Form 10-K Enviro-serve, Inc. For: Dec 31



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UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

 

———————

FORM
10-K

———————

 

[X]

QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2011.

 
     

or

 

[_] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from [–Date—] to [–Date—]
 

  

Commission
File Number: 000-27131

 

ENVIRO-SERV,
INC.

(Exact
name of registrant as specified in its charter)

  

DELAWARE   88-0381258

(State
or other jurisdiction of

incorporation
or organization)

 

(I.R.S.
Employer Identification No.)

     

2240 Twelve OaksWay, Suite 101-1, Wesley Chapel,FL

 

33544

(Address
of principal executive offices)
  (Zip
Code)

(813)
388-6891

(Registrant’s
telephone number, including area code)

 

N/A

(Former
name, former address and former fiscal year, if changed since last report)

 

———————

 

Indicate by check mark
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  [_]    No  [X]

 

Indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  [X]    No  [_]

 

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 requirements for the past 90 days.    Yes  [_]    No  [X]

 

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  [_]    No  [_]

 

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405
of this chapter) is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    Yes  [_]    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 the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [_] Accelerated  filer [_]
 
Non-accelerated filer [_]  (Do not check if a smaller
reporting company)
Smaller reporting company [X]

 

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

 

State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was last
sold, or the average bid and asked price of such common equity, as of the last business
day of the registrant’s most recently completed second fiscal quarter. 

 

Note.—If a determination
as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock
held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

 

APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate
by check mark whether the registrant has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.    Yes  [_]    No  [_]

 

(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)

 

Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date. 

 

The
number of shares of the issuer’s Common Stock outstanding as of December 31, 2011 is 249,963,747.

 

 

 

TABLE
OF CONTENTS

 

  Pages
PART
I
 
   
Item
1. Business
2
Item
1A. Risk Factors
5
Item
1B. Unresolved Staff Comments
5
Item
2. Properties
5
Item
3. Legal Proceedings
5
   
PART
I
 
   
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
6
Item
6. Selected Financial Data
7
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
7
Item
7A. Quantitative and Qualitative Disclosures about Market Risk
11
Item
8. Financial Statements and Supplementary Data
11
Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
12
Item
9A. Controls and Procedures
12
Item
9B. Other Information
13
   
PART
III
 
   
Item
10. Directors, Executive Officers and Corporate Governance
14
Item
11. Executive Compensation
15
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
16
Item
13. Certain Relationships and Related Transactions, and Director Independence
16
Item
14. Principal Accounting Fees and Services
16
   
Signatures 17

 

PART
I

 

Item
1. Business

 

History

 

We
were incorporated under the name “DP Charters” in Nevada on December 18, 1997. On April 18, 2002, we changed our name
to “Nomadic Collaboration International, Inc.” Effective May 30, 2003, LGC Acquisition Company, a Delaware corporation
and wholly owned subsidiary of Nomadic Collaboration International, Inc., a Nevada corporation, merged with and into LiquidGolf
Corporation, a Delaware corporation, such that LiquidGolf Corporation was the surviving entity, and by virtue thereof, LiquidGolf
corporation became a wholly owned subsidiary of Nomadic Collaboration. On September 29, 2003, the Company completed a re-incorporation
merger into a Delaware Corporation thus changing the state of incorporation from Nevada to Delaware. As a result of the merger,
the name of the Company changed to LiquidGolf Holding Corporation. Our business operations at this time became the sale of golf
equipment.

 

On
August 12, 2004, we determined to change the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation
to reflect our business decision to diversify our business operations beyond the sale of golf equipment. As part of this effort,
in January 2006, we purchased the Silent Sword TM software and all trademarks, service marks, and logos. On April 28, 2006 a majority
of our stockholders approved changing the name of the Company from Horizon Holding Corporation to Inverted Paradigms Corporation
to reflect our business direction of developing the Silent Sword TM software. Eventually we were not successful in achieving commercially
viable operations in the sale of golf equipment or in the sale software. We discontinued the sale of golf equipment in August
of 2006 and the sale of software in March of 2007. On October 2, 2007, we entered into an agreement with GAMI, LLC for GAMI, LLC
to purchase from the Company the Silent Sword TM software and thereafter consummated the sale.

 

In
September, 2007, it was determined to focus business interests on researching, developing and commercializing innovative, leading-edge
technologies. On September 7, 2007, Mr. Chris Trina was hired to be our CEO to pursue this business direction and our name was
changed to Transfer Technology International Corp. (“TTIN”) to reflect this business direction. In 2013, the Company
changed its name to Enviro-Serv, Inc.

 

Transfer
Technology

 

TTIN’s
goal is to build an intellectual properties portfolio and develop commercialization strategies that will lay the groundwork for
the company’s future growth. To execute this business plan, the company plans to: (1) identify, evaluate and acquire promising
technologies; (2) assess the potential market for each technology and recruit likely business partners; and (3) capitalize on
the technology potential through commercialization.

 

During
the first quarter of 2008, TTIN acquired patents relating to two technologies. The first is a patented process for preventing
flash rust on low carbon steel. The second patent is for a product that protects citrus groves from citrus canker, a disease that
causes millions of dollars of crop damage each year. Both of these technologies address large markets and offer significant sales
opportunities. A study by CCT Technologies estimates that rust damage costs U.S. businesses approximately $276 billion annually.
Regarding citrus canker, the U.S. Department of Agriculture has spent more than $436 million since 2000 on citrus canker eradication
efforts. In addition, the company is currently evaluating other patents for possible acquisition.

 

TTIN
plans to research, develop and commercialize innovative, leading-edge technologies through the acquisition of licenses and the
design of effective commercialization strategies in conjunction with business partners who can facilitate market penetration.
The company will also help clients identify and acquire development-stage technologies and processes that can enhance the client’s
business in exchange for milestone and royalty payments.

 

 

Three-fold
strategy for technology acquisition

 

The
company seeks to identify technologies that represent a significant advance over existing technologies, address an established
market and are socially responsible. TTIN plans to pursue technology licensing opportunities in the government, academic and private
sectors:

 

1.  
TTIN intends to negotiate Cooperative Research and Development Agreements (CRADA) with the Department of Energy, Department of
Agriculture and other federal agencies. As part of these agreements, the company will fund research and development of technologies
discovered by scientists employed by these government agencies;

 

2.   
In the academia market, TTIN plans to target numerous “orphaned” inventions and technology improvements. Approximately
70 percent of university patents never find a practical application or a commercial market;

 

3. 
TTIN will also search for licensing opportunities in the private sector by evaluating new technologies and entering into licensing
agreements with developers.

 

First
two patents acquired in the first quarter of 2008:

 

Flash
Off rust preventative targets corrosion market

 

Flash
Off rust preventative (U.S. patent number 7,008,910) inhibits flash rusting on low carbon steel. Applications for this product
include structural steel, marine vessels, offshore structures, marine terminals, cranes, bridges, storage tanks, pipelines and
potable water storage tanks. Rusting and corrosion adversely affect the performance of unprotected steel and may eventually result
in structural failures.

 

A
study titled “Corrosion Costs and Preventive Strategies in the United States” conducted by CCT Technologies with support
from the Federal Highway Administration and National Association of Corrosion Engineers estimates total direct cost of corrosion
damage at $276 billion annually.

 

Canker
Kill product protects citrus groves

 

Canker
Kill is an environmentally-friendly spray that protects citrus groves from a group of diseases commonly known as citrus canker.
ABC Research Corporation lab tested Canker Kill and found it effective against the Xanthomonas bacteria. Field tests by Glades
Crop Care Inc. indicated Canker Kill was more effective than traditional copper spray treatments and much better than leaving
trees untreated. Canker Kill also reduces or stops the growth of spoilage-causing micro-organisms such as Gram-positive bacteria,
Gram-negative bacteria, mold, yeast and spores. As a result, Canker Kill has potential applications in the food and beverage processing
industries.

 

Citrus
canker is a disease that causes lesions on the leaves, stems and fruit of citrus trees, including lime, orange and grapefruit.
Eradicating canker is extremely costly and typically involves burning citrus orchard trees.

 

Our
Canker Kill product contains the active ingredient d-limonene which is required to be registered for use with the United States
Environmental Protection Agency (the “EPA”). D-limonene is already registered for a use different from ours under
the herbicide label, EPA Reg No. 82052-4; 55% d-limonene. In January, 2009, the EPA led us to believe that because of the existing
registration, a simple label review is all that would be required for our use of the product. To that end we named our application
of d-limonene EcoAvenger Citrus Canker Control and submitted it for approval expecting a four month turn around. However, subsequent
to our submission, the EPA shifted its position and insisted that it would classify our regulatory request under PRIA 2 as a new
use, requiring a 15 month or longer time for review. The new additional use registration (R230) application was submitted in July,
2009, and was issued a PRIA 2 date of November 3, 2010. However, as of the date of this filing we have not received approval of
our conditional use label and remain subject to the EPA’s time table.

 

 

Other
Technologies and Operations

 

Organic
Products International

 

The
Company has begun the development of a subsidiary corporation called Organic Products International which markets organic products.
We are under contract with Cutting Edge Formulations in distributing their products; Avenger Organics De-weeder, Bug and Insect
killer, Bed Bug killer, kelp and granular fertilizers and nutrients.

 

Xt2000
Orange Oil and X-Terminate, Inc.

