NEVADA
|
|
38-3378963
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
2236
Rutherford Rd., Suite 107
|
|
|
Carlsbad,
California
|
|
92008
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
TABLE
OF CONTENTS
|
||
Page
|
||
|
||
PART
I
|
||
ITEM
1.
|
Description
of Business
|
3
|
ITEM
2.
|
Description
of Property
|
6
|
ITEM
3.
|
Legal
Proceedings
|
6
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders
|
7
|
PART
II
|
||
ITEM
5.
|
Market
for Common Equity, Related Stockholder Matters and Small
|
|
Business
Issuer Purchases of Equity Securities
|
7
|
|
ITEM
6
|
Management's
Discussion and Analysis or Plan of Operation
|
8
|
ITEM
7.
|
Financial
Statements
|
17
|
ITEM
8.
|
Changes
in and Disagreements with Accountants on
Accounting
and Financial Disclosure
|
|
ITEM
8A
|
Controls
and Procedures
|
18
|
ITEM
8B.
|
Other
Information
|
18
|
PART
III
|
||
ITEM
9.
|
Directors,
Executive Officers, Promoters and Control Persons; Compliance with
Section
16(a) of the Exchange Act
|
18
|
ITEM
10.
|
Executive
Compensation
|
20
|
ITEM
11.
|
Security
Ownership of Certain Beneficial Owners and Management
and
Related Stockholder Matters
|
22 |
ITEM
12.
|
Certain
Relationships and Related Transactions
|
24
|
ITEM
13.
|
Exhibits
|
24
|
ITEM
14.
|
Principal
Accountant Fees and Services
|
27
|
|
|
Closing
Price
|
|
||||
|
|
High
|
|
Low
|
|
||
|
|
|
|
|
|
||
Fiscal
Year Ended June 30, 2007
|
|
|
|
|
|
||
First
Quarter
|
|
$
|
0.50
|
|
$
|
0.21
|
|
Second
Quarter
|
|
$
|
1.01
|
|
$
|
0.40
|
|
Third
Quarter
|
|
$
|
0.60
|
|
$
|
0.35
|
|
Fourth
Quarter
|
|
$
|
0.51
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
Fiscal
Year Ended June 30, 2006
|
|
|
|
|
|
|
|
First
Quarter
|
|
$
|
1.85
|
|
$
|
1.36
|
|
Second
Quarter
|
|
$
|
1.75
|
|
$
|
1.10
|
|
Third
Quarter
|
|
$
|
1.20
|
|
$
|
0.60
|
|
Fourth
Quarter
|
|
$
|
0.68
|
|
$
|
0.25
|
|
|
|
Issuance
|
|
|
|
Number
of Shares
|
|
Maturity
|
|
|
|||||
8%
Convertible Debentures
|
|
Date
of
|
|
Amount
of
|
|
May
Be Converted
|
|
Date
of
|
|
|
|||||
Debenture
holder
|
|
Debenture
|
|
Debenture
|
|
Into
|
|
Debenture
|
|
|
|||||
Derek
Duchein, IRA Account
|
|
|
6/6/2007
|
|
$
|
90,000
|
|
|
180,000
|
|
|
6/6/2009
|
|
|
|
Julie
Duchien, IRA Account
|
|
|
6/6/2007
|
|
$
|
60,000
|
|
|
120,000
|
|
|
6/6/2009
|
|
|
|
Bryan
Holland
|
|
|
6/11/2007
|
|
$
|
25,000
|
|
|
50,000
|
|
|
6/11/2009
|
|
|
|
|
|
|
|
|
$
|
175,000
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Purchase Warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Date
of Issuance
|
|
|
Number
of Shares
|
|
|
Exercise
Price
|
|
|
Expiraton
Date
|
|
|
|
Derek
Duchein, IRA Account
|
|
|
6/6/2007
|
|
|
180,000
|
|
$
|
0.60
|
|
|
6/6/2012
|
|
|
Debenture
|
Julie
Duchien, IRA Account
|
|
|
6/6/2007
|
|
|
120,000
|
|
$
|
0.60
|
|
|
6/6/2012
|
|
|
Debenture
|
Bryan
Holland
|
|
|
6/11/2007
|
|
|
50,000
|
|
$
|
0.60
|
|
|
6/11/2012
|
|
|
Debenture
|
Derek
Duchein, IRA Account
|
|
|
6/6/2007
|
|
|
180,000
|
|
$
|
