ITEM 1. BUSINESS.
General
We were incorporated on October 24, 2000 under the laws of the State of Nevada.
Our business revolves around the development and marketing of a proprietary technology (the “Wax Technology”) that uses a molten wax compound consisting of paraffin wax and resins to control, clean and remediate oil and other liquid fuel spills on land and water. In addition, as part of our long-term business plan, we intend to pursue business opportunities in wastewater treatment solutions.
We continue to require additional financing if we are to continue as a going concern and to finance our business operations. As at July 31, 2012, we had cash of $1,400. If we are not able to acquire sufficient financing in the near future, our business could fail and investors could lose their investment.
The Wax Technology
The Wax Technology utilizes a wax compound made up of a proprietary mixture of paraffin wax and synthetic resins to control and clean oil spills on land, still bodies of water and shorelines. The wax compound is heated to a liquid state and the molten wax compound is then sprayed on top of the oil spill in a manner similar to spray painting a car. Once the wax compound comes into contact with the oil spill, whether the spill is on water or the ground, the wax instantaneously solidifies. A chemical reaction occurs as the hydrocarbon molecules present in the oil spill automatically bond with the hydrocarbon molecules present in the wax. The result is a solidified mixture that floats and which can then be easily collected. The collected wax/oil mixture can then be reprocessed, recycled by separating the oil from the wax, and reused. The Wax Technology is designed for easy use by any laborer, significantly reduces the costs and dangers associated with existing remediation methods and cleans to existing environmental standards.
Previous formulations of the Wax Technology utilized high grade petroleum based waxes blended with polyethylene. However, due to high petroleum prices, our management has decided to focus on lower cost lower melt point waxes at this time.
Product Development And Planned Wax Applications
Currently, we intend to market different formulations of the Wax Technology for use on:
(a)
Large and small still water, shoreline and inland water oil spills;
(b)
Large and small inland oil spills;
(c)
Industrial/commercial factory oil spills; and
(d)
Consumer inland oil spills.
Our product development work to date has focused primarily on adjusting the formulation of the wax itself, choosing waxes of different melt points for specific applications, and experimenting with waxes with different melt points and with different methods of application. When conducting our development work, consideration is given to:
(1)
Expected weather conditions and season of the year;
(2)
Type of oil spilled (e.g. bunker, diesel, gasoline, etc.);
(3)
Whether the spill is on land or water;
(4)
Method to be used to retrieve the spent solid wax/oil mixture;
(5)
Nature of the terrain (e.g. sandy beach vs. rocky shoreline); and
(6)
Application method and equipment.
By varying the formulation of wax and synthetic resins and the melting point of the wax, we are able to vary the structural strength of the wax, its rigidity, its elasticity and its adhesive qualities. Our tests have shown that paraffin waxes with a mid-range melt point and a higher ratio of resins to wax are better suited for treating oil coated beaches during summer climate conditions. The mixture is heated in a container to 350°F and sprayed onto the oil using a flare-jet nozzle 18 inches above the sand surface. Gravity feed is all that is required for this application. The resin speeds up the setting process and helps render the wax/oil residual less sticky to handle and prevents clogging in the application equipment.
When treating oil spills on still water such as lakes, ponds or tide pools, paraffin waxes having a lower range melt point and with a lower ratio of resins to wax provide better results. This wax formulation works well when used in conjunction with a synthetic mesh netting used to retrieve the wax/oil residual. A flood nozzle with a gravity feed would be used to apply this wax formulation.
When spraying cliffs or rocks, a formulation has been developed to minimize the adhesive quality of the wax. This allows the solidifying wax to flow down the face of the cliff and collect at the base, increasing the efficiency of collecting the wax/oil residual. This hot wax formulation would be sprayed on the rocks using a flare jet nozzle of 5 to 10 psi of pressure.
Heavier oils such as Bunker B or Bunker C oil require higher pressure application to penetrate the thick viscous oil layer, regardless of whether the oil is spilled on land or water. Our tests have shown that a midrange melt point wax with a low ratio of resins to wax to be more effective in cleaning up this type of oil. This wax formulation can then be applied at increased pressures depending on the depth and viscosity of the oil layer and the ambient temperature.
Prototype And Field Testing
Prototypes of the Wax Technology have been field tested in a handful of cases.
In 1974, an oil spill occurred around the shores of the ecologically sensitive Passage Island, located at the entrance to Howe Sound off the coast of British Columbia, Canada. The spilled oil occupied an area measuring approximately 450 feet long by 40 feet wide. Environment Canada commissioned the Wax Technology’s inventor, William Nelson, to clean the shoreline of Passage Island using an early prototype of the Wax Technology. The prototype wax formulation was sprayed on the contaminated area under low tide conditions and all residual oil was removed within three days using a crew of three men. Environment Canada inspected the shoreline area after the clean up with a team of marine biologists who verified that all oil and residual wax had been removed from the area. The cleanup was conducted over a three day period with a crew of three men working 12 hours per day. The equipment used consisted of 5x50 gallon steel drums used to heat and store the wax and three small spray containers for dispensing the wax onto the oil spill. The oil spill was contained and removed from the shoreline using approximately 2,000 pounds of wax. The total cost of the clean up was approximately $2,000. In conducting the clean up at Passage Island, the following deficiencies were identified and addressed:
(1)
It was observed that, when applying the wax to rocks with uneven or rough surfaces, not all of the oil was removed. As a result, the wax is now applied under pressure in order to dislodge oil located in pockets and rock crevices.
(2)
It was observed that, when applying the wax to oil resting in tidal areas, in some cases, the wax was not fully congealed prior to the tide coming back in. We addressed this issue by adding various resins to the wax compound which has reduced the solidification time.
In 1979, Mr. Nelson conducted a demonstration of an early prototype of the Wax Technology for the U.S. Coast Guard. The demonstration was conducted on the actual Capeche Oil Spill which was caused by a crude oil pipe fracture. The demonstration was conducted in an area measuring approximately 30 feet long by 20 feet wide and removed all of the oil spilled in this area. The spill was on both water and land and was cleaned up by two men using approximately 10 gallons of wax. The oil was completely removed from the spill area within one hour. The heated wax was applied by using a steel pail to contain the wax, which was then poured over the spilled oil. The total cost of the clean up was approximately $100.
In 1981, Mr. Nelson conducted another demonstration of a prototype of the Wax Technology for the U.S. Coast Guard in Honolulu, Hawaii. The Wax Technology was tested on a tidal waters area containing sand, rocks and water and measuring approximately 12 feet long by 5 feet wide. Mr. Nelson was able to remove all of the oil from this area using the Wax Technology prototype. The oil spill was contained and removed within one hour by Mr. Nelson and an assistant from the U.S. Coast Guard using three gallons of the Wax Technology prototype. The total cost of the field trial, including preparation time, was approximately $125.
Demonstrations of the Wax Technology were conducted for Ontario Hydro in 1989, 1990, 1992 and 1994. The tests were conducted on both land and inland waters on No. 2 fuel oil, turbine oil, lubricating oil, thermal oil, transformer oil, crude oil, bunker oil, diesel fuel and gasoline. The demonstrations were conducted at the Lennox TGS in Bath, Ontario, Canada. One of these demonstrations was used to clean up an actual oil spill over a land area measuring approximately 40 feet by 30 feet. The prototype wax formulation was successfully used to clean this area as well as machinery and staircases affected by the oil spill. This oil spill was cleaned up over a four hour period by two men using approximately 15 gallons of the Wax Technology at a cost of approximately $400. Other demonstrations were typically conducted by Mr. Nelson on areas measuring 5 feet by 10 feet over a one hour period using approximately one gallon of the Wax Technology. Each trial cost approximately $100.
