stock Offered
|
27,500,000
shares by the selling stockholder
|
|
Offering
Price
|
Market
price
|
|
Common
Stock Currently Outstanding
|
208,484,641
shares as of June 7, 2010
|
|
Use
of Proceeds
|
We
will not receive any proceeds of the shares offered by the selling
stockholders. See “Use of Proceeds” on page 14
herein.
|
|
Risk
Factors
|
The
securities offered hereby involve a high degree of risk. See “Risk
Factors” on page 4 herein.
|
|
Over-the-Counter
Bulletin Board Symbol
|
|
XSNX.OB
|
|
·
|
investors may have difficulty
buying and selling or obtaining market
quotations;
|
|
·
|
market visibility for our common
stock may be limited; and
|
|
·
|
a lack of visibility for our
common stock may have a depressive effect on the market for our common
stock.
|
|
•
|
technological innovations or new
products and services by us or our
competitors;
|
|
•
|
additions or departures of key
personnel;
|
|
•
|
sales of our common
stock;
|
|
•
|
our ability to integrate
operations, technology, products and
services;
|
|
•
|
our ability to execute our
business plan;
|
|
•
|
operating results below
expectations;
|
|
•
|
loss of any strategic
relationship;
|
|
•
|
industry
developments;
|
|
•
|
economic and other external
factors; and
|
|
•
|
period-to-period fluctuations in
our financial results.
|
Selling Stockholder
|
|
Shares
Beneficially
Owned Before
Offering
|
|
|
Percentage of
Outstanding
Shares
Beneficially
Owned
Before Offering
|
|
|
Shares to be
Sold in the
Offering
Assuming
The Company
Issues The
Maximum
Number of
Shares
Under the
Purchase
Agreement
|
|
|
Percentage of
Outstanding
Shares
Beneficially
Owned After
Offering
|
|
||||
Lincoln
Park Capital Fund, LLC (1)
|
6,250,000
|
(2)
|
0.03
|
%(2)
|
27,500,000
|
0.00
|
%(2)
|
(1)
|
Josh Scheinfeld and Jonathan
Cope, the principals of LPC, are deemed to be beneficial owners of all of
the shares of common stock owned by LPC. Messrs. Scheinfeld and Cope have
shared voting and disposition power over the shares being offered under
this Prospectus.
|
(2)
|
6,250,000 shares of our common
stock have been previously acquired by LPC under the Purchase Agreement,
consisting of 5,000,000 shares purchased by LPC and 1,250,000 shares we
issued to LPC as a commitment fee. We may at our discretion
elect to issue to LPC up to an additional 21,250,000 shares of our common
stock and such shares are not included in determining the percentage of
shares beneficially owned before the
offering.
|
Assumed
Average
Purchase Price
|
|
|
Number of Shares
to be Issued if Full
Purchase
|
|
|
Percentage of
Outstanding Shares After
Giving Effect to the
Issuance to LPC (1)
|
|
|
Proceeds from the
Sale of
Shares
to LPC Under the
Purchase Agreement
|
|
||||
$
|
0.084
|
(2)
|
25,617,063
|
11.24
|
%
|
$
|
2,100,000
|
|||||||
$
|
0.10
|
26,680,556
|
11.65
|
%
|
$
|
2,500,000
|
||||||||
$
|
0.12
|
(3)
|
27,499,999
|
11.96
|
%
|
$
|
2,982,258
|
|||||||
$
|
0.20
|
27,236,111
|
11.86
|
%
|
$
|
4,500,000
|
||||||||
$
|
0.30
|
22,375,000
|
9.96
|
%
|
$
|
5,000,000
|
||||||||
$
|
0.40
|
18,625,000
|
8.43
|
%
|
$
|
5,000,000
|
||||||||
$
|
0.50
|
16,375,000
|
7.49
|
%
|
$
|
5,000,000
|
|
•
|
ordinary brokers’
transactions;
|
|
•
|
transactions involving cross or
block trades;
|
|
•
|
through brokers, dealers, or
underwriters who may act solely as
agents;
|
|
•
|
“at the market” into an existing
market for the common stock;
|
|
•
|
in other ways not involving
market makers or established business markets, including direct sales to
purchasers or sales effected through
agents;
|
|
•
|
in privately negotiated
transactions; or
|
|
•
|
any combination of the
foregoing.
|
|
·
|
Factory Floor
Print:
Large format panels require floor space and while real estate
is less expensive than in the past the cost can still be
significant. In contrast single cell processing can be
conducted in a facility that is significantly
smaller. Additionally much of the cost of a large facility is
the recurring monthly utility bill which amplifies the
problem. The cost of a large facility becomes even larger if
clean rooms are required.
|
|
·
|
Product
Acceptability:
CIGS is deposited in a substrate configuration and must have a
top glass cover to achieve UL, IEC, and TUV certifications. The
top glass cover helps to provide durability necessary to provide a 20-30
year lifetime typical for the solar industry. The single cells
that are strung together can use a single tempered top glass cover
and a thin moisture barrier back sheet (similar to a silicon solar cell
panel). Not only is handling of the back sheet easier in
production the resulting solar module can be up to ~1/2 the weight of thin
films that utilize a glass cover for both sides of the solar
module.
|
|
·
|
Scrap: With large format processing, if
there is a problem during processing the entire panel is scrapped leading
to significant loss of production potential. As a result scraping is a
significant problem for large format monolithically integrated solar
panels. For a single cell with an area of approximately twenty five square
inches (for the 125mm pseudo square), a processing problem
results in scrapping only about 1.45 Watts of
product.
|
|
·
|
Breakage: Silicon solar cells
are very thin and fragile. This leads to losses resulting from breakage
during manufacture and assembly. Our proposed CIGS cell deposition is done
on stainless steel wafers. Stainless does not
break.
|
|
·
|
Large
Defects:
A large defect for large area deposition anywhere on the panel
will require the entire panel to be scrapped because that defect will
‘drag’ the rest of the panel to virtually zero output. For
single cell production the cell that encountered the defect can simply be
removed during cell testing and performance
sorting.
|
|
·
|
Small Defects
or Composition Variation: For a large area
substrate, statistically there are more small area defects and
compositional variations. These defects and compositional variations can
cause slightly different performance from cell to cell across the large
format monolithically integrated panel. The result is the
entire panel is ‘drug’ down to the lowest current cell. For
single cell processing, each cell is tested and binned (or sorted)
according to efficiency and current prior to assembly thereby resulting in
a more efficient use of a factories potential production
capacities.
|
|
·
|
Process
Control:
While all of the above are significant factors to consider
when comparing large area to small area production, large area process
control quite possibly could be the biggest differentiating feature
between large monolithically integrated panels. Control of the
manufacturing process over a large area, even with well controlled process
such as sputtering has shown significant
challenges.
|
|
§
|
The Ability to leverage previous
Commercialization Experience Developed for CIGS Thin Films and the HDD
Industry
|
|
•
|
Not starting from
“Scratch”
|
|
•
|
Lower cost re-tooling of existing
systems
|
|
•
|
Maximizing:
|
|
ü
|
Pre-existing Equipment Designs to
Speed Development
|
|
ü
|
Proven High Rate Hard Disk Drive
Mass Material and Process Control
Techniques
|
|
ü
|
Small Area Process Controls to
Improve Thin Film Quality
|
|
ü
|
Reducing Time to Market Through
the Use of Development Systems Sized to Match Commercial Production
Systems – No Need to Scale System Architecture to Achieve Commercial
Production
|
|
§
|
Replacing
Existing Silicon Wafers: A virtual drop in replacement
for expensive and unpredictable silicon wafer costs. We believe this is a
vast market opportunity to replace aging
technology.
|
|
§
|
Utility Scale
Solar Fields: Due to
the modular building block aspect of using wafers solar module size and
power output can be tailored to deliver the needs of any size solar farm
or application. The constraints of monolithic thin film technology no
longer limit panel size.
|
|
§
|
BIPV
Products: High
performance thin film flexible CIGS wafers can be designed into an array
of building products including roofing materials, building facades, and
glass.
|
|
§
|
Residential
Markets: Unlike
lower performance thin film solutions, high performance CIGS modules
deliver the energy density necessary to make residential applications
economical.
|
|
§
|
Consumer
Products: A growing
array of consumer products from hand held devices to vehicles and gadgets
of all types have begun to integrate solar. Thin film CIGS wafers can be
sized to meet the needs of these rapidly growing market
segments.
