10-Q 1 v352890_10q.htm QUARTERLY REPORT

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended: June 30, 2013

 

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

 

Commission File Number 333-140322

 

UV FLU TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   98-0496885
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization)   Identification Number)

 

411 Main Street, Bldg. #5
Yarmouth Port, Massachusetts 02675
(Address of principal executive offices) (Zip Code)

 

  (508) 362-5455  
(Registrant’s telephone number, including area code)
     

 

1694 Falmouth Road, Suite 125
Centerville, Massachusetts 02632-2933
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   ¨ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes   ¨ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

¨  Large accelerated filer ¨  Accelerated filer ¨ Non-accelerated filer x Smaller Reporting  
          (Do not check if smaller
reporting company)
  company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨Yes   x No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding at August 9, 2013
Common stock, $.001 par value   60,176,763

 

 
 

 

UV FLU TECHNOLOGIES, INC.

FORM 10-Q

 

June 30, 2013

 

INDEX

 

  PAGE
PART I—FINANCIAL INFORMATION  
   
Item 1. Financial Statements (unaudited) 4
   
Condensed Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and September 30, 2012
(Audited)
4
   
Condensed Consolidated Statements of Operations for the three and nine-months period ended June 30, 2013 and 2012
(Unaudited)
5-6
   
Condensed Consolidated Statements of Cash Flows for the nine-month periods ended June 30, 2013 and 2012
(Unaudited)
7
   
Notes to Condensed Consolidated Financial Statements 8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
   
Item 4. Controls and Procedures 21
   
PART II—OTHER INFORMATION  
   
Item 1. Legal Proceedings 22
   
Item 1A. Risk Factors 22
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
   
Item 3. Defaults Upon Senior Securities 24
   
Item 4. Mine Safety Disclosures 24
   
Item 5. Other Information 24
   
Item 6. Exhibits 24
   
Signatures 25

 

 
 

 

FORWARD-LOOKING STATEMENTS

 

This Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms or the negative of such terms. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources and accounting matters. Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation and other circumstances affecting anticipated revenues and costs, and the risk factors set forth under the heading “Risk Factors” in our Annual report on Form 10-K for the fiscal year ended September 30, 2012, filed on December 31, 2012.

 

As used in this Form 10-Q, “we,” “us” and “our” refer to UV Flu Technologies, Inc., which is also sometimes referred to as the “Company.”

 

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS

 

The forward-looking statements made in this report on Form 10-Q relate only to events or information as of the date on which the statements are made in this report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.

 

3
 

 

PART I—FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements. 

UV FLU TECHNOLOGIES, INC

CONDENSED CONSOLIDATED BALANCE SHEETS 

 

   June 30,
2013
(unaudited)
   Sept 30,
2012
(audited)
 
         
ASSETS          
           
Current Assets          
Cash  $2,229   $19,941 
Accounts receivable   2,212    13,171 
Inventory   259,033    133,025 
Prepaid expense   19,488    160,063 
           
Total Current Assets   282,962    326,200 
           
Equipment, net of depreciation of $3,127 and $2,761 as of June 30, 2013 and September 30, 2012, respectively   5,380    5,678 
           
Total Assets  $288,342   $331,878 
           
LIABILITIES          
           
Current Liabilities:          
Accounts payable and accrued expenses  $66,632   $54,857 
Notes payable – current portion   127,141    96,207 
           
Total Current Liabilities   193,773    151,064 
           
Long term portion of loan payable   66,930    6,124 
    260,703    157,188 
STOCKHOLDERS’ EQUITY          
           
Common Stock (Note 6)          
Authorized:          
 75,000,000 shares, par value $0.001 per share          
Issued and outstanding:          
59,201,763  shares at June 30, 2013 and 46,859,263 shares at September 30, 2012   59,203    46,860 
           
Additional paid-in capital   3,126,429    2,493,596 
           
Deficit Accumulated During the Development Stage   (3,157,993)   (2,365,766)
           
Total Stockholders’ Equity   27,639    (174,690)
           
Total Liabilities and Stockholders’ Equity  $288,342   $331,878 

 

The accompanying notes are an integral part of these statements.

 

4
 

 

UV FLU TECHNOLOGIES, INC

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

   Three Months 
Ended
June 30, 
2013
   Three months
ended
June 30,
2012
 
         
Sales and Rental Revenues  $51,294   $92,536 
           
Cost of Sales   33,307    52,374 
           
Gross Profit   17,987    40,162 
           
Expenses          
Depreciation and amortization   366    366 
General and Administrative   256494    276,845 
           
Total Expenses   256,860    277,211 
           
(Loss) from Operations   (238,873)   (237,048)
           
Other Income (Expense)          
Income from Debt Forgiveness   -    11,223 
Interest expense   (11,341)   (4,622)
(Loss) on foreign exchange   -    - 
           
Net (Loss)  $(250,214)  $(230,447)
           
Basic And Diluted Loss Per Share  $(0.00)  $(0.01)
           
Weighted Average Number Of Shares Outstanding   58,247,382    41,708,717 

 

The accompanying notes are an integral part of these statements.  

 

5
 

 

UV FLU TECHNOLOGIES, INC

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

   Nine months
ended
June30,
2013
   Nine months
ended
June 30,
2012
 
         
Sales and Rental Revenues  $179,016   $147,618 
           
Cost of Sales   111,332    97,325 
           
Gross Profit   67,684    50,293 
           
Expenses          
Depreciation and amortization   1098    1098 
General and administrative   826,600    732,423 
           
Total Expenses   827,698    733,521 
           
(Loss) from Operations   (760,014)   (683,228)
           
Other Income (Expense)          
Income From Debt Settlement   -    23,381 
Interest expense   (32,213)   (51,947)
Gain (Loss) on foreign exchange   -    - 
           
Net (Loss)  $(792,227)  $(711,794)
           
Basic And Diluted Loss Per Share  $(0.01)  $(0.01)
           
Weighted Average Number Of Shares Outstanding   54,935,828    36,030,829 

 

The accompanying notes are an integral part of these statements.