 

In
about June, 2009, we were introduced to a new organic product call Xt2000 Orange Oil used for termite eradication. After becoming
familiar with the product, management decided to add Xt2000 Orange Oil to its organic product line and to market the oil to licensed
pest control operators in the State of Florida. In November, 2009, we went further into this market and formed a new subsidiary
called Xterminate, Inc., a Florida corporation, which would take us directly into the eco-friendly pest control business of applying
the oil for termite control purposes. On March 1, 2010, we opened a freestanding, full service pest control operation at 5501
54th Ave. N., St. Petersburg, Florida and have four technicians who work out of that office on an independent contractor basis.
All technicians together and the subsidiary itself are licensed as wood destroying organism ID card badge holders with the state
of Florida. The termite swarming season in Florida runs from May to September and represents the months of our greatest opportunity.

 

In
2011 the Company generated total revenues of $59,994. The majority of this revenue came from providing pest control services to
the public. The balance came from the direct sale of our organic products.

 

Growth
outlook

 

The
company hopes to raise $1 million in the next 12 months for the purpose of sustaining the business operations of the Company and
commercializing technologies owned by the Company. This capital will be augmented by revenues from our pest control services operation
and organic products sales operation.

 

Scientific
Advisory Board

 

Mr.
Trina has assembled a Scientific Advisory Board for evaluating new technologies. TTIN’s expert advisors include: Dr. Sandy
W. Shultz MD, Chief of Radiology at the Lower Keys Regional Medical Center in Key West Florida and Dr. David Silver.

 

Industry
and Market opportunity

 

Technology
transfers begin with the notion that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their
own research efforts, but should instead seek to acquire or license relevant processes or patents from other companies. In addition,
internally developed technologies not used by the company should be monetized through licensing, joint ventures or spin-offs.

 

The
transfer technology market includes virtually every university, research facility, government agency and private enterprise worldwide
where new technologies are researched. This market consists of literally thousands of facilities researching tens of thousands
of new technologies across a broad spectrum of industries.

 

Stanford
University alone filed more than 300 patents in 2004, and has spun off technologies that helped build well-known companies such
as Google, Sun Microsystems, Netscape, Cisco Systems and Yahoo. Each year, the Massachusetts Institute of Technology executes
almost 100 licenses. The Georgia Institute of Technology in Atlanta, the University of Wisconsin in Madison, and Carnegie Mellon
University in Pittsburgh have dedicated considerable resources to building productive technology transfer businesses. Universities
receive hundreds of millions of dollars in royalties each year from businesses that have licensed and commercialized their inventions
through technology transfers.

 

 

TTIN
is a technology transfer company focused on researching, developing and commercializing innovative, leading-edge technologies.
The company identifies and acquires promising technologies, knowledge and/or capabilities developed by academia, governmental
research or private enterprises, with plans to utilize these technologies to address unmet needs in the public and private sector
through commercialization. It should be noted that even though the Company has to date acquired the rights to two such technologies,
it has yet to successfully launch the commercialization of a technology.

 

Employees

 

At
the present time TTIN has three full time employees and three part time employees.

 

Item
1A. Risk Factors

 

Not
required

 

Item
1B. Unresolved Staff Comments

 

This
section does not apply since the Company is not an accelerated filer or a large accelerated filer as defined in Rule 12b-2 of
the Securities Exchange Act of 1934 or a well-known seasoned issuer as defined in Rule 405 of the Securities Act of 1933.

 

Item
2. Properties

 

Our
headquarters are based in our facility located at 2240 Twelve Oaks Way, Suite 101-1, Wesley Chapel, FL. Our rent for this location
is $535 per month. Our pest control operation is located at 5501 54th Ave. N., St. Petersburg, Florida. Our rent at that location
is $1,500 per month. Both leases are on a month to month basis.

 

Item
3. Legal Proceedings

 

Lawsuit
by Gary Harrison

 

In
the first quarter of 2009 a dispute arose with Gary Harrison regarding his consulting responsibilities with the Company. In a
settlement of the matter, the Company agreed to pay Mr. Harrison $67,857 together with interest that accrues at 8% per annum.
The payment came due on January 25, 2010. The Company was unable to make the payment and the parties agreed upon a six month extension
of the payment due date to July 25, 2010. The Company was unable to make payment on July 25, 2010. This amount has been accrued
in the accompanying condensed consolidated balance sheet in settlement liabilities.

 

On
September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in
and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant
to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company
on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was
not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court
entered a default judgment against the Company in the amount of $88,949.80.

 

Default
Judgment in favor of Marilyn Simmons

 

On
January 27, 2010, TTIN was sued by Marilyn Simmons who had invested $90,000 with the Company. The suit claimed the investment
was not suitable for her and was fraudulent. TTIN disagreed with the claims and believes the suit could have been successfully
defended. However, TTIN did not have the money to retain legal counsel to defend the suit and in March, 2010, Simmons obtained
a default judgment against TTIN in the amount of $97,786.

 

 

On
April 9, 2010, TTIN entered into an agreement with Simmons (the “Stay Agreement”) wherein Simmons would stay any execution
of the judgment if TTIN would pay her a total of $120,000. TTIN must pay 7% of any money it raises for working capital purposes
toward this obligation until paid in full. During any calendar quarter that working capital is not raised, TTIN must pay at least
$5,000 from other sources on this obligation. TTIN also agreed to change the conversion terms of the note from $0.25 per share
to $0.06 per share and to issue Simmons an additional 50,000 shares of stock for $50. No interest will accrue on the $120,000
and no fees will be added to the $120,000. If TTIN defaults on the agreement, the stay will be lifted and Simmons will be able
to execute on the judgment against the assets of TTIN. As of the date this report on Form 10-K was filed, $25,000 has come due
pursuant to the stay agreement of which only $12,800 has been paid. However, no legal action has been taken as of yet to lift
the stay of execution. Mrs. Simmons recently passed away and the Company is now dealing with her estate. These amounts have been
accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.

 

Lawsuit
by Brown and Goldfarb, LLC

 

Effective
January 1, 2010, the Company entered into an agreement with Brown and Goldfarb, LLC, wherein the Company was granted an exclusive
license to sell a therapeutic device for thermally assisted urinary function. On April 28, 2010, the Company was sued by Brown
and Goldfarb, LLC in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Division K,
Case Number 10008285, for failure to pay cash advance fees of $40,000 and issue 250,000 shares of Company common stock required
by the Agreement. The parties settled the lawsuit by the Company agreeing to pay $10,000 on September 30, 2010 and $15,000 on
July 30, 2010. The Company was unable to make the first payment and as a result, default judgment was entered against the Company
in the amount of $50,000 on July 13, 2010. Brown and Goldfarb has agreed to not execute on their judgment if they receive payment
of $25,000. So far the Company has only been able to pay $5,000. The Company has accrued $50,000 to reflect the liability to the
Company as a result of the default judgment.

 

Lawsuit
by Margaret Wisniewski

 

On
December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000.
Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State
of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult.
The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court
but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate
an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated
balance sheet in settlement liabilities.

  

PART
II

 

Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Trading
Market

 

Our
common stock is quoted on the OTC Electronic Bulletin Board under the symbol “TTIN.OB”. The following table presents
the range of high and low quotations during the past two years. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.

  

Quarter Ending   High   Low
12/31/2011     $ 0.01     $ 0.01  
9/30/2011     $ 0.01     $ 0.01  
6/30/2011     $ 0.01     $ 0.01  
3/31/2011     $ 0.03     $ 0.02  
12/31/2010     $ 0.05     $ 0.01  
9/30/2010     $ 0.03     $ 0.01  
6/30/2010     $ 0.15     $ 0.01  
3/31/2010     $ 0.06     $ 0.02  

 

On
December 31, 2011, the last trade of our stock was at the price of $0.006 per share.

 

 

Holders
of our common stock

 

As
of December 31, 2011 we have 674 registered shareholders.

 

Dividends

 

There
are no restrictions in our Certificate of Incorporation or bylaws that restrict us from declaring dividends. However, we are prohibited
from declaring dividends where, after giving effect to the distribution of the dividend:

 

1.   
We would not be able to pay our debts as they become due in the usual course of business; or

 

2.   
Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights
of shareholders who have preferential rights superior to those receiving the distribution.

 

We
have not declared any dividends. We do not plan to declare any dividends in the foreseeable future.

 

Item
6. Selected Financial Data.

 

Not
required.

 

Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Results
of Operations

 

Due
to insufficient progress in prior business operations, approximately three and one- half years ago the Company liquidated its
business assets and launched a new business plan. Its business assets had been comprised of software known as Silent Sword which
protected computers from viruses and spyware. The Company had not been successful in marketing the software at levels sufficient
to make further development of the software commercially viable. At the time of transfer on October 4, 2007, the software was
not being carried on the books of the Company. The software was transferred in exchange for the acquirer’s agreement to
invest $150,000 in the Company’s common stock.

 

To
launch its new business plan, the Company hired a new CEO with experience in its new direction. The industry in which the Company
is now engaged is described by the Company as technology transfer. The Company changed its name to Transfer Technology International
Corp. to reflect involvement in this industry.

 

The
Company commercializes new or underused technologies through the acquisition of licenses and through the design of effective commercialization
strategies in conjunction with business partners who can facilitate market penetration. During the first quarter of 2008, the
Company acquired patents relating to two technologies. The first is a patented process for preventing flash rust on low carbon
steel. The second patent is for a product that protects citrus groves from citrus canker, a disease that causes millions of dollars
of crop damage each year. The Company has to date realized no revenues from the first two patents and is not carrying any value
for the patents or any rights therein on its financial statements.

 

In
addition to the commercialization of our technologies, the Company has acquired the rights to be a reseller of certain organic
products and engage in pest control application services. These two activities have created revenue streams for the Company, albeit
in a minor way at this time. Management believes, however, that these business activities have significant potential for the Company.
During the fiscal year ended December 31, 2010, the Company had top line revenues from business operations in the amount of $69,760.
During the fiscal year ended December 31, 2011, the Company had top-line revenues from business operations in the amount of $59,994.
The decrease was due to economic hardship in the overall economy.