In 1989, Mr. Nelson conducted a demonstration of the Wax Technology in the Toronto Harbour for the Toronto Harbour Commission and the Canadian Coast Guard. A mixture of diesel fuel and crude oil was spilled into a cordoned area of the harbour measuring approximately 20 feet by 15 feet. Two men using approximately five gallons of the prototype wax formulation removed the spilled oil within one hour at a cost of approximately $250. The wax compound was contained in a 15 gallon steel drum that was then heated using a propane torch. The heated wax was then poured over the spilled oil, which was then completely entrained in the wax and completely removed upon solidification.
In May of 2004, we engaged Bodycote Materials Testing Canada Inc. (“Bodycote”), an independent testing facility, to examine the effectiveness of the Wax Technology. In the Bodycote experiment, a one centimeter thick layer of crude oil was poured on top of water lying in a large bath container with a surface area of approximately 10 square feet. The hot wax compound was then poured onto the oil surface until the entire surface area had been covered. According to Bodycote’s results, the molten wax compound absorbed approximately 40% of its own weight in crude oil. As the layer of spilled oil was relatively thin, pouring the wax compound over the spilled oil was sufficient to encapsulate the oil through the water surface. If the layer of oil had been two to three inches thick, the wax compound would have been sprayed under pressure in order to penetrate the oil surface to the oil-water interface.
Competition
There are a number of existing and established technologies and techniques currently being used to clean oil spills and with which our Wax Technology would compete. Some of the techniques currently used in the industry include:
(a)
Mechanical Recovery and Containment: Mechanical recovery and containment techniques utilize floating booms to contain oil spills on water. These booms must be towed by boats or other vessels in an effort to contain the spilled oil. The oil is then collected by skimmers which remove oil and water from the surface or by vacuum hoses which suck the oil and water from the surface. The major limitation of mechanical containment techniques is that they require the coordination of a number of boats and vessels in order to surround and contain the oil spill, which will naturally tend to disperse under the influence of waves and currents. Generally the use of mechanical containment techniques will require extensive logistical support. Further, because the booms must be towed by boats, the ability to use booms in shallow inshore waters is limited. In addition, as the oil weathers and changes viscosity, the pumps and skimmers being used may need to be changed, increasing the costs and time of recovery. Finally, once the oil recovery is completed, the booms, skimmers and vacuums must be cleaned, overhauled and repaired for use on the next oil spill.
(b)
Chemical Dispersants: Dispersion of an oil spill will naturally occur when waves and other turbulence at the water surface causes the oil to break into tiny droplets and disperse into the surrounding water. Chemical solvents in applied dispersants are used to accelerate this process of physical and chemical break down. The dispersants are usually sprayed onto the oil spill using boats or airplanes. The primary disadvantage of chemical dispersants is that they involve the deliberate introduction into the environment of additional chemical pollutants. In open sea waters, the dispersal rate of the chemicals is relatively high and concentrations of the chemicals after introduction are unlikely to be high enough to produce adverse effects. However, on still/calm waters and in shallow shore waters where water exchange is poor, higher concentrations may persist for long periods and may themselves present environmental dangers.
(c)
In Situ Burning: In situ burning involves intentionally setting the oil spill ablaze in order to burn the oil off the surface. Customarily, in situ burning on water involves corralling the oil using booms and setting it ablaze using flares, explosives or lasers. The oil fire then burns until the fuel runs out or conditions favorable to combustion change. Burning can pose a number of logistical problems in addition to the obvious safety concern associated with a large oil fire. Ignition of the oil can be problematic depending upon the amount of dispersal which has occurred and the type of oil spilled. In order to maintain the oil burn, the layer of oil on the surface generally needs to be at least two to three millimeters thick. As a result of naturally occurring dispersion, booms will often need to be used in order to concentrate the oil. In addition, as the more combustible elements of the oil burn off, the cooling effects of the wind and sea may eventually extinguish the fire, leaving a significant quantity of oil unburned. Vast quantities of smoke can also be produced by in situ burning, threatening nearby populations. If it rains during the burning, the smoke can result in oily rain falling as far as 80 kilometers away. Finally, burning can leave a viscous, toxic residue which may sink or otherwise be difficult to recover.
(d)
Sorbents/Tissues: Sorbents or tissues may be used to wipe, absorb or adsorb the oil from the surface of the water or from the land. A variety of natural or synthetic materials may be used as absorbing agents. Each of these materials has a number of advantages and disadvantages. Generally, the size of the crews required to apply traditional sorbents grows exponentially with the size of the oil spill. Also, spent sorbents do not continue to collect much oil and must be disposed of or incinerated at special hazardous materials sites.
Based on our prototype tests and on field tests of the Wax Technology conducted by Mr. Nelson, we believe that our Wax Technology will provide distinct advantages over existing techniques and technologies, such as:
(1)
The supply costs for the paraffin wax, which forms the main ingredient of our Wax Technology, are relatively low when compared to the cost of materials and equipment required for existing mechanical techniques and chemical dispersants;
(2)
Application of our Wax Technology will not depend on water turbulence or water exchange to facilitate clean up of the spilled oil;
(3)
The solidified wax compound which remains after application of the Wax Technology floats, facilitating easy removal of the residual from calm/still waters;
(4)
Because the heated wax compound is applied in liquid form, the mobility of the wax allows it to seep into crevices between rocks and machinery, unlike competing sorbent products;
(5)
Removal of the solidified wax will not require the use of skimmers or vacuums, allowing for easier clean up and post-application removal than existing mechanical techniques;
(6)
Our Wax Technology does not involve the lingering introduction of residual chemicals into the environment;
(7)
The spent wax compound can be collected and recycled for use without incineration or other hazardous disposal; and
(8)
Field tests conducted by Mr. Nelson have demonstrated that the wax can be applied by a relatively small team of technicians utilizing mobile spray application equipment.
Although we have used prototype formulations of our Wax Technology in a number of test cases, we have not yet completed commercial development of products based on that technology and those prototypes have only been used in a small number of situations. Further, because our product is relatively novel, the Wax Technology has not yet gained acceptance in the market place. Ultimately, the ability of products based on our Wax Technology to successfully compete on a commercial level with existing remediation techniques will depend on our ability to establish a competitive price for our products and on our ability to demonstrate the efficiency and ease of use of our products and, most importantly, their effectiveness in cleaning oil spills compared to existing techniques.
Current Development Hurdles
Our Wax Technology is likely to be most effective when applied to oil spills located on still water, shoreline and coastal waters as well as on land. Even though the wax compound used in the Wax Technology will float, because deep sea waters tend to be more turbulent than coastal and inland waters, collection of the spent wax compound will be more difficult. In addition, turbulent waters will tend to cause the spilled oil to disperse more quickly, which would require the wax compound to be applied over potentially very large areas.
As of the date of this annual report, we are still hoping to test various formulations of our Wax Technology. Depending upon the different formulations of paraffin wax and synthetic resins, the effectiveness of the wax compound on cleaning different types of spilled oil/fuels will vary. However, our ability to develop various formulations of our Wax Technology is dependent on our ability to obtain additional financing, of which there is no assurance. If we are able to obtain sufficient financing for the testing of different wax formulations, of which there is no assurance, we believe that we would be able to finalize the composition of those different formulations within 6 months. We have not yet been able to raise sufficient financing to complete the development of different wax formulations (see “Management’s Discussion of Financial Condition and Results of Operation” below).