|
Name
|
Age
|
Position Held
|
Tenure
|
|||
Tom
Djokovich
|
53
|
CEO,
Director, Secretary, and acting Principal Accounting
Officer
|
CEO
and Director since October 2003, Secretary and PAO since September
2009
|
|||
Joseph
Grimes
|
52
|
President,
COO, Director
|
President
since March 2009, COO since April 2006, and as a director Since August
2008
|
|||
Robert
Wendt
|
47
|
CTO
|
Since
March 2009
|
|||
Thomas
Anderson
|
44
|
Director
|
Since
August 2001
|
|||
Oz
Fundingsland
|
66
|
Director
|
Since
November 2007
|
|||
Michael
Russak
|
62
|
Director
|
Since
November 2007
|
Experience, Qualification, Skill or Attribute
|
Djokovich
|
Grimes
|
Anderson
|
Fundingsland
|
Russak
|
||||||
x
|
x
|
x
|
x
|
x
|
|||||||
Professional
standing in chosen field
|
x
|
x
|
x
|
||||||||
Expertise
in solar or related industry
|
x
|
x
|
x
|
x
|
|||||||
Expertise
in technology or related industry
|
|||||||||||
Potential
Audit Committee Financial Expert
|
|||||||||||
Civic
and community involvement
|
|||||||||||
Other
public company experience
|
x
|
x
|
|||||||||
Diversity
by race, gender or culture
|
|||||||||||
Specific
skills/knowledge:
|
|||||||||||
-solar
industry
|
x
|
x
|
|||||||||
-technology
|
x
|
x
|
x
|
x
|
|||||||
-governance
|
x
|
x
|
x
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||
Tom
Djokovich, CEO(1)
|
2009
|
165,000
|
0
|
0
|
0
|
4,800
|
169,800
|
|||||||||||||
2008
|
220,000
|
0
|
0
|
0
|
4,800
|
224,800
|
||||||||||||||
Joe
Grimes, COO(2)
|
2009
|
157,500
|
0
|
0
|
107,750
|
4,800
|
270,050
|
|||||||||||||
2008
|
210,000
|
30,000
|
0
|
44,600
|
4,800
|
289,400
|
||||||||||||||
Jeff
Huitt, CFO(3)
|
2009
|
155,000
|
0
|
0
|
39,000
|
4,800
|
198,800
|
|||||||||||||
2008
|
155,000
|
0
|
0
|
44,600
|
4,800
|
204,400
|
||||||||||||||
Robert
Wendt, CTO(4)
|
2009
|
150,000
|
0
|
0
|
107,750
|
4,800
|
262,550
|
|||||||||||||
2008
|
200,000
|
0
|
0
|
44,600
|
3,600
|
203,600
|
|
(1)
|
In March 2009, Mr. Djokovich and
the Company agreed to the reduction of annual salary from $220,000 to
$165,000 as part of cost cutting measures approved by the Board of
Directors in association with the Company’s efforts to modify its plan of
operations. In addition to Mr. Djokovich’s base compensation the Company
also provides Mr. Djokovich with a $400 monthly health insurance
allowance.
|
|
(2)
|
In
March 2009, Mr. Grimes and the Company agreed to the reduction of annual
salary from $210,000 to $157,500 as part of cost cutting measures approved
by the Board of Directors in association with the Company’s efforts to
modify its plan of operations. In addition to Mr. Grimes’ base
compensation the Company also provides Mr. Grimes with a $400 monthly
health insurance allowance. Mr. Grimes’ employment agreement
with the Company included a facilities finders and relocation bonus of
$30,000 which was fully paid in the year ended September 30, 2008 upon
completion of the requirements.
|
|
(3)
|
In
March 2009, as part of our efforts to modify the Company’s plan of
operations, the Company and Mr. Huitt agreed to the termination of Mr.
Huitt’s employment status as an employee of the Company and annual salary
of $155,000 and a $400 monthly health insurance allowance. In March 2009,
the Company and Mr. Huitt’s consulting firm, Orion Business Services, LLC,
entered into a professional service consulting agreement under which Mr.
Huitt would provide financial consulting services to the Company as a
consulting chief financial officer. The Company paid $65,625 for these
professional consulting services in the fiscal year ended September 30,
2009. Effective September 9, 2009 Orion Business Services, LLC and the
Company agreed to the termination of Mr. Huitt’s services in the capacity
as chief financial officer of the
Company.
|
|
(4)
|
Prior to March 2009 Mr. Wendt
held the position of Vice President of Engineering and Product Development
and was not an executive officer to the Company. In March 2009 Mr. Wendt
was elected to the position of chief technical officer for XsunX. In March
2009 Mr. Wendt and the Company also agreed to the reduction of annual
salary from $200,000 to $150,000 as part of cost cutting measures approved
by the Board of Directors in association with the Company’s efforts to
modify its plan of operations. In February 2010 the Company and Mr. Wendt
agreed to an increase from $150,000 to $165,000 for Mr. Wendt’s annual
salary. In addition to Mr. Wendt’s base compensation the Company also
agreed to provide Mr. Wendt with a $400 monthly health insurance
allowance.
|
Name
|
Grant
Date
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
Exercise or
Base Price
of Option
Awards
($/Sh)
|
Aggregate Grant Date
Fair Value of
Stock and
Option Awards
($)
|
||||||||||
Tom
Djokovich, CEO
|
2009
|
0 | 0 | 0 | ||||||||||
2008
|
0 | 0 | 0 | |||||||||||
Jeff
Huitt, CFO
|
2009
|
0 | 0 | 0 | ||||||||||
2008
|
0 | 0.46 | 44,600 | |||||||||||
Joe
Grimes, COO
|
2009
|
2,500,000 | 0.16 | 68,750 | ||||||||||
2008
|
500,000 | 0.36 | 44,600 | |||||||||||
Robert
Wendt, CTO
|
2009
|
2,500,000 | 0.16 | 68,750 | ||||||||||
2008
|
500,000 | 0.36 | 44,600 |
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Equity
|
|
||||||||||||||||
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Incentive Plan
|
|
|||||||||||||||
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|||||||||||||||
|
|
|
|
Number of
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Market or
|
|
|||||||||||||
|
|
Number of
|
|
|
Securities
|
|
|
Number of
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Unearned
|
|
|
Payout Value of
|
|
|||||||||||
|
|
Securities
|
|
|
Underlying
|
|
|
Securities
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Unearned
|
|
|||||||||||
|
|
Underlying
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
Shares, Units or
|
|
|||||||||||
|
|
Unexercised
|
|
|
Unearned
|
|
|
Unexercisable
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock that
|
|
|
Rights That
|
|
|
Other Rights
|
|
|||||||||
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have
|
|
|||||||||
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Not Vested (#)
|
|
|||||||||
Tom
Djokovich, CEO
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Jeff
Huitt, CFO
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Joe
Grimes, COO
|
624,999
|
1,875,001
|
0
|
$
|
0.16
|
4/1/2014
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
0
|
500,000
|
0
|
$
|
0.36
|
10/23/2012
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
400,000
|
100,000
|
0
|
$
|
0.46
|
1/26/2012
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
352,000
|
148,000
|
0
|
$
|
0.51
|
7/19/2011
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
112,000
|
0
|
0
|
$
|
1.69
|
4/4/2011
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Robert
Wendt
|
624,999
|
1,875,001
|
0
|
$
|
0.16
|
4/1/2014
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
0
|
500,000
|
0
|
$
|
0.36
|
10/23/2012
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
400,000
|
100,000
|
0
|
$
|
0.46
|
1/26/2012
|
—
|
—
|
—
|
—
|
|
Date
Issued
|
|
Number
Issued
|
|
|
Exercise
Price
|
|
Expiration
Date
|
Consideration
|
|||
Joseph
Grimes (1)
|
31-March-09
|
2,500,000
|
$
|
0.16
|
1-April-14
|
As
part of an employment incentive agreement related to salary
reductions
|
||||||
Robert Wendt (1)
|
31-March-09
|
2,500,000
|
$
|
0.16
|
1-April-14
|
As
part of an employment incentive agreement related to salary
reductions
|
(1)
|
The vesting schedule for Mr.
Grimes and Mr. Wendt is as
follows:
|
|
(a)
|
208,333 shares vested on April 1,
2009 and thereafter 208,333 shall vest per each XsunX fiscal calendar
quarter of continuous employment from the date of
grant.
|
|
(b)
|
In the event of a sale or merger
of all or substantially all of the Company’s assets to an acquiring party
following which the Company would not be a surviving operating entity, the
Company will provide Optionee a fifteen (15) day prior notice of such
proposed event providing for immediate vesting of all remaining unvested
Options.
|
|
(c)
|
All remaining unvested Options
shall vest and become exercisable upon the assembly and third party
validation of a functioning XsunX manufactured solar module producing a
10% frame to frame average DC power conversion rating under standard test
conditions (STC), and the subsequent sale and delivery of a solar module
manufactured by XsunX meeting similar
specifications.
|
Name
|
Fees
Earned or
Paid in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||
Tom
Djokovich
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||
Joseph
Grimes
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||
Thomas
Anderson
|
9,000
|
0
|
63,011
|
0
|
72,011
|
|||||||||||||||
Oz
Fundingsland
|
9,000
|
0
|
59,063
|
0
|
68,063
|
|||||||||||||||
Dr.