1.00
|
|
|
6/6/2008
|
|
|
Debenture
|
Julie
Duchien, IRA Account
|
|
|
6/6/2007
|
|
|
120,000
|
|
$
|
1.00
|
|
|
6/6/2008
|
|
|
Debenture
|
Bryan
Holland
|
|
|
6/11/2007
|
|
|
50,000
|
|
$
|
1.00
|
|
|
6/11/2008
|
|
|
Debenture
|
|
|
|
|
|
|
700,000
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
Year
Ended
|
Increase
|
|||||||||||
June
30, 2007
|
June
30, 2006
|
(Decrease)%
|
%
|
||||||||||
Statements
of Operations
|
|||||||||||||
Revenues
|
$
|
521,330
|
$
|
681,337
|
$
|
(160,007
|
)
|
-23.5
|
%
|
||||
Selling
expenses
|
101,296
|
103,190
|
(1,894
|
)
|
-1.8
|
%
|
|||||||
General
and administrative
|
|||||||||||||
expenses
|
2,115,310
|
1,215,966
|
899,344
|
74.0
|
%
|
||||||||
Other
income
|
(38,121
|
)
|
-
|
(38,121
|
)
|
NM
|
|||||||
Interest
expense
|
453,543
|
207,574
|
245,969
|
118.5
|
%
|
||||||||
Total
expenses
|
2,632,028
|
1,526,730
|
1,105,298
|
72.4
|
%
|
||||||||
Net
(loss)
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
$
|
(1,265,305
|
)
|
149.7
|
%
|
||
Net
(loss) per basic and
|
|||||||||||||
diluted
share
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
50.0
|
%
|
As
of
|
Increase
|
|||||||||
June
30, 2007
|
June
30, 2006
|
(Decrease)
|
||||||||
Working
Capital
|
||||||||||
Current
assets
|
$
|
250,218
|
$
|
205,920
|
$
|
44,298
|
||||
Current
liabilities
|
1,929,861
|
|
1,765,729
|
164,132
|
||||||
Working
capital deficit
|
$
|
(1,679,643
|
)
|
$
|
(1,559,809
|
)
|
$
|
119,834
|
||
Long-term
debt
|
$
|
1,381,629
|
$
|
117,650
|
$
|
1,263,979
|
||||
Stockholders'
deficit
|
$
|
(2,875,965
|
)
|
$
|
(1,596,529
|
)
|
$
|
1,279,436
|
||
Year
Ended
|
Year
Ended
|
Increase
|
||||||||
|
June
30, 007
|
June
30, 2006
|
(Decrease
|
)
|
||||||
Statements
of Cash Flows Select Information
|
Net
cash provided (used) by:
|
||||||||||
Operating
activities
|
$
|
(1,804,748
|
)
|
$
|
(508,818
|
)
|
$
|
(1,295,930
|
)
|
|
Investing
activities
|
$
|
(130,805
|
)
|
$
|
(67,351
|
)
|
$
|
(63,454
|
)
|
|
Financing
activities
|
$
|
1,871,057
|
$
|
693,177
|
$
|
1,177,880
|
||||
As
of
|
Increase
|
|||||||||
June
30, 2007
|
June
30, 2006
|
(Decrease)
|
||||||||
Balance
Sheet Select Information
|
||||||||||
Cash
and cash equivalents
|
$
|
85,016
|
$
|
149,512
|
$
|
(64,496
|
)
|
|||
Accounts
receivable
|
$
|
75,283
|
$
|
56,107
|
$
|
19,176
|
||||
|
||||||||||
Accounts
payable and accrued expenses
|
$
|
1,382,875
|
$
|
1,348,419
|
$
|
34,456
|
·
|
The
lack of readily available price quotations;
|
·
|
The
absence of consistent administrative supervision of “bid” and “ask”
quotations;
|
·
|
Lower
trading volume; and
|
·
|
Market
conditions.
|
|
·
|
A
standardized risk disclosure document identifying the risks inherent
in
investment in penny stocks;
|
|
·
|
All
compensation received by the broker-dealer in connection with the
transaction;
|
|
·
|
Current
quotation prices and other relevant market data; and
|
|
·
|
Monthly
account statements reflecting the fair market value of the securities.
