x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
OF
1934 FOR FISCAL YEAR ENDED DECEMBER 31,
2004
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
Nevada
|
03-7392107
|
|||
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
|
FORM
10-KSB/A-2
|
|
TABLE
OF CONTENTS
|
|
|
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Page
|
PART
I
|
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4
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10
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11
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|
PART
II
|
|
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11
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|
|
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12
|
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|
|
13
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|
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20
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27
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|
27
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PART
III
|
|
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28
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30
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33
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33
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34
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35
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|
HIGH
|
LOW
|
|||||
2003
|
|
|
|||||
1st
Quarter
|
0.090
|
0.040
|
|||||
2nd
Quarter
|
0.090
|
0.020
|
|||||
3rd
Quarter
|
0.110
|
0.010
|
|||||
4th
Quarter
|
0.130
|
0.050
|
|||||
|
|||||||
2004
|
|||||||
1st
Quarter
|
0.280
|
0.100
|
|||||
2nd
Quarter
|
0.360
|
0.130
|
|||||
3rd
Quarter
|
0.200
|
0.080
|
|||||
4th
Quarter
|
0.140
|
0.090
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
||||
CONSOLIDATED
BALANCE SHEET
|
||||
DECEMBER
31, 2004
|
||||
|
|
|||
|
|
|||
ASSETS
|
|
|||
|
|
|||
CURRENT
ASSETS:
|
|
|||
Trade
accounts receivable, net of allowance for doubtful accounts of
$0
|
$
|
35,914
|
||
Other
current assets
|
848
|
|||
Total
current assets
|
36,762
|
|||
|
||||
Equipment,
net of $83,630 accumulated depreciation
|
7,185
|
|||
Customer
base, net of $11,458 amortization
|
38,542
|
|||
|
||||
Total
assets
|
$
|
82,489
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
|
||||
CURRENT
LIABILITIES:
|
||||
Convertible
notes payable to stockholder
|
$
|
187,432
|
||
Notes
payable
|
3,000
|
|||
Accounts
payable
|
318,292
|
|||
Accrued
expenses
|
70,438
|
|||
|
||||
Total
current liabilities
|
579,162
|
|||
|
||||
COMMITMENTS
AND CONTINGENCIES
|
-
|
|||
|
||||
STOCKHOLDERS'
DEFICIT:
|
||||
Series
A convertible preferred stock, $.001 par; $4,749,989 liquidation
value
5,000,000 shares authorized; 911,553 shares issued and outstanding
|
911
|
|||
Common
stock, $.001 par; 100,000,000 shares authorized; 1,290,206 shares
issued
and outstanding
|
1,290
|
|||
Additional
paid-in capital
|
22,564,785
|
|||
Accumulated
deficit
|
(23,005,159
|
)
|
||
Shareholder
receivable
|
(58,500
|
)
|
||
Total
stockholders' deficit
|
(496,673
|
)
|
||
Total
liabilities and stockholders' deficit
|
$
|
82,489
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
|||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||
YEARS
ENDED DECEMBER 31, 2004 and 2003
|
|||||||
|
|
|
|||||
|
|
|
|||||
|
2004
|
2003
|
|||||
|
|
|
|||||
Sales
|
$
|
341,199
|
$
|