Michael Russak
|
9,000
|
0
|
53,150
|
0
|
62,150
|
Shareholders/Beneficial Owners
|
Number of
Shares
|
Ownership
Percentage(1)
|
||||||
Tom
Djokovich*(2)
President
& Director
|
16,293,000 | 8.1 | % | |||||
Thomas
Anderson*
Director
|
1,500,000 |
< 1
|
% | |||||
Oz
Fundingsland*
Director
|
500,000 |
< 1
|
% | |||||
Mike
Russak*
Director
|
600,000 |
< 1
|
% | |||||
Joseph
Grimes*(3)
Chief
Operating Officer
|
2,113,998 |
< 1
|
% | |||||
Robert
Wendt*(3)
Chief
Technical Officer
|
1,509,998 |
< 1
|
% |
|
(1)
|
Applicable percentage ownership
is based on 208,484,641 shares of common stock issued and outstanding as
of June 7, 2010. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of common
stock that are currently exercisable or exercisable within 60 days of June
7, 2010 are deemed to be beneficially owned by the person holding such
securities for the purpose of computing the percentage of ownership of
such person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other
person.
|
|
(2)
|
Includes 15,368,000 shares owned
by the Djokovich Limited Partnership. Mr. Djokovich shares voting and
dispositive power with respect to these shares with Mrs.
Djokovich.
|
|
(3)
|
Includes 431,666 warrants/options
that may vest and be exercised within 60 days of the date of June 7,
2010.
|
YEAR 2010
|
High Bid
|
Low Bid
|
||||||
2
nd
Quarter 2010 ended March 31, 2010
|
$
|
0.19
|
$
|
0.12
|
||||
1
st
Quarter 2010 ended December 31, 2009
|
$
|
0.26
|
$
|
0.13
|
YEAR 2009
|
High Bid
|
Low Bid
|
||||||
4
th
Quarter 2009 ended September 30, 2009
|
$
|
0.17
|
$
|
0.10
|
||||
3
rd
Quarter 2009 ended June 30, 2009
|
$
|
0.17
|
$
|
0.11
|
||||
2
nd
Quarter 2009 ended March 31, 2009
|
$
|
0.19
|
$
|
0.09
|
||||
1
st
Quarter 2009 ended December 31, 2008
|
$
|
0.28
|
$
|
0.18
|
YEAR 2008
|
High Bid
|
Low Bid
|
||||||
4
th
Quarter 2008 ended September 30, 2008
|
$
|
0.42
|
$
|
0.26
|
||||
3
rd
Quarter 2008 ended June 30, 2008
|
$
|
0.51
|
$
|
0.37
|
||||
2
nd
Quarter 2008 ended March 31, 2008
|
$
|
0.74
|
$
|
0.33
|
||||
1
st
Quarter 2008 ended December 31, 2007
|
$
|
0.55
|
$
|
0.29
|
Name
|
Date of Grant
|
Amount
|
Exercise Price
|
Term
|
|||||||
Vanessa
Watkins (1)
|
October 10, 2008
|
115,000
|
$
|
0.36
|
5
yr.
|
||||||
Tyler
Anderson
|
October
10, 2009
|
100,000
|
$
|
0.36
|
5
yr.
|
||||||
Yang
Zhuang
|
October
29, 2009
|
20,000
|
$
|
0.36
|
5
yr.
|
||||||
Vanessa
Watkins (2)
|
March
31, 2009
|
115,000
|
$
|
0.16
|
5
yr.
|
||||||
Joseph
Grimes
|
March
31, 2009
|
2,500,000
|
$
|
0.16
|
5
yr.
|
||||||
Robert
G. Wendt
|
March
31, 2009
|
2,500,000
|
$
|
0.16
|
5
yr.
|
|
(a) (1)
The option became exercisable in the amount of 38,334 shares on April 6,
2009. Thereafter, the option shall vest and become exercisable at the rate
of 38,333 Shares per year of continuous
employment.
|
|
(a)
The
option became exercisable in the amount of 33,334 shares on May 12, 2009.
Thereafter, the option shall vest and become exercisable at the rate of
33,333 Shares per year of continuous employment. As of September 30, 2009
Mr. Anderson no longer worked for the Company and the total grant of
100,000 options was terminated and the options were returned to the pool
of available options under the XsunX 2007 Stock option
Plan.
|
|
(a)
The
option became exercisable in the amount of 6,667 shares on August 18,
2009. Thereafter, the option shall vest and become exercisable at the rate
of 6,666 Shares per year of continuous employment. As of September 30,
2009, Mr. Zhuang no longer worked for the Company and the total grant of
20,000 options was terminated and the options were returned to the pool of
available options under the XsunX 2007 Stock Option
Plan.
|
(a)
|
208,333 shares vested on April 1,
2009 and thereafter 208,333 shall vest per each XsunX fiscal calendar
quarter of continuous employment from the date of
grant.
|
(b)
|
In the event of a sale or merger
of all or substantially all of the Company’s assets to an acquiring party
following which the Company would not be a surviving operating entity, the
Company will provide optionee a fifteen (15) day prior notice of such
proposed event providing for immediate vesting of all remaining unvested
options.
|
(c)
|
All remaining unvested Options
shall vest and become exercisable upon the assembly and third party
validation of a functioning XsunX manufactured solar module producing a
10% frame to frame average DC power conversion rating under standard test
conditions (STC), and the subsequent sale and delivery of a solar module
manufactured by XsunX meeting similar
specifications.
|
2009
|
2008
|
||
Risk
free interest rate
|
1.67%
to 2.77%
|
3.23%
to 4.87%
|
|
Stock
volatility factor
|
90.56%
to 104.73%
|
53%
to 122%
|
|
Weighted
average expected option life
|
5
years
|
5
years
|
|
Expected
dividend yield
|
None
|
None
|
2009
|
2008
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
Options
|
price
|
Options
|
price
|
|||||||||||||
Outstanding,
beginning of year
|
5,750,000
|
$
|
0.39
|
1,950,000
|
$
|
0.46
|
||||||||||
Granted
|
5,350,000
|
$
|
0.17
|
3,800,000
|
$
|
0.36
|
||||||||||
Exercised
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
Expired
|
(920,000
|
)
|
$
|
0.41
|
-
|
$
|
-
|
|||||||||
Outstanding,
end of year
|
10,180,000
|
$
|
0.27
|
5,750,000
|
$
|
0.39
|
||||||||||
Exercisable
at the end of year
|
4,927,500
|
$
|
0.33
|
2,927,500
|
$
|
0.40
|
||||||||||
Weighted
average fair value of options granted during the year
|
$
|
0.11
|
$
|
0.28
|
|
Stock
|
Stock
|
Weighted
Average
Remaining
|
||||||||
Exercisable
|
Options
|
Options
|
Contractual
|
||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
||||||||
$ | 0.46 | 1,150,000 | 950,000 |
2.32
years
|
|||||||
$ | 0.53 | 100,000 | 100,000 |
2.40
years
|
|||||||
$ | 0.45 | 100,000 | 100,000 |
2.56
years
|
|||||||
$ | 0.41 | 100,000 | 100,000 |
2.91
years
|
|||||||
$ | 0.36 | 2,500,000 | 1,437,500 |
3.07
years
|
|||||||
$ | 0.36 | 500,000 | 437,500 |
3.12
years
|
|||||||
$ | 0.36 | 500,000 | 437,500 |
3.16
years
|
|||||||
$ | 0.36 | 115,000 | 57,501 |
4.03
years
|
|||||||
$ | 0.16 | 5,115,000 | 1,307,499 |
4.50
years
|
|||||||
10,180,000 | 4,927,500 |
|
|
2009
|
|
|
2008
|
|
||||||||||
|
|
|
|
Weighted
|
|
|
|
|
Weighted
|
|
||||||
|
|
Number
|
|
|
average
|
|
|
Number
|
|
|
average
|
|
||||
|
|
of
|
|
|
exercise
|
|
|
of
|
|
|
exercise
|
|
||||
|
|
Options
|
|
|
price
|
|
|
Options
|
|
|
price
|
|
||||
Outstanding,
beginning of year
|
|
|
4,195,332
|
|
|
$
|
0.61
|
|
|
|
15,362,000
|
|
|
$
|
0.22
|
|
Granted
|
-
|
$
|
-
|
3,333,332
|
$
|
0.63
|
||||||||||
Exercised
|
-
|
$
|
-
|
$
|
-
|
|||||||||||
Expired
|
-
|
$
|
-
|
(14,500,000
|
)
|
$
|
0.20
|
|||||||||
Outstanding,
end of year
|
4,195,332
|
$