 

 

Capital
Resources

 

Current
business operations have been funded by financing activities including borrowing money and the sale of notes and equity capital.
During the fiscal year ended December 31, 2010, the Company realized net cash of $352,467 through financing activities and $76,734
during the fiscal year ended December 31, 2011. Even though management believes operating revenues may be generated soon through
the commercialization of acquired technologies and the sale of organic products and pest control services, management plans on
continuing meeting it cash obligations in the foreseeable future through the continued sale of its common stock in private placements.
Other sources of capital to the Company include bridge financings from shareholders.

 

Fiscal
years ended December 31, 2010 and 2011

 

During
the fiscal year ended December 31, 2010, the Company incurred $1,053,835 in general administrative expenses, down $1,806,426 from
the prior year. The net loss for the year was $1,532,141. Due to lack of business revenue and the ability to raise money through
the sale of equity capital, during 2010 the Company had to cut back business operations, lay off staff and economize in every
way possible to keep the Company operational, thereby resulting in the decreased expense. Of the expense amount, $383,373 was
in the form of non-cash adjustments, and changes in certain assets and liabilities were $786,528. Accordingly, net cash used in
operating activities was $352,240. Expenses were offset by top-line revenue of $69,760. Revenues came from the sale of organic
products and from the Company’s new termite control operation.

 

During
the fiscal year ended December 31, 2011, the Company incurred $906,298 in general administrative expenses and a net loss of $1,317,641.
Changes in certain assets and liabilities such as accounts payable and accrued expenses were $10,473. Accordingly, net cash used
in operating activities was $76,134 for the year ended December 31, 2011. The operations of the Company were sustained by proceeds
from the sale of our common stock, proceeds from notes and revenues from the Company’s termite control operation.

  

Management
estimates cash expenditures in the future will total approximately $35,000 per month. Accordingly, going forward, the Company
needs approximately $105,000 per quarter to stay solvent. As mentioned earlier, these cash needs will be met in the near term
through the sale of equity capital and eventually through revenues from its business operations.

 

Liquidity

 

During
the fiscal years ended December 31, 2010 and 2011, the Company funded its business operations through the sale of convertible
notes and equity capital. During the spring and summer of 2009, it became more difficult than it had been in the past to raise
operating capital in this manner as a result of the downturn in the nation’s capital markets generally. In addition, as
our stock price fell with the fall of the economy, it was more difficult to raise money through the sale of equity capital. Nevertheless,
the Company continues its efforts to raise money through the sale of convertible notes.

The
Company had also anticipated that it would be generating revenue by mid 2010 through the commercialization of technologies currently
owned or acquired by the Company, principally its Canker Kill product. However, label delays for the Canker Kill product at the
EPA has pushed back commercialization of this product approximately 18 months to the middle of 2011 or early 2012 and an inability
to raise large amounts of capital has delayed our ability to acquire and commercialize other technologies.

 

Our
current plans for addressing liquidity concerns is to continue raising money through the sale of convertible notes and to generate
revenue through marketing our organic products and operating our termite eradication unit. If we are not successful in raising
sufficient capital and achieving sufficient operating revenues, the Company will cease to exist as a going concern.

 

 

CONTINGENT
LIABILITIES

 

The
following is a discussion of various circumstances that could become material liabilities for the Company.

 

Stock Issuance to
shareholder

 

In
January, 2009, SB Investment Trust, a shareholder and related party to the Company transferred free trading shares to a third
party. Sometime after that, the Company issued restricted shares to SB Investment Trust to replace the transferred shares to induce
SB Investment Trust to transfer the free trading shares to three investor relation firms for services provided to the Company.
The Securities and Exchange Commission (“SEC”) takes the position that this type of transaction may violate Section
5 of the Securities Act of 1933.

 

At
the time of the transaction, Company management did not know the stock issuance violated any rule or regulation of the SEC. When
informed of the SEC’s position on such matters, management cancelled the stock that had been issued to the SB Investment
Trust in 2010. The shares transferred to the three investor relation firms have not been returned.

 

Purchase
of Company Shares

 

Beginning
in 2008 and from time to time, the Company became aware of certain shareholders who wanted to sell their stock. Rather than have
large sales in the market that could put downward pressure on the market price, the board of directors approved a plan whereby
the Company could purchase those shares if it determined to do so. The plan also allowed the Company to purchase its own shares
in the open market. The Company issued a press release on October 2, 2008, discussing the plan and its intent to purchase its
own stock from time to time. There were 20 non-market purchases of 1,725,351 common shares in the aggregate at a combined cost
of $288,552 in 2008 through 2009. Upon purchase by the Company, the shares were cancelled.

 

A
tender offer is a means of buying a substantial portion of the outstanding stock of a company by making an offer to purchase all
shares, up to a specified number, tendered by shareholders within a specified period at a fixed price. The Company believes the
relatively small number of shares it purchased at individually negotiated prices from a limited number of shareholders does not
come under the purpose or the intent of tender offer regulation nor subject it to that regulation.

 

Default
on Buy Back Agreements

 

In
February, 2009, the Company was contacted by three investors requesting the Company buy back their investments. The Company agreed
to do so. The combined investment price was $235,000 and was to be paid by the Company over time on monthly payments. The Company
was only able to make the first two payments and is now in default on the agreements. One of the investors who was to receive
$70,000 has now contacted the Company through his lawyer and is taking the position that he was not given all appropriate rights
when he made his investment and is demanding payment in full of the $70,000 plus interest. The Company is adamantly taking the
position that the investment was made properly. However, the Company is in default on the three Buy Back Agreements and is subject
to the liability as a result thereof. The Company has accrued for the settlements as of December 31, 2010 and December 31, 2009,
in the accompanying Consolidated Balance Sheet.

 

Claims
by two additional Shareholders

 

The
Company was contacted by an attorney representing two of the Company’s investors on April 30, 2010. The attorney demanded
the investments in the Company by the investors totaling $262,000 plus interest be paid by the Company immediately. The $262,000
in investments was comprised of $160,000 in purchases of stock and/or warrants to purchase stock and $102,000 in convertible notes.
The attorney maintains the investors were not given all of their rights at the time of the investments. The Company adamantly
denies any such claims but is nevertheless under the burden of settling the dispute or potentially defending litigation that may
be brought by the investors. However, due to the remote nature of the claims and the length of time since the Company was contacted
by the investors’ legal counsel, the Company has not accrued for potential liability in its financial statements for these
claims.

 

 

Payment
Demand by two Noteholders

 

On
August 21, 2010, a convertible note issued by the Company came due in favor of Mr. Michael Buckley in the amount of $200,000.
Interest was discounted at the inception of the note so the $200,000 is the full amount due. Mr. Buckley has opted to not convert
the note and is demanding payment in cash from the Company. The Company is unable to make payment. Mr. Buckley has hired legal
counsel who has contacted the Company. An agreement has been reached whereby Mr. Buckley will delay collection of his note in
exchange for a perfected security interest in favor of Mr. Buckley in all of the assets of the Company. The perfected security
interest was put in place by making UCC-1 filings with the states of Florida and Delaware on October 27, 2010, and October 29,
2010, respectively and by filing an assignment of patents with respect to the two patents owned by Company, with the United States
Patent and Trademark Office on November 4, 2010. If the Company is not successful in paying this obligation to the satisfaction
of Mr. Buckley, Mr. Buckley will be in a position to take over all of the assets of the Company potentially shutting down all
business operations. The Company is currently attempting to make arrangements for a third party to purchase this debt from Mr.
Buckley. An additional note in the amount of $100,000 payable to Michael Buckley has also recently come due so a combined amount
of $300,000 is now owed to Mr. Buckley by the Company.

 

In
July, 2010, a convertible note issued by the Company came due in favor of Mr. Louis Fiorica in the amount of $10,000. Mr. Fiorica
has decided to not convert the note and is demanding payment of $10,000 plus interest. The Company is not in a position to make
payment. To date, no legal action has been taken by Mr. Fiorica against the Company. The Company is currently making arrangements
for a third party to purchase this debt from Mr. Buckley.

 

Note
to John Cawood

 

Approximately
ninety days ago, a note payable by the Company to Mr. John Cawood in the amount of $100,000 became due and payable. At the present
time the Company does not have means to repay the note. The Company has not been contacted by Mr. Cawood or any party representing
Mr. Cawood regarding this note.

 

Forward-Looking
Statements

 

We
may have made forward-looking statements, within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended, in this Annual Report on Form 10-K, including the section entitled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are based on our
management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements
include the information concerning our possible or assumed future results of operations, business strategies, financing plans,
competitive position, industry environment, potential growth opportunities and the effects of future regulation and the effects
of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use
of forward-looking terminology such as the words “believe,” “expect,” “anticipate,” “intend,”
“plan,” “estimate” or similar expressions.

 

Forward-looking
statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking
statements. You should understand that many important factors, in addition to those discussed elsewhere in this Annual Report
on Form 10-K, could cause our results to differ materially from those expressed in the forward-looking statements. These factors
include, without limitation, the rapidly changing industry and regulatory environment, our limited operating history, our ability
to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business,
our fixed obligations, our dependence on new capital to fund our growth strategy, our ability to attract and retain quality personnel,
our competitive environment, economic and other conditions in markets in which we operate, increases in maintenance costs and
insurance premiums and cyclical and seasonal fluctuations in our operating results. TTIN, unless legally required, undertakes
no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

Off-Balance
Sheet Arrangements

 

We
have not entered into any off-balance sheet arrangements and do not anticipate entering into any off-balance sheet arrangements
that would have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material
to investors.