 

6
 

    

UV FLU TECHNOLOGIES, INC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

   Nine months
ended
June 30,
2013
   Nine months
ended
June 30,
2012
 
         
Cash Flows from Operating Activities:          
Net (loss)  $(792,227)  $(711,794)
           
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities:          
Depreciation and amortization   1098    1098 
Debt forgiveness   -    (23,381)
Stock issued for compensation and services   512,175    344,564 
Stock issued for debt settlement   -    322,700 
Amortization of beneficial conversion feature   -    19,966 
Changes in current assets and liabilities Accounts receivable   10,960    (64,562)
Prepaid expense   140,575    41,114 
Inventory   (126,008)   (23,319)
Accounts payable and accrued liabilities   10,975    (43,268)
Net Cash Flows provided by Operating Activities   (242,452)   (136,882)
           
Cash Flows from Investing Activities:          
Purchase of equipment   -    (457)
           
Net Cash Flows provided by Investing Activities   -    (457)
           
Cash Flows From Financing Activity:          
Proceeds from notes payable   91,740    (117,294)
Sale of common shares   133,000    276,797 
Net Cash Flows  provided by Financing Activities   224,740    159,503 
           
Net Cash Flows   (17,712)   (22,164)
           
Cash, Beginning Of Period   19,941    9,519 
           
Cash, End Of Period  $2,229   $31,683 
           
Supplemental Disclosure Of Cash Flow Information          
Cash paid for:          
Interest  $32,213   $51.948 
Income tax  $-   $ 
Debt converted to shares  $-   $322,700 
Stock issued for compensation and services  $512,175  $344,564 

 

The accompanying notes are an integral part of these statements.

 

7
 

  

UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  

  1. NATURE AND CONTINUANCE OF OPERATIONS

  

  a) Organization

UV Flu Technologies, Inc (referred to herein as “we”, “us”, “our” and similar terms) was incorporated as Northwest Chariots Incorporated in the State of Nevada, United States of America, on April 04, 2006. On November 12, 2009, the Company changed its name from Northwest Chariots Incorporated to UV Flu Technologies, Inc. The Company year-end is September 30th. We acquired our subsidiary, RxAir Industries, LLC, on January 31, 2011. The consolidated financial statements as of June 30, 2013 and September 30, 2012 contain the accounts and activities of UV Flu Technologies, Inc. and RxAir Industries, LLC. All intercompany accounts and transactions have been eliminated in consolidation.

  

  2. BASIS OF PRESENTATION – GOING CONCERN

 

Our accompanying financial statements have been prepared in conformity with GAAP, which contemplates our continuation as a going concern. In addition, at June 30 2013, we had incurred losses of $3,157,993, have cash on hand of only $2,229, and have working capital of $89,189. There is no assurance that future capital raising plans will be successful in obtaining sufficient funds to assure our eventual profitability. While management believes that actions planned and presently being taken to revise our operating and financial requirements provide the opportunity for us to continue as a going concern, there is no assurance the actions will be successful. In addition, recent events in worldwide capital markets may make it more difficult for us to raise additional equity or debt capital.

 

Our financial statements do not include any adjustments that might result from these uncertainties.

  

  3. SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies is presented to assist in understanding our financial statements.  Our financial statements and notes are representations of our management who is responsible for their integrity and objectivity.  These accounting policies conform to generally accepted accounting principles in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.  The financial statements are stated in United States of America dollars.

 

a)Available-for-sale securities

The Company classifies its marketable equity securities as available-for-sale and they are carried at fair market value, with the unrealized gains and losses included in the determination of comprehensive income and reported in stockholders’ equity.

 

8
 

 

UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

 

  b) Income Taxes

We have adopted the ASC subtopic 740-10. ASC 740-10 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We provide deferred taxes for the estimated future tax effects attributable to temporary differences and carry forwards when realization is more likely than not. See Note 7.

 

  c) Inventories

Inventories are stated at the lower of cost or market, with cost being determined using the first-in first-out method.  Inventories consist of purchased goods held for resale and raw materials. As of June 30, 2013 we had $254,622 of finished goods and $4,411 in raw materials.  As of September 30, 2012, we had $117,904 of finished goods and $15,121 of raw materials.  Inventory is reviewed for obsolescence at the end of each reporting period.

 

  d) Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated useful lives for significant property and equipment categories are as follows:

 

Equipment  5 years
Furniture  7 years

 

The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there were no impairments needed as of June 30, 2013 or 2012. Depreciation expense for the nine months ended June 30, 2013 and 2012 was $1098 and $1098, respectively.

 

  e) Advertising

Advertising costs are expensed as in accordance with ASC subtopic 720-35 (formerly SOP 93-7). Advertising costs for the nine months ended June 30, 2013 and 2012 were $9,018,and $39,405, respectively. These costs were included in general and administrative costs.

 

  f) Basic and Diluted Loss Per Share

In accordance with ASC subtopic 260-10, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At June 30, 2013 and 2012, we had no stock equivalents that were anti-dilutive and excluded in the earnings per share computation, therefore basic loss per share and diluted loss per share are the same.

 

  g) Estimated Fair Value of Financial Instruments

The carrying value of our financial instruments, consisting of cash, accounts receivable, and accounts payable and accrued expenses approximate their fair value as of June 30, 2013 and 2012 due to the short-term maturity of such instruments. It is management’s opinion that we are not exposed to significant interest, currency, or credit risks arising from these financial statements. See Note 8 for further details.

