United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2005
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to _________
Commission file number 0-25097
WORLD ENERGY SOLUTIONS, INC.
(Name of small business issuer in its charter)
FLORIDA 65-0783722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3900A 31st Street North, St. Petersburg, Florida 33714
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 727-525-5552
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
(Title of class)
Check whether the issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. (_)
Note - Checking the box above will not relieve any registrant required to
file reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 (X)
No(_).
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB (_).
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act. Yes (_) No (X)
State issuer's revenues for its most recent fiscal year: $471,469.
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 sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days: $12,980,282.70 based on the average
high($1.80) and low ($1.50) price as of March 27, 2006, of $1.65 per share.
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 26,509,198 shares of Common
Stock as of March 28, 2006.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (Check One): Yes (_) No (X)
PART I
Item 1. Description of Business.
The Company
World Energy Solutions, Inc. d/b/a World Energy Solutions ("the Company",
"we" or "us") is a Florida corporation with our principal executive offices
located at 3900A 31st Street North, St. Petersburg, Florida.
The Company's new business model is the marketing of a multi-product
package to commercial, industrial and residential facilities in order to lower
their overall cost of electric, gas and water. The Company plans to market its
package both by direct sales as well as a Shared Revenue Program (SRP) where the
Company pays for the entire installation in return for a percentage of the
realized savings (Example: 80% of all savings for 10 years). No services or
products have yet been sold.The Company will continue to sell its TVSS
(Transient Voltage Surge Suppression) products as it develops its new business
model.
THE COMPANY'S TARGET MARKET
The Company's target market are commercial and industrial customers that
have an electric, gas and water bill in excess of $10,000.00 per month. The
ideal customer will have an overall energy bill in the $40,000.00 to $100,000.00
monthly range. The Company has the ability to sell and install for larger
customers on a case-by-case basis.
In 2004, net generation of electricity totaled 4.0 trillion kilowatt hours,
up 2 percent compared with the total in 2003. Of the total generated, 96 percent
came from the electric power sector; 4 percent was generated by combined
heat-and-power plants and electricity-only plants in the industrial and
commercial sectors. The United States imported 34 billion kilowatt hours and
exported 23 billion kilowatt hours of electricity in 2004.
In April 2005, total net generation of electricity was 291 billion kilowatt
hours, slightly higher than April 2004. This kilowatt hour usage translates at
$.08 per hour to the sum of $23,280,000,000.00 per month. Approximately
two-thirds (2/3) of this monthly figure is generated by commercial and
industrial facilities. A $50,000.00 per month electric bill represents
approximately .000000214 of the potential market monthly. With the U.S.
Department of Energy predicting that the demand will more than double before
year 2025, the overall market for the Company's products and services is vast.
THE BUSINESS MODEL
The Company is an ESCO (Energy Services Company). An ESCO, or Energy
Service Company, is a business that develops, installs, and finances projects
designed to improve the energy efficiency and maintenance costs for facilities
over a seven (7) to ten (10) year time period. ESCOs generally act as project
developers for a wide range of tasks and assume the technical and performance
risk associated with the project. Typically, they offer the following services:
|X| develop, design, and finance energy efficiency projects;
|X| install and maintain the energy efficient equipment involved;
|X| measure, monitor, and verify the project's energy savings; and
|X| assume the risk that the project will save the amount of energy
guaranteed.
These services are bundled into the project's cost and are repaid through the
dollar savings generated.
ESCO projects are comprehensive, which means that the ESCO employs a wide
array of cost-effective measures to achieve energy savings. These measures often
include the following: high efficiency lighting, high efficiency heating and air
conditioning, efficient motors and variable speed drives, and centralized energy
management systems.
What sets ESCOs apart from other firms that offer energy efficiency, like
consulting firms and equipment contractors, is the concept of performance-based
contracting. When an ESCO undertakes a project, the company's compensation, and
often the project's financing, are directly linked to the amount of energy that
is actually saved.
Typically, the comprehensive energy efficiency retrofits inherent in ESCO
projects require a large initial capital investment and offer a relatively long
payback period. The customer's debt payments are tied to the energy savings
offered under the project so that the customer pays for the capital improvement
with the money that comes out of the difference between pre-installation and
post-installation energy use and other costs. For this reason, ESCOs have led
the effort to verify, rather than estimate energy savings. One of the most
accurate means of measurement is the relatively new practice of metering, which
is direct tracking of energy savings according to sanctioned engineering
protocols.
Most performance-based energy efficiency projects include the maintenance
of all or some portion of the new high-energy equipment over the life of the
contract. The cost of this ongoing maintenance is folded into the overall cost
of the project. Therefore, during the life of the contract, the customer
receives the benefit of reduced maintenance costs, in addition to reduced energy
costs. As an additional service in most contracts, the ESCO provides any
specialized training needed so that the customer's maintenance staff can take
over at the end of the contract period.
Another critical component of every energy efficiency project is the
education of customers about their own energy use patterns in order to develop
an "energy efficiency partnership" between the ESCO and the customer. A primary
purpose of this partnership is to help the customer understand how their energy
use is related to the business that they conduct.
Included in the ancillary services provided in a typical performance-based
energy efficiency contract are the removal and disposal of hazardous materials
from the customer's facility. When, for example, existing fluorescent lighting
equipment, ballasts that contain PCBs, and fluorescent light tubes that contain
traces of mercury are replaced, the old equipment must be disposed of as
hazardous waste. Upgrades to heating, air conditioning, and ventilation systems
may involve the removal of asbestos and would also be properly disposed of by
the ESCO.
In addition to the economic benefits realized by ESCO customers through
energy and maintenance cost savings, this booming industry has had a profound
effect on the U.S. economy. New jobs have been created, not only within the
ESCOs, but though the use of contractors and through the many firms involved
directly and indirectly in supporting energy efficiency projects. Since
approximately one third of the money invested in ESCO projects is applied to
labor costs, out of the estimated $20 billion of projects installed to date,
approximately $7 billion has gone directly for labor employment.
Historically, the energy service industry is relatively young. Most U.S.
ESCOs place the industry's origins in the late 1970s and early 1980s when energy
prices rose dramatically following the 1973 Arab oil embargo and the Iranian
Revolution in 1979. These events created the opportunity to make a business out
of reducing customers' growing energy costs. The future for ESCOs and for their
customers is bright as there is an increasingly global need to implement energy
efficiency projects on a widespread basis.
The Company's business model is based around a multi-product approach to
energy savings (lowering electric, gas and water utility bill) for commercial,
industrial and residential facilities. The goal of the Company is to
substantially reduce energy consumption (10% to 30% plus), reduce the customer's
maintenance costs, protect the customer's equipment and increase the life of the
customer's equipment. The basic premise of our program is to sell a complete
multi-product energy savings package to customer's facilities for cash or a
shared savings revenue (80% - 20% Shared Revenue Program - SRP) modeled after
the Federal Energy Management Program of the Department of Energy. The Company
would pay for and own the entire installation of the multiple products and
receive a percentage (usually 80%) of all demonstrated savings for a certain
amount of time (10 to 20 years). The Company will accomplish these savings by
utilizing in-house proprietary products, proprietary techniques and third party
outside technologies where applicable.
Basic steps:
1. After identifying a prospective customer, we do an energy analysis of
our customer's facility.
2. We contract with our customer to install multiple state-of-the-art
energy saving technologies and techniques into their facility (Cash or
SRP).
3. The Company will monitor all phases of savings against an agreed upon
energy consumption baseline measured in kilowatt per hour usage.
4. We anticipate receiving either an agreed upon cash payment for the
installation or the 80% - 20% Shared Revenue Program - SRP generated
from this installation. Each installation is a completely custom order
to fit the customer's specific needs (80% of the cash savings is
remitted to the Company and the customer keeps 20% of the realized
savings). We maintain the ownership of all installed equipment until
the end of the term of the contract. The Company will then sell the
installed equipment to the customer for $1.00.
Should the customer decide to choose the SRP, the customer will have no capital
outlay, a complete energy savings retrofit for their facility and receive 20% of
all savings generated for the life of the contract. This allows the Company to
receive 80% of all energy savings for the life of the contract as well as energy
tax credits associated with the installation of energy-saving devices.
The Company has brought together technologies that cover the following
areas:
TVSS (Transient Voltage Surge Suppression), HVAC (Heating Ventilation Air
Conditioning) Loads, Lighting Loads, Motors Loads, Hot Water Usage, Cold
Water usage, Thermal Barriers, Thermal Coatings, Air Curtains, Energy
Management Systems along with other state of the art energy saving
technologies, strategies and techniques. Additional conservation methods
will include implantation of engineering recommendations after our
comprehensive study of the facilities' boiler plant, chiller plants,
service water systems, all phases of their air handling systems, building
insulation, controlling use of sunlight, all forms of mechanical equipment,
all forms of energy sources, specific energy management tools, and other
energy recovery systems.