In
addition, these rules require that a broker-dealer obtain financial
and
other information from a customer, determine that transactions in
penny
stocks are suitable for such customer and deliver a written statement
to
such customer setting forth the basis for this determination.
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
John
R. Dunn II
|
|
56
|
|
Chairman,
Chief Executive Officer, President, and Director
|
George
Dunn
|
|
50
|
|
Secretary,
Chief Operating Officer
|
Lowell
W. Giffhorn
|
|
60
|
|
Chief
Financial Officer and Director
|
Theo
Vermaelen
|
|
53
|
|
Director
|
Stephen
Eisold
|
|
60
|
|
Director
|
Jason
Booth
|
41
|
Director
|
Name
and
|
Fiscal
|
Option
|
|||||||||||
Principal
Position
|
Year
|
Salary
($)
|
Awards
($)
|
Total
($)
|
|||||||||
[a]
|
[b]
|
[c]
|
[f]
|
[j]
|
|||||||||
John
R. Dunn II
|
2007
|
$
|
108,000
|
$
|
5,071
|
$
|
113,071
|
||||||
President,
CEO and
|
2006
|
$
|
108,000
|
$
|
27,427
|
$
|
135,427
|
||||||
Director
|
|
||||||||||||
|
|||||||||||||
George
Dunn
|
2007
|
$
|
108,000
|
$
|
5,071
|
$
|
113,071
|
||||||
VP,
Secretary and
|
2006
|
$
|
102,000
|
$
|
24,565
|
$
|
126,565
|
||||||
COO
|
June
30, 2007
|
June
30, 2006
|
|
Dividend
yield
|
0%
|
0%
|
Volatility
|
42%
|
1%-30%
|
Risk-free
interest rates
|
5.10%
|
2.76%-4.84%
|
Expected
life
|
5
years
|
5
years
|
Name
|
Number
|
Option
|
Option
|
|||||||
of
|
Exercise
|
Expiration
|
||||||||
Securities
|
Price
|
Date
|
||||||||
Underlying
|
($)
|
|||||||||
Unexercised
|
||||||||||
Options
|
||||||||||
(#)
|
||||||||||
Exercisable
|
||||||||||
[a]
|
[b]
|
[e]
|
[f]
|
|||||||
John
R. Dunn II
|
40,000
|
|
$0.75
|
April
6, 2011
|
||||||
President,
CEO and
|
60,000
|
|
$0.64
|
April
6, 2011
|
||||||
Director
|
50,000
|
|
$0.64
|
June
15, 2012
|
||||||
|
|
|||||||||
George
Dunn
|
400,000
|
|
$0.125
|
April
6, 2011
|
||||||
VP,
Secretary and
|
400,000
|
|
$0.025
|
April
6, 2011
|
||||||
COO
|
60,000
|
|
$0.64
|
April
6, 2011
|
||||||
50,000
|
|
$0.64
|
June
15, 2012
|
Name
|
Fees
|
Option
|
All
Other
|
Total
|
Earned
|
Awards
|
Compensation
|
($)
|
|
or
|
($)
|
($)
|
||
Paid
In
|
|
|||
Cash
|
||||
|
($)
|
|
||
[a]
|
[b]
|
[d]
|
[g]
|
[h]
|
Lowell
W. Giffhorn
|
-
|
$5,071
|
$75,000
|
$80,071
|
Theo
Vermaelen
|
-
|
$5,071
|
-
|
$5,071
|
Stephen
Eisold
|
-
|
$5,071
|
-
|
$5,071
|
Jason
Booth
|
-
|
$9,043
|
-
|
$9,043
|
Shares
of Common
|
Percentage
|
|||||
Stock
Beneficially
|
of
Outstanding
|
|||||
Name
|
Postion
with the Company
|
Owned
(1) (2)
|
Shares
|
|||
Executive
Officers and
|
||||||
Directors
|
||||||
John
R. Dunn II (3)
|
Chairman
of the Board,
Chief
Executive Officer,
Chief
Technical Officer and
Director
|
5,005,000
|
21.0%
|
|||
|
||||||
George
Dunn (4)
|
Vice
President, Secretary
and
Chief Operating Officer
|
2,301,000
|
9.4%
|
|||
|
||||||
Lowell
W. Giffhorn (5)
|
Vice
President, Chief
Financial
Officer and Director
|
645,000
|
2.7%
|
|||
|
||||||
Theo
Vermaelen (6)
|
Director
|
859,359
|
3.6%
|
|||
Steven
Eisold (7)
|
Director
|
724,494
|
3.0%
|
|||
Jason
Booth (8)
|
Director
|
75,000
|
*
|
|||
All
Exective Officers and Directors as a Group |
9,609,853
|
37.3%
|
||||
Greater
than 5% Owners
|
||||||
|
||||||
Potawatomi
Business
Development
Corp.