In addition to finalizing the different formulations of the Wax Technology that we intend to market, we will also seek to address the following engineering/safety related issues:
(a)
Liquefying the Wax Compound: We are working to solve logistical issues related to heating the wax compound from a solid to liquid state and for maintaining the wax in a liquid state. Different logistical problems present themselves when attempting to use the wax compound in a large scale environment (e.g. shoreline clean ups) or small scale environment (e.g. industrial or individual consumer use). In order to use the wax compound in a large scale environment, large but mobile heating units must be used to keep the wax in a liquid state. For consumer use, a method must be devised for consumers to safely and effectively heat the wax compound.
We plan to work with our wax supplier, The International Group, Inc. (“IGI”), to utilize tanker trucks to ship the liquefied wax to potential oil spill sites. The tankers would be insulated units capable of maintaining the wax in a heated liquid state for extended periods of time. We are also in the preliminary stages of developing a mobile application unit for large scale spills, complete with propane heaters, air compressors, tanks, hoses, temperature controls and applicator nozzles. The unit is being designed to be either self propelled or towed by an All Terrain Vehicle or tractor.
In addition, for smaller industrial site spills and consumer spills, we are working on design prototypes of insulated wax canisters, complete with heat controls and dispensing equipment. As designed, the canisters could be replenished with refill wax cartridges.
(b)
Applying the Wax Compound: We are seeking to design new equipment or reconfigure existing technologies to be used to apply the wax in a timely manner. Effective remediation of oil spills requires the timely application of remediation technologies. To use the technology on large oil spills, we must ensure that the applicator equipment is mobile to ensure a speedy response. We are seeking to develop different types of applicators for use on different types of oil spills (see above).
(c)
Recovery of Wax Compound: We are working on methods to improve the efficiency of collecting the spent wax compound. One of the methods that we have developed is the use of a synthetic mesh netting which can be laid down on both land and water prior to application of the wax. Once the applied wax solidifies, the oil, wax and netting can be removed in one clean sweep.
Previous formulations for our Wax Technology utilized a high grade petroleum based wax blended with polyethylene. Due to sharp increases in petroleum prices, our management believes that using high grade petroleum based waxes is no longer cost effective. As a result, we are focusing on the use and development of lower melt point waxes, which at present are more cost effective.
We have not yet been able to raise sufficient financing to address these development issues, and there is no assurance that we will be able to raise sufficient financing to address these issues.
In addition to the above technical development issues, before we are able to market our product, we will need to secure a supplier for our wax compound (see “Manufacturing and Production” below). Further, we may be required to obtain the approval of various regulatory agencies (see “Government Regulations” below).
Manufacturing And Production
Once we have completed the development of our anticipated products, we plan to market those products directly to emergency response contractors, insurance companies and other emergency response organizations involved in the clean up and remediation of oil spills. Although we have developed and successfully tested prototypes of our Wax Technology, we are in the process of developing and refining various formulations and have not completed the development of our products for commercial application, nor have we received any revenues to date. In the past, we have worked with the International Group, Inc. (“IGI”), an unrelated independent supplier of paraffin wax, to refine our formulation for various applications. Mr. Nelson has collaborated with IGI for a number of years on different wax related projects. Based on Mr. Nelson’s long-standing personal relationship with IGI, they have verbally agreed to assist us and to provide us with limited supplies of paraffin wax formulated according to Mr. Nelson’s specifications during the prototype refinement process free of charge. IGI has also verbally agreed to provide us with bench scale quantities of paraffin wax and quantities for small field trials free of charge while we are still in the development stage of our business.
Although IGI has verbally agreed to provide us with small amounts of paraffin wax during the development stage of our business, we do not have a formal agreement with IGI. As such, IGI may, at their discretion, cease to supply us with paraffin wax.
Once we have completed the development of our commercial products, we intend to enter into a formal agreement with IGI for the manufacture and supply of our wax compound. There are a number of suppliers who provide paraffin wax in raw form, however, there are a limited number of suppliers willing and able to supply specialized wax composites. We have not yet entered into a formal agreement with IGI for the manufacture and supply of wax products and there is no assurance that we will be able to reach such an agreement with them in the future. If we are unable to reach an agreement with IGI for the manufacture and supply of our products, we will have to seek alternative suppliers, which may have a materially adverse effect on our business.
We also intend to produce “mini-kits” of our wax products to be used by consumers. The kits would be targeted to allow everyday consumers to use our products to clean minor oil spills. We hope to introduce these kits as part of our product introduction strategy and intend to sell them directly to consumers either online or by telephone. We would also provide consumers with after-sales services and support.
Marketing And Sales Plan
We have not yet completed the development of our products for commercial application and have not received any revenues or completed any sales of our products to date. Once we have completed the refinement and development of our products for commercial sale, we expect to focus our marketing and sales efforts on markets within the United States and Canada, especially in industrialized areas vulnerable to, and with a history of, spill occurrences.
We expect to concentrate our marketing and sales efforts directly at approved emergency response contractors, insurance companies and other organizations involved in the control and remediation of oil spills. We also intend to license our products to global sales agents who will assist us in marketing our products worldwide.
Patents And Trademarks
The inventor of the Wax Technology, Mr. Nelson, registered a patent application with the Canadian Intellectual Property Office (the “CIPO”) under the application number CA 2,314,066 on July 17, 2000. In March, 2007, we received notice of the first examination report from the CIPO in connection with our patent application. The CIPO raised a number of objections to our patent application regarding the wording of our claims, which were considered to be indefinite or ambiguous. In order to avoid abandonment of our patent application, we were required to file a reply to the first examination report by August 1, 2007. Due to a lack of financing, we were unable to file a reply within the required time period. As a result, our patent application was abandoned. Due to our limited financial resources and the high expected cost of reviving this patent application, we do not intend revive this patent application. In addition, during the past year, the price of petroleum has increased significantly, increasing the cost of the high grade petroleum based waxes called for in the formulation set out in this patent application. As a result, in the opinion of our management, this current formulation would no longer be cost effective. We are currently focusing on the development of lower melt point waxes, which are less expensive. We do not currently have plans to file a patent application for any new developments that we make in the use of waxes for oil spill remediation, and we will need to protect our interests by maintaining the secrecy of any new formulations that we develop.
Government Regulations
Because our Wax Technology is a chemically inert product and does not involve the lingering introduction of residual chemicals into the environment, we believe that it will be unnecessary for us to obtain prior approval from Canadian and U.S. environmental regulatory agencies to use our planned products to clean oil spills on land. However, we may be required to obtain the prior approval of federal regulatory agencies such as Environment Canada and the U.S. Environmental Protection Agency (the “EPA”) or state or local agencies before our planned products can be used to treat oil spills on inland or coastal waters. We may incur material costs or liabilities in obtaining such approvals and/or complying with applicable laws and regulations. Furthermore, our potential customers may be required to comply with numerous laws and regulations when engaging in environmental remediation activities.
We do not anticipate any material costs associated with complying with local, state or federal environmental laws in the production of our anticipated products as we intend to contract out the manufacturing of our anticipated wax products.