 

Item
7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Not
Required.

 

 

 

Item
8. Financial Statements and Supplementary Data.

 

Report
of Independent Registered Public Accounting Firm

 

The
financials for December 31, 2010 were audited by HJ & Associates, LLC, Salt Lake City, Utah. The financials for December 31,
2011 are unaudited as the Company filed its Form 15 with the Securities and Exchange Commission.

 

 

 

TRANSFER
TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARES CONSOLIDATED BALANCE SHEETS
FOR
THE YEARS ENDED DECEMBER 31, 2011 AND 2010
         
         
    December
31, 2011
  December
31, 2010
ASSETS                
CURRENT
ASSETS
               
Cash   $ 775     $ 1,189  
Other
assets
    2,191       2,191  
      2,966       3,380  
FIXED
ASSETS
               
Equipment,
net of accumulated depreciation of $2,015 and $1,209, respectively
    401       803  
TOTAL
ASSETS
  $ 3,367     $ 4,183  
                 
                 
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
               
                 
CURRENT
LIABILITIES
               
Accounts
payable
  $ 67,241     $ 56,769  
Accrued
expenses
    901,819       1,126,233  
Derivative
Liability
    296,521       292,480  
Convertible
notes and notes payable
    546,800       468,333  
Related
party loans
    101,200       102,600  
     Total
current liabilities
    1,913,581       2,046,415  
                 
STOCKHOLDERS’
DEFICIT
               
Common
stock, par value $.001 per share;
               
  250,000,000  shares
authorized in 2011 and 2010 and 249,963,747  and
               
   116,163,748
outstanding at December 31, 2011 and 2010, respectively
    249,963       116,164  
Additional
paid-in capital
    46,498,962       45,775,161  
Accumulated
deficit
    (44,751,303 )     (47,933,557 )
     Total
stockholders’ deficit
    1,910,214       (2,042,232 )
                 
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
  $ 3,367     $ 4,183  

 

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

 

 

TRANSFER
TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
FOR
THE YEARS ENDED DECEMBER 31, 2011 AND 2010
         
         
    December
31, 2011
  December
31, 2010
         
REVENUES                
Net
sales
  $ 59,994     $ 69,760  
Cost
of sales
    44,034       51,202  
Gross
Profit (Loss)
    15,960       18,558  
                 
COSTS
AND EXPENSES
               
Selling,
general and administrative
    906,298       1,053,835  
Total
costs and expenses
    906,298       1,053,835  
                 
LOSS
BEFORE OTHER INCOME (LOSS)
    (890,338 )     (1,035,277 )
                 
OTHER
INCOME (LOSS)
               
                 
Interest
expense
    (377,098 )     (438,486 )
Change
in Anti-Dilution Shares Payable
    (50,205 )     (58,378 )
Other
expense
               
                 
Total
other income (loss)
    (427,303 )     (496,864  
                 
                 
(LOSS)
BEFORE PROVISON FOR INCOME TAX
    (1,317,641 )     (1,532,141 ))
                 
PROVISION
FOR INCOME TAX
    —            
                 
                 
NET
LOSS
    (1,317,641 )   $ (1,532,141 ))
                 
                 
NET
LOSS PER COMMON SHARE – BASIC AND DILUTED
  $ (0.03 )   $ (0.04 )
                 
                 
WEIGHTED
AVERAGE OUTSTANDING SHARES
               
OF
COMMON STOCK – BASIC AND DILUTED
    161,597,814       42,038,284  
                 
                 
The
accompanying notes are an integral part of these consolidated financial statements.

 

 

TRANSFER
TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR
THE YEARS ENDED DECEMBER 31, 2011 AND 2010
         
         
    December
31, 2011
  December
31, 2010
         
CASH
FLOWS FROM OPERATING ACTIVITIES:
               
Net
loss
    (1,532,141 )     (1,532,141 )
Adjustments
to reconcile net loss to
               
net
cash used in operating activities:
               
Depreciation
and amortization
    401       806  
Accretion
of debt discount
    333       31,333  
Stock
issued for services
    748,800       301,234  
Stock
issued to shareholders as inducement for lock up agreement
    —         —    
Write
off of impaired asset
    —         —    
Beneficial
conversion feature
    —         10,000  
Debt
inducement expense
    —         50,000  
                 
Changes
in Certain Assets and Liabilities
               
Increase
(Decrease) accounts payable
    10,478       (108,071 )
Increase
(Decrease) in stock payable
    (387,782 )     58,378  
Increase
in accrued expenses
    —         836,221  
                 
Net
cash (used in) operating activities
    —         -352,240  
                 
CASH
FLOWS FROM INVESTING ACTIVITIES
    —         —    
                 
CASH
FLOWS FROM FINANCING ACTIVITIES
               
Proceeds
from officer loans
    —         27,400  
Payments
on officer loans
    (1,400 )     (15,200 )
Proceeds
from convertible and promissory notes payable
    78,134       241,267  
Proceeds
from sale of stock for cash
            99,000  
Repurchase
and cancellation of stock
    —         —    
                 
Net
cash provided by financing activities
    76,734       352,467  
                 
NET
INCREASE (DECREASE) IN CASH
    -408       227  
                 
CASH
– BEGINNING OF PERIOD
    1189       962  
                 
CASH
– END OF PERIOD
  $ 775     $ 1,189  
                 
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
               
Cash
Paid during the Year:
               
Interest
Expense
  $ —       $ —    
Income
Taxes
  $ —       $ —    
                 
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INFORMATION
  $ —       $ 768,724  
                 
                 
The
accompanying notes are an integral part of these consolidated financial statements

 

 

 

 

TRANSFER
TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR
THE YEARS ENDED DECEMBER 31, 2011 AND 2010
                     
    Common
Stock
           
    Shares   Amount   Additional
Paid-In Capital
  Accumulated
Deficit
  Total
                     
BALANCE, DECEMBER 31, 2009
(Restated)
    29,706,287       29706       44,623,745       (46,401,416 )     (1,738,965 )
                                         
Issuance of common
stock for services
    12,818,371       12819       288,415               301,234  
                                         
Issuance
of common stock for conversion of notes payable
    5,689,090       5689       705,747               711,436  
                                         
Issuance
of common stock for conversion of notes payable
    50,000,000       50000       7,204               57,204  
                                         
Issuance
of common stock for cash
    17,950,000       17950       81,050               99000  
                                         
Beneficial conversion
feature
                    10,000               10000  
                                         
Debt
inducement expense
                    50,000               50000  
                                         
Net
loss for the year ended December 31, 2010
                            (1,532,141 )     (1,532,141 )
                                         
BALANCE, DECEMBER
31, 2011
    111,910,376       111,910       45,775,161       (47,933,557 )     (2,042,232 )
                                         
Issuance of common
shares for services
    138,053,371       138053                          
                                         
BALANCE, DECEMBER
31, 2011
    249,963,747               46,498,962       (44,751,303 )     (1,910,214 )

 

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

 

 

TRANSFER
TECHNOLOGY INTERNATIONAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011 AND 2010

 

Note
1 – Organization

 

Transfer
Technology International Corp. (the “Company”) was previously known as Inverted Paradigms Corporation (“Inverted
Paradigms” or the “Company”) was incorporated in the State of Nevada on December 18, 1997. On September 29,
2003, the Company completed a re- incorporation merger into a Delaware Corporation thus changing the state of incorporation from
Nevada to Delaware. The Company is in the process of seeking new technology.

 

On
March 17, 2009 the Company announced the creation of its wholly owned subsidiary Organic Products International Corp. (OPI). The
decision to launch OPI is based on the development of three market ready products, and licensing agreements that provide a base
of product offerings.

 

In
November, 2009, the Company formed a new subsidiary called Xterminate, Inc., a Florida corporation, which launched their eco-friendly
termite control business. The Company applies oil for termite control purposes.

 

Note
2 – Basis of Presentation – Going Concern

 

The
Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern. The
Company has experienced net losses since February 16, 1999 (date of inception), which losses have caused an accumulated deficit
of $47,933,557 as of December 31, 2010 and $46,401,416 as of December 31, 2009. This factor, among others, raises substantial
doubt about the Company’s ability to continue as a going concern.

 

Management
has been able, thus far, to finance the losses through a series of private placements and convertible notes payable. The Company
is continuing to seek other sources of financing and attempting to explore alternate ways of generating revenues through partnerships
with other businesses. Conversely, the seeking of new technology is expected to result in operating losses for the foreseeable
future. There are no assurances that the Company will be successful in achieving its goals.

 

In
view of these conditions, the Company’s ability to continue as a going concern is dependent upon its ability to obtain additional
financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Management
believes that its current and future plans to raise capital provide an opportunity to continue as a going concern.

 

Note
3 – Summary of Significant Accounting Policies

 

Principles
of Consolidation

 

The
consolidated financial statements include the accounts of Transfer Technology International, Corporation and its wholly owned
subsidiaries. All significant intercompany accounts and transactions are eliminated in the consolidated financial statements.

 

Use
of Estimates

 

The
preparation of 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 and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

 

Fair
Value of Financial Instruments

 

The
carrying amount of financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses, debt and
other liabilities, approximate fair value due to their short maturities.

 

 

Revenue
Recognition

 

Revenue
is recognized when persuasive evidence of an arrangement exists, services are rendered, pricing is fixed or determinable and collectability
is reasonably assured.