|
4,000,000
|
Note
10
|
||||
Robert
Tabor
|
4,730,589
|
20.0%
|
||||
Massoud
Kharrazian
|
1,487,136
|
6.3%
|
||||
*
Less than 1%
|
Number
of securities
|
||||||||||
remaining
available
|
||||||||||
Number
of securities
|
for
issuance under
|
|||||||||
to
be issued upon
|
Weighted
average
|
equity
compensaton
|
||||||||
exercise
of
|
exercise
price of
|
plans
(excluding
|
||||||||
outstanding
options,
|
outstanding
options,
|
securities
reflected in
|
||||||||
warrants
and rights
|
warrants
and rights
|
column
(a))
|
||||||||
Plan
Category
|
(a)
|
(b)
|
(c)
|
|||||||
Equity
compensation
|
||||||||||
plans
approved by
|
||||||||||
shareholders
|
4,975,000
|
|
$0.41
|
2,525,000
|
||||||
|
||||||||||
Equity
compensation
|
|
|||||||||
plans
not approved
|
|
|||||||||
by
shareholders
|
8,660,667
|
|
$0.88
|
-
|
||||||
|
||||||||||
Total
|
13,635,667
|
|
$0.71
|
2,525,000
|
Exhibit
No.
|
|
Document
|
||
3.0
|
Articles
of Incorporation and Bylaws
|
|||
3.1
|
Amended
and Restated Articles of the Company, as amended November
|
(1)
|
||
30,
1994, incorporated by reference to Exhibit 3.1 to Amendment No.
1
to
|
||||
Registration
Statement on Form SB-2 dated December 22, 1994
|
||||
|
||||
3.2
|
Certificate
of Designation of Series A Redeemable Convertible
Preferred
|
(1)
|
||
Stock
incorporated by reference to Exhibit 3.2 to Registration Statement
on
|
||||
Form
SB-2 dated October 12, 1994
|
||||
|
||||
3.3
|
Certificate
of Designation of Series B Redeemable Convertible
Preferred
|
(1)
|
||
Stock
incorporated by reference to Exhibit 3.2 to Registration Statement
on
|
||||
Form
SB-2 dated October 12, 1994
|
||||
|
||||
3.4
|
Bylaws
of the Company incorporated by reference to Exhibit 3.4 to
|
(1)
|
||
Registration
Statement on Form SB-2 dated October 12, 1994
|
||||
|
||||
3.5
|
Certificate
of Amendment of Articles of Incorporation dated May 16,
2006
|
(1)
|
||
incorporated
by reference to Exhibit 3.5 to Form 10-KSB for year ended June
30,
2006
|
||||
|
||||
4.0
|
Instruments
Defining the Rights of Security Holders, Including
Debentures
|
|||
|
||||
4.1
|
Agreement
and Plan of Merger among Omni U.S.A., Inc., Omni Merger Sub, Inc.,
|
(1)
|
||
|
Edward
Daniel, Jeffrey Daniel and Brendan Technologies, Inc. dated as
of
|
|
||
|
December
29, 2005 incorporated by reference to Exhibit 4.1 to Current Report
|
|
||
|
on
Form 8-K dated January 5, 2006
|
|
||
|
|
|
||
4.2
|
Stock
Purchase Agreement by and among Jeffrey K. Daniel, Craig L. Daniel,
and
|
(1)
|
||
|
Edward
Daniel, as the Purchases, and Omni U.S.A., Inc., as the Seller,
dated as
|
|
||
|
of
December 29, 2005 incorporated by reference to Exhibit 4.2 to Current
Report
|
|
||
|
on
Form 8-K dated January 5, 2006
|
|
||
|
|
|
||
4.3
|
Amendment
to Loan and Related Agreements and Waiver of Default
(PACCAR)
|
(1)
|
||
|
incorporated
by reference to Exhibit 4.3 to Current Report on Form 8-K
dated
|
|
||
January
5, 2006
|
|
Exhibit
No.