Our complete energy analysis report will deliver monthly energy usage that
will include adjustments for:
Weather changes & effects on energy usage;
Equipment change-outs that affect energy usage;
Business unit of measurement adjustments (how well their business is doing
vs. our baseline energy usage. Example: A resort rented out 80% of their
rooms for that baseline month vs. 95% of the new referenced month);
Business behavior adjustments. (Example: New management decides to turn all
thermostats down five (5) degrees, or any major changes in behavioral
policy that directly effects energy usage).
The Company will include a maintenance agreement and on-going warranties
for the life the contract. The customer will be responsible for general
maintenance of their facility.
The Company is currently a Takagi dealer. Takagi Industrial Co. USA, Inc.
is the U.S. distribution arm of Takagi Industrial Co. LTD. of Japan, founded in
1946 as Takagi Machinery. Today, Takagi is one of the world's largest
manufacturers of tank-less hot water systems. We expect to become manufacturers
and distributors for a wide variety of energy saving technologies through
research and development, distributorships, mergers & acquisitions and/or
outright purchase of technologies that fit the Company's business model.
The Company currently identifies their market as commercial and industrial
customers that use electric power in the $30,000 to $250,000 dollar range
monthly. The customer may also use $2,000 to $25,000 per month natural gas or
propane gas for various energy needs.
THE ENERGY SERVICES COMPANY (ESCO) INDUSTRY
The U.S. Energy Services Company (ESCO) industry is often cited as the most
successful model for the private sector delivery of energy-efficiency services.
These projects include $2.55B of work completed by 51 ESCOs and span much of the
history of this industry. We estimate that the ESCO industry completed $1.8-2.1B
of projects in 2000. The industry has grown rapidly over the last decade with
revenues increasing at a 24% annualized rate. We summarize and compare project
characteristics and costs and analyze energy savings, including the relationship
between predicted and actual savings. ESCOs typically invested about $2.30/ft2
per project in various energy efficiency improvements, although there is large
variation in project costs within and across market segments. We find that
lighting-only projects report median electricity savings of 47% of targeted
equipment consumption; the median for lighting-&-non-lighting projects is 23% of
the total electric bill baseline. We examine project economics, including
project net benefits, benefit/cost ratio and simple payback time. Median simple
payback time is seven years for institutional sector projects and three years in
the private sector. We estimate direct economic benefits of $1.62 billion for
the 1080 projects in our database with both cost and savings data. The median
benefit/cost ratio is 2.1 for 309 private sector projects and 1.6 for 771
institutional sector projects. We discuss the role of policies and programs
adopted by state/federal legislatures and agencies that have played an important
role in stimulating ESCO activity in various markets. Finally, we estimate the
overall size and growth of the energy-efficiency services industry over the last
ten years based on a survey of 63 ESCOs. All graphs set forth below are
extracted from the Annual Energy Outlook 2005 published by the United States
Department of Energy/Energy Information Administration.
Residential delivered energy use is projected to increase by 23 percent
between 2003 and 2025 (9 per-cent by 2010). Most (68 percent) of the growth
results from increased use of electricity. Sustained growth in housing in the
South, where almost all new homes use central air conditioning, is an important
component of the national trend, along with the penetration of consumer
electronics, such as home office equipment and security systems.
The AEO2005 reference case projects an increase in the stock efficiency of
residential appliances, as stock turnover and technology advances in most
end-use services reduce residential energy intensity over time. For most
appliances covered by the National Appliance Energy Conservation Act of 1987,
the most recent Federal efficiency standards are higher than the 2003 stock,
ensuring an increase in stock efficiency without any additional new standards.
Future updates to the Federal standards could have a significant effect on
residential energy consumption, but they are not included in the reference case.
The new efficiency standards for water heaters, clothes washers, central air
conditioners, and heat pumps that were announced in January 2001 are included in
the reference case.
For almost all end-use services, existing technologies can significantly
curtail future energy demand if they are purchased by consumers. The most
efficient technologies can provide significant long-run savings in energy bills,
but their higher purchase costs (and in some cases, unsuitability for retrofit
applications) tend to restrict their market penetration. For example, condensing
technology for natural gas furnaces, which reclaims heat from exhaust gases, can
raise efficiency by more than 20 percent over units that just meet the current
standard; and variable-speed scroll compressors for air conditioners and
refrigerators can increase their efficiency by 50 percent or more. In contrast,
there is little room for efficiency improvements in electric resistance water
heaters, because the technology is approaching its thermal limit.
Recent trends in commercial sector fuel shares are expected to continue,
with growth in overall consumption similar to its pace over the past two
decades. Commercial delivered energy use (excluding primary energy losses in
electricity generation) is projected to grow by 1.9 percent per year between
2003 and 2025, slightly faster than the projected growth rate for commercial
floor space of 1.7 percent. Energy consumption per square foot is projected to
show little increase, with efficiency standards, voluntary government programs
aimed at improving efficiency, and other technology improvements expected to
balance the effects of a projected increase in demand for electricity-based
services and a slow rise in energy prices after 2010.
Electricity accounted for 50 percent of commercial delivered energy
consumption in 2003, and its share is projected to increase to 57 percent in
2025. Expected efficiency gains in electric equipment are projected to be offset
by the continuing penetration of new technologies and greater use of office
equipment. Natural gas, which accounted for 39 percent of commercial energy
consumption in 2003, is projected to decline to a 33-percent share by the end of
the forecast. Distillate fuel oil, which accounted for 10 percent of commercial
demand in the years before deregulation of the natural gas industry, made up
only 6 percent of commercial energy demand in 2003. The distillate fuel share is
projected to remain at 6 percent in 2025, as fuel oil continues to compete with
natural gas for space and water heating uses. With conventional fuel prices
projected to increase only slowly, no appreciable growth in the share of
renewable energy in the commercial sector is anticipated.
Total electricity sales are projected to increase at an average annual rate
of 1.9 percent in the AEO2005 reference case, from 3,481 billion kilowatt hours
in 2003 to 5,220 billion kilowatt hours in 2025. From 2003 to 2025, annual
growth in electricity sales is projected to average 1.6 percent in the
residential sector, 2.5 percent in the commercial sector, and 1.3 percent in the
industrial sector.
The average size of homes is projected to be larger in 2025 than in 2003 in
terms of both square footage and ceiling height, with corresponding increases in
electricity use for heating, cooling, and lighting. In addition, expected
population shifts to warmer climates increase the amount of electricity used for
air conditioning, although the projected increases are mitigated in part by the
implementation of a more stringent efficiency standard for air conditioners and
heat pumps in 2006.
Projected efficiency gains for electric equipment in the commercial sector
are offset by the continuing penetration of new telecommunications technologies.
Although electricity use is projected to increase with the growth of industrial
output, increases in electricity sales to the industrial sector are expected to
be off-set by a 2.7-percent average annual increase in onsite generation.
With growing electricity demand and the retirement of 43 gigawatts of
inefficient, older generating capacity, 281 gigawatts of new capacity (including
end-use combined heat and power) will be needed by 2025. Most retirements are
expected to be older oil-and natural-gas-fired steam capacity, along with
smaller amounts of older oil-and natural-gas-fired combustion turbines and
coal-fired capacity, which are not competitive with newer natural gas combustion
turbine or combined-cycle capacity.
More than 60 percent of new capacity additions are projected to be
natural-gas-fired combined-cycle, combustion turbine, or distributed generation
technologies. More than 80 percent of the capacity additions will be needed
after 2010, when the current excess of generation capacity has been reduced. As
natural gas prices rise later in the forecast, new coal-fired capacity is
projected to become increasingly competitive, accounting for nearly one-third of
the capacity expansion expected in the reference case. Most of the new coal
capacity is expected to use advanced pulverized coal technology and to begin
operation after 2015. About 16 gigawatts of capacity using advanced clean coal
technology, with higher capital costs but relatively low fuel costs, is also
expected to be added.
Item 2. Description of Property.
The Company maintains two facilities: its main office which houses its
corporate and manufacturing facilities and a second unit used for research and
development within the same industrial complex and has two separate leases. The
main office lease has a term expiring on October 15, 2006 and contains a one-
year renewal option. The research and development facility does not contain a
renewal option and the payment of its rent is guaranteed by the Company's
President. That lease commenced in October 2004 and has a term ending on October
14, 2006.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Part II
Item 5. Market for Common Equity and Related Stockholder Matters.