 

9
 

 

UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

 

  h) Revenue Recognition

It is our policy that revenues will be recognized in accordance with ASC subtopic 605-10. Revenues are recognized only when the Company has transferred to the customer the significant risk and rewards of ownership of the goods, title to the products transfers, the amount is fixed and determinable, evidence of an agreement exists, there is reasonable assurance of collection of the sales proceeds, the Company has no future obligations, and the customer bears the risk of loss. This occurs at the time of shipment (FOB shipping point) of the products from the Company’s warehouse and an invoice is prepared.. There are no rights of return and exchange is allowed only on defective products. Recognition of revenue is not affected as the right of exchange results in new units being shipped to the customer once defective units have been received by the company and verified as defective.

 

  i) Currency

Our functional currency is the United States Dollar.

 

  j) Use of Estimates

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

 

  k) Cash and Cash Equivalents

Cash is comprised of cash on hand and demand deposits. Cash equivalents include short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. There were no cash equivalents as of June 30, 2013 and September 30, 2012.

 

  l) Sales Concentrations

Over 50% of our sales for the nine months ended June 30, 2013 have been accounted for by our largest customer. Remaining sales are equally distributed.

 

  m) Impairment of long-lived assets

The Company reviews its long-lived assets and intangibles periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future cash flows be less than the carrying value, the Company would recognize an impairment loss. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets and intangibles. The Company recognized no impairment losses during the nine months ended June 30, 2013 or 2012.

 

n)Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At September 30, 2012 and June 30, 2013, the Company had no funds in excess of the FDIC insured limits.

 

10
 

 

o)Reclassifications

Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

 

p)Year-end

The Company has adopted September 30 as its fiscal year end.

 

q)Recent Accounting Pronouncements

The Company has evaluated all new accounting pronouncements as of the date these financial statements were issued and has determined that none have or will have a material impact on the financial statements or disclosures.

 

4.PREPAID EXPENSES AND OTHER ASSETS

 

The Company had $19,488 and $160,003 in prepaid expenses and other assets as of June 30, 2013 and 2012, respectively. The balance as of June 30, 2013 consists of prepaid insurance of $7,158, prepaid rent of $1,950, deposits of $4,380, and other assets of $6,000.

 

  5. NOTES PAYABLE AND GAIN ON FORGIVENESS OF DEBT

 

As of September 30, 2011, the Company had a note payable in the amount of $7,500. The note was due on demand and accrued interest at 10%. In December of 2011, the principle balance of $7,500 was converted into 62,500 shares of common stock at fair market value. Accrued interest of $8,907 was forgiven and recorded as forgiveness of debt income. No balance remains on this loan as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $115,000. The note was due on October 24, 2011 and accrued interest at 6% and was convertible. The beneficial conversion feature of the note was valued and a discount was recorded in the amount of $57,500. During the year ended September 30, 2011, $51,112 of the discount was amortized into interest expense and $6,388 remained as a discount as of September 30, 2012. During the year ended September 30, 2012, the remaining $6,388 discount was amortized into interest expense and there is no discount remaining. In October of 2011, the $115,000 principle balance and $3,000 of accrued interest was converted into 4,916,666 shares of common stock at fair market value. No balance remains on this note as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $32,500. The note was due on June 6, 2012 and accrued interest at 8% and was convertible. The beneficial conversion feature of the note was valued and a discount was recorded in the amount of $15,275. During the year ended September 30, 2011, $1,697 of the discount was amortized into interest expense and $13,578 remained as a discount as of September 30, 2012. During the year ended September 30, 2012, the remaining $13,578 was amortized into interest expense and there is no discount remaining. This note was repaid in February of 2012 so no balance remains on this note as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $19,000. The note was due on demand and accrued interest at 6% and was convertible at the market value of the stock on the date the note was executed. There was no beneficial conversion feature related to this note. During the year ended September 30, 2012, an additional $121,800 was received on this loan bringing the balance to $140,800. In May of 2012, the principle balance of $140,800 was converted into 5,866,668 shares of common stock at fair market value. Accrued interest of $2,316 was forgiven and recorded as forgiveness of debt income. No balance remains on this note as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $16,677. The note is due in 60 monthly instalments of $489.15. The note would mature in September of 2014. As of September 30, 2012, the balance due on this note is $12,331 of which $6,124 is long term and $6,207 is current. As of June 30, 2013, the balance due on this note is $9,072 of which $1,930 is long term and $7,142 is current.

 

11
 

 

In August of 2012, the Company borrowed $20,000. During the nine months ended June 30, 2013 the company borrowed another $49,000 from the same entity. During the three months ended June 30, 2013, $49,000 of these loans were repaid. As of June 30, 2013, the balance of the note is $20,000 and is due on deman and bears interest at a rate of 10%.

 

In the nine months ended June 30, 2013, the Company borrowed $15,000. The note is due on September 26, 2014, and accrues interest at 2% per calendar month. As of June 30, 2013, the balance of the note is $15,000 and is shown in the long term portion of loans payable.

 

In April, July, and August of 2012, the Company borrowed $30,000, $20,000, and $20,000 from the same entity. In January of 2013 the Company borrowed an additional $15,000 from the same entity. In January of 2013 these notes were combined into one note for $85,000. The note would mature on January 1, 2014 and carries an interest rate of 2% per month.

 

In April of 2013, the Company borrowed $20,000 from an unrelated entity. The note is due in October of 2014, has an interest rate of 12%, and is convertible at $0.05 per share. The Company has the option to pay the interest on this note in stock at $0.05 per share rather than cash. If the Company pays the interest in stock the interest rate becomes 24%.

 

In April of 2013, the Company borrowed $30,000 from an unrelated entity. The note is due in October of 2014, has an interest rate of 12%, and is convertible at $0.05 per share. The Company has the option to pay the interest on this note in stock at $0.05 per share rather than cash. If the Company pays the interest in stock the interest rate becomes 24%.