|
0.61
|
4,195,332
|
$
|
0.61
|
||||||||||
Exercisable
at the end of year
|
4,047,332
|
$
|
0.62
|
4,047,332
|
$
|
0.61
|
||||||||||
Weighted
average fair value of warrants granted during the year
|
$
|
-
|
$
|
0.63
|
|
|
|
Weighted
|
||||||||
|
|
|
Average
|
||||||||
|
|
|
Remaining
|
||||||||
Exercisable
|
Warrants
|
Warrants
|
Contractual
|
||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
||||||||
$ | 1.69 | 112,000 | 112,000 |
1.51
years
|
|||||||
$ | 0.51 | 500,000 | 352,000 |
1.80
years
|
|||||||
$ | 0.20 | 250,000 | 250,000 |
2.25
years
|
|||||||
$ | 0.50 | 1,666,666 | 1,666,666 |
3.09
years
|
|||||||
$ | 0.75 | 1,666,666 | 1,666,666 |
3.09
years
|
|||||||
4,195,332 | 4,047,332 |
FINANCIAL
STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008
|
|
F-2 – F-3
|
|
F-4
|
|
Statements
of Operations for the years ended September 30, 2009 and 2008 and the
period February 25, 1997 (inception) to September 30, 2009
|
F-5
|
Statements
of Stockholders Equity for the years ended September 30, 2009 and 2008 and
the period February 25, 1997 (inception) to September 30,
2009
|
F-6
|
Statements
of Cash Flows for the years ended September 30, 2009 and 2008 and the
period February 25, 1997 (inception) to September 30, 2009
|
F-8
|
Notes
to Financial Statements
|
F-9
|
Balance
Sheets March 31, 2010 (unaudited) and September 30, 2009
(audited)
|
F-18
|
Statements
of Operations for the Three and Six Months ended March 31, 2010 and 2009
(unaudited) and the period February 25, 1997 (inception) to March 31, 2010
(unaudited)
|
F-19
|
Statements
of Stockholders Equity for the Six Months ended March 31, 2010
(unaudited)
|
F-20
|
Statements
of Cash Flows for the Six Months ended March 31, 2010 and 2009 (unaudited)
and the period February 27, 1997 (inception) to March 31, 2010
(unaudited)
|
F-21
|
Notes
to Financial Statements (Unaudited)
|
F-22
|
|
September 30, 2009
|
September 30, 2008
|
||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
& cash equivalents
|
$
|
530,717
|
$
|
2,389,218
|
||||
Inventory
asset
|
300,000
|
1,417,000
|
||||||
Prepaid
expenses
|
118,332
|
11,986
|
||||||
Total
Current Assets
|
949,049
|
3,818,204
|
||||||
PROPERTY
& EQUIPMENT
|
||||||||
Office
& miscellaneous equipment
|
51,708
|
50,010
|
||||||
Machinery
& equipment
|
450,386
|
435,910
|
||||||
Leasehold
improvements
|
89,825
|
89,825
|
||||||
591,919
|
575,745
|
|||||||
Less
accumulated depreciation
|
(378,353
|
)
|
(299,559
|
)
|
||||
Net
Property & Equipment
|
213,566
|
276,186
|
||||||
OTHER
ASSETS
|
||||||||
Manufacturing
equipment in progress
|
207,219
|
5,824,630
|
||||||
Security
deposit
|
5,815
|
5,815
|
||||||
Total
Other Assets
|
213,034
|
5,830,445
|
||||||
TOTAL
ASSETS
|
$
|
1,375,649
|
$
|
9,924,835
|
||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
389,293
|
$
|
425,548
|
||||
Accrued
expenses
|
24,451
|
30,957
|
||||||
Credit
card payable
|
17,918
|
40,405
|
||||||
Total
Current Liabilities
|
431,662
|
496,910
|
||||||
LONG
TERM LIABILITIES
|
||||||||
Accrued
interest on note payable
|
4,256
|
-
|
||||||
Note
payable, vendor
|
456,921
|
-
|
||||||
Total
Long Term Liabilities
|
461,177
|
-
|
||||||
TOTAL
LIABILITIES
|
892,839
|
496,910
|
||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Preferred
stock, $0.01 par value;
|
||||||||
50,000,000
authorized preferred shares
|
-
|
-
|
||||||
Common
stock, no par value;
|
||||||||
500,000,000
authorized common shares
|
||||||||
196,484,610
and 186,292,437 shares issued and outstanding,
respectively
|
23,767,869
|
22,613,369
|
||||||
Paid
in capital, common stock warrants
|
3,175,930
|
2,641,412
|
||||||
Additional
paid in capital
|
5,248,213
|
5,248,213
|
||||||
Deficit
accumulated during the development stage
|
(31,709,202
|
)
|
(21,075,069
|
)
|
||||
TOTAL
SHAREHOLDERS' EQUITY
|
482,810
|
9,427,925
|
||||||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,375,649
|
$
|
9,924,835
|
|
From Inception
|
|||||||||||
|
February 25, 1997
|
|||||||||||
|
Years Ended
|
to
|
||||||||||
|
September 30, 2009
|
September 30, 2008
|
September 30, 2009
|
|||||||||
REVENUE
|
$
|
-
|
$
|
-
|
$
|
14,880
|
||||||
OPERATING
EXPENSES
|
||||||||||||
Selling,
general and administrative, and research and development
expense
|
3,316,853
|
3,331,683
|
14,597,953
|
|||||||||
Stock
option and warrant expense
|
534,518
|
673,287
|
3,450,120
|
|||||||||
Depreciation
and amortization expense
|
127,293
|
257,222
|
562,406
|
|||||||||
TOTAL
OPERATING EXPENSES
|
3,978,664
|
4,262,192
|
18,610,479
|
|||||||||
LOSS
FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSE)
|
(3,978,664
|
)
|
(4,262,192
|
)
|
(18,595,599
|
)
|
||||||
OTHER
INCOME/(EXPENSES)
|
||||||||||||
Interest
income
|
5,443
|
176,250
|
445,493
|
|||||||||
Impairment
of assets
|
(5,826,990
|
)
|
(215,625
|
)
|
(7,031,449
|
)
|
||||||
Legal
settlement
|
-
|
-
|
1,100,000
|
|||||||||
Loan
fees
|
-
|
-
|
(7,001,990
|
)
|
||||||||
Write
down of inventory asset
|
(1,117,000
|
)
|
-
|
(1,117,000
|
)
|
|||||||
Forgiveness
of debt
|
287,381
|
245,000
|
592,154
|
|||||||||
Other,
non-operating
|
-
|
(1,331
|
)
|
(5,215
|
)
|
|||||||
Interest
expense
|
(4,303
|
)
|
(1,054
|
)
|
(95,596
|
)
|
||||||
TOTAL
OTHER INCOME/(EXPENSES)
|
(6,655,469
|
)
|
203,240
|
(13,113,603
|
)
|
|||||||
NET
LOSS
|
$
|
(10,634,133
|
)
|
$
|
(4,058,952
|
)
|
$
|
(31,709,202
|
)
|
|||
BASIC
AND DILUTED LOSS PER SHARE
|
$
|
(0.06
|
)
|
$
|
(0.02
|
)
|
||||||
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING BASIC AND DILUTED
|
189,455,449
|
166,998,772
|
|
Deficit
|
|||||||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||||||
|
Additional
|
Stock Options/
|
during the
|
|||||||||||||||||||||||||
|
Common Stock
|
Paid-in
|
Warrants
|
Treasury Stock
|
Development
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Paid-in-Capital
|
Shares
|
Stage
|
Total
|
|||||||||||||||||||||
Balance
at February 25, 1997
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||
Issuance
of stock for cash
|
15,880
|
217,700
|
-
|
-
|
-
|
-
|
217,700
|
|||||||||||||||||||||
Issuance
of stock to Founders
|
14,110
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Issuance
of stock for consolidation
|
445,000
|
312,106
|
-
|
-
|
-
|
-
|
312,106
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 1997
|
-
|
-
|
-
|
-
|
(193,973
|
)
|
(193,973
|
)
|
||||||||||||||||||||
Balance
at September 30, 1997
|
474,990
|
529,806
|
-
|
-
|
-
|
(193,973
|
)
|
335,833
|
||||||||||||||||||||
Issuance
of stock for services
|
1,500
|
30,000
|
-
|
-
|
-
|
-
|
30,000
|
|||||||||||||||||||||
Issuance
of stock for cash
|
50,200
|
204,000
|
-
|
-
|
-
|
-
|
204,000
|
|||||||||||||||||||||
Consolidation
stock cancelled
|
(60,000
|
)
|
(50,000