The Company's common stock was traded from January 1, 2005 through November
17, 2005 on the Over-the-Counter Bulletin Board under the symbol AVDU.OB. From
November 18, 2005 through present the Company's common stock was traded on the
Over-the-Counter Bulletin Board under the symbol WEGY.OB. The high and low sales
prices for each quarter of the calendar years 2004 and 2005 are as follows:
Common Stock
----------------------------------
High Low
----------------------------------
1st quarter 2004 9.46 9.43
2nd quarter 2004 10.53 10.34
3rd quarter 2004 9.97 9.90
4th quarter 2004 5.54 5.47
1st quarter 2005 3.59 3.49
2nd quarter 2005 2.73 2.36
3rd quarter 2005 2.76 2.72
4th quarter 2005 3.14 3.13
Recent Sales of the Company's Securities.
Number Common
Name Shares Purchased Date Price/Share Issuer
Tanta Anghelescu 18 03/05/04 $0.001 1
James Bergeron 10 03/05/04 $0.001 1
Jan Butler 4 03/05/04 $0.001 1
Ivanka Chotreva 2 03/05/04 $0.001 1
Joseph Chumbley 4 03/05/04 $0.001 1
Kelly Fesler 2 03/05/04 $0.001 1
Jevto Knezevic 8 03/05/04 $0.001 1
Vera Lukie 4 03/05/04 $0.001 1
Mihail Mihailov 6 03/05/04 $0.001 1
Chekita Mitchell 4 03/05/04 $0.001 1
John O'Brien 14 03/05/04 $0.001 1
Jodi Sherry 12 03/05/04 $0.001 1
Don Sutton 4 03/05/04 $0.001 1
Jack Watson 4 03/05/04 $0.001 1
Elizel Angelescu 50,000 03/15/04 $ 0.50 1
George Anghelescu 60,000 04/06/04 $ 0.50 1
John O'Brien 50,000 04/06/04 $ 0.50 1
John Aliprantis 50,000 04/21/04 $ 0.50 1
Cheryl Koebele 10,000 04/21/04 $ 0.50 1
Harry Eisnaugle 20,000 04/27/04 $ 0.50 1
Paul Ksyniak 20,000 04/27/04 $ 0.50 1
Edward Montambault 100,000 05/07/04 $ 0.50 1
Wes Wissel 60,000 05/13/04 $ 0.50 1
Tanta Anghelescu 53,982 06/02/04 $0.001 1
James Bergeron 29,990 06/02/04 $0.001 1
Jan Butler 11,996 06/02/04 $0.001 1
Ivanka Chotreva 5,998 06/02/04 $0.001 1
Joseph Chumbley 11,996 06/02/04 $0.001 1
Kelly Fesler 5,998 06/02/04 $0.001 1
Kiefner & Hunt 30,000 06/02/04 $0.001 1
Jevto Knezevic 23,992 06/02/04 $0.001 1
Vera Lukie 11,996 06/02/04 $0.001 1
Mihail Mihailov 17,994 06/02/04 $0.001 1
Chekita Mitchell 11,996 06/02/04 $0.001 1
John O'Brien 41,986 06/02/04 $0.001 1
Jodi Sherry 35,988 06/02/04 $0.001 1
Don Sutton 11,996 06/02/04 $0.001 1
Jack Watson 11,996 06/02/04 $0.001 1
Philip Gene Flood
Living Trust dated
April 24th,1997 200,000 06/14/04 $ 0.50 1
Joseph & Sally Peel 100,000 06/14/04 $ 0.50 1
Edward & Alice
Prange 60,000 06/14/04 $ 0.50 1
Wes Wissel 20,000 06/14/04 $ 0.50 1
Thomas Conley 10,000 06/28/04 $ 0.50 1
Richard & Marna
Taylor 20,000 06/28/04 $ 0.50 1
Joseph Chumbley 20,000 07/02/04 $ 0.50 1
Jerry Little 50,000 07/02/04 $ 0.50 1
Edward & Alice
Prange 60,000 07/06/04 $ 0.50 1
Edward & Francoise
Bineau Bineau
Family Trust 50,000 07/22/04 $ 0.50 1
Gloria Jameson 10,000 07/22/04 $ 0.50 1
Theresa Rivera 10,000 07/26/04 $ 0.50 1
Claire Meadows 4,000 08/02/04 $ 0.50 1
Claire Meadows 6,000 08/02/04 $ 0.50 1
Wes Wissel 20,000 08/05/04 $ 0.50 1
James F. Conner 10,000 08/16/04 $ 0.50 1
Stanley Johnson 20,000 08/16/04 $ 0.50 1
James Cole 20,000 08/16/04 $ 0.50 1
Robert Kratz 100,000 08/25/04 $ 0.50 1
Stephen Johnson 7,500 09/29/04 $0.001 1
u/a/dtd July 26,
1999 George E.
Lewis IV Revocable
Trust 7,175 10/13/04 $ 0.50 1
Jim E. Hartley 50,000 10/13/04 $ 0.50 1
AnnRee Chumbley 20,000 12/16/04 $ 0.50 1
Pamela J. Clark 14,000 12/24/04 - - 1
Nicole Conley 200 12/28/04 $ 0.50 1
Thomas Conley 200 12/28/04 $ 0.50 1
Thomas Conley 40,000 12/28/04 $ 0.50 1
Joseph & Linda
Chumbley 36,600 12/31/04 $ 0.50 1
Ken Fleetwood 1,000 12/31/04 $ 0.50 1
Pamela J. Clark 36,000 02/14/05 $ 0.50 1
Joseph & Linda
Chumbley 2,000 03/07/05 $ 0.50 1
Joseph & Linda
Chumbley 4,000 03/07/05 $ 0.50 1
Joseph & Linda
Chumbley 14,600 04/11/05 $ 0.50 1
Joseph & Linda
Chumbley 14,600 04/11/05 $ 0.50 1
George Anghelescu 28,000 05/31/05 $ 0.50 1
Karl B. Clark 50,000 05/31/05 $ 0.50 1
James F. Conner 20,000 05/31/05 $ 0.50 1
Joseph & Linda
Chumbley 19,000 06/01/05 $ 0.50 1
Robert C. Kratz 300,000 06/01/05 $ 0.50 1
Joseph & Linda
Chumbley 22,000 06/03/05 $ 0.50 1
Joseph & Linda
Chumbley 8,650 06/03/05 $ 0.50 1
AnnRee Chumbley 40,000 06/03/05 $ 0.50 1
Pamela J Clark 6,000 06/03/05 $ 0.50 1
Pamela J Clark 8,000 06/03/05 $ 0.50 1
Thomas Conley 22,000 06/03/05 $ 0.50 1
John O'Brien 8,000 06/03/05 $ 0.50 1
Edward C. & Alice
P. Prangue 80,000 06/03/05 $ 0.50 1
Richard & Marna
Taylor 10,000 06/03/05 $ 0.50 1
AnnRee Chumbley 50,000 06/10/05 $ 0.50 1
Joseph & Linda
Chumbley 600 06/10/05 $ 0.50 1
Joseph & Linda
Chumbley 200 06/10/05 $ 0.50 1
Joseph & Linda
Chumbley 3,000 06/10/05 $ 0.50 1
Jim E. Hartley 50,000 06/10/05 $ 0.50 1
Jim E. Hartley 50,000 06/10/05 $ 0.50 1
Pamela J Clark 10,000 06/21/05 $ 0.50 1
Pamela J Clark 10,000 06/27/05 $ 0.50 1
Christa Paul 200,000 06/27/05 $ 0.50 1
Joseph & Linda
Chumbley 1,000 06/29/05 $ 0.50 1
Philip G Flood 100,000 06/29/05 $ 0.50 1
Pamela J Clark 2,000 07/05/05 $ 0.50 1
Thomas Conley 28,000 07/05/05 $ 0.50 1
Joseph & Linda
Chumbley 600 07/06/05 $ 0.50 1
Annree Chumbley 20,000 07/06/05 $ 0.50 1
Robert C. Kratz 100,000 07/06/05 $ 0.50 1
Mark Kevin Potter 20,000 07/09/05 $ 0.50 1
Paul M & Mary Jo
Arnold 50,000 07/11/05 $ 0.50 1
Janet Butler 4,000 07/11/05 $ 0.50 1
Ronald E, Errington 50,000 07/11/05 $ 0.50 1
Donald J. & Theda
Wilhelm 4,000 07/11/05 $ 0.50 1
Glenn D. Witt 50,000 07/11/05 $ 0.50 1
J. Terry Ottinger 100,000 07/13/05 $ 0.50 1
Owen Reuterwall
Rev. Trust U/A/DTD
12-14-95 20,000 07/20/05 $ 0.50 1
Pamela J Clark 50,000 07/26/05 $ 0.50 1
Christopher Nelson
TTEE FBO Christopher
G. Nelson Family
Trust 25,000 08/08/05 $ 0.50 1
Mary Jo Nelson TTEE
FBO Mary Jo Nelson
Family Trust 25,000 08/08/05 $ 0.50 1
Allied Properties,
Inc. 50,000 08/16/05 $ 0.50 1
Pamela J Clark 35,000 11/09/05 $ 1.00
AnnRee Chumbley 10,000 11/28/05 $ 1.00
Pamela J Clark 10,000 12/09/05 $ 1.00
Jim E. Hartley 100,000 12/19/05 $ 1.00
Edward C. & Alice
P. Prange 50,000 12/19/05 $ 1.00
Barbara Ann Bretz 25,000 12/27/05 $ 1.00
Flood Living Trust
Date April 24th,
1997 50,000 12/27/05 $ 1.00
Jennifer Parry 25,000 12/27/05 $ 1.00
Allied Properties 25,000 12/30/05 $ 1.00
1 Issued by Professional Technical Services, Inc.
All sales were made pursuant to Section 4(2) of the 1933 Act. The proceeds
of the sale of these securities is to provide operating capital and development
costs.