Environment Canada Approval Requirements
In Canada, where an oil spill will potentially affect inland or coastal waters subject to the Canadian Fisheries Act, permission must be obtained from the regional office of Environment Canada to use oil spill treatment agents or products. Permission is granted by Environment Canada on a case-by-case basis, but is not required for oil spills not affecting waters subject to the Fisheries Act. In order for remediation personnel to obtain permission to use our planned products, those products must be submitted to the Environmental Technology Centre of Environment Canada (the “ETC”) for testing and approval. Although we have not yet submitted our products to the ETC for testing, we have made initial contact with the ETC with respect to obtaining their approval for our planned products. In our discussions with the ETC, they have expressed concerns with regards to the use of the Wax Technology on fast moving waters, the Wax Technology’s absorption rate and on the recoverability of the spent wax. However, the ETC’s comments are based on a twenty-year old, early prototype of the Wax Technology that Mr. Nelson had demonstrated for Environment Canada in the 1970’s. We are working to address those concerns in our current development activities, including increasing the absorption capacity of the wax compound and the use of a synthetic mesh netting to remove the spent solidified wax (see “Product Development and Planned Wax Applications” and “Current Development Hurdles” above). Further, we intend to restrict marketing for the use of our product to calm/still waters and shoreline clean ups where we believe use of the Wax Technology will be most beneficial. Subject to our ability to obtain additional financing, of which there is no assurance, once we have completed the development of our planned products, we hope to make a formal submission to the ETC for their approval.
U.S. Environmental Protection Agency Approval Requirements
In the United States, federal authorization is required to use a product on a specific oil spill incident only where the oil spill has the potential to affect U.S. navigable waters, as defined by Section 300.5 of the National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”) Regulations. Where the oil spill does not have the potential to affect U.S. navigable waters, federal authorization is not required, although individual state and local governments may impose their own authorization requirements.
Where an oil spill does have the potential to affect U.S. navigable waters, a regional response team (“RRT”) consisting of representatives of a number of federal and state agencies, including a representative of the EPA, will have jurisdiction over the clean up of the oil spill. If the product to be used in the clean up of the oil spill is a chemical or biological agent, as defined by Section 300.5 of the NCP Regulations, the product must be listed on the NCP Product Schedule and incident specific RRT member approval is required to use the product. The EPA is responsible for determining whether a product must be listed on the NCP Product Schedule. Because our Wax Technology is a chemically inert product used to remove the spilled oil, we believe that our planned products will be classified as a sorbent under the NCP Regulations and will not require listing on the NCP Product Schedule and will thus not require approval prior to their use on specific spill incidents. However, in order to confirm the status of our planned products, once we have completed the development of our products and subject to our obtaining additional financing, of which there is no assurance, we intend to submit our products to the EPA to confirm that those products meet the definition of a sorbent under the NCP Regulations.
Employees
Other than Mr. Daly, we do not currently have any significant employees. However, we have retained the services of the inventor of our Wax Technology, William Nelson, as a technical consultant who is crucial to our business plan.
Mr. William Nelson has verbally agreed to provide us with technical advice free of charge to assist in our development of our Wax Technology. If we determine that we require extensive technical studies or engineering work to be performed, we will enter into a formal consultancy agreement with Mr. Nelson.
Mr. Nelson is an accomplished inventor and is recognized around the world as a leading expert in paraffin waxes. Mr. Nelson has acted as a consultant to several large chemical companies. In the past, Mr. Nelson has assisted aboriginals in British Columbia, Canada prospect for gold using a secret process he developed using black light and assisted in the remediation of Chernobyl by utilizing a technology he invented to seal the nuclear reactor’s stone casing or “sarcophagus” from leaking further radiation.
ITEM 1A.
ITEM 1A. RISK FACTORS.
The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.
Need For Financing
We do not currently have the financial resources to complete our plan of operation for the next twelve months. We anticipate that we will require financing in the amount of $750,000 in order to fund our plan of operation over the next twelve months. We presently do not have sufficient financing arrangements in place and there is no assurance that we will be able to obtain sufficient financing on terms acceptable to us or at all. If further financing is not available, our ability to meet our financial obligations and pursue our plan of operation will be substantially limited. If we are not able to meet our financial obligations as they come due, our business could fail and investors could lose a substantial portion or all of their investment.
We have filed a Registration Statement on Form S-1 (File No. 333-170648) (the “Registration Statement”) for the offer and sale by us of up to 1,000,000 shares of our common stock at a price of $0.15 per share (the “Direct Offering”) and the resale of 8,494,999 shares of our common stock by certain selling security holders (the “Resale Offering”). The SEC declared the Registration Statement effective on December 23, 2010. On March 25, 2012, we filed a Post-Effective Amendment to the Registration Statement, which was declared effective on May 30, 2012. On October 23, 2012, we sold 266,667 shares under the Direct Offering for total proceeds of $40,000, which will be used for working capital purposes. There is no assurance that we will sell any additional shares under the Direct Offering.
Limited Operating History, Risks Of A New Business Venture
We were incorporated on October 24, 2000 and, prior to our acquisition of the Wax Technology, we had been involved primarily in organizational activities and in seeking business opportunities related to environmental technologies and products. We have not earned any revenues to date.
Potential investors should be aware of the difficulties normally encountered by a new enterprise and the high rate of failure of such enterprises. The potential for future success must be considered in light of the problems, expenses, difficulties complications and delays encountered in connection with the development of a business in the area in which we intend to operate and in connection with the formation and commencement of operations of a new business in general. These include, but are not limited to, unanticipated problems relating to research and development programs, marketing, approvals by government agencies, competition and additional costs and expenses that may exceed current estimates. There is no history upon which to base any assumption as to the likelihood that our business will prove successful, and there can be no assurance that we will generate any operating revenues or ever achieve profitable operations.
Our Operations Will Be Subject To Extensive Government Regulations
Our operations will be subject to extensive government regulations in the United States, Canada and in other countries in which we may operate. In order to sell our anticipated products, we may be required to obtain a number of regulatory approvals at the federal, state and local level, including the approval of the U.S. Environmental Protection Agency and Environment Canada. We may incur material costs or liabilities in obtaining such approvals and/or complying with applicable laws and regulations. Furthermore, our potential customers may be required to comply with numerous laws and regulations when engaging in environmental remediation activities. There can be no assurance that we will be able to successfully comply with all present or future government regulations. An inability to obtain necessary regulatory approvals or the imposition of onerous conditions on the use of our anticipated products will have a materially adverse effect on us, our business and our financial condition.
Our Business Operations, Assets and Personnel Are Located Outside The United States
Although we are incorporated in the United States, all of our current operating activities are conducted in, and all of our assets and personnel are located in, Canada. As such, investors in our securities may experience difficulty in enforcing judgments or liabilities against the Company or our personnel under United States securities laws.
Our corporate headquarters are located at 20 Lyall Avenue, Toronto, Ontario, Canada M4E 1V9. As we are a Nevada corporation, we are required to maintain a resident agent in the State of Nevada for the purpose of receiving service of process. Under Section 78.090 of the Nevada Revised Statutes, all legal process and any demand or notice authorized by law to be served upon the Company may be served upon our resident agent in Nevada. Our resident agent for this purpose is Camlex Management (Nevada) Inc. of 8275 S. Eastern Avenue, Suite 200, Las Vegas, Nevada 89123.
As a Nevada corporation, we are subject to the laws of the United States, including the federal securities laws of the United States, and to the jurisdiction of United States courts. As such, investors may bring proceedings against us, and enforce judgments obtained against us, in United States courts.
Generally, original actions to enforce liabilities under United States federal securities laws may not be brought in a Canadian court. Such actions must be brought in a court in the United States with applicable jurisdiction. Persons obtaining judgments against us in United States courts, including judgments obtained under United States federal securities laws, will then be required to bring an application in a Canadian court to enforce such judgments in Canada.
Competition Is Intense And We May Be Unable To Achieve Market Acceptance
The business environment in which we intend to operate is highly competitive. Currently, there exist a number of established methods, products and technologies used to control, clean and remediate oil spills and we expect to experience competition from a number of established companies involved in the environmental remediation industry. Certain of our potential competitors will have greater technical, financial, marketing, sales and other resources than us.