 

Recent
Accounting Pronouncements

 

In
August 2010, the FASB issued ASU No 2010-22, Accounting for Various Topics. Technical Corrections to SEC Paragraphs- An
announcement made by the staff of US Securities and Exchange Commission. This Update makes changes to several of the SEC
guidance literature within the Codification. Some of the changes relate to (1) Oil and Gas Exchange Offers, (2) Accounting
for Divestiture of a Subsidiary or Other Business Operations, (3) Replaces “Push Down” basis accounting
references with “New” basis of accounting to be used in the acquired companies financial statements, (4) Fees
paid to an investment banker in connection with an acquisition or asset purchase, when the investment banker is also
providing interim financing or underwriting services must be allocated between the related service and debt issue costs. The
amendments in this Update are effective immediately. The Company doesn’t expect this guidance to have a significant
impact on its financials since there are no changes to accounting that were not already being applied by the
Company.

 

In
July 2010, the FASB issued ASU No 2010-20, Receivables (Topic 310) – Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses. This Update requires additional disclosures for financing receivables,
excluding short-term trade accounts receivables and or receivables measured at fair value. The new disclosures are designed
to allow a user to better evaluate a company’s credit risk in the portfolio of financing receivables, how the risk is
analyzed and in allowing for credit losses and the reason for the changes in the allowance for credit losses. Some of the
additional disclosures required are to provide a roll forward of allowance for credit losses by portfolio segment basis,
credit quality of indicators of financing receivables by class of financing receivables, the aging of financing receivables
by class of financing receivable, significant purchases and sales of financing receivables by portfolio segment, amongst
other requirements. The amendments in this Update are effective for reporting periods ending on or after December 15, 2010
for disclosures as of the end of the reporting period and disclosures related to activity are effective for reporting periods
beginning on or after December 15, 2010 for public entities. For nonpublic entities, the disclosures are effective for annual
reporting periods ending on or after December 15, 2011. Comparative disclosures for earlier reporting periods are encouraged,
but not required. The Company doesn’t expect this guidance to have a significant impact on its financials since it
doesn’t have any finance receivables. The receivables are short-term trade receivables.

 

In
February 2010, the FASB issued ASU No 2010-10, Consolidation (Topic 810) – Amendments for Certain Investment Funds. This
update provides for the deferral of the consolidation requirements under Topic 810 for a reporting entity’s interest in
an entity 1) that has all the attributes of an investment company or 2) for which it is industry practice to apply measurement
principles for financial reporting purposes that are consistent with those followed by investment companies. The amendments are
effective as of the first annual period that begins after November 15, 2009, and for interim periods within that period. The Company
will adopt this Update on January 1, 2010 and it didn’t have a significant impact on the financials since the Company has
no interest in investment type companies.

 

 

Recent
Accounting Pronouncements (Continued)

 

In
February 2010, the FASB issued ASU No 2010-08, Technical Corrections to Various Topic. This update provides clarifications, eliminates
inconsistencies and outdated provisions within the guidance. None of the provisions fundamentally change US GAAP, but certain
clarifications regarding hedging and derivatives may cause a change in the application of that Subtopic. The amendments are effective
for the first reporting beginning after issuance – March 31, 2010 for the Company. The amendments were reviewed and no items
of significance were noted. As such, this update is not expected to have a significant impact on the Company’s financial
statements.

 

In
January 2010, the FASB issued ASU No 2010-06, Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about
Fair Value Measurements. This update provides amendment to the codification regarding the disclosures required for fair value
measurements. The key additions area as follows: 1) Disclose transfer in and out of Level 1 and 2, 2) Activity in Level 3 should
show information about purchases, sales, settlements, etc on a gross basis rather than as net basis, and 3) Additional disclosures
about inputs and valuation techniques. The new disclosure requirements are effective for interim and annual periods beginning
after December 31, 2009, except for the gross disclosures of purchases, etc which is effective for periods beginning after December
15, 2010. The Company will adopt this Update on January 1, 2010 and doesn’t expect it will have a significant impact on
the financials since there aren’t many items recorded at fair value, but additional disclosures about inputs and valuation
techniques will be made.

 

In
January 2010, the FASB issued ASU No 2010-04, Accounting for Various Topics – Technical Corrections to SEC Paragraphs.
This update provides updates/corrections to various topics of the codification with regards to the SEC’s position on
various matters. There is no new guidance, but adjustments to the SEC’s position on already issued updates. Some of the
main topics covered are as follows: 1) Requirements for using push down accounting in an acquisition 2) appropriate balance
sheet presentation of unvested, forfeitable equity instruments are issued to non employees as consideration for future
services – these are to be treated as not issued and no entry recorded until the instruments are earned.

 

3)
intangible assets arising from insurance contracts acquired in a business combination. The corrections are applicable for 2009
since the updates relate to already issued guidance. The main issue that may impact the Company is the accounting for unvested,
forfeitable equity instruments. The Company will evaluate and determine if there are any contracts with non-employees for which
equity instruments are granted and ensure they are accounted for in accordance with the update.

 

Sales
Tax and Value Added Taxes

 

In
accordance with FASB ASC 605-45, formerly EITF Issue 06-3, How Taxes Collected From Customers and Remitted to Government Authorities
Should be Presented in the Income Statement,
the Company accounts for sales taxes and value added taxes on its goods and services
on a gross basis in the statement of operations.

 

Income
Taxes

 

The
Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enacted date. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

 

Deferred
Income Taxes

 

Deferred
income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss and tax credit
carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the
related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences,
if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets
if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the
period that includes the enactment date.

 


Income Tax Uncertainties

 

The
calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations.
The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting
principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence
indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals
or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount
that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate
such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates
these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes
in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in
recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the
period. The Company recognizes interest and penalties as incurred in finance income, (expense), net in the Consolidated Statements
of Operations.

 

In
2009 the Company issued stock to various persons as compensation for services without issuing forms 1099 to those persons. In
the event of an audit by the IRS it is possible the Company would be assessed penalties for improper tax treatment of those stock
issuances. The Company has not recognized any potential interest or penalties based upon the uncertainty noted because the effect
of the uncertainty has not resulted in any reduction of taxes owing. Therefore, the Comapny is not subject to any potential penalties
or interest.

 

Net
Loss Per Share Information

 

Basic
and diluted loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during
the reporting period. The Company’s common stock warrants have been excluded from the diluted loss per share computation
since their effect is anti-dilutive.

 

The following is a reconciliation of the computation for basic and diluted EPS:

 

    December
31,
  December
31,
    2011   2010 
NET
LOSS
  $ (1,317,641 )   $ (1,532,141 )
WEIGHTED
AVERAGE OUTSTANDING SHARES OF COMMON STOCK – BASIC AND DILUTED
    161,597,814       42,038,284  

 

 

For the years ended December 31, 2011 and
2010 options and warrants were not included in the computation of diluted EPS because inclusion would have been
anti-dilutive. Stock options were not included since none have been granted.

 

 

Note
4 – Equipment

 

Equipment is summarized as follows:

 

      December
31,
      December
31,
 
      2011       2010  
Computers
and equipment
  $ 2,819     $ 2,819  
Less:
accumulated depreciation
    2,418       2,015  
Computers
and equipment – Net
  $ 401     $ 803  

 

 Depreciation expense for the year ended December 31, 2011 and December 31, 2010 was $2,418 and $2,015 respectively.

 

Note
5 – Commitments

 

Our
headquarters are based in our facility located at 2240 Twelve Oaks Way, Suite 101-1, Wesley Chapel, FL. Our rent for this location
is $535 per month. Our pest control operation is located at 5501 54 th Ave. N., St. Petersburg, Florida. Our rent at that location
is $1,500 per month. Both leases are on a month to month basis.

 

Note
6 – Convertible Notes and Notes Payable

 

Various
notes are in default and continue to accrue interest. The Company has the option, and it is managements’ intent to convert
all past due convertible notes to common stock in 2010 and 2011. The conversion price shall be based upon one half the average
closing share price of the stock for the 10 prior days before conversion or .25 cents, whichever is greater.

  

    December 31,   December 31,
    2011   2010
Various unsecured convertible note payables, with varying interest rates between 10% – 18%, due on demand and in default.   $ —       $ —    
                 
Various unsecured convertible note payable, 10% interest rate, due on January 2011.     —         180,000  
                 
Various unsecured promisory notes, with varying interest rates between 10% – 12.     78,467       60,000  
                 
Total Convertible Notes and Notes Payable   $ 546,800     $ 468,333  

  

During
the year ended December 31, 2010, the Company converted debt totaling $768,724, which included $126,224 of accrued interest into
55,389,090 shares of common stock. The debt was held by 32 convertible note holders. The debt was converted at the rate of $0.13
per share. The convertible notes originally established a conversion price of $0.25 per share. On August 26, 2010, the board of
directors repriced the conversion rate to $0.13 per share given the depressed value of the Company’s stock. In accordance
with generally accepted accounted principles, the Company recognized approximately $50,000 of debt inducement expense in connection
with this transaction.