|
)
|
-
|
-
|
-
|
-
|
(50,000
|
)
|
||||||||||||||||||
Net
Loss for the year ended September 30, 1998
|
-
|
-
|
-
|
-
|
-
|
(799,451
|
)
|
(799,451
|
)
|
|||||||||||||||||||
Balance
at September 30, 1998
|
466,690
|
713,806
|
-
|
-
|
-
|
(993,424
|
)
|
(279,618
|
)
|
|||||||||||||||||||
Issuance
of stock for cash
|
151,458
|
717,113
|
-
|
-
|
-
|
-
|
717,113
|
|||||||||||||||||||||
Issuance
of stock for services
|
135,000
|
463,500
|
-
|
-
|
-
|
-
|
463,500
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 1999
|
-
|
-
|
-
|
-
|
-
|
(1,482,017
|
)
|
(1,482,017
|
)
|
|||||||||||||||||||
Balance
at September 30, 1999
|
753,148
|
1,894,419
|
-
|
-
|
-
|
(2,475,441
|
)
|
(581,022
|
)
|
|||||||||||||||||||
Issuance
of stock for cash
|
15,000
|
27,000
|
-
|
-
|
-
|
-
|
27,000
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2000
|
-
|
-
|
-
|
-
|
-
|
(118,369
|
)
|
(118,369
|
)
|
|||||||||||||||||||
Balance
at September 30, 2000
|
768,148
|
1,921,419
|
-
|
-
|
-
|
(2,593,810
|
)
|
(672,391
|
)
|
|||||||||||||||||||
Extinguishment
of debt
|
-
|
337,887
|
-
|
-
|
-
|
-
|
337,887
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2001
|
-
|
-
|
-
|
-
|
-
|
(32,402
|
)
|
(32,402
|
)
|
|||||||||||||||||||
Balance
at September 30, 2001
|
768,148
|
2,259,306
|
-
|
-
|
-
|
(2,626,212
|
)
|
(366,906
|
)
|
|||||||||||||||||||
Net
Loss for the year ended September 30, 2002
|
-
|
-
|
-
|
-
|
-
|
(47,297
|
)
|
(47,297
|
)
|
|||||||||||||||||||
Balance
at September 30, 2002
|
768,148
|
2,259,306
|
-
|
-
|
-
|
(2,673,509
|
)
|
(414,203
|
)
|
|||||||||||||||||||
Issuance
of stock for assets
|
70,000,000
|
3
|
-
|
-
|
-
|
-
|
3
|
|||||||||||||||||||||
Issuance
of stock for cash
|
9,000,000
|
225,450
|
-
|
-
|
-
|
-
|
225,450
|
|||||||||||||||||||||
Issuance
of stock for debt
|
115,000
|
121,828
|
-
|
-
|
-
|
-
|
121,828
|
|||||||||||||||||||||
Issuance
of stock for expenses
|
115,000
|
89,939
|
-
|
-
|
-
|
-
|
89,939
|
|||||||||||||||||||||
Issuance
of stock for services
|
31,300,000
|
125,200
|
-
|
-
|
-
|
-
|
125,200
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2003
|
-
|
-
|
-
|
-
|
-
|
(145,868
|
)
|
(145,868
|
)
|
|||||||||||||||||||
Balance
at September 30, 2003
|
111,298,148
|
2,821,726
|
-
|
-
|
-
|
(2,819,377
|
)
|
2,349
|
||||||||||||||||||||
Issuance
of stock for cash
|
2,737,954
|
282,670
|
-
|
-
|
-
|
-
|
282,670
|
|||||||||||||||||||||
Warrant
expense
|
-
|
-
|
-
|
825,000
|
-
|
375,000
|
1,200,000
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2004
|
-
|
-
|
-
|
-
|
-
|
(1,509,068
|
)
|
(1,509,068
|
)
|
|||||||||||||||||||
Balance
at September 30, 2004
|
114,036,102
|
3,104,396
|
-
|
825,000
|
-
|
(3,953,445
|
)
|
(24,049
|
)
|
|||||||||||||||||||
Issuance
of stock for cash
|
6,747,037
|
531,395
|
-
|
-
|
-
|
-
|
531,395
|
|||||||||||||||||||||
Issuance
of stock for services
|
3,093,500
|
360,945
|
-
|
-
|
-
|
-
|
360,945
|
|||||||||||||||||||||
Warrant
expense
|
-
|
-
|
-
|
180,000
|
-
|
-
|
180,000
|
|||||||||||||||||||||
Beneficial
conversion
|
-
|
-
|
400,000
|
-
|
-
|
-
|
400,000
|
|||||||||||||||||||||
Shares
held as collateral for debentures
|
-
|
-
|
-
|
-
|
26,798,418
|
-
|
-
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2005
|
-
|
-
|
-
|
-
|
-
|
(1,980,838
|
)
|
(1,980,838
|
)
|
|||||||||||||||||||
Balance
at September 30, 2005
|
123,876,639
|
3,996,736
|
400,000
|
1,005,000
|
26,798,418
|
(5,934,283
|
)
|
(532,547
|
)
|
|||||||||||||||||||
Issuance
of stock for services
|
72,366
|
31,500
|
-
|
-
|
-
|
-
|
31,500
|
|||||||||||||||||||||
Warrant
expense
|
-
|
-
|
-
|
996,250
|
-
|
-
|
996,250
|
|||||||||||||||||||||
Beneficial
conversion
|
-
|
-
|
5,685,573
|
-
|
-
|
-
|
5,685,573
|
|||||||||||||||||||||
Debenture
conversion
|
21,657,895
|
5,850,000
|
-
|
-
|
-
|
-
|
5,850,000
|
|||||||||||||||||||||
Issuance
of stock for interest expense
|
712,956
|
241,383
|
-
|
-
|
-
|
-
|
241,383
|
|||||||||||||||||||||
Issuance
of stock for warrant conversion
|
10,850,000
|
3,171,250
|
-
|
-
|
-
|
-
|
3,171,250
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2006
|
-
|
-
|
-
|
-
|
-
|
(9,112,988
|
)
|
(9,112,988
|
)
|
|||||||||||||||||||
Balance
at September 30, 2006 (restated)
|
157,169,856
|
13,290,869
|
6,085,573
|
2,001,250
|
26,798,418
|
(15,047,271
|
)
|
6,330,421
|
|
Deficit
|
|||||||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||||||
|
Additional
|
Stock Options/
|
during the
|
|||||||||||||||||||||||||
|
Common Stock
|
Paid-in
|
Warrants
|
Treasury Stock
|
Development
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Paid-in-Capital
|
Shares
|
Stage
|
Total
|
|||||||||||||||||||||
Cancellation
of stock for services returned
|
(150,000
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Release
of security collateral
|
-
|
-
|
-
|
-
|
(26,798,418
|
)
|
-
|
-
|
||||||||||||||||||||
Issuance
of stock for warrants
|
900,000
|
135,000
|
-
|
-
|
-
|
-
|
135,000
|
|||||||||||||||||||||
Stock
option and warrant expense
|
-
|
-
|
-
|
772,315
|
-
|
-
|
772,315
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2007
|
-
|
-
|
-
|
-
|
-
|
(1,968,846
|
)
|
(1,968,846
|
)
|
|||||||||||||||||||
Balance
at September 30, 2007 (restated)
|
157,919,856
|
13,425,869
|
6,085,573
|
2,773,565
|
-
|
(17,016,117
|
)
|
5,268,890
|
||||||||||||||||||||
Fusion
Equity common stock purchase
|
15,347,581
|
5,200,000
|
(55,300
|
)
|
-
|
-
|
-
|
5,144,700
|
||||||||||||||||||||
Commitment
fees
|
3,500,000
|
1,190,000
|
(1,190,000
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Cumorah
common stock purchase
|
8,650,000
|
2,500,000
|
-
|
-
|
-
|
-
|
2,500,000
|
|||||||||||||||||||||
Wharton
settlement
|
875,000
|
297,500
|
(397,500
|
)
|
-
|
-
|
-
|
(100,000
|
)
|
|||||||||||||||||||
MVS
warrant cancellation
|
-
|
-
|
805,440
|
(805,440
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Stock
options and warrant expense
|
-
|
-
|
-
|
673,287
|
-
|
-
|
673,287
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2008
|
-
|
-
|
-
|
-
|
-
|
(4,058,952
|
)
|
(4,058,952
|
)
|
|||||||||||||||||||
Balance
at September 30, 2008
|
186,292,437
|
22,613,369
|
5,248,213
|
2,641,412
|
-
|
(21,075,069
|
)
|
9,427,925
|
||||||||||||||||||||
Issuance
of stock for cash
|
2,000,000
|
400,000
|
-
|
-
|
-
|
-
|
400,000
|
|||||||||||||||||||||
Issuance
of stock for cash
|
1,000,000
|
200,000
|
-
|
-
|
-
|
-
|
200,000
|
|||||||||||||||||||||
Issuance
of stock for services
|
50,000
|
11,000
|
-
|
-
|
-
|
-
|
11,000
|
|||||||||||||||||||||
Issuance
of stock for cash
|
1,129,483
|
70,000
|
-
|
-
|
-
|
-
|
70,000
|
|||||||||||||||||||||
Issuance
of stock for services
|
900,000
|
108,000
|
-
|
-
|
-
|
-
|
108,000
|
|||||||||||||||||||||
Issuance
of stock for services