820,933
|
|||
|
|||||||
Cost
of sales
|
292,138
|
483,519
|
|||||
Selling,
general and administrative
|
1,839,824
|
697,164
|
|||||
Depreciation
|
12,690
|
37,091
|
|||||
Amortization
|
11,458
|
-
|
|||||
Bad
debts
|
-
|
24,920
|
|||||
Total
operating expenses
|
2,156,110
|
1,242,694
|
|||||
|
|||||||
Loss
from operations
|
(1,814,911
|
)
|
(421,761
|
)
|
|||
|
|||||||
OTHER
INCOME (EXPENSE)
|
|||||||
|
|||||||
Other
Income
|
1,049
|
1,481
|
|||||
Forgiveness
of debt
|
-
|
81,088
|
|||||
Interest
expense
|
(22,911
|
)
|
(12,107
|
)
|
|||
|
|||||||
NET
INCOME (LOSS)
|
$
|
(1,836,773
|
)
|
$
|
(351,299
|
)
|
|
|
|||||||
Basic and
Diluted loss per share:
|
$
|
(1.65
|
)
|
$
|
(0.45
|
)
|
|
|
|||||||
Weighted
average shares outstanding
|
1,115,605
|
787,098
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT
|
YEARS
ENDED DECEMBER 31, 2004 and 2003
|
|
Preferred
Stock
|
Common
Stock
|
|||||||||||
|
|
|
|||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||
|
|
|
|
|
|||||||||
Balances,
|
|
|
|
|
|||||||||
December
31, 2002
|
1,055,553
|
$
|
1,055
|
721,000
|
$
|
721
|
|||||||
|
|||||||||||||
Sale
of Networld
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Issuance
of options to consultants
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Shares
issued for debt
|
-
|
-
|
197,725
|
198
|
|||||||||
|
|||||||||||||
Exercise
of consultants options
|
-
|
-
|
66,667
|
67
|
|||||||||
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Balances,
|
|||||||||||||
December
31, 2003
|
1,055,553
|
1,055
|
985,392
|
986
|
|||||||||
|
|||||||||||||
Exercise
of consultants warrants
|
-
|
300,000
|
300
|
||||||||||
|
|||||||||||||
Warrants
to consultants
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Conversion
of preferred shares into common shares
|
(144,000
|
)
|
144
|
4,815
|
4
|
||||||||
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Balances,
|
|||||||||||||
December
31, 2004
|
911,553
|
$
|
911
|
1,290,206
|
$
|
1,290
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
|||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT
|
|||||||||||||
YEARS
ENDED DECEMBER 31, 2004 and 2003
|
|||||||||||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
|
Paid-In
Capital
|
Accumulated
Deficit
|
Shareholder
Receivable
|
Total
|
|||||||||
|
|
|
|
|
|||||||||
Balances,
|
|
|
|
|
|||||||||
December
31, 2002
|
$
|
20,109,925
|
$
|
(20,817,087
|
)
|
$
|
-
|
$
|
(705,386
|
)
|
|||
|
|||||||||||||
Sale
of Networld
|
352,458
|
-
|
-
|
352,458
|
|||||||||
|
|||||||||||||
Issuance
of options to consultants
|
53,000
|
-
|
-
|
53,000
|
|||||||||
|
|||||||||||||
Shares
issued for debt
|
149,802
|
-
|
-
|
150,000
|
|||||||||
|
|||||||||||||
Exercise
of consultants options
|
99,933
|
-
|
-
|
100,000
|
|||||||||
|
|||||||||||||
Net
loss
|
-
|
(351,299
|
)
|
-
|
(351,299
|
)
|
|||||||
|
|||||||||||||
Balances,
|
|||||||||||||
December
31, 2003
|
20,765,118
|
(21,168,386
|
)
|
-
|
(401,227
|
)
|
|||||||
|
|||||||||||||
Exercise
of consultants warrants
|
479,700
|
(58,500
|
)
|
421,500
|
|||||||||
|
|||||||||||||
Warrants
to consultants
|
1,319,827
|
-
|
-
|
1,319,827
|
|||||||||
|
|||||||||||||
Conversion
of preferred shares into common shares
|
139
|
-
|
-
|
||||||||||
|
|||||||||||||
Net
loss
|
-
|
(1,836,773
|
)
|
-
|
(1,836,773
|
)
|
|||||||
|
|||||||||||||
Balances,
|
|||||||||||||
December
31, 2004
|
$
|
22,564,785
|
$
|
(23,005,159
|
)
|
$
|
(58,500
|
)
|
$
|
(496,673
|
)
|
WORLDTEQ
GROUP INTERNATIONAL, INC.