Special Note Regarding Forward Looking Statements.
This annual report on Form 10-KSB of World Energy Solutions, Inc f/k/a
Advanced 3-D Ultrasound Services, Inc.,for the year ended December 31, 2005
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe
harbors created thereby. To the extent that such statements are not recitations
of historical fact, such statements constitute forward-looking statements which,
by definition, involve risks and uncertainties. In particular, statements under
the Sections; Description of Business, Business Model and Management's
Discussion and Analysis of Financial Condition and Results of Operations contain
forward-looking statements. Where, in any forward-looking statement, the Company
expresses an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to
differ materially from those anticipated, and include but are not limited to:
general economic, financial and business conditions; changes in and compliance
with governmental regulations; changes in tax laws; and the costs and effects of
legal proceedings.
Holders
As of March 27, 2006, the number of holders of record of shares of common
stock, excluding the number of beneficial owners whose securities are held in
street name was approximately 231.
Dividend Policy
The Company will not pay any cash dividends on its common stock in 2006
because it intends to retain its earnings to finance the expansion of its
business. Thereafter, declaration of dividends will be determined by the Board
of Directors in light of conditions then existing, including without limitation
the Company's financial condition, capital requirements and business condition.
Equity Compensation Plan Information
Number of Number of
securities to be securities remaining
issued upon exer- available for future
cise of outstand- Weighted-average issuance under equity
ing options, exercise price of compensation plans
warrants, and outstanding options, (excluding securities
Plan category and rights warrants and rights reflected in column (a))
(a) (b) (c)
-------------------- ------------------- -------------------- ------------------------
Equity compensation
plans approved by None Not Applicable Not Applicable
security holders
Equity compensation
plans not approved
by security holders 1,300,000 (1)(2)(3) Not Applicable -0-
-------------------- -------------------- ------------------------
Total
==================== ==================== ========================
(1) Includes 600,000 shares issued to Mr. Croxton pursuant to January 31, 2006 employment agreement.
(2) Includes 600,000 shares issued to Mr. Prentice pursuant to January 31, 2006 employment agreement.
(3) Includes 100,000 shares issued to Mr. Kurk pursuant to January 31, 2006 consulting agreement.
Item 6. Management's Discussion and Analysis of Financial Condition and
Resultsof Operations
Introduction
World Energy Solutions, Inc. (referred to as the "Company", "WESI," "New
WESI," or in the first person notations of "we," "us," and "our") began
operations in 1984 under the corporate name of Professional Technical Systems,
Inc. (PTS). PTS merged with WESI in November 2005 (the "November 2005 Merger")
with WESI being the legal acquiror but PTS being the accounting acquiror.
Therefore the financial statements presented herein are those of WESI (formerly
known as PTS) as the surviving entity of the November 2005 Merger.
In August 2005, a Florida corporation named World Engery Solutions, Inc.
("Old WESI") merged with Advanced 3D Ultrasound, Inc. (ADVU) with ADVU being the
legal acquiror but Old WESI being the accounting acquiror (the "August 2005
Merger"). ADVU was the surviving entity of the August 2005 Merger and
subsequently changed its name to WESI.
ADVU, Old WESI, and New WESI, prior to merging with PTS, had no revenues
and minimal assets and activity. PTS has been the operating manufacturer before
and after the merger.
WESI manufactures and sells transient voltage surge suppressors and related
products and commercial and residential energy-saving equipment and applications
to distributors and customers throughout the United States. Although this
activity is expected to continue, the Company plans to implement a new business
model to market a multi-product package to commercial, industrial and
residential facilities in order to lower there overall cost of electric, gas and
water of these facilities. The Company plans to market its package both by
direct sales as well as a Shared Revenue Program (SRP) where the Company pays
for the entire installation cost of the product package in return for payments
of a percentage of the savings realized by the facilities using the product
package. This new business model is expected to increase revenues and profits
for the Company.
Liquidity and Capital Resources
Our cash increased to approximately $240,000 as of December 31, 2005
compared to $102,000 as of December 31, 2004. This increase is due mostly to
proceeds from the sale of common stock since we are using cash for operating
activities. Additionally the Company realized proceeds of approximately $321,000
from the sale of land held for investment.
The cash used in operations in 2005 exceeded the cash used in operations in
2004 by approximately $800,000. Although gross profit from sales increased,
general and administrative expenses increased approximately $823,000. This
increase is attributable to increased salaries, consulting and professional
fees.
We do not believe our current operations will produce the working capital
needed to implement our entire new business model. Operations in 2005 have been
funded in large part through the sale of common stock and such funding will need
to continue in order to allow us to implement our new business model. The
Company has been successful in acquiring certain services through consulting
agreements that are funded in large part through the issuance of common stock.
However, the Company currently is offering up to $10,000,000 of its common stock
in a private placement. The proceeds from the private placement will be used to
fund research and development, consulting and professional fees, new product
installations, other expenses and for working capital.
Currently the Company has debt financing either from its officers, or
guaranteed by its officers. Debt financing is not expected to be a funding
resource.
Results of Operations and Critical Accounting Policies and Estimates
The results of operations are based on preparation of financial statements
in conformity with accounting principles generally accepted in the United
States. The preparation of financial statements requires management to select
accounting policies for critical accounting areas as well as estimates and
assumptions that affect the amounts reported in the financial statements. The
Company's accounting policies are more fully described in Note 1 of Notes to
Financial Statements. We have identified the following accounting policy and
related judgment as critical to understanding the results of our operations.
Valuation Allowance on Deferred Tax Assets
SFAS No. 109, "Accounting for Income Taxes" requires that deferred tax
assets be evaluated for future realization and reduced by a valuation allowance
to the extent we believe a portion will not be realized. We consider many
factors when assessing the likelihood of future realization of our deferred tax
assets including our recent cumulative earnings experience, expectations of
future taxable income, the carry-forward periods available to us for tax
reporting purposes and other relevant factors. At December 31, 2005, our net
deferred tax assets are $3,949,000, comprised principally of net operating loss
carry forwards (NOLs). Classification of deferred tax assets between current and
long-term categories is based on the expected timing of realization, and the
valuation allowance is allocated on a pro rata basis.
We have reflected a valuation allowance of 100%, which resulted in an
income tax benefit of zero. The range of possible judgments relating to the
valuation of our deferred tax asset is very wide. If we had concluded that the
weight of available evidence supported a decision that substantially all of our
deferred tax assets may be realized, we would have a substantial income tax
benefit in our statement of operations. Significant judgment is required in
making this assessment, and it is very difficult to predict when, if ever, our
assessment may conclude our deferred tax assets is realizable.
2005 Compared to 2004
Total product sales for 2005 were $472,000, a 5% decrease from 2004 sales
of $497,000 due to decreased demand for the Company's product. There were no
major customers in 2005 however in 2004 one customer accounted for 14% of sales.
Gross profit on sales increased from 44% in 2004 to 49% in 2005.
Approximately 3% of this increase was due to the absence of issues with obsolete
inventory in 2005 as compared to 2004.
Our general and administrative expenses increased to $1,234,000 in 2005
from $416,000 in 2004. Additional legal, accounting and other professional
expenses of approximately $138,000 were incurred related to the mergers
discussed above because in 2005 the Company for the first time performed an
audit . The Company incurred consulting fees of $424,000 in 2005 and none in
2004 related to its proposed business model. Lastly, salaries increased
approximately $245,000 due to increased salaries, additional personnel and due
to the President shifting his focus from research and development to business
development. This also accounted for a decrease in research and development
expenses from 2004 to 2005.
We expect significant increases in future consulting, salary and research
and development expenses as a result of the implementation of our new business
model.