|
|
Document
|
||
4.4
|
Amendment
to Loan and Related Agreements and Waiver of Default
(Textron)
|
(1)
|
||
incorporated
by reference to Exhibit 4.4 to Current Report on Form 8-K
dated
|
||||
January
5, 2006
|
||||
4.5
|
Promissory
Note between Jeffrey K. Daniel, Craig L. Daniel, and Edward
Daniel,
|
(1)
|
||
collectively
the Borrowers, and Omni U.S.A., Inc. with a maturity date of
|
||||
December
29, 2008 incorporated by reference to Exhibit 4.5 to Current
Report
|
||||
on
Form 8-K dated January 5, 2006
|
||||
|
||||
4.6
|
2006
Equity Incentive Plan incorporated by reference to Exhibit 4.6
to
|
(1)
|
||
Registration
Statement on Form S-8 dated June 15, 2006
|
||||
|
||||
4.7
|
Form
of Securities Purchase Agreement incorporated by reference to Exhibit
4.7
|
(1)
|
||
to
Current Report on Form 8-K dated July 18, 2006
|
||||
|
||||
4.8
|
Form
of 8% Convertible Debenture incorporated by reference to Exhibit
4.8
|
(1)
|
||
to
Current Report on Form 8-K dated July 18, 2006
|
||||
|
||||
4.9
|
Form
of Registration Rights Agreement incorporated by referecne to Exhibit
4.9
|
(1)
|
||
to
Current Report on Form 8-K dated July 18, 2006
|
||||
|
||||
4.10
|
Form
of Warrant incorporated by reference to Exhibit 4.10 to Current
Report
on
|
(1)
|
||
Form
8-K dated July 18, 2006
|
||||
|
||||
4.11
|
Form
of Loan and Security Agreement incorporated by reference to Exhibit
4.11
|
(1)
|
||
to
Current Report on Form 8-K dated July 18, 2007
|
||||
|
||||
4.12
|
Form
of 15% Secured Promissory Note incorporated by referecne to Exhibit
4.12
|
(1)
|
||
to
Current Report on Form 8-K dated July 18, 2007
|
||||
|
||||
4.13
|
Form
of Warrant incorporated by reference to Exhibit 4.13 to Current
Report
on
|
(1)
|
||
Form
8-K dated July 18, 2007
|
||||
|
||||
10.0
|
Material
Contracts
|
|||
|
||||
10.1
|
John
R. Dunn II Employment Contract dated November 1, 2004 incorporated
by
|
(1)
|
||
reference
to Exhibit 10.1 to Current Report on Form 8-K dated January 5,
2006
|
||||
|
||||
10.2
|
George
Dunn Employment Contract dated November 1, 2004 incorporated
by
|
(1)
|
||
reference
to Exhibit 10.2 to Current Report on Form 8-K dated January 5,
2006
|
||||
|
||||
14.0
|
Code
of Ethics
|
|||
|
||||
14.1
|
Code
of Ethics incorporated by reference to Exhibit 14.1 to Form 10-KSB
for
year
|
(1)
|
||
ended
June 30, 2006
|
Exhibit
No.