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003
|
|||||||
|
|
|
|||||
|
|
|
|||||
|
2004
|
2003
|
|||||
|
|
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|||||
Net
loss
|
$
|
(1,836,773
|
)
|
$
|
(351,299
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Non-cash
stock and option compensation
|
1,319,827
|
53,000
|
|||||
Depreciation
and amortization
|
24,148
|
37,091
|
|||||
Bad
debt
|
-
|
24,920
|
|||||
Change
in assets and liabilities:
|
|||||||
Accounts
payable
|
74,342
|
(49,856
|
)
|
||||
Accrued
expenses
|
24,379
|
52,559
|
|||||
Deferred
revenue
|
-
|
(51,616
|
)
|
||||
Trade
accounts receivable
|
(3,685
|
)
|
21,825
|
||||
Other
current assets
|
(848
|
)
|
12,574
|
||||
|
|||||||
Net
cash used in operating activities
|
(398,610
|
)
|
(250,802
|
)
|
|||
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of equipment
|
(54,609
|
)
|
-
|
||||
|
|||||||
Net
cash used in investing activities
|
(54,609
|
)
|
-
|
||||
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Proceeds
from exercise of options
|
421,500
|
100,000
|
|||||
Proceeds
from notes payable
|
3,000
|
-
|
|||||
Proceeds
from shareholder note payable, net
|
-
|
97,609
|
|||||
Capital
contribution
|
-
|
-
|
|||||
Payments
on notes payable
|
(3,088
|
)
|
|||||
|
|||||||
Net
cash provided by financing activities
|
421,412
|
197,609
|
|||||
|
|||||||
CHANGE
IN CASH
|
(31,807
|
)
|
(53,193
|
)
|
|||
|
|||||||
CASH
AND CASH EQUIVALENTS, beginning of year
|
31,807
|
85,000
|
|||||
CASH
AND CASH EQUIVALENTS, end of year
|
$
|
-
|
$
|
31,807
|
|||
|
|||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Payment
of interest
|
$
|
-
|
$
|
-
|
|||
|
|||||||
NON-CASH
FINANCING ACTIVITIES:
|
|||||||
Stock
issued notes payable
|
$
|
-
|
$
|
150,000
|
|||
Net
liabilities assumed by Networld acquirer
|
-
|
352,458
|
|||||
Exchange
of preferred stock to common stock
|
(144
|
)
|
-
|
|
For
the year ended December 31,
|
||||||
|
2004
|
2003
|
|||||
|
|
|
|||||
Net
loss available to common stockholders, as reported
|
$
|
(1,836,773
|
)
|
$
|
(351,299
|
)
|
|
|
|||||||
Less:
stock based compensation determined under fair value based
method
|
(281,771
|
)
|
-
|
||||
Pro
forma net loss
|
$
|
(2,118,544
|
)
|
$
|
(351,299
|
)
|
|
|
|||||||
Basic
and diluted net loss per share
|
|||||||
As
reported
|
$
|
(1.65
|
)
|
$
|
(0.45
|
)
|
|
Pro
forma
|
$
|
(1.89
|
)
|
$
|
(0.45
|
)
|
Long-term:
|
||||
Deferred
tax assets
|
$
|
7,111,762
|
||
Valuation
allowance
|
(7,111,762
|
)
|
||
|
$ | - |
|
Options
|
Weighted
Average Share Price
|
Warrants
|
Weighted
average Share Price
|
|||||||||
|
|
|
|
|
|||||||||
Year
ended December 31, 2003:
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
Granted
|
-
|
-
|
2,000,000
|
.10
|
|||||||||
Excercised
|
-
|
-
|
(2,000,000
|
)
|
-
|
||||||||
|
|||||||||||||
Outstanding
at December 31, 2003
|
1,232,000
|
$ |
.29
|
4,036,650
|
$
|
.66
|
|||||||
|
|||||||||||||
Year
ended December 31, 2004:
|
|||||||||||||
|
|||||||||||||
Granted
|
2,350,000
|
.13
|
9,000,000
|
.05
|
|||||||||
Excercised
|
-
|
-
|
(9,000,000
|
)
|
.05
|
||||||||
Expired
|
-
|
-
|
(886,650
|
)
|
2.45
|
||||||||
Outstanding
at December 31, 2004
|
3,582,000
|
$
|
.19
|
3,150,000
|
$
|
.16
|
|
Outstanding
|
Exercisable
|
||||||||
Exercise
Price
|
Number
of Shares
|
Remaining
life
|
Number
of Shares
|
|||||||
|
|
|
|
|||||||
|
|
|
|
|||||||
$.29
|
87,000
|
1
years
|
87,000
|
|||||||
.29
|
145,000
|
2
years
|
145,000
|
|||||||
.29
|
600,000
|
3
years
|
600,000
|
|||||||
.29
|
400,000
|
4
years
|
400,000
|
|||||||
.13
|
2,350,000
|
