UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark one)
[X] Annual Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934
For the quarterly period ending June 30, 2004
[ ] Transition Report Under Section 13 or 15(d) of The Securities Exchange
Act of 1934
For the transition period from ______________ to _____________
ECOLOCLEAN INDUSTRIES, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 98-0420750
------------------------ ------------------------
(State of incorporation) (IRS Employer ID Number)
2242 South Hwy #83, Crystal City, TX 78839
(Address of principal executive offices)
(830) 374-9100
(Issuer's telephone number)
Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock - $0.001 par value
Check whether the issuer has (1) filed all reports required to be files by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
As of June 30, 2004, there were 36,050,664 shares of Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format : Yes No X
--- ---
ECOLOCLEAN INDUSTRIES, INC.
FORM 10-QSB
INDEX
Page
PART I - Financial Information
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 2004 and December 31, 2003............................. 3-4
Condensed Consolidated Statements of Operations
For the Three Months Ended June 30, 2004 and 2003............... 5
Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 2004 and 2003................. 6
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2004 and 2003 ................ 7-8
Notes to Condensed Consolidated Financial Statements............ 9-11
Item 2 - Management's Discussion and Analysis or Plan of Operation ........12-14
Item 3 - Controls and Procedures........................................... 15
PART II - Other Information
Item 1 - Legal Proceedings ................................................ 16
Item 2 - Changes in Securities and Use of Proceeds......................... 16
Item 3 - Defaults Upon Senior Securities................................... 16
Item 4 - Submission of Matters to a Vote of Security Holdings.............. 16
Item 5 - Other Information................................................. 17
Item 6 - Exhibits and Reports on Form 8K .................................. 17
Signature ................................................................ 17
-2-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ECOLOCLEAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
June 30, 2004 December 31, 2003
----------------- -----------------
(Unaudited)
Current Assets:
Cash $ 294,573 $ 2,532
Accounts Receivable 114,738 77,037
Prepaid Expenses 172,107 19,616
----------------- -----------------
Total Current Assets 581,418 99,185
----------------- -----------------
Property Plant and Equipment, Net 847,098 425,718
----------------- -----------------
Other Assets:
Deposits 12,770 200
License, Net 17,729 20,528
Intangible Asset 33,585 33,585
----------------- -----------------
Total Other Assets 64,084 54,313
----------------- -----------------
Total Assets $ 1,492,600 $ 579,216
================= =================
See Accompanying Notes to Condensed Consolidated Financial Statements
-3-
ECOLOCLEAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
---------------------------------------
June 30, 2004 December 31, 2003
----------------- -----------------
(Unaudited)
Current Liabilities:
Accounts Payable and
Accrued Expenses $ 591,018 $ 488,823
Note Payable 0 27,414
----------------- -----------------
Total Current Liabilities 591,018 516,237
Long-Term Debt 0 0
Due to Related Parties 1,685,100 775,369
----------------- -----------------
Total Liabilities 1 2,276,118 1 1,291,606
----------------- -----------------
Commitments and Contingencies -- --
Stockholders' (Deficit):
Preferred Stock, $0.001 par value
1,000,000 shares authorized, none issued
Common Stock, $0.0001 par value per share,
50,000,000 shares authorized;
32,500,664 shares issued and
outstanding December 31, 2003
36,050,664 shares issued and outstanding
June 30, 2004 3,605 3,250
Additional Paid-in Capital 1,390,702 190,558
Accumulated (Deficit) (2,177,825) (906,198)
----------------- -----------------
Total Stockholders' (Deficit) (783,518) (712,390)
----------------- -----------------
Total Liabilities and
Stockholders' (Deficit) $ 1,492,600 $ 579,216
================= =================
See Accompanying Notes to Condensed Consolidated Financial Statements
-4-
ECOLOCLEAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Revenues: $ 132,331 $ 64,440
------------- -------------
Operating Expenses:
Cost of Sales 103,342 14,340
Operating Expenses 204,493 31,049
Depreciation & Amortization 29,609 9,465
Interest 18,391 5,203
Officer's Salary 30,000 30,000
General and Administrative 709,037 126,800
------------- -------------
Total Operating Expenses 1,094,872 216,857
------------- -------------
Net (Loss) $ (962,541) $ (152,417)
============= =============
Net (Loss) Per Common Share
Basic and Diluted $ (0.03) $ (0.00)
----------------- ============= =============
Weighted Average Number of Common
Shares Outstanding, Basic and Diluted 34,325,664 31,475,664
============= =============
See Accompanying Notes to Condensed Consolidated Financial Statements
-5-
ECOLOCLEAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Revenues: $ 271,058 $ 64,440
------------- -------------
Operating Expenses:
Cost of Sales 151,895 14,340
Operating Expenses 283,259 52,725
Depreciation & Amortization 49,284 16,980
Interest 32,989 7,814
Officer's Salary 60,000 60,000
General and Administrative 965,258 284,539
------------- -------------
Total Operating Expenses 1,542,685 436,398
------------- -------------
Net (Loss) $ (1,271,627) $ (371,958)
============= =============
Net (Loss) Per Common Share
Basic and Diluted $ (0.04) $ (0.01)
============= =============
Weighted Average Number of Common
Shares Outstanding, Basic and Diluted 34,275,664 30,783,850
============= =============
See Accompanying Notes to Condensed Consolidated Financial Statements
-6-
ECOLOCLEAN INDUSTRIES, INC.
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
(UNAUDITED)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Cash Flows Provided (Required) By
Operating Activities:
Net (Loss) $ (1,271,627) $ (371,958)
Adjustments to Reconcile Net (Loss)
to Net Cash Provided (Required) By
Operating Activities:
Depreciation and Amortization 49,284 16,980
Issuance of Common Stock
For Services Provided 557,500 44,800
Officer's Salary 60,000 60,000
Changes in
Accounts Receivable (37,701) 16,616
Prepaid Expenses (9,492) 14,773
Deposits (12,570) (200)
Accounts Payable and Accrued Expenses 42,195 75,179
Customer Deposits 0 (65,000)
Current Maturities of Long-Term Debt (27,414) (27,847)
------------- -------------
Net Cash (Required)
by Operating Activities (649,825) (236,657)
------------- -------------
Cash Flows (Required)
by Investing Activities:
Acquisitions of Property, Plant & Equipment (467,865) (162,381)
------------- -------------
Net Cash (Required)
By Investing Activities (467,865) (162,381)
------------- -------------
See Accompanying Notes to Condensed Consolidated Financial Statements
-7-
ECOLOCLEAN INDUSTRIES, INC.
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
(UNAUDITED)
(CONTINUED)
Six Months Six Months
Ended Ended
June 30, 2004 June 30, 2003
------------- -------------
Cash Flows Provided by Financing Activities
Proceeds From Collection of
Stock Subscriptions 0 10,000
Proceeds From Issuance
of Common Stock 500,000 25,000
Proceeds of Loans From
Related Parties 909,731 364,400
------------- -------------
Net Cash Provided by Financing Activities 1,409,731 399,400
------------- -------------
Net Increase in Cash 292,041 362
Cash at Beginning of Period 2,532 704
------------- -------------
Cash at End of Period $ 294,573 $ 1,066
============= =============
Supplemental Disclosures of
Cash Flow Information
Cash Payments for Interest $ 829 $ 463
============= =============
Cash Payments for Income Taxes $ 0 $ 0
============= =============
Non-Cash Financing Activities:
Issuance of Common Stock:
Operating Activities $ 557,500 $ 44,800
Payment of Prepaid Expense 143,000 0
Payment of Accounts Payable 0 82,274
------------- -------------
Total Non-Cash Financing Activities $ 700,500 $ 127,074
============= =============
See Accompanying Notes to Condensed Consolidated Financial Statements
-8-
ECOLOCLEAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 1 - BASIS OF PRESENTATION
------ ---------------------
The accompanying unaudited condensed consolidated financial statements
for the six month periods ended June 30, 2004 and 2003 have been
prepared in conformity with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-QSB and Regulation S-B. The financial information as of June 30,
2004 is derived from the registrant's Form 10-KSB for the year ended
December 31, 2003. Certain information or footnote disclosures normally
included in condensed consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United
States of America have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission.