|
Document
|
|||
21.0
|
Subsidiaries
of the small business issuer
|
|||
21.1
|
Subsidiaries
of the small business issuer incorporated by reference to Exhibit
21.1
|
(1)
|
||
to
Form 10-KSB for the year ended June 30, 2006
|
|
|||
|
||||
31.0
|
Rule
13a-14(a)/15d-14(a) Certifications
|
|
||
|
||||
31.1
|
302
Certification of John R. Dunn II
|
(2)
|
||
|
||||
31.2
|
302
Certification of Lowell W. Giffhorn
|
(2)
|
||
|
||||
32.0
|
Section
1350 Certifications
|
|
||
|
||||
32.1
|
906
Certification of John R. Dunn II
|
(2)
|
||
|
||||
32.2
|
906
Certification of Lowell W. Giffhorn
|
(2)
|
||
(1)
Previously filed in indicated registration statement or
report
|
||||
(2)
Exhibit filed herewith
|
Farber
Hass Hurley & McEwen LLP
|
|||||||
Fee
category
|
2007
|
2006
|
|||||
Audit
fees
|
$
|
82,794
|
$
|
16,250
|
|||
Audit-related
fees
|
$
|
1,400
|
$
|
-
|
|||
Tax
fees
|
$
|
-
|
$
|
-
|
|||
All
other fees
|
$
|
-
|
$
|
-
|
|||
Total
fees
|
$
|
84,194
|
$
|
16,250
|
|||
Index
to Consolidated Financial Statements
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated
Balance Sheets, June 30, 2007 and 2006
|
F-3
|
Consolidated
Statements of Operation, for the years ended
|
|
June
30, 2007 and 2006
|
F-4
|
Consolidated
Statement of Stockholders' Deficit, for the years ended
|
|
June
30, 2007 and 2006
|
F-5
|
Consolidated
Statements of Cash Flows, for the years ended June 30,
|
|
2007
and 2006
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7-F-22
|
Farber Hass Hurley McEwen LLP | |||
/s/ Farber Hass Hurley McEwen LLP | |||
|
|||
Brendan
Technologies, Inc.
|
|||||||
Consolidated
Balance Sheets
|
|||||||
June
30,
|
2007
|
2006
|
|||||
|
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
85,016
|
$
|
149,512
|
|||
Accounts
receivable, net
|
75,283
|
56,107
|
|||||
Prepaid
expenses
|
89,919
|
301
|
|||||
Total
current assets
|
250,218
|
205,920
|
|||||
Property
and equipment, net
|
157,356
|
72,740
|
|||||
Other
assets
|
27,951
|
8,190
|
|||||
|
$
|
435,525
|
$
|
286,850
|
|||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|||||||
Current
liabilities:
|
|||||||
Convertible
notes payable in default
|
$
|
130,000
|
$
|
255,000
|
|||
Accrued
interest in default
|
95,382
|
78,217
|
|||||
Note
payable
|
100,000
|
-
|
|||||
Accounts
payable
|
12,916
|
161,430
|
|||||
Accrued
wages and vacation
|
842,525
|
772,030
|
|||||
Accrued
interest
|
527,434
|
414,959
|
|||||
Deferred
revenue
|
98,394
|
77,651
|
|||||
Current
portion of lease obligations
|
7,388
|
6,442
|
|||||
Current
portion 8% convertible debentures net of debt discount
|
24,010
|
-
|
|||||
Current
portion 8% convertible debentures net of debt discount-
|
|||||||
related
parties
|
91,812
|
-
|
|||||
Total
current liabilities
|
1,929,861
|
1,765,729
|
|||||
Long
term portion of lease obligations
|
3,607
|
10,996
|
|||||
8%
Convertible debentures net of debt discount
|
1,343,868
|
23,002
|
|||||
8%
Convertible debentures net of debt discount - related
parties
|
34,154
|
83,652
|
|||||
Total
liabilities
|
3,311,490
|
1,883,379
|
|||||
Stockholders'
deficit
|
|||||||
Preferred
stock, $.004995 par value; 5,000,000 shares
|
|||||||
authorized:
none outstanding
|
-
|
-
|
|||||
Common
stock, $.004995 par value; 50,000,000 shares
|
|||||||
authorized:
23,705,594 and 25,498,794 issued and
|
|||||||
outstanding
at June 30, 2007 and 2006, respectively
|
118,409
|
127,366
|
|||||
Additional
paid in capital
|
5,358,033
|
4,517,814
|
|||||
Accumulated
deficit
|
(8,352,407
|
)
|
(6,241,709
|
)
|
|||
Total
stockholders' deficit
|
(2,875,965
|
)
|
(1,596,529
|
)
|
|||
|
$
|
435,525
|
$
|
286,850
|
See
accompanying report of independent registered public accounting
firm,
summary of accounting policies
|
|||||
and
notes to consolidated financial
statements.
|
Brendan
Technologies, Inc.