10
years
|
271,991
|
|||||||
|
||||||||||
|
3,582,000
|
1,503,991
|
||||||||
|
||||||||||
Warrants
outstanding and exercisable as of December 31, 2004:
|
||||||||||
|
||||||||||
|
Outstanding
|
Exercisable
|
||||||||
|
Number
|
Remaining
|
Number
|
|||||||
Exercise
Price
|
of
Shares
|
life
|
of
Shares
|
|||||||
|
||||||||||
$2.75
|
150,000
|
2
years
|
150,000
|
|||||||
|
||||||||||
.03
|
3,000,000
|
2
years
|
3,000,000
|
|||||||
|
||||||||||
|
3,150,000
|
3,150,000
|
ASSETS
|
Previously
|
Increase
|
|
|||||||
CURRENT
ASSETS:
|
Stated
|
(Decrease)
|
Restated
|
|||||||
|
|
|
|
|||||||
|
|
|
|
|||||||
Trade
accounts receivable
|
35,914
|
35,914
|
||||||||
Other
current assets
|
848
|
848
|
||||||||
Total
current assets
|
36,762
|
36,762
|
||||||||
|
||||||||||
EQUIPMENT,
net
|
7,185
|
7,185
|
||||||||
Customer
base, net
|
38,542
|
38,542
|
||||||||
Total
assets
|
$
|
82,849
|
$
|
82,849
|
||||||
|
||||||||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||||
CURRENT
LIABILITIES:
|
||||||||||
Notes
payable
|
$
|
-
|
$
|
3,000
|
$
|
3,000
|
||||
Note
payable stockholder
|
187,432
|
187,432
|
||||||||
Accounts
payable
|
327,272
|
(8,980
|
)
|
318,292
|
||||||
Accrued
expenses
|
4,800
|
65,638
|
70,438
|
|||||||
Payroll
liabilities and taxes
|
45,727
|
(45,727
|
)
|
-
|
||||||
Total
current liabilities
|
567,031
|
12,131
|
579,162
|
|||||||
|
||||||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||||
|
||||||||||
STOCKHOLDERS’
DEFICIT:
|
||||||||||
Series
A convertible preferred
|
911
|
911
|
||||||||
Common
stock
|
38,706
|
(37,416
|
)
|
1,290
|
||||||
Additional
paid-in capital
|
22,104,807
|
459,978
|
22,564,785
|
|||||||
Accumulated
deficit
|
(22,262,299
|
)
|
(742,860
|
)
|
(23,005,159
|
)
|
||||
Total
stockholders’ deficit
|
(117,875
|
)
|
(378,798
|
)
|
(496,673
|
)
|
||||
Total
liabilities and stockholders’ deficit
|
$
|
449,156
|
$
|
(366,667
|
)
|
$
|
82,489
|
CURRENT
ASSETS:
|
Previously
Stated
|
Increase
(Decrease)
|
Restated
|
|||||||
|
|
|
|
|||||||
Sales
|
$
|
341,199
|
$
|
-
|
$
|
341,199
|
||||
|
||||||||||
|
||||||||||
Cost
of sales
|
299,618
|
(7,480
|
)
|
292,138
|
||||||
Selling,
general and administrative
|
817,332
|
1,022,492
|
1,839,824
|
|||||||
Bad
debts
|
-
|
-
|
||||||||
Depreciation
|
12,690
|
12,690
|
||||||||
Amortization
|
-
|
11,458
|
11,458
|
|||||||
Operating
expenses
|
1,129,640
|
1,026,470
|
2,156,110
|
|||||||
|
||||||||||
Loss
from operations
|
(788,441
|
)
|
(1,026,470
|
)
|
(1,814,911
|
)
|
||||
|
||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||
Other
|
(301,171
|
)
|
300,122
|
1,049
|
||||||
Interest
expense
|
(5,350
|
)
|
(17,561
|
)
|
(22,911
|
)
|
||||
|
||||||||||
NET
LOSS
|
$
|
(1,093,913
|
)
|
$
|
(742,860
|
)
|
$
|
(1,836,773
|
)
|
|
|
||||||||||
|
||||||||||
BASIC
AND DILUTED LOSS PER COMMON SHARE:
|
$
|
(0.019
|
)
|
$
|
(1.65
|
)
|
||||
|
||||||||||
|
||||||||||
Weighted
Average Common Shares Outstanding
|
35,106,190
|
1,115,605
|
Name
|
Age
|
Position
|
Since
|
|||
|
|
|
|
|||
Jeff
Lieberman
|
36
|
President,
Treasurer and Chairman of the Board of Directors
|
February
2003
|
|||
|
|
|
|
|||
Brian
Rosinski
|
29
|
Secretary
and Director
|
April
2003
|
|||
|
|
|
|
|||
Timothy
Carnahan
|
36
|
Director,
and Chairman Of the Compensation Committee
|
October
2003
|
The
following lists the key consultants to WorldTeq as of March 5,
2004:
|
||
|
|
|
Name
|
Field
|
|
|
|
|
XCL
Partners
|
Investment
Banking Consultant
|
|
|
|
|
Chesapeake
|
Investor
Relations Consultant
|
|
|
|
|
|
|
|
There
are no other officers or significant
employees.