The preparation of condensed consolidated financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date
of the condensed consolidated financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. In the opinion of
management, the accompanying consolidated financial statements include
all adjustments necessary (which are of a normal and recurring nature)
for the fair presentation of the results of the interim periods
presented. While the registrant believes that the disclosures presented
are adequate to keep the information from being misleading, it is
suggested that these accompanying financial statements be read in
conjunction with the registrant's audited consolidated financial
statements and notes included in the registrant's Form 10-KSB for the
year ended December 31, 2003.
Operating results for the six-month period ended June 30, 2004 are not
necessarily indicative of the results that may be expected for the
remainder of the fiscal year ending December 31, 2004. The accompanying
unaudited condensed consolidated financial statements include the
accounts of the registrant and its wholly-owned subsidiaries. All
significant inter-company accounts and transactions have been
eliminated in consolidation.
-9-
ECOLOCLEAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 2 - LICENSE COSTS
------ -------------
The Company acquired an industry exclusive, perpetual worldwide license
to commercialize the inventions on patents and market, manufacture,
sell, lease and, or utilize, for processing electrocoagulation units
for the treatment of effluent water. Royalties are $3,000 per unit
manufactured and 2% of gross processing revenues.
A summary of license costs amortized over a 5-year life are as follows:
License $ 27,993
Less: Accumulated Amortization 10,264
------------
$ 17,729
============
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
------ -----------------------------
A summary of property, plant and equipment at June 30, 2004 is as
follows:
Land $ 80,000 N/A
Warehouse 29,726 40 Years
Electrocoagulation Units 239,113 5 Years
Machinery & Equipment 539,709 5 Years
Office Furniture and Equipment 7,493 5 Years
Computers & Related Equipment 14,050 5 Years
Transportation Equipment 25,713 5 Years
--------
Total 935,804
Less Accumulated Depreciation 88,706
--------
Net Property, Plant & Equipment $847,098
========
-10-
ECOLOCLEAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 4 - RELATED PARTY TRANSACTIONS
------ --------------------------
The Board of Directors has approved a salary for services provided. At
June 30, 2004 the cumulative amount of unpaid officer's salary was
$220,000 and is included in accounts payable and accrued expenses.
At June 30, 2004 cumulative advances bearing interest at 5% P.A. due to
officers of the Company amounted to $1,685,100 plus $53,132 accrued
interest. The advances are due January 10, 2005 with the right of
prepayment.
NOTE 5 - OTHER
------ -----
On April 14, 2004, the Company issued 100,000 shares of its restricted
common stock for investor and public relations services valued at
$44,000.
On April 15, 2004, the Company issued 500,000 shares of its restricted
common stock for consulting services valued at $212,000.
On June 15, 2004, the Company issued 350,000 shares of its restricted
common stock for consulting services valued at $108,500.
On June 22, 2004, the Company approved the issuance of 800,000 shares
of its restricted common stock valued at $176,000 and 200,000 shares
under its 2004 Stock Grant and Option Plan valued at $110,000 for legal
services.
On June 30, 2004, the Company issued 1,000,000 shares of of its
restricted common stock for $500,000.
On June 30, 2004, the Company issued 500,000 shares of its restricted
common stock valued at $130,000 for services regarding the private
placement of the Company's common stock.