|
|||||||
Consolidated
Statements of Operation
|
|||||||
Year
Ended June 30,
|
2007
|
2006
|
|||||
Revenue
|
$
|
521,330
|
$
|
681,337
|
|||
Selling
expenses
|
101,296
|
103,190
|
|||||
General
and administrative expenses
|
2,115,310
|
1,215,966
|
|||||
2,216,606
|
1,319,156
|
||||||
Income
(loss) from operations
|
(1,695,276
|
)
|
(637,819
|
)
|
|||
Other
income (expense)
|
|||||||
Other
income
|
38,121
|
-
|
|||||
Interest
expense
|
(453,543
|
)
|
(207,574
|
)
|
|||
Loss
before provision for income taxes
|
(2,110,698
|
)
|
(845,393
|
)
|
|||
Provision
for income taxes
|
-
|
-
|
|||||
Net
loss
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
|
Basic
and diluted loss per share
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
|
Basic
and diluted weighted average
|
|||||||
common
shares outstanding
|
23,710,507
|
15,146,106
|
|||||
See
accompanying report of independent registered public accounting
firm,
summary of accounting
|
Brendan
Technologies, Inc.
|
||||||||||||||||
Consolidated
Statements of Stockholders' Deficit
|
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Years
Ended June 30, 2007 and 2006
|
||||||||||||||||
Common
Stock
|
Additional
Paid
|
Retained
Earnings
|
Stockholders'
|
|||||||||||||
|
Shares
|
Amount
|
in
Capital
|
(Deficit)
|
(Deficit)
|
|||||||||||
Balance,
July 1, 2005
|
4,687,209
|
$
|
23,413
|
$
|
1,161,948
|
$
|
(5,396,316
|
)
|
$
|
(4,210,955
|
)
|
|||||
Issuance
of common stock at $3.00
|
||||||||||||||||
per
share
|
67,500
|
337
|
202,163
|
-
|
202,500
|
|||||||||||
Offering
costs paid in cash
|
(31,875
|
)
|
-
|
(31,875
|
)
|
|||||||||||
Brendan
shares converted to Omni at 4 to 1
|
14,264,127
|
71,248
|
(71,248
|
)
|
-
|
-
|
||||||||||
Brendan
notes payable and accrued interest
|
||||||||||||||||
converted
to Omni stock
|
4,352,879
|
21,743
|
2,632,455
|
-
|
2,654,198
|
|||||||||||
Omni
common shares issued in payment of
|
||||||||||||||||
Brendan
accounts payable related to merger
|
100,000
|
500
|
34,500
|
-
|
35,000
|
|||||||||||
Omni
common shares issued to an
|
||||||||||||||||
individual
as costs of the merger
|
800,000
|
3,996
|
(3,996
|
)
|
-
|
-
|
||||||||||
Omni
shares previously outstanding
|
||||||||||||||||
recapitalized
due to the merger
|
1,227,079
|
6,129
|
(6,129
|
)
|
-
|
-
|
||||||||||
Sale
of previous Omni operating subsidiaries
|
||||||||||||||||
treated
as contributed capital
|
-
|
-
|
498,000
|
-
|
498,000
|
|||||||||||
Value
of warrants and stock options issued
|
-
|
-
|
101,996
|
-
|
101,996
|
|||||||||||
Net
(loss) for the year ended
|
||||||||||||||||
June
30, 2006
|
-
|
-
|
-
|
(845,393
|
)
|
(845,393
|
)
|
|||||||||
Balance,
June 30, 2006
|
25,498,794
|
$
|
127,366
|
$
|
4,517,814
|
$
|
(6,241,709
|
)
|
$
|
(1,596,529
|
)
|
|||||
Cancellation
of shares
|
(1,793,200
|
)
|
(8,957
|
)
|
8,957
|
-
|
-
|
|||||||||
Warrant
valuation related to financing costs
|
-
|
40,403
|
-
|
40,403
|
||||||||||||
Warrant
valuation as result of services provided
|
-
|
30,390
|
-
|
30,390
|
||||||||||||
Non
cash issuance of stock options
|
-
|
80,208
|
-
|
80,208
|
||||||||||||
Non
cash debt discount on issuance of
|
||||||||||||||||
8%
convertible debentures, net of amortization
|
-
|
680,261
|
-
|
680,261
|
||||||||||||
Net
(loss) for the year ended June 30, 2007
|
-
|
-
|
(2,110,698
|
)
|
(2,110,698
|
)
|
||||||||||
Balance,
June 30, 2007
|
23,705,594
|
$
|
118,409
|
$
|
5,358,033
|
$
|
(8,352,407
|
)
|
$
|
(2,875,965
|
)
|
|||||
See
accompanying report of independent registered public accounting
firm,
summary of accounting policies
|
||||||||||||||||
and
notes to consolidated financial
statements.