 

 

Note 7 – Related Party Loans

  

    December 31,    December 31,
    2011   2010
         
May 2009 – Unsecured promissory note payable for $ 50,000, bearing interest at a fixed rate of 8%. The maturity date is past and all principal and interest is due on demand.   $ 50,000     $ 50,000  
                 
July 2009 – Unsecured promissory note payable for $ 15,000, bearing interest at a fixed rate of 10%. The maturity date is past and all principal and interest is due on demand.   $ 15,000     $ 15,000  
                 
September 2009 – Unsecured promissory note payable for $ 5,000, bearing interest at a fixed rate of 10%. The maturity date is past and all principal and interest is due on demand.   $ 5,000     $ 5,000  
                 
November 2009 – Unsecured Promissory note payable for $ 1,200, bearing interest at a fixed rate of 10%. The maturity date is November 2010 at which time all principal and interest are due.   $ —       $ —    
                 
December 2009 – Unsecured Promissory note payable for $ 4,000, bearing interest at a fixed rate of 10%. The maturity date is December 2010 at which time all principal and interest are due.   $ —       $ —    
                 
March 2010 – Unsecured Promissory note payable for $ 3,600, non interest bearing note. The maturity date is March 2011 at which time all principal and interest are due.   $ 3,200     $ 3,600  
                 
March 2010 – Unsecured convertible note payable for $30,000 bearing interest at a fixed rate of 10%. The maturity date is March 2011 at which time all principal and interest are due.   $ 28,000     $ 28,000  
                 
May 2010 – Unsecured Promissory note payable for $ 1,000, non
interest bearing note. The maturity date is May 2011 at which time all principal and interest are due.
  $ —       $ 1,000  
Total Related Party Loans   $ 101,200     $ 102,600  

 

Note
8 – Contingent Liabilities

 

Lawsuit
by Gary Harrison

 

In
the first quarter of 2009 a dispute arose with Gary Harrison regarding his consulting responsibilities with the Company. In a
settlement of the matter, the Company agreed to pay Mr. Harrison $67,857 together with interest that accrues at 8% per annum.
The payment came due on January 25, 2010. The Company was unable to make the payment and the parties agreed upon a six month extension
of the payment due date to July 25, 2010. The Company was unable to make payment on July 25, 2010. This amount has been accrued
in the accompanying condensed consolidated balance sheet in settlement liabilities.

 

On
September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in
and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant
to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company
on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was
not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court
entered a default judgment against the Company in the amount of $88,949.80.

 

 

Default
Judgment in favor of Marilyn Simmons

 

On
January 27, 2010, TTIN was sued by Marilyn Simmons who had invested $90,000 with the Company. The suit claimed the investment
was not suitable for her and was fraudulent. TTIN disagreed with the claims and believes the suit could have been successfully
defended. However, TTIN did not have the money to retain legal counsel to defend the suit and in March, 2010, Simmons obtained
a default judgment against TTIN in the amount of $97,786.

 

On
April 9, 2010, TTIN entered into an agreement with Simmons (the “Stay Agreement”) wherein Simmons would stay any execution
of the judgment if TTIN would pay her a total of $120,000. TTIN must pay 7% of any money it raises for working capital purposes
toward this obligation until paid in full. During any calendar quarter that working capital is not raised, TTIN must pay at least
$5,000 from other sources on this obligation. No interest will accrue on the $120,000 and no fees will be added to the $120,000.
If TTIN defaults on the agreement, the stay will be lifted and Simmons will be able to execute on the judgment against the assets
of TTIN. As of the date this report on Form 10-K was filed, $25,000 has come due pursuant to the stay agreement of which only
$12,800 has been paid. However, no legal action has been taken as of yet to lift the stay of execution. Mrs. Simmons recently
passed away and the Company is now dealing with her estate. These amounts have been accrued in the accompanying condensed consolidated
balance sheet in settlement liabilities.

 

Lawsuit
by Brown and Goldfarb, LLC

 

Effective
January 1, 2010, the Company entered into an agreement with Brown and Goldfarb, LLC, wherein the Company was granted an exclusive
license to sell a therapeutic device for thermally assisted urinary function. On April 28, 2010, the Company was sued by Brown
and Goldfarb, LLC in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Division K,
Case Number 10008285, for failure to pay cash advance fees of $40,000 and issue 250,000 shares of Company common stock required
by the Agreement. The parties settled the lawsuit by the Company agreeing to pay $10,000 on September 30, 2010 and $15,000 on
July 30, 2010. The Company was unable to make the first payment and as a result, default judgment was entered against the Company
in the amount of $50,000 on July 13, 2010. Brown and Goldfarb has agreed to not execute on their judgment if they receive payment
of $25,000. So far the Company has only been able to pay $5,000. The Company has accrued $50,000 to reflect the liability to the
Company as a result of the default judgment.

 

Stock
Issuance to shareholder

 

In
January, 2009, SB Investment Trust, a shareholder and related party to the Company transferred free trading shares to a third
party. Sometime after that, the Company issued restricted shares to SB Investment Trust to replace the transferred shares to induce
SB Investment Trust to transfer the free trading shares to three investor relation firms for services provided to the Company.
The Securities and Exchange Commission (“SEC”) takes the position that this type of transaction may violate Section
5 of the Securities Act of 1933.

 

At
the time of the transaction, Company management did not know the stock issuance violated any rule or regulation of the SEC. When
informed of the SEC’s position on such matters, management cancelled the stock that had been issued to the SB Investment
Trust in 2010. The shares transferred to the three investor relation firms have not been returned.

 

Purchase
of Company Shares

 

Beginning
in 2008 and from time to time, the Company became aware of certain shareholders who wanted to sell their stock. Rather than have
large sales in the market that could put downward pressure on the market price, the board of directors approved a plan whereby
the Company could purchase those shares if it determined to do so. The plan also allowed the Company to purchase its own shares
in the open market. The Company issued a press release on October 2, 2008, discussing the plan and its intent to purchase its
own stock from time to time. There were 20 non-market purchases of 1,725,351 common shares in the aggregate at a combined cost
of $288,552 in 2008 through 2009.

 

A
tender offer is a means of buying a substantial portion of the outstanding stock of a company by making an offer to purchase all
shares, up to a specified number, tendered by shareholders within a specified period at a fixed price. The Company believes the
relatively small number of shares it purchased at individually negotiated prices from a limited number of shareholders does not
come under the purpose or the intent of tender offer regulation nor subject it to that regulation.

 

 

Default
on Buy Back Agreements

 

In
February, 2009, the Company was contacted by three investors requesting the Company buy back their investments. The Company agreed
to do so. The combined investment price was $235,000 and was to be paid by the Company over time on monthly payments. The Company
was only able to make the first two payments and is now in default on the agreements. One of the investors who was to receive
$70,000 has now contacted the Company through his lawyer and is taking the position that he was not given all appropriate rights
when he made his investment and is demanding payment in full of the $70,000 plus interest. The Company is adamantly taking the
position that the investment was made properly. However, the Company is in default on the three Buy Back Agreements and is subject
to the liability as a result thereof. The Company has accrued for the settlement as of September 30, 2010 and December 31, 2009,
in the accompanying Condensed Consolidated Balance Sheet.

 

Claims
by two additional Shareholders

 

The
Company was contacted by an attorney representing two of the Company’s investors on April 30, 2010. The attorney demanded
the investments in the Company by the investors totaling $262,000 plus interest be paid by the Company immediately. The $262,000
in investments was comprised of $160,000 in purchases of stock and/or warrants to purchase stock and $102,000 in convertible notes.
The attorney maintains the investors were not given all of their rights at the time of the investments. The Company adamantly
denies any such claims but is nevertheless under the burden of settling the dispute or potentially defending litigation that may
be brought by the investors. However, due to the remote nature of the claims and the length of time since the Company was contacted
by the investors’ legal counsel, the Company has not accrued for potential liability in its financial statements for these
claims.

 

Note
to John Cawood

 

Ninety
days ago, a note payable by the Company to Mr. John Cawood in the amount of $100,000 became due and payable. At the present time
the Company does not have means to repay the note. The Company has not been contacted by Mr. Cawood or any party representing
Mr. Cawood regarding this note.

 

Lawsuit
by Margaret Wisniewski

 

On
December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000.
Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State
of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult.
The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court
but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate
an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated
balance sheet in settlement liabilities.

 

Payment
Demand by two Noteholders

 

On
August 21, 2010, a convertible note issued by the Company came due in favor of Mr. Michael Buckley in the amount of $200,000.
Interest was discounted at the inception of the note so the $200,000 is the full amount due. Mr. Buckley has opted to not convert
the note and is demanding payment in cash from the Company. The Company is unable to make payment. Mr. Buckley has hired legal
counsel who has contacted the Company. An agreement has been reached whereby Mr. Buckley will delay collection of his note in
exchange for a perfected security interest in favor of Mr. Buckley in all of the assets of the Company. The perfected security
interest was put in place by making UCC-1 filings with the states of Florida and Delaware on October 27, 2010, and October 29,
2010, respectively and by filing an assignment of patents with respect to the two patents owned by Company, with the United States
Patent and Trademark Office on November 4, 2010. If the Company is not successful in paying this obligation to the satisfaction
of Mr. Buckley, Mr. Buckley will be in a position to take over all of the assets of the Company potentially shutting down all
business operations. An additional note in the amount of $100,000 payable to Michael Buckley has also recently come due so a combined
amount of $300,000 is now owed to Mr. Buckley by the Company. The Company is currently making arrangements for a third party to
purchase this debt from Mr. Buckley.

 

 

In
July, 2010, a convertible note issued by the Company came due in favor of Mr. Louis Fiorica in the amount of $10,000. Mr. Fiorica
has decided to not convert the note and is demanding payment of $10,000 plus interest. The Company is not in a position to make
payment. To date, no legal action has been taken by Mr. Fiorica against the Company.

 

The
following table sets forth the accrual for settlement liability as of December 31, 2010:

 

      2010  
Lanterman   $ 169,000  
Siebert     35,500  
Ear     49,000  
Harrison     80,071  
Simmons     115,450  
Brown and Goldfarb     50,000  
Wisniewski     50,000  
Total:   $ 549,021  

 

The following table sets forth the accrual for settlement
liability as of December 31, 2009:

 

    2009
Lanterman     $ 153,400  
Siebert       32,020  
Ear       44,200  
Harrison       71,928  
Total:     $ 301,548  

 

Income
Taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due.
Deferred taxes related to differences between the basis of assets and liabilities for financial and income tax reporting will
either be taxable or deductible when the assets or liabilities are recovered or settled. The difference between the basis of assets
and liabilities for financial and income tax reporting are not material therefore, the provision for income taxes from operations
consist of income taxes currently payable.