 

In May of 2013, the Company borrowed $15,000 from an unrelated entity. The note is due in October of 2013, has an interest rate of 24%, and is convertible at $.04 per share. The Company has the option to pay the interest on this note in stock at $0.04 per share rather than cash. If the Company pays the interest in stock the interest rate becomes 48%.

 

During the year ended September 30, 2012, as detailed out above, the Company converted a total of $266,300 of debt into 10,845,834 shares of common stock. The company also recorded forgiveness of debt income relating to these conversions in the amount of $11,222. During the year the Company also had $12,159 of account payable forgiven to bring total forgiveness of debt income to $23,381 for the year ended September 30, 2012. During the six months ended March 31, 2013, no debt or payables were converted to common stock.

 

Interest expense, including amortization of discounts, relating to these notes was $32,213 and $51,947 for the nine months ended June 30, 2013 and 2012, respectively.

 

12
 

 

UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  6. COMMON STOCK

 

Our authorized common stock consists of 75,000,000 shares of common stock with a par value of $0.001 per share. On January 20, 2012, the Company did a 1 for 4 reverse split of its common stock. All stock amount shown in these financial statements have been adjusted for that split.

 

On September 30, 2011, the Company had 20,950,017 shares of common stock issued and outstanding and no outstanding options or warrants.

 

During the year ended September 30, 2012, the Company issued 10,845,834 shares of common stock in relation to conversions of notes payable in the amount of $266,300. See Note 5 for further details.

 

During the year ended September 30, 2012, the president of the Company contributed assets with a fair market value of $14,000 to the Company. This contribution will not be repaid and was considered contributed capital.

 

In October of 2011, the Company issued 4,291,667 shares for consulting services. The shares were valued at $0.24, fair market value, for a total expense of $103,000.

 

In October of 2011, the Company issued 1,729,167 shares of common stock for $55,500 of accounts payable held by a related party. The shares were valued at market value.

 

In October of 2011, the Company issued 1,062,500 shares of common stock for compensation amounting to $25,500. The shares were valued at market value.

 

In December of 2011, the Company issued 62,500 shares of common stock at a purchase price of $.08, for total proceeds of $5,000.

 

In December of 2011, the Company issued 105,000 shares of common stock for consulting services. The shares were valued at $.06, fair market value, for a total expense of $6,300.

 

In February of 2012, the Company issued 493,750 shares of common stock at a purchase price of $.08, for total proceeds of $39,500.

 

In February of 2012, the Company issued 500,000 shares of common stock as compensation. The shares were valued at market value for a total expense of $90,000

 

In February of 2012, the Company issued 56,250 shares of common stock for consulting services. The shares were valued at $.08, fair market value, for a total expense of $4,500.

 

In February of 2012, the Company issued 400,000 to satisfy a $60,000 accrued expense liability. The shares were valued at fair market value.

 

In April of 2012, the Company issued 2,799,214 shares of common stock at a purchase price of $.04, for total proceeds of $121,162.

 

In April of 2012, the Company issued 600,000 shares of common stock as compensation. The shares were valued at market value for a total expense of $79,800

 

In April of 2012, the Company issued 100,000 shares of common stock for consulting services. The shares were valued at $.133, fair market value, for a total expense of $13,300.

 

In April of 2012, the Company issued 120,000 shares of common stock as payment of interest. The shares were valued at market value for a total expense of $7,200

 

13
 

 

In May of 2012, the Company issued 1,000,000 shares of common stock at a purchase price of $.05, for total proceeds of $50,000.

 

In May of 2012, the Company issued 113,333 shares of common stock for consulting services. The shares were valued at $.15, fair market value, for a total expense of $17,000.

 

In August and September of 2012, the Company issued 1,100,000 shares of common stock at various purchase prices, for total proceeds of $39,000.

 

In August and September of 2012, the Company issued 450,000 shares of common stock for consulting services. The shares were valued at fair market value, for a total expense of $25,500.

 

In September of 2012, the Company issued 100,000 shares of common stock as payment of interest. The shares were valued at market value for a total expense of $4,000.

 

On September 30, 2012, the Company had 46,859,263 shares of common stock issued and outstanding and no outstanding options or warrants.

 

In October of 2012, 1,950,000 shares of common stock were issued for a capital investment of $78,000.

 

In October of 2012, 2,452,500 common shares were issued for consulting services. All were valued at $0.04.

 

In October of 2012, a total of 1,100,000 shares, all valued at $.03, were issued for compensation.

 

In October of 2012, the Board of Directors approved a Non-Qualified stock option plan for key employees and directors. 5,000,000 shares of common stock were reserved and 5,000,000 options were issued as compensation. All the options were valued at $0.03. 2,500,000 options vested immediately and were expensed as compensation expense during the three months ended December 31, 2012. 1,250,000 of the options vest in six months and the remaining 1,250,000 options vest in twelve months. These vesting options were valued and recorded as a prepaid asset that will be amortized into compensation expense over the vesting period. During the nine months ended June 30, 2013, $75,000 was amortized into expense and $0 remains in prepaid expense as of June 30, 2013. The options have a term of ten years and an exercise price of $0.03, which was the fair market value of the stock on the date of the grant. During the three months ended June 30, 2013, once of the employees left the Company and the related 500,000 options were canceled. There are 3,375,000 options vested as of June 30, 2013.

 

On January 28, 2013, the Company issued 4,117,500 shares, all valued at $.04. 1,125,000 were issued for total proceeds of $45,000, 2,737,500 were issued as compensation for services, and 255,000 for pre-paid interest, as noted in note 6. Included in the 1,125,000 shares sold for total proceeds of $45,000, the Company also issued the buyers 562,500 warrants. The warrants have a term of two years and an exercise price of $0.03.

 

In April of 2013 the Company issued 1,652,500 shares for the consulting services and 550,000 shares for compensation. All shares were valued at $0.04 and expensed in the nine months ended June 30, 2013.