|
|
Annual
Compensation
|
Long
Term Compensation
|
|
||||||
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual Compensation ($)
|
Restricted
Stock
Award(s) ($)
|
Securities
Underlying
Options
(#)
|
LTIP
Payouts ($)
|
Other
($)
|
|
|
|
|
|
|
|
|
|
|
|
Jeff
Lieberman, CEO,
President, Treasurer and Chairman of the Board
|
2003
2004
|
51,321
72,000
|
|
50,000
50,000
|
N/A
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Rosinski, (1) Secretary and Director
|
2002
2003
|
30,113
36,113
|
|
|
N/A
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tim
Carnahan, (2) Director
|
2002
2003
|
|
|
N/A
0
|
N/A
N/A
|
|
|
|
Option/SAR
Grants in Last Fiscal Year
|
|||||||||||||
Individual
Grants
|
|||||||||||||
Name
|
Number
of Securities Underlying Options/SARs
Granted (#)
|
%
of Total Options/SARs Granted to Employees in
Fiscal Year
|
Exercise
or Base Price
($/Sh)
|
Expiration
Date
|
|||||||||
|
|
|
|
|
|||||||||
Jeff
Lieberman,
CEO,
President, Treasurer and Chairman of the Board
|
0
|
2,000,000
|
|
|
|||||||||
|
|
||||||||||||
Brian
Rosinski,
Secretary
and Director
|
0
|
350,000
|
|
|
|||||||||
|
|
||||||||||||
Tim
Carnahan,
(2)
Director
|
0
|
0
|
|
|
Range
of Exercise prices
|
Number
|
Outstanding
Remaining Contractual Life
|
|||||
|
|
|
|||||
$
.05
|
3,000,000
|
2006
|
|||||
$
.05
|
2,000,000
|
N/A
|
|||||
$
.27
|
850,000
|
2006
|
|||||
$
.10
|
1,000,000
|
N/A
|
TITLE
OF CLASS
|
NAME
AND ADDRESS
|
Number
of
|
%
OF
|
|
|
|
|
Common
|
Jeff
Lieberman
|
171,000(1)
|
0.83
|
|
5225
Pooks Hill Road, Apt A18S
|
|
|
|
Bethesda,
MD 20814
|
|
|
|
|
|
|
Common
|
Bruce
Bertman
|
12,357,511
|
36.7%
|
|
10101
Johns Drive
|
|
|
|
Damascus,
MD 20872
|
|
|
|
|
|
|
Common
|
All
Executive officers and Directors and affiliates as a group
|
266,000(2)
|
34.57
|
Certification
of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley
Act
of 2002
|
Certification
Pursuant to Section 13a-14 of the Securities Exchange Act of 1934
of
Timothy Carnahan (CYIOS Chief Financial Officer)
|
Certification
of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of
2002
|
Written
Statement of Principal Financial and Accounting Officer Furnished
Pursuant
to 18 U.S.C. Section 1350, as Adopted by Section 906 of the Sarbanes-Oxley
Act of 2002
|
/s/
Jeffrey Lieberman
|
|
Jeffrey
Lieberman
|
|
Chief
Executive Officer,
|
|
President,
Treasurer and Chairman of the Board
|
/s/
Jeffrey Lieberman
|
|
Jeffrey
Lieberman
|
|
Chief
Executive Officer,
|
|
President,
Treasurer and Chairman of the Board
|
/s/
Brian Rosinski
|
|
Brian
Rosinski
|
|
Secretary
and Director
|