In addition, while the environmental remediation industry is a mature one, there is no established market for products utilizing our Wax Technology. We are unable to provide assurances that our target customers and markets will accept our technologies or will purchase our products and services in sufficient quantities to achieve profitability. If a significant market fails to develop or develops more slowly than we anticipate, we may be unable to recover the losses incurred to develop products and we may be unable to meet our operational expenses. Acceptance of our anticipated products by environmental remediation firms and other organizations will depend upon a number of factors, including the cost competitiveness of our products, customer reluctance to try new products or services, regulatory requirements or the emergence of more competitive or effective products.
Asserting And Defending Intellectual Property Rights May Impact The Results Of Our Operations
We had applied for a patent from the CIPO, however, we did not receive a final grant of patent from the CIPO, and we have decided to abandon our patent application at this time. As patent applications are publicly available documents, competitors may be able to copy the formulations set out in our patent application. Due to our limited financial resources, we do not expect to apply for patent protection for any new developments that we make to the Wax Technology. As a result, in order to protect future developments, we will need to maintain the secrecy of our formulations and the methods we use. If we are unable to maintain the secrecy of those developments, then competitors may be able to copy our formulations and methodology, which would have a material adverse effect on our business.
Dependence On Key Personnel
Our success will largely depend on the performance of our directors and officers and our key consultants. Our success will also depend on our ability to attract and retain highly skilled technical, research, management, regulatory compliance, sales and marketing personnel. Competition for such personnel is intense. The loss of the services of such personnel or the inability to attract and retain other key personnel could impair the development of our business, operating results and financial condition.
Our Stock is a Penny Stock
Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:
1.
contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
2.
contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;
3.
contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
4.
contains a toll-free telephone number for inquiries on disciplinary actions;
5.
defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and
6.
contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.
ITEM 2.
ITEM 2. PROPERTIES.
We currently do not own any real property. We currently lease an office space located at 20 Lyall Avenue, Toronto, Ontario, Canada M4E 1V9, consisting of approximately 700 square feet at a cost of $200 per month. We rent this office space from Paul G. Daly, who is our sole director and our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any other legal proceedings and, to our knowledge, no other legal proceedings are pending, threatened or contemplated.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET INFORMATION
The principal market for our common stock is the OTC Bulletin Board. The high and the low prices for our shares for each quarter of our last two fiscal years of actual trading were:
Although our shares began trading on the OTC Bulletin Board on December 2, 2005, no information on the high and low bid prices for our common stock was available from the OTC Bulletin Board. Our shares are quoted under the symbol “IFTV.” OTC Bulletin Board quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.
REGISTERED HOLDERS OF OUR COMMON STOCK
Our authorized capital consists of 100,000,000 shares of common stock, par value $0.001 per share. As of October 25, 2012, there were 106 registered holders of our common stock.
DIVIDENDS
We have not declared any dividends on our common stock since our inception. There are no dividend restrictions that limit our ability to pay dividends on our common stock in our Articles of Incorporation or Bylaws. Chapter 78 of the Nevada Revised Statutes (the “NRS”), does provide certain limitations on our ability to declare dividends. Section 78.288 of Chapter 78 of the NRS prohibits us from declaring dividends where, after giving effect to the distribution of the dividend:
(a)
we would not be able to pay our debts as they become due in the usual course of business; or
(b)
except as may be allowed by our Articles of Incorporation, our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders who may have preferential rights and whose preferential rights are superior to those receiving the distribution.
We have neither declared nor paid any cash dividends on our capital stock and do not anticipate paying cash dividends in the foreseeable future. Our current policy is to retain any earnings in order to finance the expansion of our operations. Our board of directors will determine future declaration and payment of dividends, if any, in light of the then-current conditions they deem relevant and in accordance with the NRS.
RECENT SALES OF UNREGISTERED SECURITIES
Other than as disclosed in our Current Reports on Form 8-K, we have not completed any unregistered sales of equity securities.
We have filed a Registration Statement on Form S-1 (File No. 333-170648) (the “Registration Statement”) for the offer and sale by us of up to 1,000,000 shares of our common stock at a price of $0.15 per share (the “Direct Offering”) and the resale of 8,494,999 shares of our common stock by certain selling security holders (the “Resale Offering”). The prices at which the selling security holders may sell their shares will be determined by prevailing market prices, prices related to prevailing market prices or at privately negotiated prices. We will not receive any proceeds from the sale of shares being sold by selling security holders. The SEC declared the Registration Statement effective on December 23, 2010 (the “Effective Date”). We commenced the offering immediately following the Effective Date. On March 25, 2012, we filed a Post-Effective Amendment to the Registration Statement to update and supplement the information contained in the Registration Statement as required by Section 10(a)(3) of the Securities Act. The Post-Effective Amendment was declared effective on May 30, 2012. From the Effective Date to July 31, 2012, we did not sell any shares, receive any proceeds nor incur any expenses in connection with the Offering. On October 23, 2012, we sold 266,667 shares under the Direct Offering for total proceeds of $40,000, which will be used for working capital purposes. There is no assurance that we will sell any additional shares under the Direct Offering.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
PLAN OF OPERATION
Our current plan of operation calls for us to spend approximately $750,000 over the next twelve months in pursuing our plan of operation subject to obtaining sufficient financing. This amount is significantly greater than the total amount of financing that we have been able to obtain to date. There exists a substantial doubt that we will be able to obtain sufficient financing to complete this plan of operation in the current economic climate.
If we are able to obtain sufficient financing, our plan of operation for the next twelve months will involve the following:
1.
Product Formulation and Testing: We intend to continue to develop, refine and test various formulations of our Wax Technology to develop a number of final products for application on various types of oils and fuels and locations. During this phase of our business plan, we expect that the majority of our activities will involve laboratory research and development and field testing of various formulations. During this stage of our development we will also work to develop application equipment designed to meet the needs of specific customers. We anticipate spending approximately $75,000 to complete the product formulation and testing phase of our plan of operation. If we are able to obtain sufficient financing, of which there is no assurance, we expect that it will take us approximately six months to complete this phase of our plan of operation.
2.
Product Refinement, Market Development and Regulatory Approvals: Once we have completed the development of our anticipated products, we intend to focus our efforts on developing the market for those products. We will refine our marketing and sales program for each of the products depending upon the results our product development efforts. We expect that this phase of our plan will involve the following:
(i)
We will analyze our business model based on the anticipated costs of manufacturing our products and will determine the price of our products based upon that analysis and upon our analysis of market demand.
(ii)
We will conduct field tests of our product formulations and applicator equipment in an attempt to further refine them prior to marketing.
(iii)
Subject to our obtaining additional financing, of which there is no assurance, we intend to submit our products to Environment Canada and the US Environmental Protection Agency and other regulatory bodies in an attempt to obtain their approval for our products.
We anticipate spending approximately $75,000 to complete this phase of our plan of operation. We do not anticipate beginning this stage of our plan of operation until we have completed the product formulation and testing phase. We anticipate that this phase of our business will take approximately six to twelve months to complete and we do not anticipate making any significant sales or generating any significant revenues until this phase of our plan of operation is complete.
3.
Production and Manufacturing: Once we have completed the market development stage of our plan, we anticipate that we will begin to produce and manufacture our products. We expect to expend approximately $325,000 over a twelve month period in producing and manufacturing our planned products and the applicator equipment to be used for dispensing those products. Production and manufacturing costs are expected to include the cost of raw materials, including paraffin wax, blending of the wax and other raw materials and packaging.
4.