 

There
was no provision for income tax for the years ended December 31, 2011 and 2010. At December 31, 2011 and 2010 the Company had
an accumulated deficit approximating $44,751,303 and $46,401,416, respectively.

 

The
Company has recorded full valuation allowance on its deferred tax assets as of December 31, 2011 and December 31, 2010. These
assets were primarily derived from net operating losses, which The Company will more than likely than not be able to utilize.

 

Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

At
December 31, 2011, the Company had net operating loss carryforwards of approximately that may be offset against future taxable
income from the year 2010 through 2030. No tax benefit has been reported in the December 31, 2010 consolidated financial statements
since the potential tax benefit is offset by a valuation allowance of the same amount.

 

Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards
may be limited as to use in future years.

 

 

Note
10 – Stockholders’ Deficit

 

The
Company had 250,000,000 authorized shares of common stock as of December 31, 2011 and December 31, 2010. The Company had 249,963,747
and 111,910,376 shares of common stock issued and outstanding as of December 31, 2011 and December 31, 2010 respectively.

 

2011

 

During
the quarter ended December 31, 2011, the Company issued 138,053,371 shares of common stock for services. The common stock were
issued at a price of $.001 per share.

 

2010

 

During
the quarter ended March 31, 2010, the Company issued 350,000 shares of common stock for executive compensation. The common stocks
were issued at a price of $.03 per share.

 

During
the quarter ended March 31, 2010, the Company issued 170,000 shares of common stock for directors compensation. The common stocks
were issued at a price of $.03 per share.

 

During
the quarter ended March 31, 2010, the Company issued 50,000 shares of common stock for employees compensation. The common stocks
were issued at a price of $.03 per share.

 

During
the quarter ended March 31, 2010, the Company issued 635,000 shares of common stock for consultants compensation. The common stocks
were issued at a price of $.03 per share.

 

During
the quarter ended March 31, 2010, the Company was returned and cancelled 430,000 shares of common stock issued in 2009 for consultants
compensation.

 

There
were no transactions of the common stock during the quarter ended June 30, 2010.

 

During
the quarter ended September 30, 2010, the Company issued 6,700,000 shares for cash of $84,000. During the quarter ended September
30, 2010, the Company issued 5,389,090 shares to convert debt.

 

During
the quarter ended September 30, 2010, the Company issued 275,000 shares of common stock for directors compensation. The common
stocks were issued at a price of $.01 per share.

 

During
the quarter ended September 30, 2010, the Company issued 125,000 shares of common stock for employees compensation. The common
stocks were issued at a price of $.01 per share.

 

During
the quarter ended September 30, 2010, the Company issued 4,430,000 shares of common stock for consultants compensation. The common
stocks were issued at a price of $.01 per share.

 

During
the quarter ended September 30, 2010, the Company issued an additional 830,000 shares of common stock for consultants compensation.
The common stocks were issued at a price of $.02 per share.

 

During
the quarter ended September 30, 2010, the Company issued 2,500,000 shares of common stock for executive compensation. The common
stocks were issued at a price of $.02 per share.

 

During
the quarter ended December 31, 2010, the Company issued 50,000,000 shares to convert debt. During the quarter ended December 31,
2010, the Company issued 11,250,000 shares for cash of $15,000.

 

During
the quarter ended December 31, 2010, the Company issued 750,000 shares of S-8 common stock for consultant compensation. The common
stocks were issued at a price of $.001 per share.

 

 

Note
10 – Stockholders’ Deficit (CONTINUED)

 

2010
(CONTINUED)

 

During
the quarter ended December 31, 2010, the Company issued 1,598,000 shares of common stock for executive compensation. The common
stocks were issued at a price of $.01 per share.

 

During
the quarter ended December 31, 2010, the Company issued 1,005,371 shares of common stock for consultants compensation. The common
stocks were issued at a price of $.01 per share.

 

During
the quarter ended December 31, 2010, the Company issued 100,000 shares of common stock for employees compensation. The common
stocks were issued at a price of $.01 per share.

 

The
following table summarizes our warrants as of December 31, 2010:

  

Year
of Issuance
  Warrant Type   Warrant Shares   Exercise Price   Expiration Date
2009     Class B warrants     386,500       (B)     Various 2011
2010     Class A warrants     250,000       0.02     24-Apr-11
            1,000,000       0.02     Oct. 14, 2011
            1,250,000       0.02     24-Apr-12
            1,000,000       0.03     Sep. 29, 2012
      Class B warrants     1,000,000       0.06     Sep. 29, 2013
Total warrants outstanding           4,886,500              
                           

(B)
5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.

 

The following table summarizes our warrants as of December 31, 2009:

 

Year Of Issuance   Warrant Type   Warrant Shares   Exercise Price   Expiration Date
                 
                 
2008     Class B warrants     4,446,750       (B)     Various 2010
2009     Class A warrants     386,500       (A)     Various 2010
2009     Class B warrants     386,500       (B)     Various 2011
Total warrants outstanding           5,219,750              

 

 

(A)  5 day average prior to exercise, discounted at 25%, or $0.50 per share, whichever is greater.

 

(B)  5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.

 

 

The following table summarizes warrant activity
during the years ended December 31, 2010 and 2009.

 

    Warrants Outstanding   Exercise Price
Outstanding at December 31, 2008     8,893,500     One half at (A) and one half at (B)
Warrants granted     773,000     One half at (A) and one half at (B)
Expired     4,446,750     (A)
             
Outstanding at December 31, 2009     5,219,750     386,500 at (A) and balance at (B)
Warrants granted     4,500,000     2,500,000 at 0.02; 1,000,000 at 0.03; 1,000,000 at 0.06
Expired     4,833,250     386,500 at (A) and balance at (B)

 

(A) 5 day average prior to exercise,
discounted at 25%, or $0.50 per share, whichever is greater.

 

(B)  5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.

  

OTHER INCOME (LOSS)            
             
Interest expense   $ (104,681.00 )   $ (3.00 )   $ (104,684.00 )
Legal settlement     (302,857.00 )     302,857.00       —    
Change in Anti-Dilution Shares Payable     —         500,727.00       500,727.00  
Other     (62,024.00 )     6,817.00       (55,207.00 )
Total other income (loss)   $ (469,562.00 )   $ 810,398.00     $ 340,836.00  
                         
                         
(LOSS) BEFORE PROVISION FOR INCOME TAX   $ (2,795,408.00 )   $ 371,009.00     $ (2,424,399.00 )
              —            
PROVISION FOR INCOME TAX     —         —         —    
NET LOSS   $ (2,795,408.00 )   $ 371,009.00     $ (2,424,399.00 )
                         
                         
NET LOSS PER COMMON SHARE – BASIC AND DILUTED     (0.10 )     (0.01 )     (0.09 )
                         
WEIGHTED AVERAGE OUTSTANDING SHARES                        
OF COMMON STOCK – BASIC AND DILUTED     27,245,536.00       (67,527.00 )     27,178,009.00  

  

Note
12 – Subsequent Events

 

On
September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in
and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant
to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company
on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was
not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court
entered a default judgment against the Company in the amount of $88,949.80.

 

 

On
December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000.
Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State
of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult.
The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court
but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate
an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated
balance sheet in settlement liabilities.

 

On
February 1, 2011, the Company issued an aggregate of 3,953,371 Rule 144 restricted shares of common stock of the Company to a
total of 7 persons. The shares were issued as compensation to employees and directors for services rendered to the Company and
to investors in exchange for investment proceeds. The valuation of the consideration received by the Company ranged from $0.001
to $0.004 per share depending upon the transaction. The issuance of the shares was exempt from the registration requirements of
Section 5 of the Securities Act of 1933 (the “Act”) pursuant to Section 4(2) of the Act since the shares were issued
by the Company and did not involve any public offering.

 

In
the first quarter of the fiscal year beginning January 1, 2011, the Company raised $100,800 in investment capital by issuing convertible
notes to a total of six persons.

 

The
Company has evaluated subsequent events pursuant to ASC 855 and has determined that there are no additional events to disclose.

 

 

Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

On
February 24, 2011, the Company dismissed Friedman, LLP from its position as the Company’s independent registered public
accounting firm. The Company’s Board of Directors approved the dismissal.

 

The
Company engaged Friedman, LLP to serve as its independent registered public accounting firm in January 2010. The audit report
of Friedman, LLP on the Company’s financial statements for the year ended December 31, 2009 did not contain an adverse opinion
or disclaimer of opinion, however it did contain a qualification describing a going concern uncertainty as well as a restatement
of the 2008 financial statements. Friedman, LLP did not, during the applicable periods, advise the Company of any of the enumerated
items described in Item 304(a) (1)(iv) of Regulation S-K.

 

During
the two most recent fiscal years, there were no (i) disagreements between the Company and Friedman LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved
to its satisfaction, would have caused Friedman LLP to make reference to the subject matter of such disagreements in connection
with its report, or (ii) “reportable events,” as described in Item 304(a)(1)(v) of Regulation S-K, except as set forth
in Item 9A in the Form 10-K filed by the Company on June 24, 2010, regarding lack of internal controls over controls and procedures.

 

The
Company engaged HJ & Associates, LLC, Certified Public Accountants (“HJ”) as its new independent accountants on
February 28, 2011. Prior to February 28, 2011, the Company had not consulted with HJ regarding (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the
Company’s consolidated financial statements, and no written report or oral advice was provided to the Company by HJ concluding
there was an important factor to be considered by the Company in reaching a decision as to an accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a reportable event, as that term is defined in
Item 304(a)(1)(v) of Regulation S-K.