|
Brendan
Technologies, Inc.
|
|||||||
Consolidated
Statements of Cash Flows
|
|||||||
Year
Ended June 30,
|
2007
|
2006
|
|||||
Operating
activities:
|
|
||||||
Net
loss
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
|
Adjustments
to reconcile net loss
|
|||||||
to
cash provided by operating activities:
|
|||||||
Amortization
and depreciation
|
46,189
|
14,858
|
|||||
Provision
for uncollectible receivables
|
1,000
|
-
|
|||||
Stock
option compensation
|
80,208
|
83,650
|
|||||
Amortization
of debt discount
|
164,951
|
-
|
|||||
Amortization
of financing costs
|
17,398
|
-
|
|||||
Amortization
of warrant valuation issued for services
|
11,397
|
-
|
|||||
Other
non cash items
|
(38,122
|
)
|
98,000
|
||||
Changes
in assets and liabilities:
|
|||||||
(Increase)
decrease in accounts receivable
|
(20,176
|
)
|
15,644
|
||||
(Increase)
decrease in prepaid expense and other assets
|
(67,381
|
)
|
29
|
||||
Increase
(decrease) in accounts payable
|
(110,392
|
)
|
48,773
|
||||
Increase
(decrease) in accrued liabilities
|
200,135
|
60,967
|
|||||
Increase
(decrease) in deferred revenue
|
20,743
|
14,654
|
|||||
Net
cash (used in) operating activities
|
(1,804,748
|
)
|
(508,818
|
)
|
|||
Investing
activities:
|
|||||||
Purchase
of property and equipment
|
(130,805
|
)
|
(67,351
|
)
|
|||
Net
cash (used in) investing activities
|
(130,805
|
)
|
(67,351
|
)
|
|||
Financing
activities:
|
|||||||
Principal
payments of lease obligations
|
(6,443
|
)
|
(2,448
|
)
|
|||
Principal
payments on notes payable in default
|
(125,000
|
)
|
-
|
||||
Proceeds
from notes receivable on sale of Omni divisions
|
-
|
400,000
|
|||||
Proceeds
from issuance of 8% convertible debentures
|
1,902,500
|
125,000
|
|||||
Proceeds
from issuance of short term note payable
|
100,000
|
-
|
|||||
Proceeds
from issuance of common stock, net of cash
|
|||||||
paid
for costs
|
-
|
170,625
|
|||||
Net
cash provided by financing activities
|
1,871,057
|
693,177
|
|||||
Net
increase (decrease) in cash and cash equivalents
|
(64,496
|
)
|
117,008
|
||||
Cash
and cash equivalents, beginning of year
|
149,512
|
32,504
|
|||||
Cash
and cash equivalents, end of year
|
$
|
85,016
|
$
|
149,512
|
|||
Supplemental
Disclosure of Cash Flow Information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
88,306
|
$
|
17,708
|
|||
Income
taxes
|
$
|
-
|
$
|
-
|
|||
Non
Cash Investing and Financing Activities:
|
|||||||
Debt
discount on 8% convertible debentures
|
$
|
680,261
|
$
|
18,346
|
|||
Financing
costs related to debentures and notes
|
$
|
40,403
|
$
|
-
|
|||
Valuation
of warrants issued for services
|
$
|
30,390
|
$
|
-
|
|||
Property
and equipment acquired through lease
|
$
|
-
|
$
|
7,886
|
|||
Conversion
of Brendan notes payable into common stock
|
$
|
-
|
$
|
1,692,972
|
|||
Conversion
of Brendan accrued interest into common stock
|
$
|
-
|
$
|
961,226
|
|||
Issuance
of common stock in payment of accounts payable
|
$
|
-
|
$
|
35,000
|