Forward-looking Statement
All statements other than statements of historical fact in this report are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995, and are based on management's current expectations of the
Company's near term results, based on current information available and
pertaining to the Company. The Company assumes no obligation to update publicly
any forward-looking statements. Actual results may differ materially from those
projected in the forward-looking statements.
Item 7. Financial Statements.
WORLD ENERGY SOLUTIONS, INC.
(FORMERLY ADVANCED 3D ULTRASOUND SERVICES, INC.)
FINANCIAL STATEMENTS
DECEMBER 31, 2005
[LETTERHEAD OF FERLITA, WALSH, & GONZALEZ, P.A. -- CERTIFIED PUBLIC ACCOUNTANTS]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of
World Energy Solutions, Inc.
St. Petersburg, Florida
We have audited the balance sheet of World Energy Solutions, Inc. as of December
31, 2005, and the related statements of operations, changes in stockholders'
equity, and cash flows for the years ended December 31, 2005 and 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of World Energy Solutions, Inc. as
of December 31, 2005, and the results of its operations and its cash flows for
the years ended December 31, 2005 and 2004, in conformity with accounting
principles generally accepted in the United States of America.
/s/
Ferlita, Walsh & Gonzalez, PA
Tampa, Florida
March 29, 2006
The accompany notes are an integral part of these financial statements.
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
BALANCE SHEET
DECEMBER 31, 2005
ASSETS
Current assets
Cash $ 240,194
Accounts receivable 49,785
Inventory 111,818
Prepaid expenses and other current assets 92,386
------------------
Total current assets 494,183
------------------
Property and equipment, net 70,135
------------------
Other assets
Deposits 3,850
Deferred offering costs 11,000
------------------
Total other assets 14,850
------------------
Total Assets $ 579,168
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 19,228
Accounts payable 28,828
Accrued expenses 13,661
Advance payments from dealers and customers 19,057
Loans payable to related parties 167,424
------------------
Total current liabilities 297,655
------------------
Long-term debt, less current portion 49,457
------------------
Commitments and contingencies
Stockholders' equity
Preferred stock; $.0001 par value; 100,000,000 shares
authorized and unissued -
Common stock; $.0001 par value; 100,000,000 shares
authorized; 24,057,041 shares issued and outstanding 2,405
Paid-in capital 1,977,473
Accumulated deficit (1,698,365)
------------------
Total stockholders' equity 281,513
------------------
Total Liabilities and Stockholders' Equity $ 579,168
==================
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
2005 2004
------------ ------------
Net sales $ 471,469 $ 497,109
------------ ------------
Cost of goods sold 239,447 275,540
------------ ------------
Gross profit 232,022 221,569
General and administrative expenses 1,234,069 415,983
------------ ------------
Earnings (loss) from operations (1,002,047) (194,414)
Other income (expense)
Bad debt expense - (11,384)
Gain on disposal of property and equipment 47,457 -
Impairment loss - (22,555)
Interest expense (20,904) (13,526)
Miscellaneous income (expense) 537 (1,506)
Research and development (230,521) (309,967)
Warranty expense - (5,227)
------------- ------------
Total other income (expense) (203,431) (364,165)
Earnings (loss) before provision ------------- ------------
for income taxes (1,205,478) (558,579)
Provision for income taxes - -
------------- ------------
Net loss $ (1,205,478) $ (558,579)
============= ============
Loss per common share $ (0.07) $ (0.05)
============= ============
Weighted average common shares outstanding 16,846,073 10,781,587
============= ============
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
Common Stock
----------------------- Paid -in Accumulated Total Stockholders'
Shares Amount Capital Deficit Equity (Deficit)
----------- --------- ----------- ------------ -------------------
Balance, December 31, 2003 12,000,000 $ 12,000 $ - $ 71,108 $ 83,108
Employee stock bonus award 288,000 - 1,266 - 1,266
Issuance of stock for technology 5,130,000 2 22,553 - 22,555
3,000-for-1 forward split - 5,416 - (5,416) -
Issuance of stock for services 30,000 30 14,970 - 15,000
Issuance of stock for cash 1,436,675 1,437 716,901 - 718,338
Net loss - - - (558,579) (558,579)
----------- --------- ----------- ------------- -------------------
Balance, December 31, 2004 18,884,675 18,885 755,690 (492,887) 281,688
Issuance of stock for cash 2,046,250 2,046 1,186,079 - 1,188,125
Stock redeemed (8,566,500) (8,567) - - (8,567)
Recapitalization as a result
of merger 11,692,976 1,169 24,576 - 25,745
Change in par value - (11,128) 11,128 - -
Net loss - - - (1,205,478) (1,205,478)
----------- --------- ----------- ------------- -------------------
Balance, December 31, 2005 24,057,401 $ 2,405 $ 1,977,473 $ (1,698,365) $ 281,513
=========== ========= =========== ============= ===================
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
2005 2004
------------ -----------
Cash flows from operating activities
Net loss $ (1,205,478) $ (558,579)
------------ -----------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 14,352 8,010
Bad debt expense - 11,384
Impairment loss - 22,555
Gain on disposal of property and equipment (47,457) -
Employee stock bonus award - 1,266
Stock issued to consultants - 15,000
(Increase) decrease in:
Accounts receivable 1,333 5,822
Inventory 33,107 45,426
Prepaid expenses and other current assets 17,911 12,287
Deposits (340) (2,110)
Increase (decrease) in:
Accounts payable (13,133) 20,552
Accrued expenses 161 1,571
Advance payments from dealers and customers (1,412) 14,691
------------ -----------
Total adjustments 4,522 156,454
------------ -----------
Net cash used in operating activities (1,200,956) (402,125)
------------ -----------
Cash flows from investing activities
Purchase of equipment (4,387) (52,188)
Acquisition of land held for resale - (276,947)
Proceeds from disposal of property and equipment 324,404 -
Net cash provided by (used in) ------------ -----------
investing activities 320,017 (329,135)
------------ -----------
Cash flows from financing activities
Proceeds from issuance of common stock 1,188,125 718,338
Payments for common stock redeemed (8,567) -
Proceeds from loans payable to related parties - 272,000
Repayment of loans payable to related parties (125,944) (140,265)
Proceeds from long-term debt - 69,142
Repayment of long-term debt (35,287) (107,334)
Proceeds from reverse merger 845 -
Net cash provided by financing ------------ -----------
activities 1,019,172 811,881
------------ -----------
Net increase in cash 138,233 80,621
Cash, beginning of year 101,961 21,340
------------ -----------
Cash, end of year $ 240,194 $ 101,961
============ ===========
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
(Continued)
2005 2004
---------- ----------
Supplemental disclosures of noncash investing and financing activities:
Cost of land held for resale acquired with
long-term debt $ - $ 210,000
Common stock issued for technology - 22,555
Employee stock bonus award - 1,266
Common stock issued for services - 15,000
Long-term debt repaid with proceeds from
sale of property and equipment 210,000 -
The Company acquired the net assets of
World Energy Services, Inc. in exchange
for all the Company's capital stock. In
conjunction with the recapitalization,
liabilities were assumed as follows:
Fair value of assets acquired $ 111,845 $ -
Liabilities assumed (86,100) -
Increase in common stock andpaid-in capital ---------- ----------
$ 25,745 $ -
========== ==========
Cash flow information:
Cash paid in interest $ 18,801 $ 15,551
Cash paid for income taxes $ - $ 727
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 AND 2004
(1) Significant Accounting Policies:
The following is a summary of the more significant accounting policies and
practices of World Energy Solutions, Inc. (the Company) which affect the
accompanying financial statements.
(a) Organization - Advanced 3-D Ultrasound Services, Inc. was incorporated
on September 23, 1997. Advanced 3D Ultrasound Services, Inc. merged with
World Energy Solutions, Inc. (WESI) effective August 17, 2005. Advanced 3D
Ultrasound Services, Inc. remained as the surviving entity as the legal
acquiror, while WESI was the accounting acquiror (see note 2).
On November 7, 2005, Advanced 3D Ultrasound Services, Inc. changed its name
to World Energy Solutions, Inc.
On November 7, 2005, WESI merged with Professional Technical Systems, Inc.
(PTS). WESI remained as the surviving entity as the legal acquiror, while
PTS was the accounting acquirer (see note 2).
(b) Operations - The Company manufactures and sells transient voltage surge
suppressors and related products and commercial and residential
energy-saving equipment and applications to distributors and customers
throughout the United States. Sales revenue in the accompanying financial
statements is entirely from the sale of transient voltage surge suppressors
and are recorded on the accrual method of accounting. The Company is
located in St. Petersburg, Florida.
(c) Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect certain reported
amounts and disclosures. Accordingly, actual results could differ from
those estimates.
(d) Cash - For the purposes of reporting cash flows, the Company considers
all highly liquid investments with an original maturity of three months or
less to be cash equivalents.
