Edgar Filing: W Technologies, Inc.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

(X)

QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2009

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to __________________

Commission file number: 000-24520

W Technologies, Inc.

(Name of small business issuer in its charter)


Delaware	04-3021770
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

P.O. Box 531450, Henderson, NV 89053-1450

(Address of principal executive offices)

Issuer’s telephone number

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes (X) No ( )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 1, 2009 was approximately $84,352, based upon the closing price per share of the Common Stock of $0.0004 on that date.

The number of shares outstanding of each the issuer’s Common Stock as of April 30, 2009: 210,878,844 shares of common stock at $0.0001 Par Value. The Company also has 502,500,000 shares issued and held as security on a promissory note. These shares would not become outstanding unless the Company defaults on the term of this note. Currently, the Company does not have the funds to pay the note.

Documents incorporated by reference: None

Transitional Small Business Disclosure Format (Check One): Yes ( ) No (X)

___________________________________________________________________________________

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Page

ITEM 1: FINANCIAL STATEMENTS

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4: CONTROLS AND PROCEDURES

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5: OTHER INFORMATION

ITEM 6: EXHIBITS

PART I—FINANCIAL INFORMATION

ITEM I—FINANCIAL STATEMENTS


W TECHNOLOGIES, INC. A Development Stage Company CONSOLIDATED BALANCE SHEETS

ASSETS	April 30, 2009	July 31, 2008
	(Unaudited)
Current assets:
Cash	$ --	$ 1,538
Available for sale securities	--	42,330
Total current assets	--	43,868

Total assets	$ --	$ 43,868

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current portion of long-term debt	$ 740,248	$ 765,248
Accounts payable – related parties	--	382,968
Accounts payable	165,240	397,051
Total current liabilities	905,488	1,545,267

Total liabilities	905,488	1,545,267
Stockholders' equity:
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 462,222 shares issued and outstanding	46	46

Common stock - $0.0001 par value; 750,000,000 shares authorized; 713,378,844 and 632,396,450 issued at April 30, 2009 and July 31, 2008 respectively, of which 502,500,000 are Treasury shares	71,338	63,240
Additional paid in capital	28,436, 861	27,821,123
Treasury stock	(50,250)	(50,250)
Unrealized loss in available for sale securities	--	(1,659,771)
Accumulated deficit	(29,363,483)	(27,675,787)
Total stockholders’ equity	(905,488)	(1,501,399)
Total liabilities and stockholders’ equity	$ --	$ 43,868

The accompanying notes are an integral part of these consolidated financial statements


W TECHNOLOGIES, INC. A Development Stage Company CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three months ended April 30,		Nine months ended April 30,		For the Period from September 26, 2007 through April 30,
	2009	2008	2009	2008	2009

Operating income and (expenses):
Revenues, net	$ --	$ --	$ --	$ 1,122,098	$ --
Handicapping fees	--	--	--	(100,465)	--
Advertising	--	--	--	(303,369)	15,375
Commissions	--	--	--	(249,618)	3,378
Salaries	--	--	--	(153,304)	(16,580)
Professional fees	(6,572)	(35,465)	(24,572)	(120,280)	(93,872)
General and administrative	--	4,792	(40,777)	(277,363)	(45,488)
Total operating income and (expenses)	$ (6,572)	$(30,673)	$ (65,349)	$ (82,301)	$ (137,187)


Other income and (expenses):
Gain on sale of assets	--	--	--	2,390,322	--
Forgiveness of indebtedness	--	1,020	151,828	42,369	344,435
Interest (expense), including amortization of debt discount	(23,636)	(55,670)	(68,437)	(153,773)	(218,285)
Interest (expense) related party	--	(5,690)	(3,599)	(17,402)	(53,422)
(Loss) on available for sale securities	--	--	(1,702,101)	--	(1,702,101)
Total other income and (expense)	(23,636)	(60,340)	(1,6,22,345)	2,261,516	(1,629,373)

Income tax (expense)	--	--	--	--	--

Net income (loss)	$ (30,208)	$ (91,013)	$(1,687,694)	$ 2,179,215	$(1,766,560)

Basic income (loss) per share of common stock	$ 0.00	$ 0.00	$ (0.01)	$ 0.02
Basic and diluted (loss) per share of common stock	$ 0.00	$ 0.00	$ (0.01)	$ 0.02

Basic and diluted income (loss) per share of common stock	210,878,844	129,896,450	156,890,581	129,896,450
Diluted weighted shares of common stock outstanding	210,878,844	134,518,670	156,890,581	134,518,670

The accompanying notes are an integral part of these consolidated financial statements

W TECHNOLOGIES, INC.