-11-
Item 2. Management's Discussion and Analysis or Plan of Operation
OVERVIEW AND PLAN OF OPERATION
Background
----------
Background
During the quarter ended June 30, 2004, Ecoloclean Industries, Inc. had gross
operating revenues of $132,331, all of which were generated by its Louisiana
subsidiaries (World Environmental Technologies, Inc.[WET] and Reliant Drilling
Systems, Inc. [RDS]) and its recently activated Texas subsidiary (Ecoloclean of
Texas, Inc. [ECOT]). The newly activated Texas subsidiary, ECOT, which is
located in Beaumont, TX, is primarily engaged in industrial environmental
clean-up for clients such as Petro-chemical refineries, paper mills, chemical
plants, and other industrial organizations that employ processes that frequently
generate waste products requiring clean-up and/ or disposal. ECOT's general
manager is well known in this field and has many contacts with prospective
customers with whom he has previously enjoyed professional relationships.
Current Operations
------------------
A. Industrial Field Services.
Since implementing ECOT, the general manager has successfully cleaned one lagoon
for a large international paper Company and is poised to commence work on two
additional lagoons. ECOT has also been engaged by a large Arizona smelter that
processes copper ore to clean a contaminated lagoon at its location. This
remediation process required highly trained personnel and specialized equipment.
B. Drilling Support Services for Oil Exploration & Production Companies.
RDS, which specializes in drilling support services, has employed local managers
with strong industry reputations to assist the Company in realizing its mission
of becoming a leader in oil field services. During the next 12 months, the
Company anticipates that all solids control equipment presently owned by RDS
will be in operation on a virtually continual basis at various drilling sites
including the sites we are now servicing. Currently, RDS is handling the solids
control program at several wells for oil exploration and production companies
and is on stand-by to support additional locations for another oil exploration
and production company. RDS has signed Master Service Agreements with several
Operators with active drilling programs starting in the near future.
C Industrial and Exploration Liquid Waste Remediation Services
WET has utilized the Company's LA statewide Water Discharge Permit and its
patented Electro Coagulation (EC) treatment systems to aggressively market its
services for oil field and industrial liquid waste remediation. These efforts
have resulted in WET acquiring Master Service Agreements from several Refinery
Groups and Petroleum Operators.
12
D. Agricultural Clean-Up.
The Company attended The Dairy Waste Technology Tour that was held by the
Hamilton, Comanche, and Erath County Dairy Operators on April 15th of this year.
The Company exhibited its technology to approximately 104 attendees, all of whom
were owners of area dairy farms. The Company's process, presentation, and
exhibited results were well received, and response from numerous dairy farms has
been positive.
The Company's process was also the featured exhibit at the 2004 Watershed Heroes
Core4 Conference that was held at Waco, Texas on June 21-23, 2004, sponsored by
The American Farm Bureau Federation, American Farm Bureau Foundation for
Agriculture, and The Texas Farm Bureau Federation. This conference was directed
at the problem of pollution in Lake Waco and the Bosque Watershed that feeds
into Lake Waco which has been caused by farm waste originating in Hamilton,
Comanche, Bosque, and Erath Counties, Texas, located north of the lake. The
Company's process was observed by approximately 175 attendees and numerous
follow up inquiries have been received from dairy farm owners. This interest in
the Company's process as a solution to the dairy farm owners' problems has
intensified following circulation of the May and June, 2004 issue of the Texas
Dairy Review, which reveals the fact that a total of 19 Federal lawsuits were
filed again the Bosque River Watershed dairies for breaking the Clean Water Act.
Since this article appeared, the Company has been contacted by Texas A&M
Extension Service and other State and Federal Regulatory Agencies regarding the
demonstration of a process on a dairy farm in Bosque County, Texas. Texas A&M
has located a dairy farm where the Company is to move its electro coagulation
(EC) unit on or about August 15, 2004 to demonstrate the process and its
efficiency in removing phosphate from the dairy waste. The Company is confident
that the process will be successfully demonstrated and that it will result in
one or more contracts with dairy farms in the area.