(e) Accounts receivable - The Company carries its accounts receivable at
cost less an allowance for doubtful accounts which is based on management's
assessment of the collectibility of accounts receivable. Based on
management's assessment, an allowance was not required at December 31, 2005
and 2004.
(f) Inventory - Inventory is stated at the lower of average cost or market
and includes costs of materials, labor and manufacturing overhead.
(g) Income taxes - Deferred income tax assets and liabilities are computed
annually for differences between the financial statement basis and tax
basis of assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to reverse. Valuation
allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized. Income tax expense is the tax payable
or refundable for the period plus or minus the change during the period in
deferred tax assets and liabilities.
(h) Warranty costs - The Company provides product warranties for specific
product lines and accrues for estimated future warranty costs in the period
in which revenue is recognized. Warranty costs accrued as of December 31,
2005 and 2004 was $5,227.
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 AND 2004
(1) Significant Accounting Policies: (Continued)
(i) Freight costs - The Company includes freight-in costs in cost of goods
sold. Total freight-in included in cost of goods sold for the years ended
December 31, 2005 and 2004 was $7,115 and $12,043, respectively.
(j) Advertising expense - The Company expenses advertising costs as
incurred. Advertising expense was $6,744 and $14,041 for the years ended
December 31, 2005 and 2004, respectively.
(k) Research and development costs - Expenditures for research and
development activities are charged to expense as incurred. Such
expenditures amounted to $230,521 and $309,967 in 2005 and 2004,
respectively. Research and development expenditures for equipment that has
alternative future uses are capitalized.
(l) Fair value of financial instruments - The carrying amounts reported in
the balance sheets for cash, receivables and payables are a reasonable
estimate of fair value.
(m) Loss per common share - Loss per share is based on the weighted average
number of common shares outstanding during each period in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share.
(n) Long-lived assets - Property and equipment are carried at cost.
Depreciation is computed on the straight-line method, based on the
estimated useful lives of the related assets which are five to seven years.
Capital leases are included as a component of property and equipment and
amortization of assets under capital leases is included in depreciation
expense.
Long-lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying
amount may not be recoverable. When required, impairment losses on assets
to be held and used are recognized based on the excess of the asset's
carrying amount over fair value of the asset and long-lived assets to be
disposed of are reported at the lower of carrying amount or fair value less
cost to sell.
(2) Mergers:
On August 17, 2005, Advanced 3D Ultrasound, Inc. (ADVU) acquired all of the
outstanding common stock of WESI. For accounting purposes, the acquisition has
been treated as a recapitalization of ADVU with WESI as the acquiror (reverse
acquisition). Each WESI shareholder received one share of restricted common
stock of ADVU for each share of WESI common stock held by the WESI shareholders.
As of August 16, 2005, WESI had 11,463,500 shares of common stock issued and
outstanding. As of August 16, 2005, ADVU had 198,063 shares of common stock
issued and outstanding. Immediately following the merger, World Energy
Solutions, Inc. had 11,661,563 shares of common stock issued and outstanding.
Advanced 3D Ultrasound, Inc. effected the merger with WESI for the purpose
of acquiring the management expertise of WESI management and to acquire the
business model developed by WESI management. WESI had no operations prior to the
merger.
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 AND 2004
(2) Mergers: (Continued)
On November 7, 2005, WESI acquired all of the outstanding common stock of
Professional Technical Systems, Inc. (PTS). For accounting purposes, the
acquisition has been treated as a recapitalization of WESI with PTS as the
acquiror (reverse acquisition). The financial statements presented herein are
the historical financial statements of PTS. Each PTS shareholder received one
share of restricted common stock of WESI for each share of PTS common stock held
by the PTS shareholders. As of November 7, 2005, PTS had 12,034,425 shares of
common stock issued and outstanding. As of November 7, 2005, WESI had 11,692,976
shares of common stock issued and outstanding. Immediately following the merger,
WESI had 23,727,401 shares of common stock issued and outstanding.
(3) Inventory:
Inventory consists of the following at December 31:
2005 2004
---------- ----------
Raw materials $ 59,977 $ 98,995
Work-in-process 8,328 14,346
Finished goods 24,242 37,206
Purchased finished goods 32,328 7,435
---------- ----------
124,875 157,982
Less allowance for obsolescence 13,057 13,057
---------- ----------
$ 111,818 $ 144,925
========== ==========
(4) Property and Equipment:
Property and equipment consist of the following at December 31:
2005 2004
---------- ----------
Office equipment $ 28,701 $ 27,439
Manufacturing equipment 42,633 42,633
Furniture and fixtures 9,522 6,398
Vehicles 6,750 56,453
Research and development equipment 43,772 43,772
Leasehold improvements 18,158 18,158
---------- ----------
149,536 194,853
Less accumulated depreciation 79,401 114,753
---------- ----------
$ 70,135 $ 80,100
========== ==========
Office equipment at December 31, 2005 and 2004, respectively, includes equipment
acquired under a capital lease with a capitalized value of $16,073. Related
amortization included in accumulated depreciation was $7,100 and $3,885 at
December 31, 2005 and 2004, respectively.
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 AND 2004
(5) Notes and Loans Payable:
Loans payable to related parties represents loans or advances owed to the
President or CFO of the Company, who are also stockholders of the Company. Loans
to the President accrue interest at 8%, are due on demand and are
uncollateralized. Accrued interest of $2,103 is included in accrued expenses on
the accompanying balance sheet at December 31, 2005. Loans to the CFO are
noninterest bearing.
Long-term debt consists of the following at December 31:
2005 2004
---------- ----------
Stockholder credit cards, monthly payments due based on a percentage of the
outstanding balance,including variable interest at the rate
of 7.00% at December 31, 2005; unsecured $ 19,816 $ 15,049
Stockholder revolving line of credit, monthly
payments due based on a percentage of the
outstanding balance, including variable
interest; unsecured - 39,237
Revolving bank line of credit, monthly payments
due based on a percentage of the outstanding
balance, including variable interest at the
rate of 10% at December 31, 2005; guaranteed
by the Company's President. 48,869 37,432
Capital lease payable, monthly payments of $325,
including interest at 8.3%, due September 2008;
secured by equipment - 12,254
---------- ----------
68,685 103,972
Less current portion 19,228 28,651
---------- ----------
$ 49,457 $ 75,321
========== ==========
The Stockholder credit cards and revolving line of credit reflected in the above
table are payable to the President of the Company.
Maturities on long-term debt over the next five years are as follows:
Year Ending December 31, Amount
------------------------ ----------
2006 $ 19,228
2007 13,729
2008 9,830
2009 7,059
2010 5,086
Thereafter 13,753
----------
$ 68,685
==========
WORLD ENERGY SOLUTIONS, INC.
(Formerly Advanced 3D Ultrasound Services, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 AND 2004
(6) Lease Commitments:
The Company maintains two facilities: its main office which houses its
corporate and manufacturing facilities and a second unit used for research and
development within the same industrial complex and has two separate leases. The
main office lease has a term expiring on October 15, 2006 and contains a one-
year renewal option. The research and development facility does not contain a
renewal option and the payment of its rent is guaranteed by the Company's
President. That lease commenced in October 2004 and has a term ending on October
14, 2006.
As of December 31, 2005, the minimum rental payments due under these
operating leases are as follows:
December 31, Amount
------------ ------------
2006 $ 44,795
2007 -
2008 -
2009 -
2010 -
Thereafter -
------------
$ 44,795
============
Total rent expense on these leases was $52,372 and $37,159 for the years ended
December 31, 2005 and 2004, respectively.
(7) Related Party Transactions:
Through September 2004, the Company leased its main facility from the
President of the Company and paid rent of $21,400 for the nine months ended
September 30, 2004 to that individual. In September 2004, the facility was sold
to an unrelated party.
During 2004, the Company wrote-off $11,384 of accounts receivable for
expenses paid on behalf of a company owned by the Company's president that was
created for the expansion and furtherance of the Company's research and
development activities. In 2004, the Company reflected sales of $5,000, which
were paid for, to this same entity.
Interest expense recorded on debts owed the President of the Company
totaled $14,717 and $10,725 for the years ended December 31, 2005 and 2004,
respectively. See Note 5 for details of related party debt.
As part of the employment agreement with the Company's Chief Financial
Officer (CFO), on March 5, 2004, the Company issued 5,130,000 (1,710 pre-split)
shares of its common stock for energy-saving technology valued at $22,555
developed by the CFO. In accordance with guidance of SFAS 142, Goodwill and
Other Intangible Assets, the acquired asset was written off.
(8) Concentrations of Credit Risk:
The Company sells its products to customers on an open credit basis. The
Company's trade accounts receivable are due from such customers and are
generally uncollateralized. No one customer accounted for more than 10% of
Company sales in 2005. Sales to one customer accounted for approximately 14% of
the Company's total sales for the year ended December 31, 2004.