|
76,976
|
10,500
|
-
|
-
|
-
|
-
|
10,500
|
|||||||||||||||||||||
Issuance
of stock for services
|
35,714
|
5,000
|
-
|
-
|
-
|
-
|
5,000
|
|||||||||||||||||||||
Issuance
of stock for cash
|
5,000,000
|
350,000
|
-
|
-
|
-
|
-
|
350,000
|
|||||||||||||||||||||
Stock
compensation expense
|
-
|
-
|
-
|
534,518
|
-
|
-
|
534,518
|
|||||||||||||||||||||
Net
Loss for the year ended September 30, 2009
|
-
|
-
|
-
|
-
|
-
|
(10,634,133
|
)
|
(10,634,133
|
)
|
|||||||||||||||||||
Balance
at September 30, 2009
|
196,484,610
|
$
|
23,767,869
|
$
|
5,248,213
|
$
|
3,175,930
|
$
|
-
|
$
|
(31,709,202
|
)
|
$
|
482,810
|
|
|
|
|
|
|
|
|
From Inception
|
|
|||
|
|
|
|
|
|
|
|
February 25,1997
|
|
|||
|
|
Years Ended
|
|
|
to
|
|
||||||
|
|
September 30, 2009
|
|
|
September 30, 2008
|
|
|
September 30, 2009
|
|
|||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$
|
(10,634,133
|
)
|
$
|
(4,058,952
|
)
|
$
|
(31,709,202
|
)
|
|||
Adjustment
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
Depreciation
& amortization
|
127,293
|
257,222
|
562,406
|
|||||||||
Common
stock issued for services and interest
|
134,500
|
-
|
1,964,134
|
|||||||||
Stock
option and warrant expense
|
534,518
|
673,287
|
3,450,120
|
|||||||||
Beneficial
conversion and commitment fees
|
-
|
-
|
5,685,573
|
|||||||||
Asset
impairment
|
5,826,990
|
215,625
|
7,031,449
|
|||||||||
Write
down of inventory asset
|
1,117,000
|
-
|
1,117,000
|
|||||||||
Gain
on settlement of debt
|
(287,381
|
)
|
-
|
(287,381
|
)
|
|||||||
Settlement
of lease
|
59,784
|
-
|
59,784
|
|||||||||
Change
in Assets and Liabilities
|
||||||||||||
(Increase)
Decrease in:
|
||||||||||||
Prepaid
expenses
|
(106,346
|
)
|
329,771
|
(118,332
|
)
|
|||||||
Inventory
asset
|
-
|
(1,700,000
|
)
|
(1,417,000
|
)
|
|||||||
Other
assets
|
-
|
1,638,326
|
(5,815
|
)
|
||||||||
Increase
(Decrease) in:
|
||||||||||||
Accounts
payable
|
345,211
|
16,729
|
2,439,940
|
|||||||||
Accrued
expenses
|
(2,250
|
)
|
(36,951
|
)
|
28,707
|
|||||||
Credit
cards payable
|
22,487
|
(30,533
|
)
|
17,918
|
||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(2,862,327
|
)
|
(2,695,476
|
)
|
(11,198,617
|
)
|
||||||
CASH
FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of manufacturing equipment and facilities in process
|
-
|
(5,617,410
|
)
|
(5,824,629
|
)
|
|||||||
Payments
on note receivable
|
-
|
-
|
(1,500,000
|
)
|
||||||||
Receipts
on note receivable
|
-
|
1,500,000
|
1,500,000
|
|||||||||
Purchase
of marketable prototype
|
-
|
-
|
(1,780,396
|
)
|
||||||||
Purchase
of fixed assets
|
(16,174
|
)
|
(111,213
|
)
|
(591,919
|
)
|
||||||
NET
CASH USED IN INVESTING ACTIVITIES
|
(16,174
|
)
|
(4,228,623
|
)
|
(8,196,944
|
)
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from warrant conversion
|
-
|
-
|
3,306,250
|
|||||||||
Proceeds
from debentures
|
-
|
-
|
5,850,000
|
|||||||||
Proceeds
for issuance of common stock, net
|
1,020,000
|
7,544,700
|
10,770,028
|
|||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
1,020,000
|
7,544,700
|
19,926,278
|
|||||||||
NET
INCREASE (DECREASE) IN CASH
|
(1,858,501
|
)
|
620,601
|
530,717
|
||||||||
CASH
& CASH EQUIVALENTS, BEGINNING OF YEAR
|
2,389,218
|
1,768,616
|
-
|
|||||||||
CASH
& CASH EQUIVALENTS, END OF YEAR
|
$
|
530,717
|
$
|
2,389,218
|
$
|
530,717
|
||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
Interest
paid
|
$
|
46
|
$
|
47,217
|
$
|
119,663
|
||||||
Taxes
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
|
1.
|
ORGANIZATION AND LINE OF
BUSINESS
|
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
|
Leasehold
improvements
|
Length
of the lease
|
|
Computer
software and equipment
|
3
Years
|
|
Furniture
& fixtures
|
5
Years
|
|
Machinery
& equipment
|
5
Years
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
3.
|
CAPITAL
STOCK
|
|
4.
|
STOCK OPTIONS AND
WARRANTS
|
2009
|
2008
|
|||
Risk
free interest rate
|
1.67%
to 2.77%
|
3.23% to 4.87%
|
||
Stock
volatility factor
|
90.56% to 104.73%
|
53%
to 122%
|
||
Weighted
average expected option life
|
5
years
|
5
years
|
||
Expected
dividend yield
|
None
|
None
|
|
4.
|
STOCK
OPTIONS AND WARRANTS (Continued)
|
2009
|
2008
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
Options
|
price
|
Options
|
price
|
|||||||||||||
Outstanding,
beginning of year
|
5,750,000
|
$
|
0.39
|
1,950,000
|
$
|
0.46
|
||||||||||
Granted
|
5,350,000
|
$
|
0.17
|
3,800,000
|
$
|
0.36
|
||||||||||
Exercised
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
Expired
|
(920,000
|
)
|
$
|
0.41
|
-
|
$
|
-
|
|||||||||
Outstanding,
end of year
|
10,180,000
|
$
|
0.27
|
5,750,000
|
$
|
0.39
|
||||||||||
Exercisable
at the end of year
|
4,927,500
|
$
|
0.33
|
2,927,500
|
$
|
0.40
|
||||||||||
Weighted
average fair value of options granted during the year
|
$
|
0.11
|
$
|
0.28
|
Weighted
|
||||||||||||
Average
|
||||||||||||
Stock
|
Stock
|
Remaining
|
||||||||||
Exercisable
|
Options
|
Options
|
Contractual
|
|||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
|||||||||
$ | 0.46 | 1,150,000 | 950,000 |
2.32
years
|
||||||||
$ | 0.53 | 100,000 | 100,000 |
2.40
years
|
||||||||
$ | 0.45 | 100,000 | 100,000 |
2.56
years
|
||||||||
$ | 0.41 | 100,000 | 100,000 |
2.91
years
|
||||||||
$ | 0.36 | 2,500,000 | 1,437,500 |
3.07
years
|
||||||||
$ | 0.36 | 500,000 | 437,500 |
3.12
years
|
||||||||
$ | 0.36 | 500,000 | 437,500 |
3.16
years
|
||||||||
$ | 0.36 | 115,000 | 57,501 |
4.03
years
|
||||||||
$ | 0.16 | 5,115,000 | 1,307,499 |
4.50
years
|
||||||||
10,180,000 | 4,927,500 |
|
4.
|
STOCK OPTIONS AND WARRANTS
(Continued)
|
2009
|
2008
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
Options
|
price
|
Options
|
price
|
|||||||||||||
Outstanding,
beginning of year
|
4,195,332
|
$
|
0.61
|
15,362,000
|
$
|
0.22
|
||||||||||
Granted
|
-
|
$
|
-
|
3,333,332
|
$
|
0.63
|
||||||||||
Exercised
|
-
|
$
|
-
|
$
|
-
|
|||||||||||
Expired
|
-
|
$
|
-
|
(14,500,000
|
)
|
$
|
0.20
|
|||||||||
Outstanding,
end of year
|
4,195,332
|
$
|
0.61
|
4,195,332
|
$
|
0.61
|
||||||||||
Exercisable
at the end of year
|
4,047,332
|
$
|
0.62
|
4,047,332
|
$
|
0.61
|
||||||||||
Weighted
average fair value of
|
||||||||||||||||
warrants
granted during the year
|
$
|
-
|
$
|
0.63
|
Weighted
|
||||||||||||
Average
|
||||||||||||
Remaining
|
||||||||||||
Exercisable
|
Warrants
|
Warrants
|
Contractual
|
|||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
|||||||||
$ | 1.69 | 112,000 | 112,000 |
1.51
years
|
||||||||
$ | 0.51 | 500,000 | 352,000 |
1.80
years
|
||||||||
$ | 0.20 | 250,000 | 250,000 |
2.25
years
|
||||||||
$ | 0.50 | 1,666,666 | 1,666,666 |
3.09
years
|
||||||||
$ | 0.75 | 1,666,666 | 1,666,666 |
3.09
years
|
||||||||
4,195,332 | 4,047,332 |
|
5.