 

In June of 2013 the Company issued 455,000 shares for consulting services, 90,000 shares for interest on borrowings, and 650,000 shares for compensation. All shares were valued at $.04 and expensed in the nine months ended June 30, 2013.

 

In June of 2013, the Company sold 250,000 shares for a total of $10,000.

 

In June of 2013, the Company had 925,000 shares returned and canceled. The shares were originally issued in prior periods for consulting services that were not completed.

 

14
 

 

As of June 30, 2013, the Company has 59,201,763 shares of common stock issued and outstanding,4,500,000 options granted of which 3,375,000 are vested and exercisable at $0.03, and 562,500 warrants which are vested and exercisable at $0.03.

 

 

  7. INCOME TAXES

 

We are subject to US income taxes.  To date, we have accumulated losses of approximately $3,157,993 and therefore have paid no income tax.  We expect tax rates in the US to be approximately 34%.  Substantially all operations prior to September 30, 2009 were in Canada.  Substantially all operations after October of 2010 have been conducted in the United States.

 

Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes.  Our deferred tax assets consist entirely of the benefit from net operating loss (“NOL”) carry-forwards.  The NOL carry-forwards expire in 2029.  Our deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the NOL carry-forwards.  NOL carry-forwards may be further limited by a change our ownership, other provisions of the tax laws, and because the Company has never filed tax returns in the United States.

 

The provision for refundable Federal income tax, using an effective tax rate of thirty-four percent (34%), consists of the following:

   Nine months
ended
June 30,
2013
   Year ended
September 30,
2012
 
Refundable Federal income tax attributable to:        
Current operations  $(269,000)  $(213,000)
Change in deferred tax valuation allowance   269,000    213,000 
Net refundable amount   -    - 

 

The cumulative tax effect at the expected rate of thirty-four percent (34%) of significant items comprising our net deferred tax amount is as follows:

 

   June 30, 2013   September 30,
2012
 
Deferred tax asset attributable to:          
Net operating loss carryover  $880,000   $611,000 
Less: Valuation allowance   (880,000)   (611,000)
Net deferred tax asset   -    - 

 

At June 30, 2013, we had an unused Canadian NOL carryover of approximating $128,859 that is available to offset future taxable income in Canada; it expires the beginning in 2026. At June 30, 2013, we had unused NOL carryover of approximately $2,800,000 that is available to offset future taxable income in the U.S., it expires beginning in 2030.

 

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UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  8. FAIR VALUE MEASUREMENTS

 

The Company adopted ASC Topic 820-10 at the beginning of 2009 to measure the fair value of certain of its financial assets required to be measured on a recurring basis.  The adoption of ASC Topic 820-10 did not impact the Company’s financial condition or results of operations.  ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability.  The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

 

Level 2 – Valuations based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

 

Level 3 – Valuations based on inputs that are supportable by little or no market activity and that are significant to the fair value of the asset or liability.

 

The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

 

   Level 1   Level 2   Level 3   Fair Value 
Cash  $2,229   $-   $-   $2,229 
Accounts receivable   -    2,212    -    2,212 
Accounts payable   -    66,632    -    66,632 
Notes Payable   -    194,071    -    194,071 

 

The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis as of September 30, 2012:

 

   Level 1   Level 2   Level 3   Fair Value 
Cash  $19,941   $-   $-   $19,941 
Accounts receivable   -    13,171    -    13,171 
Accounts payable   -    54,857    -    54,857 
Notes Payable   -    102,331    -    102,331 

 

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UV FLU TECHNOLOGIES, INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  9. COMMITMENTS

 

The Company has entered into three leases for its main business locations as of June 30, 2013. The first lease for office space calls for payments of $900 to $1,000 per month from August 15, 2010 to August 14, 2013. The second lease for office space calls for payments of $1,460 per month from May 1, 2012 to April 30, 2013. The third lease for a corporate service package calls for payments of $175 per month from August 1, 2012 to January 31, 2013. The minimum future payments under these leases are $11,620 for the year ended September 30, 2013. Rent expense was $24,065 and $23,200 for the nine months ended June 30, 2013 and 2012, respectively.

 

10.RELATED PARTY TRANSACTIONS

 

During the nine months ended June 30, 2013 and the year ended September 30, 2012, the Company paid Chamberlain Capital Partners, a company owned by the president, for his services and also reimbursed Chamberlain for the President’s health insurance and for miscellaneous office expenses. During the nine months ended June 30, 2013, the Company paid Chamberlain approximately $58,400 in compensation for the President’s services, and approximately $21,050 in reimbursements for health insurance and miscellaneous expenses. During the year ended September 30, 2012, the Company paid Chamberlain approximately $51,000 in compensation for the President’s services, and approximately $15,000 in reimbursements for health insurance and miscellaneous office expenses

 

11.SUBSEQUENT EVENTS

 

The Company has evaluated all subsequent events through the date these financial statements were issued and determined there are no further subsequent events to record and the following subsequent events to disclose:

 

The Company has raised $43,750 since July 1, 2013, and has issued 975,000 shares. 120,000 shares were issued at a value of $.04 per share, as 6 months pre-paid interest on $20,000 in notes, 230,000 shares were issued at $.04 for consulting, 500,000 shares were issued at $.04, for an investment of $20,000, and 125,000 shares were issued for a cost of $3,750, for exercising 125,000 warrants at $.03.

 

17
 

 

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this quarterly report.  Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments.  Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf.  We disclaim any obligation to update forward-looking statements.

 

Background

 

UV Flu Technologies, Inc. (“we”, “us”, “our,” or the “Company”) was organized under the laws of the State of Nevada on April 4, 2006 under the name “Northwest Chariots, Inc.”  We were engaged in the business of renting and selling electrically powered human transporters, like electric bicycles, chariots, and quads.  Following our fiscal year ended September 30, 2009, we decided to change our product mix to air purification products and to focus on the research, development, manufacturing, and sales of air purification systems and products.