Marketing: We also anticipate that, once we have completed the market development stage of our plan, we will begin to aggressively market our products. We intend to develop marketing literature, demonstration videos and digital media, enhance our internet capabilities, visit potential customers and conduct demonstrations and present exhibits at tradeshows. We expect to spend approximately $100,000 on marketing activities over a twelve month period.
In addition, we anticipate spending approximately $75,000 on legal, patent and other professional fees and approximately $100,000 on general administrative expenses and salaries for any sales and/or administrative personnel that we may hire.
Although we will explore opportunities in wastewater treatment as they present themselves, we do not expect to actively pursue opportunities in this area over the next twelve months and we intend to focus our available resources on developing and marketing the Wax Technology.
Financing Requirements
Currently, we do not have sufficient financial resources to complete our plan of operation for the next twelve months. As such, our ability to complete our plan of operation is dependent upon our ability to obtain additional financing in the near term.
To date, we have relied on short term loans from our sole executive officer and director and private placement sales of our equity securities in order to finance our ongoing activities and to meet our outstanding financial obligations. There is no assurance that we will be able to continue to obtain financing from these sources in the future. Our sole executive officer and director could refuse to provide us with any additional financing and we may not be able to find suitable investors willing to purchase our equity securities. If we are unable to obtain financing, our business could fail and shareholders could lose some or all of their investment.
We have filed a Registration Statement on Form S-1 (File No. 333-170648) (the “Registration Statement”) for the offer and sale by us of up to 1,000,000 shares of our common stock at a price of $0.15 per share (the “Direct Offering”) and the resale of 8,494,999 shares of our common stock by certain selling security holders (the “Resale Offering”). The SEC declared the Registration Statement effective on December 23, 2010. On March 25, 2012, we filed a Post-Effective Amendment to the Registration Statement, which was declared effective on May 30, 2012. On October 23, 2012, we sold 266,667 shares under the Direct Offering for total proceeds of $40,000, which will be used for working capital purposes. There is no assurance that we will sell any additional shares under the Direct Offering.
RESULTS OF OPERATIONS
Revenues
We have not earned any revenues to date and we do not anticipate earning revenue until we have completed commercial development of products incorporating our Wax Technology. We are presently in the development stage of our business and we can provide no assurance that we will be able to complete commercial development or successfully sell or license products incorporating our Wax Technology once development is complete.
Expenses
The major components of our expenses for the year ended July 31, 2012 and 2011 are outlined in the table below:
During the year ended July 31, 2012, our operating expenses primarily consisted of accounting expenses, legal expenses and office administration expenses. Our expenses for the year ended July 31, 2012 increased by 21.2% from our previous fiscal year. The increase was primarily due to increases in office expenses, professional fees and foreign exchange loss.
We are required to report all costs of conducting our business. As such, we have recorded as an expense the fair market value of contributed executive services provided to us at no cost. For the years ended July 31, 2012 and 2011, we recorded contributed executive services of $60,000. These services are provided to us at no charge and a corresponding increase in additional paid-in capital has been recorded.
If we are able to obtain sufficient financing to proceed with our plan of operation, of which there is no assurance, we expect that our expenses will increase significantly as we engage in product and business development activities.
LIQUIDITY AND CAPITAL RESOURCES
Our only sources of financing for the fiscal year ended July 31, 2012 was proceeds from the issuance of common stock and an increase in amounts due to related parties.
Our plan of operation calls for us to spend significantly more than our current capital resources or the amount of financing that we have been able to obtain to date. As such, there is a substantial doubt that we will be able to raise significant financing to complete our stated plan of operation. Any substantial financing that we are able to obtain is expected to be in the form of equity financing.
On February 23, 2012, we sold 100,000 shares of our common stock at a price of $0.10 per share for proceeds of $10,000. This private placement was completed pursuant to the provisions of Regulation S promulgated under the United States Securities Act, as amended. The purchaser represented that he was not a “US person” as that term is defined in Rule 902(k) of Regulation S, and that he was not acquiring our securities for the account or benefit of a US person.
We have filed a Registration Statement on Form S-1 (File No. 333-170648) (the “Registration Statement”) for the offer and sale by us of up to 1,000,000 shares of our common stock at a price of $0.15 per share (the “Direct Offering”) and the resale of 8,494,999 shares of our common stock by certain selling security holders (the “Resale Offering”). The SEC declared the Registration Statement effective on December 23, 2010. On March 25, 2012, we filed a Post-Effective Amendment to the Registration Statement, which was declared effective on May 30, 2012. On October 23, 2012, we sold 266,667 shares under the Direct Offering for total proceeds of $40,000, which will be used for working capital purposes. There is no assurance that we will sell any additional shares under the Direct Offering.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.
Our significant accounting policies are disclosed in Note 3 to the audited financial statements included in this Annual Report. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:
Foreign Currency Translation
Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at transaction dates. Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date. Gains and losses from restatement of foreign currency monetary assets and liabilities are included in the statements of operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in the statement of operations.
Contributed Executive Services
We are required to report all costs of conducting our business. Accordingly, we record the fair value of contributed executive services provided to us at no cost as compensation expense, with a corresponding increase to additional paid-in capital, in the year in which the services are provided.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Index to Financial Statements:
Audited financial statements as of July 31, 2012, including:
1.
Report of Independent Registered Accounting Firm (Davidson & Company, Chartered Accountants);
2.
Balance Sheets as of July 31, 2012 and 2011;
3.
Statements of Operations for the years ended July 31, 2012 and 2011 and cumulative from inception on October 24, 2000 to July 31, 2012;
4.
Statement of Stockholders’ Equity (Deficiency) from inception on October 24, 2000 to July 31, 2012;
5.
Statements of Cash Flows for the years ended July 31, 2012 and 2011 and cumulative from inception on October 24, 2000 to July 31, 2012; and
6.
Notes to the Financial Statements.
INFITECH VENTURES INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of
Infitech Ventures Inc.
We have audited the accompanying balance sheets of Infitech Ventures Inc. as of July 31, 2012 and 2011, and the related statements of operations, stockholders' equity (deficiency) and cash flows for the years ended July 31, 2012 and 2011 and for the period from inception on October 24, 2000 to July 31, 2012. Infitech Ventures Inc.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Infitech Ventures Inc. as of July 31, 2012 and 2011, and the results of its operations and its cash flows for the years ended July 31, 2012 and 2011 and for the period from inception on October 24, 2000 to July 31, 2012 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred a loss of $127,357 for the year ended July 31, 2012, and has an accumulated deficit of $990,971, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
“DAVIDSON & COMPANY LLP”
Vancouver, Canada Chartered Accountants
October 26, 2012
INFITECH VENTURES INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
As at July 31
The accompanying notes are an integral part of these financial statements.
INFITECH VENTURES INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
The accompanying notes are an integral part of these financial statements.
INFITECH VENTURES INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(Expressed in United States Dollars)
The accompanying notes are an integral part of these financial statements.
INFITECH VENTURES INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
The accompanying notes are an integral part of these financial statements.
INFITECH VENTURES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
1.
HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on October 24, 2000 under the Laws of the State of Nevada. The Company intended to develop and market a wax technology relating to the process of solidifying and removing spilled oil on land and water. The Company is considered to be a development stage company as it has not generated revenues from operations.
All amounts are stated in United States dollars unless otherwise noted.
2.
GOING CONCERN
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern.
The operations of the Company have primarily been funded by the issuance of common stock. Continued operations of the Company are dependant on the Company’s ability to complete equity financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity sales. Such sales may not be available or may not be available on reasonable terms.