Since early May, 2004, the Company has had one of its EC units in Arkansas
attempting to remove phosphates from a large swine producer and currently,
management feels that the Company has demonstrated that it can successfully
remove phosphates to a level acceptable to the producer, thereby eliminating the
cost of trucking the swine waste to a disposal site. The Company ultimately
anticipates obtaining a long term contract with this major swine producer for
the elimination of the phosphates which are responsible for the producer's
difficulties.
Financial Considerations
------------------------
Currently, there are not sufficient revenues to offset annual operating
overhead, which is now estimated to be approximately $1,500,000. Until the
Company obtains the amount of working capital required to meet its operating
overhead, it may be necessary to call upon the investment community or the
Company's officers and directors for financial assistance. During the quarter
ended June 30, 2004, a private placement was completed of 1,000,000 shares of
the Company's restricted common stock for $500,000.
13
During this quarter, the Company's president, Royis Ward, provided $560,840 in
loans to the Company. Mr. Ward has indicated a willingness to continue such
advances until such time as cash flows can offset the monthly operating
overhead. We have no written agreement with Mr. Ward and no assurances can be
given that he will indefinetly provide our Company with funds. All of these
funds have been utilized to obtain additional equipment and to offset monthly
overhead operating expenses.
Conclusion
----------
The Company has expended substantial financial resources to establish an
infrastructure of personnel and equipment capable of meeting the needs of our
expanding business. It is anticipated that the Company's marketing efforts and
industry reputation will create a level of business activities sufficient to
meet operating overhead costs on a monthly basis within the near future.
RESULTS OF OPERATIONS
REVENUES: The Company reported revenues of $271,058 for the six months ended
June 30, 2004 as compared with $64,440 revenues for the six months ended June
30, 2003. The increased revenue was due to increased revenues from our solids
control subsidiary and our recently activated environmental clean-up subsidiary.
TOTAL COSTS AND EXPENSES: Total costs and expenses increased from $436,398 for
the six months ended June 30, 2003 to $1,542,685 for the six months ended June
30, 2004.
OPERATING EXPENSES: Operating expenses increased from $52,725 for the six months
ended June 30, 2003 to $283,259 for the six months ended June 30, 2004. the
increase of $230,534 was primarily due to continuation of ramping up our
infra-structure/support activities in anticipation of increased business.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses increased from $284,539 for the six months ended June
30, 2003 to $965,258 for the six months ended June 30, 2004. The increase of
$680,719 was primarily due to increased sales expense including demo and testing
costs incurred in our efforts to obtain long-term contracts, increased
consulting fees, increased legal fees and additional management and
administrative salaries as we seek to expand our customer base.
INCOME TAX: The pretax loss increased from $(371,958) for the six months ended
June 30, 2003 to $(1,271,627) for the six months ended June 30, 2004, an
increased loss of $899,669.
LIQUIDITY AND CAPITAL RESOURCES: Capital expenditures during the six months
ended June 30, 2004, totaled $467,865 as compared with $162,381 for the six
months ended June 30, 2003.
The increase of $305,484 consists of capital asset purchases and cost of
$386,383 for equipment needed by solids control division, $67,657 for E/C Unit
and related equipment construction, and $13,825 for office furniture, office
equipment and computers which total $467,865 less $162,381 expended during the
six months ended June 30, 2003.
Total debt increased from $1,291,606 to December 31, 2003 to $2,276,118 at June
30, 2004. Total debt as of June 30, 2004 and December 31, 2003 expressed as a
percentage of total debt and shareholder equity was 152.50% and 223.00%
respectively.
14
Net loss for the six months ended June 30, 2004 was ($1,271,627) an increase of
341.9 % from the net loss of ($371,958) for the six months ended June 30, 2003.
Diluted net loss per common share increased 400% to ($0.04) per share. The net
loss per share calculation for the six months ended June 30, 2004 included an
increase in actual and equivalent shares outstanding.