 

In furtherance of our business objectives, on November 12, 2009, we effected a 32-for-1 forward stock split of all our issued and outstanding shares of common stock, and we merged with our wholly-owned subsidiary, UV Flu Technologies, Inc., for the purposes of effecting a name change to “UV Flu Technologies, Inc.”

 

Effective November 15, 2009, we acquired AmAirapure Inc.’s air purification technology, product, inventory, and certain equipment pursuant to an Asset Purchase Agreement with AmAirapure, Inc.  We issued 15,000,000 shares of our common stock to shareholders of AmAirapure in connection with the asset acquisition.  Additionally, on November 25, 2009, we entered into a Distribution Agreement with Puravair Distributors LLC (“Puravair”) where we appointed Puravair as our exclusive master distributor for our Viratech UV-400 product and our other products for the professional, medical, and commercial markets in the U.S. and Canada.  On September 30, 2010, we terminated our Distribution Agreement with Puravair and began adding new distributors, which totaled five as of year end.

 

The latest production runs of our Viratech UV-400 product incorporate our patented UV bacteria killing technology, which has been cleared by the FDA for use as a medical device.  In June 2010, we expanded our market reach by introducing the latest generation of our Viratech UV-400 product into the residential and hospitality markets.

 

On October 28, 2010, we entered into a binding letter of intent with The Red Oak Trust (“Red Oak”) (the “LOI”) in connection with our proposed acquisition of one hundred percent (100%) of the issued and outstanding units of RxAir Industries, LLC, a Nevada limited liability company (“RxAir”), which is wholly owned by Red Oak (the “Acquisition”).  RxAir began operations 15 years ago and has built a reputation for delivering high-quality air purification products made in the United States.  The Acquisition included the Company acquiring RxAir’s patents, trademarks, inventory, production equipment, one 510k covering an FDA clearance for the Rx-3000 as a Class II Medical Device, as well as a customer list covering approximately 1,000 locations, including over 400 hospitals.  The Company plans to use the Acquisition as a springboard into the medical and commercial market and believes the Acquisition will lead to increased sales.

 

On January 31, 2011, we entered into and completed our Acquisition of RxAir pursuant to the Acquisition Agreement, dated January 31, 2011, by and the Company, and Red Oak, as the sole shareholder of RxAir.  At the closing of the Acquisition, RxAir became a wholly-owned subsidiary of the Company.

 

18
 

 

The Company, has spent the last two years building the brand, and focusing marketing efforts towards areas that will not only generate sales, but educate consumers about the indoor air quality space, and why it is so important, and why our product is so unique in its ability to treat all forms of indoor air pollution. Sales have begun to show the results from these initiatives.  In order to meet our business objectives, we will need to raise additional funds through equity or convertible debt financing. There can be no assurance that we will be successful in raising additional funds and, if unsuccessful, our plans for expanding operations and business activities may have to be curtailed.  Any attempt to raise funds, through debt or equity financing, would likely result in dilution to existing shareholders.

 

Critical Accounting Policies

 

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management of our company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  We believe certain critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.  A description of our critical accounting policies is set forth in our Annual Report on Form 10-K for the year ended September 30, 2012.  As of, and for the nine months ended June 30, 2013, there have been no material changes or updates to our critical accounting policies.

 

Results of Operations

 

The following discussion of the financial condition, results of operations, cash flows and changes in our financial position should be read in conjunction with our audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012 filed on December 31, 2012.

 

Results of Operations for the nine months ended June 30, 2013 as compared to the nine months ended June 30, 2012

 

During the nine months ended June 30, 2013, we received gross revenue of $179,016 as compared to $147,618 for the nine months ended June 30, 2012.

 

For the nine months ended June 30, 2013 and March 31, 2012, we incurred a loss of $(792,227) and ($711,794) respectively.

  

Sales Revenue

 

During the nine months ended June 30, 2013, we received gross revenue of $179,016 as compared to $147,618 for the nine months ended June 30, 2012.  The increase is primarily related to the increase in sales of our Viratech UV-400, which has gained increased consumer traction from the health concerns generated from the current flu epidemic. The results don’t fully reflect the strides the Company has made in building a platform for significant growth. The Company has decided to split its marketing efforts into 4 major areas:

 

·Residential
·Medical
·Commercial
·Sleep Market

 

19
 

 

Residentially, the Company is utilizing mediums that can efficiently sell product, while also educating the consumer. Internet marketers, like Groupon and Woot, video, infomercials, and direct mail and email campaigns are all potential mediums. Our target market is health-conscious consumers, new mothers, any individuals undergoing chemotherapy or transplants, and individuals with asthma or allergies.

 

The Medical space, we are pursuing through our RX Air platform, which has an installed base of almost 600 hospitals worldwide. We plan on attacking this space through added distributors, both domestically, as well as Internationally, while also contacting all of our current customers. We are adding potential distributors in Italy, Finland, Jordan, and Tunisia.

 

The Commercial space includes offices, hair salons, restaurants, pet and veterinary applications, correctional facilities, health facilities, government buildings and day care centers.

 

The Sleep Market, which has the potential to be several times larger than the current air purification space, should be augmented by an endorsement agreement with a nationally known Sleep Doctor, whose frequent television appearances should help consumer and brand awareness. Clinical studies have linked Indoor Air Pollution as being the biggest environmental factor in causing sleep related issues, and sleep disorders are now known to dramatically increase the risks of stroke, cancer, diabetes, and a host of other health ailments. We feel furniture stores, through their bedding and infant nursery departments, hotels, sleep centers, and consumers with sleep disorders are all potential customers.