|
INCOME
TAXES
|
6.
|
DEFERRED TAX
BENEFIT
|
|
6.
|
DEFERRED
TAX BENEFIT (Continued)
|
2009
|
||||
Book
Income
|
$
|
(4,253,653
|
)
|
|
State
Income Taxes
|
-
|
|||
Nondeductible
Stock Compensation
|
213,807
|
|||
Other
|
1,784
|
|||
NOL
Carryover
|
-
|
|||
Valuation
Allowance
|
4,038,062
|
|||
Income
Tax Expense
|
$
|
-
|
2009
|
||||
Deferred
Tax Assets:
|
||||
NOL
Carry forward
|
$
|
6,659,187
|
||
Depreciation
|
38,990
|
|||
Contribution
Carry forward
|
40
|
|||
Section
179 Expense Carry-Forward
|
90,686
|
|||
Deferred
Tax Liabilities:
|
-
|
|||
Valuation
Allowance
|
(6,788,903
|
)
|
||
Net
Deferred Tax Asset
|
$
|
-
|
|
7.
|
IMPAIRMENT
OF ASSETS
|
|
8.
|
PROMISSORY
NOTE
|
|
9.
|
SETTLEMENT
OF DEBT
|
10.
|
CONCENTRATION
OF CREDIT RISK
|
11.
|
COMMITMENTS
AND CONTINGENCIES
|
11.
|
COMMITMENTS
AND CONTINGENCIES
(Continued)
|
12.
|
NOTE
RECEIVABLE
|
13.
|
SUBSEQUENT
EVENTS
|
|
|
March 31,
2010
|
|
|
September 30,
2009
|
|
||
|
|
(Unaudited)
|
|
|
|
|
||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
& cash equivalents
|
$
|
597,445
|
$
|
530,717
|
||||
Inventory
asset
|
240,000
|
300,000
|
||||||
Prepaid
expenses
|
26,870
|
118,332
|
||||||
Total
Current Assets
|
864,315
|
949,049
|
||||||
PROPERTY
& EQUIPMENT
|
||||||||
Office
& miscellaneous equipment
|
51,708
|
51,708
|
||||||
Machinery
& equipment
|
450,386
|
450,386
|
||||||
Leasehold
improvements
|
89,825
|
89,825
|
||||||
591,919
|
591,919
|
|||||||
Less
accumulated depreciation
|
(425,306
|
)
|
(378,353
|
)
|
||||
Net
Property & Equipment
|
166,613
|
213,566
|
||||||
OTHER
ASSETS
|
||||||||
Manufacturing
equipment in progress
|
437,219
|
207,219
|
||||||
Security
deposit
|
5,815
|
5,815
|
||||||
Total
Other Assets
|
443,034
|
213,034
|
||||||
TOTAL
ASSETS
|
$
|
1,473,962
|
$
|
1,375,649
|
||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
521,347
|
$
|
389,293
|
||||
Accrued
expenses
|
23,994
|
24,451
|
||||||
Credit
card payable
|
5,439
|
17,918
|
||||||
Total
Current Liabilities
|
550,780
|
431,662
|
||||||
LONG
TERM LIABILITIES
|
||||||||
Accrued
interest on note payable
|
27,102
|
4,256
|
||||||
Note
payable, vendor
|
456,921
|
456,921
|
||||||
Total
Long Term Liabilities
|
484,023
|
461,177
|
||||||
TOTAL
LIABILITIES
|
1,034,803
|
892,839
|
||||||
COMMITMENTS
& CONTINGENCIES
|
||||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Preferred
stock, $0.01 par value; 50,000,000 authorized preferred
shares
|
-
|
-
|
||||||
Common
stock, no par value; 500,000,000 authorized common
shares 208,484,641 and 196,484,610 shares issued and outstanding,
respectively
|
24,763,369
|
23,767,869
|
||||||
Paid
in capital, common stock warrants
|
3,325,866
|
3,175,930
|
||||||
Additional
paid in capital
|
5,238,213
|
5,248,213
|
||||||
Deficit
accumulated during the development stage
|
(32,888,289
|
)
|
(31,709,202
|
)
|
||||
TOTAL
SHAREHOLDERS' EQUITY
|
439,159
|
482,810
|
||||||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,473,962
|
$
|
1,375,649
|
|
|
Three Months Ended
|
Six Months Ended
|
From
Inception
February 25,
1997
through
|
|
|||||||||||||||
|
|
March 31,
2010
|
March 31,
2009
|
March 31,
2010
|
March 31,
2009
|
March 31,
2010
|
|
|||||||||||||
REVENUE
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
14,880
|
||||||||||
OPERATING
EXPENSES
|
||||||||||||||||||||
Selling
and marketing expenses
|
92,056
|
30,927
|
202,049
|
131,462
|
1,300,583
|
|||||||||||||||
General
and administrative expenses
|
265,925
|
652,980
|
544,949
|
1,675,922
|
11,338,819
|
|||||||||||||||
Research
and development
|
107,491
|
165,898
|
152,382
|
178,734
|
2,857,931
|
|||||||||||||||
Stock
option and warrant expense
|
75,568
|
77,251
|
149,936
|
154,501
|
3,600,056
|
|||||||||||||||
Depreciation
and amortization expense
|
23,476
|
40,337
|
46,953
|
77,389
|
609,359
|
|||||||||||||||
TOTAL
OPERATING EXPENSES
|
564,516
|
967,393
|
1,096,269
|
2,218,008
|
19,706,748
|
|||||||||||||||
LOSS
FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSE)
|
(564,516
|
)
|
(967,393
|
)
|
(1,096,269
|
)
|
(2,218,008
|
)
|
(19,691,868
|
)
|
||||||||||
OTHER
INCOME/(EXPENSES)
|
||||||||||||||||||||
Interest
income
|
-
|
1,094
|
44
|
4,509
|
445,537
|
|||||||||||||||
Impairment
of assets
|
-
|
-
|
-
|
-
|
(7,031,449
|
)
|
||||||||||||||
Write
down of inventory asset
|
(60,000
|
)
|
-
|
(60,000
|
)
|
-
|
(1,177,000
|
)
|
||||||||||||
Legal
settlement
|
-
|
-
|
-
|
-
|
1,100,000
|
|||||||||||||||
Loan
fees
|
-
|
-
|
-
|
-
|
(7,001,990
|
)
|
||||||||||||||
Forgiveness
of debt
|
-
|
287,381
|
-
|
287,381
|
592,154
|
|||||||||||||||
Other,
non-operating
|
-
|
(108
|
)
|
-
|
7,481
|
(5,215
|
)
|
|||||||||||||
Interest
expense
|
(11,427
|
)
|
-
|
(22,862
|
)
|
-
|
(118,458
|
)
|
||||||||||||
TOTAL
OTHER INCOME/(EXPENSES)
|
(71,427
|
)
|
288,367
|
(82,818
|
)
|
299,371
|
(13,196,421
|
)
|
||||||||||||
NET
LOSS
|
$
|
(635,943
|
)
|
$
|
(679,026
|
)
|
$
|
(1,179,087
|
)
|
$
|
(1,918,637
|
)
|
$
|
(32,888,289
|
)
|
|||||
BASIC
AND DILUTED LOSS PER SHARE
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||||
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING BASIC AND DILUTED
|
201,914,092
|
188,868,536
|
200,288,206
|
188,868,536
|
|
|
Deficit
|
|
|||||||||||||||||||||||||||||
|
|
Accumulated
|
|
|||||||||||||||||||||||||||||
|
|
Additional
|
Stock Options/
|
during the
|
|
|||||||||||||||||||||||||||
|
|
Preferred Stock
|
Common Stock
|
Paid-in
|
Warrants
|
Development
|
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Paid-in-Capital
|
Stage
|
Total
|
|||||||||||||||||||||||||
Balance
at September 30, 2009
|
-
|
$
|
-
|
196,484,610
|
$
|
23,767,869
|
$
|
5,248,213
|
$
|
3,175,930
|
$
|
(31,709,202
|
)
|
$
|
482,810
|
|||||||||||||||||
Issuance
of common shares in October 2009 for cash (2,556,818 common shares issued
at $0.088 per share ) (unaudited)
|
-
|
-
|
2,556,818
|
225,000
|
-
|
-
|
-
|
225,000
|
||||||||||||||||||||||||
Issuance
of common shares in November 2009 for services (53,789 common shares
issued at a fair value of $0.1859 per share) (unaudited)
|
-
|
-
|
53,789
|
10,000
|
-
|
-
|
-
|
10,000
|
||||||||||||||||||||||||
Issuance
of common shares in December 2009 for subscription receivable (1,000,000
common shares issued at $0.088 per share) (unaudited)
|
-
|
-
|
1,000,000
|
88,000
|
-
|
-
|
-
|
88,000
|
||||||||||||||||||||||||
Stock
compensation expense (unaudited)
|
-
|
-
|
-
|
-
|
-
|
149,936
|
-
|
149,936
|
||||||||||||||||||||||||
Issuance
of common shares in March 2010 for cash (2,000,000 common shares issued at
$0.075 per share) (unaudited)
|
2,000,000
|
150,000
|
150,000
|
|||||||||||||||||||||||||||||
Issuance
of common shares in March 2010 for services (139,424 common shares issued
at $0.16 per share) (unaudited)