At December 31, 2005, the Company's deposits in a financial institution
exceeded amounts covered by insurance provided by the U.S. Federal Deposit
Insurance Corporation by $157,752.
(9) Income Taxes:
The provision for federal and state income taxes for the years ended December 31
is as follows:
2005 2004
---------- ----------
Current $ - $ -
Deferred - -
---------- ----------
Total provision for income taxes $ - $ -
========== ==========
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities as
of December 31 are as follows:
2005 2004
----------- ----------
Deferred tax assets:
Net operating loss carryforwards $ 3,963,000 $ 102,798
Other 1,000 4,959
----------- ----------
Total deferred tax assets $ 3,964,000 $ 107,757
=========== ==========
Deferred tax liabilities:
Book basis of property and equipment
in excess of tax basis $ 15,000 $ 221
----------- ----------
Total deferred tax liabilities $ 15,000 $ 221
=========== ==========
Net deferred tax asset before valuation
allowance $ 3,949,000 $ 107,536
Valuation allowance (3,949,000) (107,536)
----------- ----------
Net deferred tax asset $ - $ -
=========== ==========
The Company has recorded a 100% valuation allowance against the net deferred tax
asset at December 31, 2005 and 2004 due to the uncertainty of its ultimate
realization. As time passes, management will be able to better assess the amount
of tax benefit it will realize from using the net deferred tax asset resulting
from the loss carryforwards. The valuation allowance increased $3,841,464 and
$107,016 in 2005 and 2004, respectively. At December 31, 2005, the Company has
available unused federal net operating losses of approximately $10,189,000 that
may be used against future taxable income and if not utilized, will expire by
the end of 2025.
(10) Stock Transactions:
The following stock transaction disclosures through November 7, 2005 are
those of PTS prior to the reverse acquisition of the Company as disclosed in
Note 2.
On March 5, 2004, the PTS stockholders approved an amendment to the
Articles of Incorporation reducing the par value of common stock from $1 to $.10
per share and increasing the number of authorized shares of common stock from
7,000 to 100,000,000. On that same date, the Company issued 288,000 (96
pre-split) common shares to its employees as a stock bonus award and 5,130,000
(1,710 pre-split) common shares in exchange for technology. On April 30, 2004,
the Company's board of directors declared a 3,000-for-1 forward stock split. On
June 1, 2005, the Company stockholders approved an amendment to the Articles of
Incorporation reducing the par value of the common stock from $.10 to $.001.
Stockholders' equity reflects the stock split by reclassifying from "Retained
Earnings (Deficit)" to Common Stock an amount equal to par value of the
additional shares arising from the split. All references in the financial
statements to the number of shares authorized, outstanding, and per share
amounts have been restated to reflect these changes for all periods presented.
During the period January 1, 2005 through August 10, 2005, the Company sold
1,716,250 shares of its common stock at fifty cents per share for a total of
$858,125.
In July 2005, the Company repurchased 6,000,000 shares of its common stock
from the Company's President for $6,000 and 2,566,500 shares from the Company's
CFO for $2,564.
On November 7, 2005 the Company agreed to increase its authorized common
shares to 100,000,000 shares.
From November 8, 2005 through December 31, 2005, the Company sold 330,000
shares of its common stock for $1 per share for a total of $330,000.
On November 8, 2005 the Company reduced the par value of its common stock
from $.001 to $.0001 per share.
On November 7, 2005 the Company approved the issuance of 100 million $.0001
par value preferred stock. No preferred shares have been issued. The rights and
privileges of the preferred shares will be established by the Board of
Directors.
(11) Subsequent Events:
On January 31, 2006, the Company entered into employment agreements with
its CEO/CFO and President. The agreement calls for annual salaries of $156,000
and 600,000 shares of Company common stock. The employment agreements contain a
noncompete agreement and provide for severance pay equal to one year base
salary.
On January 31, 2006, the Company entered into six one-year consulting
agreements for various services including marketing, business development,
product design engineering and product development, real estate acquisition and
business planning. These agreements provide as compensation the issuance of
925,000 shares of common stock. Additionally, the agreements include total cash
compensation of $3,050 per week and reimbursement of expenses. Lastly, two of
the agreements allow for additional compensation to be determined between the
Company and the consultant for specific services.
On February 24, 2006, the Company entered into a media campaign agreement
for nationally syndicated newspaper and/or radio features in exchange for
restricted common stock valued at $1,000,000 to be satisfied in two payments. On
February 28, 2006, the Company made the first payment with the issuance of
326,797 shares of restricted common stock.
Item 8. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.
None
Item 8A. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures
The Company's management, recognizes its responsibility for establishing
andmaintaining internal control over financial reporting for the Company.
Afterevaluating the effectiveness of our "disclosure controls and procedures"
(as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and
15d-15(e)) as of December 31, 2004 (the "Evaluation Date"), the Company's
management has concluded, as of the Evaluation Date, the Company's disclosure
controls and procedures were adequate and designed to ensure the information
required to be disclosed in the reports filed or submitted by us under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
with in the requisite time periods.
(b) Effectiveness of Internal Control
The Company's management is reviewing the Company's internal controls over
financial reporting to determine the most suitable recognized control framework.
The Company will give great weight and deference to the product of the
discussions of the SEC's Advisory Committee on Smaller Public Companies (the
"Advisory Committee") and the Committee of Sponsoring Organizations' task force
entitled Implementing the COSO Control Framework in Smaller Businesses (the
"Task Force"). Both the Advisory Committee and the Task Force are expected to
provide practical, needed guidance regarding the applicability of Section 404 of
the Sarbanes-Oxley Act to small business issuers. The Company's management
intends to perform the evaluation required by Section 404 of the Sarbanes-Oxley
Act at such time as a framework is adopted by the Company. For the same reason,
the Company's registered accounting firm has not issued an "attestation report"
on the Company management's assessment of internal controls.
(c) Changes in Internal Controls
After evaluation by the Company's management, the Company's management has
determined there were no significant changes in the Company's internal controls
or in other factors that could significantly affect the Company's internal
controls subsequent to the Evaluation Date.
Item 8B. Other Information.
None.
PART III.
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
Three (3) directors, constituting the entire Board of Directors, serve until the
next Annual Meeting of shareholders, or until a successor shall be elected and
shall qualify:
Name Age Principal Occupation Year First Became
Director
Benjamin C. Croxton 57, CEO, CFO, Registrant 2005
Mike Prentice 75 President, Registrant 2005
Thomas E. Kurk 53 Managing Director, KTK Capital, Inc. 2006
Benjamin C. Croxton served as Executive Vice President of Professional
Technical Systems, Inc., a company engaged in the business of developing,
manufacturing and selling electrical surge protection devices, from April 2003
to March 2004, and has served as its President from March 2004 to the present.
From June 2000 to the present, Mr. Croxton has served as President of iTactical
Services, Inc., which is engaged in the business of providing technical temp
services to the telecom industry. Mr. Croxton is not a director of any other
reporting company.
Mike Prentice has served as President of Professional Technical Systems,
Inc. from April 1984 to the present. Mr. Prentice is not a director of any other
reporting company.
Thomas E. Kurk has been Managing Director of KTK Capital, Inc. since
October 2005, from October 2001 until October 2005 he was engaged as an
independent contractor, providing corporate finance and business development
consulting services. Mr. Kurk is not a director of any other reporting company.
Jodi Crumbliss resigned as a director on February 24, 2006. Mr. Kurk was
elected
to the Board on that date to serve until the next election of directors.
Directors, including directors also serving the Company in another capacity
and receiving separate compensation therefor shall be entitled to receive from
the Company as compensation for their services as directors such reasonable
compensation as the board may from time to time determine, and shall also be
entitled to reimbursements for any reasonable expenses incurred in attending
meetings of directors. To date, the Board of Directors has received no
compensation, and no attendance fees have been paid.
Audit Committee Financial Expert
No one on the Board of Directors can be deemed to be an audit committee
financial expert. Our business model is not complex and our accounting issues
are straightforward. Responsibility for our operations is centralized within our
executive management, which is comprised of two persons. We recognize that
having a person who possesses all of the attributes of an audit committee
financial expert would be a valuable addition to our Board of Directors,
however, we are not, at this time, able to compensate such a person therefore,
we may find it difficult to attract such a candidate.
Code of Ethics
The Company has adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. Our code of ethics will be
provided to any person without charge, upon request. Requests should be
addressed to Investor Relations Department, c/o World Energy Solutions, Inc.,
3900A 31st Street North, St. Petersburg, Florida 33714.
Item 10. Executive Compensation.