 

In June, we signed a test agreement, with a major national marketing company, with a line of air heaters and air purifiers. The first initiative is expected to launch right after Labor Day, and if successful, could result in a major production contract which could take over 90% of the Company’s production capacity. Ad copy for the campaign is expected to be approved by the 2nd week in August.

 

We have designed a lower cost unit for the residential marketplace that we feel will be the best product in the market, and will incorporate our technology with an advanced filter medium. We feel next year the demand for that product internationally could be significant.

 

Net Income (Loss)

 

During the nine months June 30, 2013, our net loss was $792,227as compared to a net loss of $711,794 for the nine months ended June 30, 2012.  The increase in net loss is due to an increase in expenses associated with outsourcing the professional and consulting services needed for being a public entity, along with building of the sales platform needed to take the company to the next level.

 

General and Administrative Expenses

 

During the three months ended June 30, 2013, we incurred total expenses of $256,860 as compared to $277,211 for the three months ended June 30, 2012.  The increase is primarily related to expenses for marketing, office and administration, professional fees, consulting and investor relation costs increased due to an increase business activity associated with development of the new product line.   The increases in these particular expenses are as follows:

 

 

   June 30, 2013   June 30, 2012 
Marketing  $3,597    32,366 
Office and administration   11,763    79,363 
Professional fees   241,134    165,116 
Depreciation   366    366 
Total  $256,860    277,211 

 

Depreciation and amortization expense was $1098 for the nine months ended June 30, 2013 and $1098 for the nine months ended June 30, 2012.

 

20
 

 

Liquidity and Capital Resources

 

As of June 30, 2013, we had cash of $2,219, and working capital of $89,189.  During the period ended June 30, 2013, we funded our operations from receipts of sales revenues, proceeds from loans payable and sale of shares.   In order to survive, we are dependent on increasing our sales volume.  Additionally, we plan to continue further financings and believe that this will provide sufficient working capital to fund our operations for at least the next 12 months.  Changes in our operating plans, increased expenses, additional acquisitions, or other events may cause us to seek additional equity or debt financing in the future.

 

For the nine months ended June 30, 2013, $242,452 in cash flows was used in operating activities as compared to $136,882 that was used from operating activities for the nine months ended June 30, 2012.  The decrease is primarily due to an increase in our general and administrative expenses for the nine months ended June 30, 2013 as compared to the nine months ended June 30, 2012 as a result of the increased costs associated with running and upgrading our Dallas, Tx RX Air subsidiary.

 

For the nine month period ended June 30, 2013 cash flows used for investing activities was $0, as compared to $0, cash used for the nine month period ended June 30, 2012.

 

For the nine months ended June 30, 2013, cash provided by financing activities was $224,740, compared to $159,503 of cash provided for the period ended June 30, 2012. Cash provided during the nine months ended June 30, 2012 was $91,740, net, from loan proceeds and $133,000 from the sale of stock.

 

We anticipate that our cash requirements will be significant in the near term due to contemplated development, purchasing, marketing and sales of our air purification technologies and products.  Accordingly, we expect to continue raise capital through share offering and sales to fund current operations.

 

Off-Balance Sheet Arrangements

We presently do not have any off-balance sheet arrangements.

 

Capital Expenditures

 

We did not make any capital expenditures in the nine months ended June 30, 2013.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

 

Item 4. Controls and Procedures.

 

We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design of the our disclosure controls and procedures (as defined by Exchange Act Rule 13a-15(e) and 15a-15(e)) as of the end of our fiscal quarter pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer/ Principal Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Principal Executive Officer/Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

There were no changes in our internal controls over financial reporting that occurred during the nine months ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

 

21
 

 

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

Not applicable.

 

Item2.Unregistered Sales of Equity Securities and Use of Proceeds.

 

As of September 30, 2011, the Company had a note payable in the amount of $7,500. The note was due on demand and accrued interest at 10%. In December of 2011, the principle balance of $7,500 was converted into 62,500 shares of common stock at fair market value. Accrued interest of $8,907 was forgiven and recorded as forgiveness of debt income. No balance remains on this loan as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $115,000. The note was due on October 24, 2011 and accrued interest at 6% and was convertible. The beneficial conversion feature of the note was valued and a discount was recorded in the amount of $57,500. During the year ended September 30, 2011, $51,112 of the discount was amortized into interest expense and $6,388 remained as a discount as of September 30, 2012. During the year ended September 30, 2012, the remaining $6,388 discount was amortized into interest expense and there is no discount remaining. In October of 2011, the $115,000 principle balance and $3,000 of accrued interest was converted into 4,916,666 shares of common stock at fair market value. No balance remains on this note as of September 30, 2012.

 

As of September 30, 2011, the Company had a note payable in the amount of $19,000. The note was due on demand and accrued interest at 6% and was convertible at the market value of the stock on the date the note was executed. There was no beneficial conversion feature related to this note. During the year ended September 30, 2012, an additional $121,800 was received on this loan bringing the balance to $140,800. In May of 2012, the principle balance of $140,800 was converted into 5,866,668 shares of common stock at fair market value. Accrued interest of $2,316 was forgiven and recorded as forgiveness of debt income. No balance remains on this note as of September 30, 2012.

 

During the year ended September 30, 2012, as detailed out above, the Company converted a total of $266,300 of debt into 10,845,834 shares of common stock. The company also recorded forgiveness of debt income relating to these conversions in the amount of $11,222. During the year the Company also had $12,159 of account payable forgiven to bring total forgiveness of debt income to $23,381for the year ended September 30, 2012. During the nine months ended June 30, 2013, no debt or payables were converted to common stock.

 

In October of 2011, the Company issued 4,291,667 shares for consulting services. The shares were valued at $0.24, fair market value, for a total expense of $103,000.

 

In October of 2011, the Company issued 1,729,167 shares of common stock for $55,500 of accounts payable held by a related party. The shares were valued at market value.