A Development Stage Company

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months ended April 30,
	2009	2008
Cash flows – operating activities:
Total cash (used in) operations	$ (1,538)	$ (715,282)

Cash flows – investing activities:
Sale of securities held for sale	--	780,810
Total cash provided by investing activities	--	780,810

Cash flows – financing activities:
Issuance of notes payable	--	785,339
Payments on long-term debt and lease obligations	--	(851,368)
Total cash provided by financing activities	--	(66,029)

Net increase (decrease) in cash	(1,538)	(501)
Cash – beginning of the periods	1,538	2,621
Cash – end of the periods	$ --	$ 2,120

The accompanying notes are an integral part of these consolidated financial statements

W TECHNOLOGIES, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations and cash flows at April 30, 2009 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s July 31, 2008 audited financial statements. The results of operations for the periods ended April 30, 2009 are not necessarily indicative of the operating results for the full year.

NOTE 2 – GOING CONCERN

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has no established ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT EVENTS

During the nine months ended April 30, 2009 the company issued 80,982,394 shares of common stock to retire $623,834 of liabilities, including accounts payable and current portion of long-term debt.

The value of the stock of Betbrokers PLC (“Betbrokers”), a UK company, held for sale by the Company was determined to have a permanent decline in value, and therefore, the Company has recognized this loss in value. This permanent decline in value was caused by Betbrokers being placed in Administration in August 2008. Subsequent events have made it clear that there is no remaining value for the common stockholders.

ITEM 2-MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Company has no revenues, no assets, and no ability to raise funds.

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to continue as a going concern. Although we believe the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the report will prove to be accurate.

With the September 2007 closing of the asset sale to Betbrokers PLC (“Betbrokers”) the Company has ceased all business operations. The Company currently has no means to pay existing debts or fund ongoing obligations. The Company is dependent on loans from its sole officer to pay ongoing expenses such as audit cost. It is unlikely our current officer will be able to continue to pay ongoing costs and the Company may be forced to cease all activity including our SEC reporting obligations and seek bankruptcy protection or just dissolve. It is likely investors in such situation would receive nothing and the stock of the Company would cease to trade on the Bulletin Board or other exchanges or markets.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, 2009

Any discussion of results of operations will not be relevant to a reader in analyzing either past or future operations. With the sale of all of the operating assets, the Company will not be engaged in the prior business and the future operating costs and revenues, if any, will be substantially different then prior operating costs and revenues.

SUMMARY OF CASH FLOWS FOR THE NINE MONTHS ENDED APRIL 30, 2009

Cash decreased approximately $1,538 during the nine months ended April 30, 2009. With the termination of operations in September 2007, the Company does not expect to receive any more revenues and the only cash it will receive is loans or stock sales.

LIQUIDITY AND CAPITAL RESOURCES

We have no assets and it is likely the investors will not receive any distributions.

Our working capital deficit at April 30, 2009 was $905,488, as compared to $1,501,399 at July 31, 2008.

The Company is experiencing significant liquidity issues. These liquidity issues include not being able to pay ongoing expenses or past due notes and obligations. If the Company is not able to obtain some liquidity, either from loans or from private stock sales, the Company may be forced to cease all activity and seek bankruptcy protection. Additionally, the Company may be forced to stop all payments to third parties which would force it to not be able to continue with its SEC reporting obligations and result in being delisted from the OTC Bulletin Board.

The inability to pay ongoing operations may also result in defaults on loans which would result in shares used as security on the loans being received by lenders. Currently, 502,500,000 shares of the Company are subject to security interest for a note. If the Company defaults on this note, the holder of the note would receive 502,500,000 shares of the Company’s common stock which would substantially dilute all current shareholders. These same note holders also hold a security interest in our preferred stock which could result in additional voting rights for the holders of the note if a default occurs. Currently, the Company does not have the funds to pay this note and if default occurs, it will cause substantial dilution to current shareholders and effectively give the lender voting control over the Company. The lender would be able to control the vote on any matters brought before shareholders and would be able to elect new directors of the Company.

It is becoming increasingly more difficult for the Company to maintain its corporate status and SEC filing requirements. Combined with the potential default on notes, current shareholders likely will be diluted with the issuance of additional shares and with the no value remaining in Betbrokers stock, shareholders will not receive any distributions from the Betbrokers stock. Additionally, the lack of liquidity may force the Company to cease all activity resulting in the complete loss of shareholder value.