There can be no assurance the Company will be able to continue to raise funds in which case the Company may be unable to meet its obligations. Should the Company be unable to realize economic benefit from its assets and discharge its liabilities in the normal course of business, the net realizable value of assets may be materially less than the amounts recorded on the balance sheets. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The current market conditions and volatility increase the uncertainty of the Company’s ability to continue as a going concern given the need to both curtail expenditures and to raise additional funds. The Company is experiencing, and has experienced, negative operating cash flows. The Company will continue to search for new or alternate sources of financing but anticipates that the current market conditions may impact the ability to source such funds.
3.
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted by the Company are as follows:
Use of estimates
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the 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 these estimates.
INFITECH VENTURES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Foreign currency translation
Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at transaction dates. Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date. Gains and losses from restatement of foreign currency monetary assets and liabilities are included in the statements of operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in the statement of operations.
Cash and cash equivalents
The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At July 31, 2012 and 2011, cash and cash equivalents consisted of cash held at banks.
Accounting for impairment of long-lived assets and for long-lived assets to be disposed of
Long-lived assets to be held and used by the Company are continually reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
For long-lived assets to be held and used, the Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. In the event that facts and circumstances indicate that the carrying amount of an asset may not be recoverable and an estimate of future undiscounted cash flows is less than the carrying amount of an asset, an impairment loss will be recognized.
Web-site development costs
Web-site development costs are expensed as incurred.
Contributed executive services
The Company is required to report all costs of conducting its business. Accordingly, the Company records the fair value of contributed executive services provided to the Company at no cost as compensation expense, with a corresponding increase to additional paid-in capital, in the year in which the services are provided.
For each of the years ended July 31, 2012 and 2011 the Company recorded contributed executive services in the amount of $60,000.
Income taxes
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expenses (benefit) result from the net change during the period of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
INFITECH VENTURES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Net loss per share
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive shares of common stock.
Recent accounting pronouncements
There are no recent accounting pronouncements which are expected to have a material effect on the Company’s financial statements.
4.
PATENT APPLICATION AND INTELLECTUAL PROPERTY
Pursuant to an agreement dated May 6, 2004, the Company acquired a patent application and intellectual rights to a process to solidify and remove spilled oil on land and water.
In consideration for the sale, assignment and transfer of the technology, the Company agreed to:
a)
Pay the inventor the sum of $10,000 upon execution of the agreement (paid);
b)
Issue to the inventor a total of 150,000 shares of common stock upon execution of the agreement (issued); and
c)
Pay to the inventor a royalty fee in the amount of $0.075 (Cdn $0.10) per pound of the formulation produced by or on behalf of the Company to any subsidiary, affiliate, agent or sub-contractor of the Company as defined in the agreement.
During the year ended July 31, 2007, due to the uncertainty of the development of this patent, management wrote off the cost to date in its statement of operations.
5.
CAPITAL STOCK
Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation.
On February 23, 2012, the Company issued 100,000 shares of its common stock at $0.10 per share for proceeds totaling $10,000 in a private placement transaction.
INFITECH VENTURES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
6.
INCOME TAXES
The Company has net operating loss carry forwards of approximately $991,000 available for deduction against future years taxable income. The valuation allowance increased to $336,930 during the year ended July 31, 2012, since the realization of the net operating loss carry forwards are doubtful. It is reasonably possible that the Company’s estimate of the valuation allowance will change. The operating loss carry forwards will expire at various times through 2032.
7.
RELATED PARTY TRANSACTIONS
At July 31, 2012, there is $133,488 (2011 - $98,946) due to a director and shareholder of the Company. The amounts are unsecured, non-interest bearing and are due on demand. Although these advances are interest free, interest will be imputed and charged to contributed capital. To date, imputed interest is an immaterial amount and has not been recorded through July 31, 2012.
For each of the years ended July 31, 2012 and 2011 the Company accrued rent of $2,400 to a director of the Company. Rent is accrued on a month to month basis. At July 31, 2012 there is $21,600 (2011 - $19,200) payable to a related party with respect to rent payable.
For the year ended July 31, 2012 there was $60,000 (2011- $60,000) in contributed executive services recorded in additional paid in capital in relation to services of the Company’s sole director.
These transactions were in the normal course of operations and were measured at the exchange value which represents the amount of consideration established and agreed to by the related parties.
INFITECH VENTURES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
July 31, 2012
8.
SUPPLEMENTAL CASH FLOW DISCLOSURE
During the year ended July 31, 2005 the Company acquired a patent application and intellectual rights and issued to the inventor a total of 150,000 shares of common stock at $0.05 per share.
During the year ended July 31, 2006 the Company issued 601,000 shares at a value of $36,060 among which $33,960 was received during the year ended July 31, 2005.
During the years ended July 31, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 the Company’s sole director contributed $60,000 per year as executive services which were recorded as additional paid in capital.
9.
FINANCIAL INSTRUMENTS
The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, accounts payable and accrued liabilities - related party and due to related parties. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted. Cash is based on level 1 inputs.
10.
SEGMENT INFORMATION
The Company operates in one reportable segment, being the development of a technology relating to the process of solidifying and removing spilled oil on land and water, primarily in Canada.
11.
SUBSEQUENT EVENT
On October 23, 2012, the Company issued 266,667 shares of its common stock at $0.15 per share for proceeds totaling $40,000 pursuant to a registered offering of 1,000,000 shares.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rules 13a-15(e) and 15(d)-15(e) as of July 31, 2012 (“Evaluation Date”). Based upon that evaluation our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.
The framework used to evaluate the effectiveness of our internal controls over financial reporting is based upon guiding principles advocated by The Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 1992. This guidance provides a set of twenty basic principles representing the fundamental concepts associated with, and drawn directly from, the five components of the framework i.e. control environment, risk assessment, control activities, information and communication and monitoring.
Internal controls over financial reporting is defined in the SEC's rules as those controls designed by the company's principal executive and financial officers to provide reasonable assurance regarding the reliability of the company's financial reporting and the preparation of financial statements in accordance with GAAP.
Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended July 31, 2012 fairly present our financial condition, results of operations and cash flows in all material respects.
Management’s Assessment on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.
Internal controls over financial reporting include those policies and procedures that:
1.
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2.
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and
3.
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:
Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.
Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.
Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting.
Inadequate Financial Statement Closing Process: We have an inadequate financial statement closing process.
Lack of Audit Committee & Outside Directors on the Company’s Board of Directors: We do not have a functioning audit committee and outside directors on the Company’s Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.
Management, including our Chief Executive Officer and the Chief Financial Officer, has discussed the material weakness noted above with our third party consulting accountant. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this annual report.
Changes in Internal Control over Financial Reporting
As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended July 31, 2012 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table sets forth the name and positions of our sole executive officer and director as of the date hereof.
Name Age Positions
Paul G. Daly Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director
Set forth below is a brief description of the background and business experience of our sole executive officer and director:
Paul G. Daly is our founder and our sole director, Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer and has served in those capacities since our incorporation on October 24, 2000. Mr. Daly founded Daly Environmental Consultants (“DEC”) in 1992, and continues to operate DEC on a part-time basis. DEC offers economical solutions to environmental problems of industrial and commercial firms and government agencies at federal, provincial/state and local levels. As our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer, Mr. Daly is required to allocate all business opportunities related to our proposed wax products and our proposed wastewater treatment business to us. Any unrelated business opportunities may be pursued by Mr. Daly personally.