|
139,424
|
22,500
|
22,500
|
|||||||||||||||||||||||||||||
Issuance
of common shares in March 2010 for cash (6,250,000 common shares issued at
$0.08 per share) (unaudited)
|
6,250,000
|
500,000
|
500,000
|
|||||||||||||||||||||||||||||
Stock
issuance costs (unaudited)
|
(10,000)
|
(10,000)
|
||||||||||||||||||||||||||||||
Net
Loss for the six months ended March 31, 20 (unaudited)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,179,087
|
)
|
(1,179,087
|
)
|
||||||||||||||||||||||
Balance
at March 31, 2010 (unaudited)
|
-
|
$
|
-
|
208,484,641
|
$
|
24,763,369
|
$
|
5,238,213
|
$
|
3,325,866
|
$
|
(32,888,289
|
)
|
$
|
439,159
|
|
|
Six Months Ended
|
From
Inception
February
25,1997
through
|
|
||||||||
|
|
March 31,
2010
|
March 31,
2009
|
March 31,
2010
|
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$
|
(1,179,087
|
)
|
$
|
(1,918,637
|
)
|
$
|
(32,888,289
|
)
|
|||
Adjustment
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
Depreciation
& amortization
|
46,953
|
77,389
|
609,359
|
|
||||||||
Common
stock issued for services and interest
|
32,500
|
11,000
|
1,996,634
|
|||||||||
Stock
option and warrant expense
|
149,936
|
154,500
|
3,600,056
|
|||||||||
Beneficial
conversion and commitment fees
|
-
|
-
|
5,685,573
|
|||||||||
Asset
impairment
|
-
|
-
|
7,031,449
|
|||||||||
Write
down of inventory asset
|
60,000
|
-
|
1,177,000
|
|||||||||
Gain
on settlement of debt
|
-
|
-
|
(287,381
|
)
|
||||||||
Settlement
of lease
|
-
|
-
|
59,784
|
|||||||||
Change
in Assets and Liabilities:
|
||||||||||||
(Increase)
Decrease in:
|
||||||||||||
P Prepaid
expenses
|
91,462
|
(15,384
|
)
|
(26,870
|
)
|
|||||||
Inventory
held for sale
|
-
|
-
|
(1,417,000
|
)
|
||||||||
Other
assets
|
-
|
-
|
(5,815
|
)
|
||||||||
Increase
(Decrease) in:
|
||||||||||||
Accounts
payable
|
119,575
|
1,138,645
|
2,559,515
|
|||||||||
Accrued
expenses
|
22,389
|
(10,449
|
)
|
51,096
|
||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(656,272
|
)
|
(562,936
|
)
|
(11,854,889
|
)
|
||||||
CASH
FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of manufacturing equipment and facilities in process
|
(230,000
|
)
|
(1,400,871
|
)
|
(6,054,629
|
)
|
||||||
Payments
on note receivable
|
-
|
-
|
(1,500,000
|
)
|
||||||||
Receipts
on note receivable
|
-
|
-
|
1,500,000
|
|||||||||
Purchase
of marketable prototype
|
-
|
-
|
(1,780,396
|
)
|
||||||||
Purchase
of fixed assets
|
-
|
(68,025
|
)
|
(591,919
|
)
|
|||||||
NET
CASH USED BY INVESTING ACTIVITIES
|
(230,000
|
)
|
(1,468,896
|
)
|
(8,426,944
|
)
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from warrant conversion
|
-
|
-
|
3,306,250
|
|||||||||
Proceeds
from debentures
|
-
|
-
|
5,850,000
|
|||||||||
Proceeds
for issuance of common stock, net
|
953,000
|
600,000
|
11,723,028
|
|||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
953,000
|
600,000
|
20,879,278
|
|||||||||
NET
INCREASE (DECREASE) IN CASH
|
66,728
|
(1,431,832
|
)
|
597,445
|
||||||||
CASH
& CASH EQUIVALENTS, BEGINNING OF PERIOD
|
530,717
|
2,389,218
|
-
|
|||||||||
CASH
& CASH EQUIVALENTS, END OF PERIOD
|
$
|
597,445
|
$
|
957,387
|
$
|
597,445
|
||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
Interest
paid
|
$
|
4
|
$
|
-
|
$
|
119,679
|
||||||
Taxes
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
1.
|
BASIS OF
PRESENTATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
For the period ended
3/31/2010
|
|
||||||
|
|
Number
of
Options
|
|
|
Weighted
average
exercise
price
|
|
||
Outstanding,
beginning of the period
|
10,180,000
|
$
|
0.27
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Exercised
|
-
|
$
|
-
|
|||||
Expired
|
-
|
$
|
-
|
|||||
Outstanding,
end of the period
|
10,180,000
|
$
|
0.27
|
|||||
Exercisable
at the end of the period
|
5,890,914
|
$
|
0.31
|
|||||
Weighted
average fair value of options granted during the period
|
$
|
-
|
|
|
Average
|
||||||||||
Stock
|
Stock
|
Remaining
|
||||||||||
Exercisable
|
Options
|
Options
|
Contractual
|
|||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
|||||||||
$ | 0.46 | 1,150,000 | 950,000 |
1.82
years
|
||||||||
$ | 0.53 | 100,000 | 100,000 |
1.90
years
|
||||||||
$ | 0.45 | 100,000 | 100,000 |
2.06
years
|
||||||||
$ | 0.41 | 100,000 | 100,000 |
2.41
years
|
||||||||
$ | 0.36 | 2,500,000 | 1,441,750 |
2.57
years
|
||||||||
$ | 0.36 | 500,000 | 481,250 |
2.62
years
|
||||||||
$ | 0.36 | 500,000 | 481,250 |
2.66
years
|
||||||||
$ | 0.36 | 115,000 | 76,667 |
3.53
years
|
||||||||
$ | 0.16 | 5,115,000 | 2,159,997 |
4.00
years
|
||||||||
10,180,000 | 5,890,914 |
|
|
For the period ended
3/31/2010
|
|
|||||
|
|
Number
of
Options
|
Weighted
average
exercise
price
|
|
||||
Outstanding,
beginning of the period
|
4,195,332
|
$
|
0.61
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Exercised
|
-
|
$
|
-
|
|||||
Expired
|
-
|
$
|
-
|
|||||
Outstanding,
end of the period
|
4,195,332
|
$
|
0.61
|
|||||
Exercisable
at the end of the period
|
4,047,332
|
$
|
0.64
|
|||||
Weighted
average fair value of warrants granted during the period
|
$
|
-
|
|
|
Average
|
||||||
|
|
Remaining
|
||||||
Warrants
|
Warrants
|
Contractual
|
||||||
Outstanding
|
Exercisable
|
Life (years)
|
||||||
112,000 | 112,000 |
1.01
years
|
||||||
500,000 | 352,000 |
1.30
years
|
||||||
250,000 | 250,000 |
1.75
years
|
||||||
1,666,666 | 1,666,666 |
2.59
years
|
||||||
1,666,666 | 1,666,666 |
2.59
years
|
||||||
4,195,332 | 4,047,332 |
We
have not authorized any dealer, salesperson or other person to provide any
information or make any representations about XsunX, Inc. except the
information or representations contained in this Prospectus. You should
not rely on any additional information or representations if
made.
This
Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy any securities:
●
except the common stock offered by this Prospectus;
●
in any jurisdiction in which the offer or solicitation is not
authorized;
●
in any jurisdiction where the dealer or other salesperson is not qualified
to make the offer or solicitation;
●
to any person to whom it is unlawful to make the offer or solicitation;
or
●
to any person who is not a United States resident or who is
outside the jurisdiction of the United States.
The
delivery of this Prospectus or any accompanying sale does not imply
that:
●
there have been no changes in the affairs of XsunX, Inc. after the date of
this Prospectus; or
●
the information contained in this Prospectus is correct after the date of
this Prospectus.
All
dealers effecting transactions in the registered securities, whether or
not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as underwriters.
|
PROSPECTUS
27,500,000
Shares of Common Stock
XSUNX
INC.
July
6, 2010
|