The following are excerpts from Sionix’s Form 10-QSB for the quarter ended June 30, 2000 (filed on August 21, 2000):
Plans for Ensuing Twelve Months. During the next twelve months the Company plans to commence production and marketing of its DAF (Dissolved Air Flotation) Water Filtration systems, Automatic Back-Flush Filtration System, O-Zone Mixing Chamber and other related products. The Company anticipates that it will contract for the manufacture of some components directly, but will enter into a joint venture or similar arrangement with an established manufacturer for the production of most components and final assembly, as well as most aspects of marketing and sales. The Company is currently negotiating a joint venture agreement with an established manufacturing company in a related business. With respect to the components to be produced by the Company, it has executed several contracts and fabrication has commenced on several components for production of the DAF system. The Company does not anticipate any significant purchases of equipment or other significant capital expenditures in this connection, nor does it expect to significantly increase the number of employees until such time as production has commenced and additional employees are needed in the areas of administration, quality control, sales and customer technical support.
The Company does not contemplate the need to raise additional equity capital during the next twelve months in order to commence production. It believes its current cash reserves are sufficient to meet its presently anticipated cash needs until it begins to collect revenues from the sale of products through the anticipated joint venture. The Company believes that use of the joint venture arrangement will significantly decrease its capital requirements to commence production. However, in the event that unforeseen events occur, the Company encounters delays in bringing the products to production, or the Company pursues other business opportunities, it may be required to raise additional equity capital.
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Results of Operations (Nine Months Ended June 30, 2000 Compared to Nine Months Ended June 30, 1999). For the nine months ended June 30, 2000, the Company reported a loss of $1,563,185, or $.04 per share. This compares with a loss of $403,964, or $.01 per share, for the nine months ended June 30, 1999. The increase in the loss is principally due to higher administrative and marketing costs incurred as the Company nears production, as well as to "book" expense related to issuance of shares to officers and other employees as compensation pursuant to their Employment Agreements.
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During the three months ended June 30, 2000, the Company issued 1,213,114 shares of its Common Stock to seven persons, including employees and independent contractors, for services rendered. The Company believes all of such sales were exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4 (2) thereof and Regulation D thereunder. |