Prior to the formation of DEC, Mr. Daly was employed as Marketing Manager (1986-1992) for Deep Shaft Technology Inc. Mr. Daly's responsibilities in this position included contract negotiation, licensee arrangements, management of representative sales persons, and the organization of company participation in trade shows. From 1982 to 1986, Mr. Daly was employed as a Product Supervisor in the explosives division of C-I-L Inc. In addition, Mr. Daly is a member of several environment-related professional associations, including the Water Environment Federation and the Water Environment Association of Ontario. In 1982, Mr. Daly received the CPPA Conference - Douglas Jones Environmental Award for significant contributions to the environment within the pulp and paper industry in Canada. From 1981 to 1992, Mr. Daly authored several papers for technical conferences held in Canada and the United States. Mr. Daly received his Bachelor of Science degree from Laurentian University (Canada) in 1975.
Terms Of Office
Our directors are elected to hold office until the next annual meeting of the shareholders and until their respective successors have been elected and qualified. Our executive officers are appointed by our board of directors and hold office until removed by our board of directors or until their successors are appointed.
Committees Of The Board Of Directors
Mr. Daly is our sole director. As such, we do not have a separately designated audit committee, nominating committee or any other committees. Mr. Daly, as our sole director, fulfills the duties normally undertaken by those committees.
Audit Committee Financial Expert
Mr. Daly does not qualify as an “audit committee financial expert” as defined in Item 401(e) of Regulation S-B. Mr. Daly believes that we will not be able to attract and retain directors who would qualify as “audit committee financial experts” at this time due to our limited financial resources.
Other Significant Employees And Consultants
Other than Mr. Daly, we do not currently have any significant employees. However, we have retained the services of the inventor of our Wax Technology, William Nelson, as a technical consultant who is crucial to our business plan.
Mr. William Nelson has been retained by us to assist us in the commercialization and development of products based on our Wax Technology. Mr. Nelson has verbally agreed to provide us with technical advice free of charge to assist in our development of our Wax Technology. If we determine that we require extensive technical studies or engineering work to be performed, we will enter into a formal consultancy agreement with Mr. Nelson.
Mr. Nelson is an accomplished inventor and is recognized around the world as a leading expert in paraffin waxes. Mr. Nelson has acted as a consultant to several large chemical companies. In the past, Mr. Nelson has assisted aboriginals in British Columbia, Canada prospect for gold using a secret process he developed using black light and assisted in the remediation of Chernobyl by utilizing a technology he invented to seal the nuclear reactor’s stone casing or “sarcophagus” from leaking further radiation.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities (collectively, the “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Based on our review of the copies of such forms received by us, no other reports were required for those persons, and we believe that during the year ended July 31, 2012, all Reporting Persons complied with all Section 16(a) filing requirements applicable to them.
CODE OF ETHICS
We adopted a Code of Ethics applicable to our officers and directors which is a “code of ethics” as defined by applicable rules of the SEC. Our code of ethics is attached as an exhibit to our Annual Report for the year ended July 31, 2005. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our President, Treasurer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K filed with the SEC.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
We did not pay any compensation to our sole executive officer and sole director during the fiscal year ended July 31, 2012. However, we have recorded in our financial statements the fair value of the executive services provided to us at no cost as contributed executive services.
Outstanding Equity Awards at Fiscal Year End
As at July 31, 2012, we did not have any outstanding equity awards.
Compensation Arrangements
Due to our limited financial resources, we currently do not pay any compensation to Paul G. Daly for acting as our sole executive officer and sole director. We are required to report all costs of conducting our business. Accordingly, we record the fair value of contributed executive services provided to us at no cost as compensation expense, with a corresponding increase to additional paid-in capital, in the year which the services are provided.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
EQUITY COMPENSATION PLANS
We have no equity compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
Equity Compensation Plan Information
Plan Category
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(a)
Weighted-Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
(b) Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
column (a))
(c)
Equity Compensation Plans Approved By Security Holders Not Applicable Not Applicable Not Applicable
Equity Compensation Plans Not Approved By Security Holders Not Applicable Not Applicable Not Applicable
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of October 25, 2012 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors, (iii) each of our named executive officers; and (iv) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
Notes:
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of our shares actually outstanding on October 25, 2012. As of October 25, 2012, there were 14,961,666 shares of our common stock issued and outstanding.
(2)
Sanibel Intertrade Co. is beneficially owned by George Sagredos.
Changes in Control
We are not aware of any arrangement which may result in a change in control in the future.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
RELATED TRANSACTIONS
Except as disclosed below, none of the following parties has, during our last two fiscal years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, in which the Company is a participant and the amount involved exceeds the lesser of $120,000 or 1% of the average of the Company’s total assets for the last two completed fiscal years:
(i)
Any of our directors or officers;
(ii)
Any person proposed as a nominee for election as a director;
(iii)
Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of our outstanding shares of common stock;
(iv)
Any of our promoters; and
(v)
Any relative or spouse of any of the foregoing persons who has the same house as such person.
During the past two fiscal years, Paul G. Daly, our sole executive officer and sole director, has provided us an aggregate of $50,500 and CDN $5,500 in short term loans. As at July 31, 2012, we owed Mr. Daly a total of $133,488. These amounts are non-interest bearing, unsecured and payable on demand. These amounts were loaned to us by Mr. Daly to assist us in meeting our ongoing financial obligations. There is no assurance that Mr. Daly will continue to provide us with any future financing. We have paid Mr. Daly an aggregate of $4,800 in rent for office space over the last two fiscal years.
DIRECTOR INDEPENDENCE
Our common stock is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. Under NASDAQ Rule 5605(a)(2), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Our sole director, Paul G. Daly, is also our sole executive officer. As a result, we do not have any independent directors.
As a result of our limited operating history and minimal resources, our management believes that it will have difficulty in attracting independent directors. In addition, we would likely be required to obtain directors and officers insurance coverage in order to attract and retain independent directors. Our management believes that the costs associated with maintaining such insurance is prohibitive at this time.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
During the fiscal years ended July 31, 2012 and 2011, we retained our independent auditor, Davidson & Company LLP, Chartered Accountants, to provide services in the following categories and amounts:
Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors
Our sole executive officer and sole director, Paul G. Daly, pre-approves all audit and non-audit services performed by our independent auditors during the fiscal year.
No non-audit services were provided by our independent auditors during the last two fiscal years.
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following exhibits are either provided with this Annual Report or are incorporated herein by reference:
Notes:
(1)
Filed as an exhibit to our Registration Statement on Form 10-SB originally filed with the SEC on February 15, 2005, as amended.
(2)
Filed as an exhibit to our Annual Report on Form 10-KSB filed with the SEC on November 9, 2005.
(3)
Filed as an exhibit to our Quarterly Report on Form 10-QSB filed with the SEC on March 23, 2007.
(4)
Filed as an exhibit to our Annual Report on Form 10-KSB filed with the SEC on November 2, 2007.
(5)
Filed as an exhibit to our Quarterly Report on Form 10-QSB filed with the SEC on March 14, 2008.
(6)
Filed as an exhibit to our Amended Quarterly Report on Form 10-QSB/A filed with the SEC on October 23, 2008.
(7)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on December 14, 2009.
(8)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on March 16, 2010.
(9)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on March 17, 2011.
(10)
Filed as an exhibit to our Annual Report on Form 10-K filed with the SEC on October 31, 2011.
(11)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on December 15, 2011.
(12)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on March 14, 2011.
(13)
Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on June 14, 2012.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INFITECH VENTURES INC.
Date: October 26, 2012
By: /s/ Paul G. Daly
PAUL G. DALY
President, Secretary, Treasurer, Chief Executive
Officer, Chief Financial Officer and Director
(Principal Executive Officer
and Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: October 26, 2012
By: /s/ Paul G. Daly
PAUL G. DALY
President, Secretary, Treasurer, Chief Executive
Officer, Chief Financial Officer and Director
(Principal Executive Officer
and Principal Accounting Officer)