 

Item
9A. Controls and Procedures.

 

Evaluation
of Disclosure Controls and Procedures

 

We
conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term
“disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange
Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure
that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated
to the company’s management, including its principal executive and principal financial officers, or persons performing similar
functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that, as discussed below, the Company’s disclosure controls and procedures
had not been effective at the reasonable assurance level to allow timely decisions regarding required disclosure.

 

 

Management’s
Annual Report on Internal Control over Financial Reporting.

 

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Our evaluation of internal control over financial reporting includes
using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring
Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control
environment. The internal controls for the Company are provided by executive management’s review and approval of all transactions.
Our internal control over financial reporting also includes those policies and procedures that:

 

(1) 
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of our assets;

 

(2) 
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management;
and

 

(3) 
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the financial statements.

 

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management
assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. This annual report does not
include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange
Commission that permits us to provide only management’s report in this annual report.

 

Material
Weaknesses

 

A
material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood
that a material misstatement of the financial statements will not be prevented or detected. Management has identified two material
weaknesses.

 

First,
our CEO Mr. Chris Trina is the sole signer on our bank accounts and has sole decisional authority to payout money pursuant to
operating the day to day business functions of the Company. Accordingly, there is not proper segregation of duties over our financial
transactions. Due to budgetary constraints, the Company is not in a position to hire additional accounting staff and is therefore
not able to remedy this material weakness at this time.

 

Second,
with existing personnel the Company lacks the accounting expertise to prepare its quarterly and year end financial statements
in conformity with Generally Accepted Accounting Principles. The Company intends to remedy this material weakness through additional
training of its existing personnel.

  

Item
9(B). Other Information
.

 
None.

 

PART
III

 

Item
10. Directors, Executive Officers and Corporate Governance

 

The
following table sets forth the names, ages, and positions with TTIN for each of the directors and officers of TTIN.

  

Name   Age   Position(s)
Chris Trina     47     Chief Executive Officer, Chief Financial Officer, President, and Director
William Parsons     62     Director
Sandy W. Shultz, M.D.     57     Director

  

Chris
Trina

 

On
September 7, 2007 the Board of Directors appointed Chris Trina President, Director and Chief Executive Officer. In the fall of
2010, Mr. Trina also became the Chief Financial Officer of the Company. Prior to joining TTIN, Mr. Trina was a Senior Investment
Advisor with National Securities Corporation from November 2006 through March 2007. Mr. Trina was the President of Secure Financial
Assets Group, a retail brokerage firm, from September 2005 through September 2006. From September 1997 to August 2005, Mr. Trina
was the Senior Vice President of Sales at Gunnallen Financial, Inc. Since June 1997, Mr. Trina has been the President and sole
stockholder of Windsor Financial Holdings, Inc, a private investment banking and insurance firm. Mr. Trina has twenty-one years
Wall Street experience and received his Bachelor of Science degree in Accountancy from the University of South Florida in 1985.

 

William
Parsons

 

Mr.
Parsons has served as a Director of the Company since August 2004. Mr. Parsons was a Partner with Arthur Anderson from 1992-2002.
Mr. Parsons is currently an Executive Vice President and Partner with SENN-Delaney Leadership, where he has been since 2002. In
addition, Mr. Parsons is the general partner of Parsons Partners. Mr. Parsons received his Bachelor of Science degree at Clarkson
University and his Masters in Business Administration from UCLA.

 

Sandy
W. Shultz, M.D.

 

Effective
January 14, 2008, Sandy W. Shultz, M.D. was elected to the Board of Directors of TTIN. Dr. Shultz graduated from George Washington
University School of Medicine where he served as senior class president. After completing his Internal Medicine internship at
the Veterans Administration Medical Center, in Washington, D.C., Dr. Shultz completed a residency and became Chief Resident Department
of Radiology at George Washington University. In 1985 and 1986 Dr. Shultz completed a Fellowship in Vascular and Interventional
Radiology. Dr. Shultz has been published in medical journals on various topics. Dr. Shultz currently serves as Chief of Radiology
in the Department of Radiology at the Lower Keys Regional Medical center in Key West Florida. Dr. Shultz has been married for
thirty years. He and his wife, Shelley have three children and currently reside in Key West, Florida.

 

In
2010, the Company’s CEO, Mr. Chris Trina filed for personal bankruptcy. Otherwise, TTIN’s officers and directors have
not been involved, during the past five years, in any bankruptcy proceedings, conviction or criminal proceedings; have not been
subject to any order, judgment, or decree, not subsequently reversed or suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities
or banking activities; and have not been found by a court of competent jurisdiction, the Securities and Exchange Commission or
the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

 

There
have been no changes in the procedures by which security holders may recommend nominees to TTIN’s Board of Directors. The
Board of Directors does not currently have a standing audit committee.

 

 

TERM
OF OFFICE

 

Our
Directors are appointed for terms of one year to hold office until the next annual general meeting of the holders of our common
stock, or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.

 

SIGNIFICANT
EMPLOYEES

 

We
have no significant employees other than the officers and the directors described above.

 

Section
16(A) Beneficial Ownership Reporting Compliance

 

Based
upon a review of Forms 3 and 4 and amendments thereto furnished to TTIN during the 2008 fiscal year, the following table details
non- compliance with Section 16(a) of the Exchange Act of 1934.

 

 

Name   Late Reports   Transactions not Reported   Reports not Filed
Chris Trina     0       0       0  
Robert J. Calamunci     1       0       0  
William Parsons     1       0       0  
Sandy W. Shultz, M.D.     1       0       0  
                         

 

Item 11. Executive Compensation.

 

    Summary Compensation Table
Name and principal position   Year   Salary ($)   Stock Awards ($)   Total ($)
Chris Trina, CEO, CFO (1)     2010     $ 25,800     $ 50,000     $ 75,800  
      2009     $ 175,384     $ 3,000     $ 178,384  
      2008     $ 240,000             $ 240,000  
Robert J. Calamunci, former CFO (2)     2009     $ 54,000     $ 6,500     $ 60,500  
      2008     $ 32,308             $ 32,308  

 

(1) Mr.
Trina is our current CEO and CFO and has a written employment contract with TTIN pursuant
to which he receives a salary of $240,000 annually. His contract also provides that Mr.
Trina is entitled to a perpetual 20% ownership in the Company pursuant to which he is
entitled to stock issuances as the total number of shares issued and outstanding in the
Company increases. He did not receive his full cash compensation during 2009 and 2010,
due to lack of funding for the Company nor has he received all stock payable to him under
his right to perpetual 20% ownership.
     
(2) Mr.
Calamunci resigned as CFO of TTIN in August, 2010.

 

DIRECTOR
COMPENSATION

 

There
are no standard arrangements pursuant to which directors are compensated for services rendered to TTIN. TTIN does compensate its
directors from time to time with stock for services as directors. At the present time, directors receive stock valued at approximately
$10,000 to $12,000 on an annual basis for their service on the board. The shares are restricted pursuant to the terms and conditions
of Rule 144 promulgated under the Securities Act of 1933.

 

 

Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

             
Title of Class   Name and Address of beneficial owner   Amount and nature of beneficial owner   Percent of class
Common      Chris Trina     6,500,897       5.60 %
      2206 Bay Club Circle                
      Tampa, FL  33607                
                       
Common     Dino P. Kanelos     11,000,000       9.50 %
      1928 Iverson Lane                
      Marvin, NC  28173                

 

The following table provides certain information as of December 31, 2011 about the beneficial ownership of our common shares by our officers and directors individually and as a group.

 

Title of class   Name of beneficial owner   Amount and nature of beneficial ownership   Percent of class
             
Common     Chris Trina   $ 6,500,897       5.60 %
Common     Sandy W. Shultz, M.D.     2,256,534       1.90 %
Common     William Parsons     1,810,825       1.60 %
Common     All officers and directors as a group (3)   $ 10,568,256       9.10 %

 

(1)  All ownership is direct ownership unless noted
otherwise. Of the 2,256,534 shares reported for Mr. Shultz, $2,223,234 are owned by Mr. Shultz outright and 33,300 are owned by his son, Zachary Shultz.

 

Item
13. Certain Relationships and Related Transactions, and Director Independence

 

Director
Independence

 

We
have three directors. Chris Trina is not considered an independent director. William Parsons and Sandy W. Shultz, M.D. are considered
independent directors. The definition the Company uses to determine whether a director is independent is NASDAQ Rule 4200(a)(15).

 

Item
14. Principal Accounting Fees and Services

  

    Fiscal 2009   Fiscal 2010 and 2009
Audit Fees (1)   $ 70,000     $ 47,500  
Audit-Related Fees (2)     45,000       —    
Tax Fees     —         —    
All other Fees     —         —    
Total   $ 115,000     $ 47,500  

 

Audit
Fees – Audit fees billed to the Company by its outside independent accountants for auditing for Company’s annual financial
statements for 2009 and 2010 respectively.

 

Audit-Related
Fees – Review fees billed to the Company by its outside independent accountants for reviewing the Company’s quarterly
financial statements for the calendar quarters during the fiscal years ended December 31, 2009 and 2010.

 

 

SIGNATURES

 

The
registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

  Enviro-Serv, Inc.
   
   By: /s/
Chris Trina
    Chris
Trina
Chief Executive Officer

 

Date:  September
21, 2018

 

In
accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

 

  Enviro-Serv, Inc.
   
   By: /s/
Chris Trina
   

Chris Trina
Director and Principal Executive Officer

Principal Financial Officer

 

Date: September 21, 2018

 

 

 

 

 

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