Item 3. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
Within the 90 days prior to the date of this Quarterly Report for the
period ended June 30, 2004, we carried out an evaluation, under the supervision
and with the participation of our management, including the Company's Chairman
and Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 (the
"Exchange Act"), which disclosure controls and procedures are designed to insure
that information required to be disclosed by a company in the reports that it
files under the Exchange Act is recorded, processed, summarized and reported
within required time periods specified by the SEC's rules and forms. Based upon
that evaluation, the Chairman and the Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company required to be included in the
Company's period SEC filings.
(b) Changes in Internal Control.
Subsequent to the date of such evaluation as described in subparagraph
(a)above, there were no significant changes in our internal controls or other
factors that could significantly affect these controls, including any corrective
action with regard to significant deficiencies and material weaknesses.
FORWARD-LOOKING STATEMENTS:
We have included forward-looking statements in this report. For this purpose,
any statements contained in this report that are not statements of historical
fact may be deemed to be forward looking statements. Without limiting the
foregoing, words such as "may", "will", "expect", "believe", "anticipate",
"estimate", "plan" or "continue" or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
and actual results may differ materially depending on a variety of factors.
Factors that might cause forward-looking statements to differ materially from
actual results include, among other things, overall economic and business
conditions, demand for the Company's products, competitive factors in the
industries in which we compete or intend to compete, natural gas availability
and cost and timing, impact and other uncertainties of our future acquisition
plans.
15
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
The Company does not issue or invest in financial instruments or their
derivatives for trading or speculative purposes. The operations of the Company
are conducted primarily in the United States, and, are not subject to material
foreign currency exchange risk. Although the Company has outstanding debt and
related interest expense, market risk of interest rate exposure in the United
States is currently not material.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the second quarter of 2004 the Company authorized, offered and,
or sold the following securities pursuant to exemptions from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
On April 14, 2004, we issued 100,000 common shares to Barry Gross for
investor and public relations services valued at $44,000.
On April 15, 2004, we issued 500,000 common shares to Grot Consulting,
LLC for consulting services valued at $212,000.
On June 15, 2004, we issued 350,000 common shares to Carcas Capital for
consulting services valued at $108,000.
On June 22, we authorized the issuance of 800,000 common shares to
Gregory Wilson for legal services valued at $176,000.
On June 30, 2004, we sold 1,000,000 common shares to Carl
Hessel/Margaux Investments for $500,000.
On June 30, 2004, we issued 500,000 common shares valued at $130,000 to
Carl Hessel for services regarding the private placement of the Company's common
shares.
We believe the shares issued above were issued in private transactions
pursuant to Section 4(2) of the Securities Act of 1933, as amended, (the
"Securities Act"). These shares are considered restricted securities and may not
be publicly resold unless registered for resale with appropriate governmental
agencies or unless exempt from any applicable registration requirements.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of the security holders, through the
solicitation of proxies or otherwise, during the quarter of the fiscal year
covered by this report.
16
Item 5. Other Information
On [date] we formed Ecoloclean of Texas, Inc., a Texas corporation,
(ECOT). ECOT's offices are located in Beaumont, Texas. It will be primarily
engaged in industrial environmental clean-up for clients such as petro-chemical
refineries, paper mills, chemical plants, oil refineries, and other industrial
organizations that employ processes that frequently generate waste products
requiring clean-up and, or disposal.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit No. Exhibit Name
31.1 Chief Executive Officer-Section 302 Certification
pursuant to Sarbane-Oxley Act.
31.2 Chief Financial Officer- Section 302 Certification
pursuant to Sarbane-Oxley Act.
32.1 Chief Executive Officer-Section 906 Certification
pursuant to Sarbane-Oxley Act.
32.2 Chief Financial Officer- Section 906 Certification
pursuant to Sarbane-Oxley Act.
(b) Reports on Form 8-K. None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ECOLOCLEAN INDUSTRIES, INC.
/s/ Royis Ward
Dated: August 16, 2004 ---------------------------
By: Royis Ward
Title: President, CEO
/s/ Michael Ward
Dated: August 16, 2004 ---------------------------
By: Michael Ward
Title: Secretary, CFO
17