 

In October of 2011, the Company issued 1,062,500 shares of common stock for compensation amounting to $25,500. The shares were valued at market value.

 

In December of 2011, the Company issued 62,500 shares of common stock at a purchase price of $.08, for total proceeds of $5,000.

 

22
 

 

In December of 2011, the Company issued 105,000 shares of common stock for consulting services. The shares were valued at $.06, fair market value, for a total expense of $6,300.

 

In February of 2012, the Company issued 493,750 shares of common stock at a purchase price of $.08, for total proceeds of $39,500.

 

In February of 2012, the Company issued 500,000 shares of common stock as compensation. The shares were valued at market value for a total expense of $90,000

 

In February of 2012, the Company issued 56,250 shares of common stock for consulting services. The shares were valued at $.08, fair market value, for a total expense of $4,500.

 

In February of 2012, the Company issued 400,000 to satisfy a $60,000 accrued expense liability. The shares were valued at fair market value.

 

In April of 2012, the Company issued 2,799,214 shares of common stock at a purchase price of $.04, for total proceeds of $121,162.

 

In April of 2012, the Company issued 600,000 shares of common stock as compensation. The shares were valued at market value for a total expense of $79,800

 

In April of 2012, the Company issued 100,000 shares of common stock for consulting services. The shares were valued at $.133, fair market value, for a total expense of $13,300.

 

In April of 2012, the Company issued 120,000 shares of common stock as payment of interest. The shares were valued at market value for a total expense of $7,200

 

In May of 2012, the Company issued 1,000,000 shares of common stock at a purchase price of $.05, for total proceeds of $50,000.

 

In May of 2012, the Company issued 113,333 shares of common stock for consulting services. The shares were valued at $.15, fair market value, for a total expense of $17,000.

 

In August and September of 2012, the Company issued 1,100,000 shares of common stock at various purchase prices, for total proceeds of $39,000.

 

In August and September of 2012, the Company issued 450,000 shares of common stock for consulting services. The shares were valued at fair market value, for a total expense of $25,500.

 

In September of 2012, the Company issued 100,000 shares of common stock as payment of interest. The shares were valued at market value for a total expense of $4,000.

 

In October of 2012, 1,950,000 shares of common stock were issued for a capital investment of $78,000.

 

In October of 2012, 2,452,500 common shares were issued for consulting services. All were valued at $0.04.

 

In October of 2012, a total of 1,100,000 shares, all valued at $.03, were issued for compensation.

 

In October of 2012, the Board of Directors approved a Non-Qualified stock option plan for key employees and directors. 5,000,000 shares of common stock were reserved and 5,000,000 options were issued as compensation. All the options were valued at $0.03. 2,500,000 options vested immediately and were expensed as compensation expense during the three months ended December 31, 2012. 1,250,000 of the options vest in six months and the remaining 1,250,000 options vest in twelve months. These vesting options were valued and recorded as a prepaid asset that will be amortized into compensation expense over the vesting period. During the nine months ended June 30, 2013, $75,000 was amortized into expense and $0 remains in prepaid expense as of June 30, 2013. The options have a term of ten years and an exercise price of $0.03, which was the fair market value of the stock on the date of the grant. During the three months ended June 30, 2013, once of the employees left the Company and the related 500,000 options were canceled. There are 3,375,000 options vested as of June 30, 2013.

 

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On January 28, 2013, the Company issued 4,117,500 shares, all valued at $.04. 1,125,000 were issued for total proceeds of $45,000, 2,737,500 were issued as compensation for services, and 255,000 for pre-paid interest, as noted in note 6. Included in the 1,125,000 shares sold for total proceeds of $45,000, the Company also issued the buyers 562,500 warrants. The warrants have a term of two years and an exercise price of $0.03.

 

In April of 2013 the Company issued 1,652,500 shares for the consulting services and 550,000 shares for compensation. All shares were valued at $0.04 and expensed in the nine months ended June 30, 2013.

 

In June of 2013 the Company issued 455,000 shares for consulting services, 90,000 shares for interest on borrowings, and 650,000 shares for compensation. All shares were valued at $.04 and expensed in the nine months ended June 30, 2013.

 

In June of 2013, the Company sold 250,000 shares for a total of $10,000.

 

In June of 2013, the Company had 925,000 shares returned and canceled. The shares were originally issued in prior periods for consulting services that were not completed.

 

As of June 30, 2013, the Company has 59,201,763 shares of common stock issued and outstanding,4,500,000 options granted of which 3,375,000 are vested and exercisable at $0.03, and 562,500 warrants which are vested and exercisable at $0.03.

 

Item 3.Defaults Upon Senior Securities.

 

None.

 

Item 4.Mine Safety Disclosures.

 

None.

 

Item 5.Other Information.

 

None.

 

Item 6.Exhibits.

LIST OF EXHIBITS

 

Exhibit No.   Description
     
31.1   PEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2   PFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32   PEO/PFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS XBRL Instance Document (furnished herewith)
101.SCH XBRL Taxonomy Extension Schema (furnished herewith)
101.CAL XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
101.DEF XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
101.LAB XBRL Taxonomy Extension Label Linkbase (furnished herewith)
101.PRE XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  UV FLU TECHNOLOGIES, INC
     
 Date: August 16, 2013 By: /s/ John J. Lennon  
  Name: John J. Lennon
  Title: President, Chief Executive Officer and
    Chief Financial Officer

 

LIST OF EXHIBITS

  

Exhibit No.   Description
     
31.1   PEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2   PFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32   PEO/PFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS   XBRL Instance Document (furnished herewith)
101.SCH   XBRL Taxonomy Extension Schema (furnished herewith)
101.CAL   XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
101.DEF   XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
101.LAB   XBRL Taxonomy Extension Label Linkbase (furnished herewith)
101.PRE   XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)

 

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