CRITICAL ACCOUNTING ISSUES

The discussion and analysis of our financial condition and results of operations were based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses. Our significant accounting policies are described in Note 2 to our consolidated financial statements. In response to SEC Release No. 33-8040, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies," we have identified certain policies as being of particular importance to the portrayal of our financial position and results of operations that require the application of significant judgment by management. We analyze our estimates, including those related to revenue recognition, valuation of equity issuances, and contingencies and potential litigation, and base our estimates on historical experience and various other assumptions that we believe reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

ITEM 3- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At April 30, 2009 the Company has no assets subject to market risk.

ITEM 4- CONTROLS AND PROCEDURES

The Company's management evaluated, with the participation of the Company's principal executive and principal financial officer, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on his evaluation, the Company's principal

executive and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of April 30, 2009.

There has been no change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company's period ended April 30, 2009, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1- LEGAL PROCEEDINGS

There are no legal proceedings pending; however, the Company is in default on all note obligations and does not have the funds to pay the notes or other creditors. Accordingly, it is highly likely the Company will be involved in litigation related to these claims.

ITEM 2- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

80,982,394 shares were issued during the nine months ended April 30, 2009 to retire $623,834 of liabilities, including accounts payable and current portion of long-term debt.; however, warrants for 3,949,667 expired during the nine months ended April 30, 2009.

ITEM 3- DEFAULTS UPON SENIOR SECURITIES

In September of 2006 the Company entered into a $655,000 short term loan with a private investor. The note has an 18% interest rate and a maturity date of June 30, 2007. As collateral, the Company made a general pledge agreement, giving a security interest in the assets of the Company including a specific credit card reserve account. Additionally, the Company pledged its 502,500,000 treasury shares of common stock in the event of default. CEO Wayne Root also pledged his 462,222 preferred shares in the event of default. On September 26, 2007 the Company amended the loan to extend maturity for nine months, and secured the loan with 10,000,000 shares of Betbrokers stock in the name of W Technologies to be used in the event of default. At April 1, 2008 this note was renewed with a due date of November 7, 2008. At the same time the $28,750 remaining principal balance of a note to a private investor was included in this note. Also included in this note was all accrued interest for both notes as of April 1, 2008, and the note holder’s legal costs. As of April 30, 2009 the outstanding balance on the note was $538,520. This note is in default. As part of the note, the Company agreed to pledge 21,115,436 shares of Betbrokers stock to secure the note. The pledged Betbrokers stock represents almost all of the shares of Betbrokers still held by the Company.

In June 2007 the Company received a loan in the amount of $25,000 from Director Roger L. Harrison. This loan has a due date of August 31, 2007, the principal and accrued interest of $ 31,212 were retired in January 2009 by the issuance of 4,051,749 shares of the Company’s common stock.

On September 26, 2007 the Company amended the existing Laurus Master Fund, Ltd note to extend the term for 11 months and to change the interest rate from 13% to 20%.

As of April 30, 2009 the outstanding balance on the note was $146,728. As of October 31, 2009 the Company stopped accruing interest on this note. The principal and $29,868 accrued interest are in default.

During the year ended July 31, 2007 the Company received two loans from J. Wright totaling $60,000 at an interest rate of 12%, due July 31, 2007. In connection with the sale of assets to Betbrokers the principal amount of the Wright note was increased to $65,000 and the interest rate changed to 18%. The due date of the new loan was extended to June 30, 2008. Additionally, 1,250,000 shares of Betbrokers stock in the name of W Technologies were pledged as collateral in the event of default. As of April 30, 2009 the outstanding principal balance on the note was $55,000 and the note is currently in default. As of October 31, 2009 the Company stopped accruing interest on this note.

ITEM 4- SUMBISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the three months ended April 30, 2009 to a vote of security holders, through the solicitation of proxies or otherwise.

ITEM 5- OTHER INFORMATION

NONE

ITEM 6- EXHIBITS

Exhibit No. Description Location

31.1 Certification of Chief Filed herewith

Executive Officer Pursuant electronically

to Section 302 of the

Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Filed herewith

Financial Officer Pursuant electronically

to Section 302 of the

Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Filed herewith

Executive Officer Pursuant electronically

to 18 U.S.C Section 1350

32.2 Certification of Chief Filed herewith

Financial Officer Pursuant electronically

to 18 U.S.C Section 1350

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.

W Technologies, Inc.

(Registrant)

Dated: June 10, 2009 By: /s/ Wayne Allyn Root

Wayne Allyn Root

Chief Financial Officer

Dated: June 10, 2009 By: /s/ Wayne Allyn Root

Wayne Allen Root

Chairman and Chief Executive Officer