SUMMARY COMPENSATION TABLE
Long-term compensation
........................................................
Annual compensation Awards Payouts
-------------------------------------- ---------------------------- ---------
Securities
Other annual Restricted underlying LTIP All other
Name & principal Year Salary Bonus compensation stock awards options/SARs payouts compensation
($) ($) ($) ($) (#) ($)
Benjamin C. Croxton 2005 $18,000 - - - - - - (1)
Mike Prentice 2005 $18,000 - - - - - - (1)
=================== ======== ======== =========== ============ ============== ============ ======= ============
(1) Does not include salary paid by Professional Technical Systems, Inc.
On January 31, 2006, the Company entered into employment agreements with
its Mr. Croxton and Mr. Prentice. The agreements provide for annual salaries of
$156,000 and the transfer of 600,000 shares of Company common stock. The
employment agreements contain a noncompete agreement and provide for severance
pay equal to one year base salary.
Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
The following table shows the ownership of the Common Stock of the Company
on March 4, 2005, by each person who, to the knowledge of the Company, owned
beneficially more than ten percent (10%) of such stock, the ownership of each
director, and the ownership of all directors and officers as a group. Unless
otherwise noted, shares are subject to the sole voting and investment power of
the indicated person.
Names and Address of Individual Amount and Nature of Approximate %
or Identity of Group Beneficial Ownership of Class
Benjamin C. Croxton 8,147,176 30.73%
3900A 31st Street North
St. Petersburg, FL 33714
Mike Prentice 5,672,176 21.40%
3900A 31st Street North
St. Petersburg, FL 33714
Thomas E. Kurk 100,000 0.38%
2229 Bancroft Place, NW
Suite 401
Washington, DC 20008
Rachel Steele 4,723,008 (1) 17.82%
7732 N. Mobley Drive
Odessa, FL 33556
All Officers and Directors as a group 13,919,352 52.51%
(1) Includes 1,385,000 shares held by Rajax, Inc. and 2,000,000 shares held as
custodian.
Item 12. Certain Relationships and Related Transactions.
Through September 2004, the Company leased its main facility from Mr.
Prentice of the Company and paid rent of $21,400 for the nine months ended
September 30, 2004 to that individual. In September 2004, the facility was sold
to an unrelated party.
On January 31, 2006, the Company entered into employment agreements with
its Mr. Croxton and Mr. Prentice. The agreements provide for annual salaries of
$156,000 and the transfer of 600,000 shares of Company common stock. The
employment agreements contain a noncompete agreement and provide for severance
pay equal to one year base salary.
Interest expense recorded on debts owed the President of the Company
totaled $14,717 and $10,725 for the years ended December 31, 2005 and 2004,
respectively.
On January 31, 2006 the Company entered into a consulting agreement with
Mr. Kurk pursuant to which he received 100,000 of the Company's common shares.
As part of the employment agreement with the Company's Chief Financial
Officer (CFO), on March 5, 2004, the Company issued 5,130,000 (1,710 pre-split)
shares of its common stock for energy-saving technology valued at $22,555
developed by the CFO. In accordance with guidance of SFAS 142, Goodwill and
Other Intangible Assets, the acquired asset was written off.
Item 13. Exhibits.
Exhibit Number Location
and Description Reference
--------------------------------------------------------------------------------
(a) Reports of Independent Certified Accountants Filed Herewith
(b) Financial Statements Filed Herewith
(c) Exhibits required by Item 601, Regulation S-B:
(1.0) Underwriting Agreement None
(2.0) Plan of purchase, sale, reorganization, arrangement,
liquidation, or succession
(2.1) Agreement and Plan of Merger Between See Note 6
Registrant and World Energy Solutions, Inc (below)
(2.2) Agreement and Plan of Merger Between See Note 7
Registrant and Professional Technical (below)
Systems, Inc.
(3.0) Articles of incorporation and by-laws
(3.1) Initial Articles of Incorporation filed See Note 1
November 23, 1998. (below)
(3.2) Amendment to initial Articles of See Note 2
Incorporation (Name Change, Authorized (below)
Shares, & Issuance of Shares).
(3.3) By-Laws filed February 2, 1999. See Note 3
(below)
(4.0) Instruments defining the rights of security
holders, including indentures
(4.1) Specimen Share Certificate for Common Stock.
(9.0) Voting Trust Agreement None
(10.0) Material Contracts
(10.1) Strategic Alliance Agreement Between See Note 4
the Company and UTEK Corporation (below)
(10.2) Employment Agreement with Benjamin Croxton See Note 5
dated January 31, 2006. (below)
(10.3) Employment Agreement with Mike Prentice See Note 5
dated January 31, 2006. (below)
(10.4) Consulting Agreement with Thomas Kurk See Note 5
dated January 31, 2006. (below)
(10.5) Consulting Agreement with Rachel Steele See Note 5
dated January 31, 2006. (below)
(10.6) Consulting Agreement with Robert J. Depalo See Note 5
dated January 31, 2006. (below)
(10.7) Consulting Agreement with Nancy W. Hunt See Note 5
dated January 31, 2006. (below)
(10.8) Consulting Agreement with George Walker See Note 5
dated January 31, 2006. (below)
(10.9) Consulting Agreement with Dan Witherspoon See Note 5
dated January 31, 2006. (below)
(11.0) Statement re: Computation of Per Share Earnings Note 1
to Financial
Statements
(14.0) Code of Ethics Filed Herewith
(16.0) Letter on changes in certifying accountant None
(18.0) Letter on change in accounting principles None
(20.0) Other documents or statements to security holders None
or any document incorporated by reference
(21.0) Subsidiaries of Registrant None
(22.0) Published Report re: Matters Submitted to Vote of
Security Holders None
(23.0) Consents of Experts and Counsel None
(24.0) Power of Attorney None
(31.0) Certificate of Chief Executive Officer Filed Herewith
and Chief Financial Officer
(32.0) Certification pursuant to 18 U.S.C. Section 1350, Filed Herewith
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(99.0) Additional exhibits None
(d) Reports of Form 8-K None
Exhibit Key
--------------------------------------------------------------------------------
Note 1 Incorporated by reference to the Company's Form 10-SB filed with the
Securities and Exchange Commission on November 23, 1998.
Note 2 Incorporated by reference to the Company's Form 10-K filed with the
Securities and Exchange Commission on November 18, 2005.
Note 3 Incorporated by reference to the Company's Form 10-SBA No. 1 filed
with the Securities and Exchange Commission on February 2, 1999.
Note 4 Incorporated by reference to the Company's Form 10-K filed with the
Securities and Exchange Commission on September 13, 2005.
Note 5 Incorporated by reference to the Company's Form S-8 filed with the
Securities and Exchange Commission on January 31, 2006.
Note 6 Incorporated by reference to the Company's Form 10-K filed with the
Securities and Exchange Commission on August 19, 2005.
Note 7 Incorporated by reference to the Company's Form 10-K filed with the
Securities and Exchange Commission on November 14, 2005.
Item 14. Principal Accountant Fees and Services
Audit Fees
The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant, Ferlita, Walsh &
Gonzalez, P.A. for the audit of the registrant's annual financial statements and
review of financial statements included in the registrant's Form 10-QSB or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years was
$27,172. Audit fees for the same period billed to Professional Technical
Systems, Inc. was an additional $57,020.
Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for
assurance and related services by Ferlita, Walsh & Gonzalez, P.A. that are
reasonably related to the performance of the audit or review of the registrant's
financial statements and are not reported under the caption "Audit Fees" was
$-0-. The nature of the services comprising the fees disclosed under this
category was: N/A.
Tax Fees
The aggregate fees billed in each of the last two fiscal years for
professional services rendered by Ferlita, Walsh & Gonzalez, P.A. for tax
compliance, tax advice, and tax planning was $3,354.
All Other Fees,
The aggregate fees billed in each of the last two fiscal years for products
and services provided by Ferlita, Walsh & Gonzalez, P.A., other than the
services reported above were $-0- in paragraphs (e)(1) through (e)(3) of this
section. The nature of the services comprising the fees disclosed under this
category was: N/A.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WORLD ENERGY SOLUTIONS, INC.
By: /s/ BENJAMIN C. CROXTON
---------------------------------
BENJAMIN C. CROXTON,
Chief Executive Officer
Chief Operating Officer
Date: March 29, 2006
In accordance with the 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.
By: /s/ BENJAMIN C. CROXTON
---------------------------------
BENJAMIN C. CROXTON
Chief Executive Officer
Chief Operating Officer
Director
Date: March 29, 2006
By: /s/ MIKE PRENTICE
---------------------------------
MIKE PRENTICE
President
Director
Date: March 29, 2006
By: /s/ THOMAS E. KURK
---------------------------------
THOMAS E. KURK
Director
Date: March 29, 2006